Archive for the ‘advertising’ Tag

Circuit City: The Lost Years

I started my professional career as a programmer with Circuit City in 1985 and I remember vividly how very cool a place it was to work.  Not only were you part of a company that sold a cool product, but the organization treated people like family.  On top of that, consumer electronics retailing was a specialty back then and Circuit City was the king of the mountain.  There were many reasons for their dominance but the biggest was that for all intents and purposes, it was still a family business and the values that founders Sam Wurtzel and Alan Hecht built the business on were ingrained in the culture.

I’ll digress for a minute to share some very early Circuit City trivia as a way to convey how savvy a businessman Sam Wurtzel was.  Bear with me, there is a reason for this detour.  It was the summer of 1948 and Sam was driving his family to Florida for a vacation.  Coming through Richmond, VA, Sam saw a billboard announcing that WTVR – “The South’s First Television Station” was on the air.  Sam figured that with a TV station here, Richmonders were going to need a TV store.  With that as his business idea, Sam rented out a corner of a Sears tire store and went into business selling TV’s door to door.  The concept of Tryvertising has been talked about in recent years, but it’s basically how Sam approached selling TVs.  He would deliver the TV on Tuesday and let customers keep it for a week to try it out, which of course meant that they got to see NBC’s hit Texaco Theater with Milton Berle on Tuesday nights. The following Tuesday, Sam was to pick up the TV, but not wanting to miss that evening’s Milton Berle show, most customers decided to purchase it instead.  Simple idea, brilliant approach!

Sam and Al developed the WARDS TV business during the 1950’s.  The “W” stood for Wurtzel and the “ARDS” were Sam’s kids’ initials.  During the next three decades, several other store formats were experimented with. The name change accompanied a regional expansion and public stock offering in the 1980s.  All along the way, Wurtzel, and later his son, Alan, built the business on the the 4-S Model: Service, Selection, Savings & Satisfaction, which was credited in Jim Collins’ 2001 classic “Good to Great” as the differentiator that allowed Circuit City shares to perform 18.5 better than the market between 1982 and 1997.

The 4-S model was the customer lens through which every “associate” viewed their work. Whether developing software or working on the sales floor, everything you did was about delivering those four S’s to the customer. Earlier this week, The Consumerist posted a video compilation of old Circuit City TV spots from the company’s heyday years of the late 80s and early 90s.  The messages in these spots rang true then, but sound like empty promises a decade after the 4-S model was abandoned and management stopped focusing on what mattered – The Customer.  The results speak for themselves.  With a stock price now around $0.28 (yes, that’s 28 cents!) and likely to follow CompUSA into retail oblivion, it’s sad to think about how the leaders of this company were able to destroy it in just ten short years.  The comments on The Consumerist post tell the story of how the brand is perceived today.

Take a walk down memory lane (if you’re old enough), and remember that you brand is not what you say it is, but rather what your customers say based on their experience with you.

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Companies Without Conversation: Comcast Gets Twitter; Circuit City Does Not

Comcast and Circuit City have many things in common.

Both companies sell products and services that deliver video and internet to American consumers.  They also share the dubious distinction of consistently scoring near the bottom of their respective industries in the American Consumer Satisfaction Index surveys (see here & here).

With limited competition, Comcast’s dismal rating doesn’t pose as great a risk to their future profitability as does Circuit City’s score, which is clearly reflected in their ever sinking stock price.  Over the last few years, Circuit City has not executed well at meeting customer expectations.  As a result, they have lost a big chunk of their base and aren’t attracting new customers as fast as the old ones are leaving.  Consumer Electronics retail is a commodity industry and customers can buy their CE products just about anywhere. Bringing customers back to Circuit City should be the company’s top priority.  Doing so will require a number of things, but consistently meeting or exceeding customer’s expectations would be a good place to start.

Another good place to start might be engaging with customers within their Social Media channels to better understand where the experience breaks down, and to offer unexpected support for problem resolution.  Interestingly, both companies are also getting involved with Social Media.  Circuit City maintains a blog on its website and both companies have started using Twitter; however, the ways in which they are using it couldn’t be farther apart.

Comcast has been receiving a significant amount of positive press from their use of Twitter. Frank Eliason, Comcast’s digital care manager and the man behind the Twitter account, comcastcares, tells me their   Twitter program started back in March ’08.  Using a number of monitoring tools, Frank and his small team listen to the stream of “Tweets” coming from Twitter looking for comments about Comcast.  When they encounter one, they immediately reply to the person who made the comment, usually asking if they can help.  As of this writing, comcastcares has made over 10,000 updates and has over 2700 followers.  They operate comcastcares like some kind of proactive help desk, contacting customers who have publicly shared that they are having a problem.

Think about that for a minute.

A company that is actively trying to address every complaint made about it on Twitter.  Every problem solved here equates to a customer whose expectations have been exceeded.  Those customers will are going to tell others about their great experience.  More importantly, by listening to its customers, Comcast is learning about the things that are getting in the way of a great customer experience.  It’s a feedback loop that can be used to drive improvements into their operational programs.

Circuit City on the other hand doesn’t seem to understand the basic concept here.  They established their Twitter account, Circuit_City, about the same time as Comcast, but roughly six months later, they haven’t even broken triple digits in Updates. Circuit City isn’t using Twitter to listen for and help frustrated customers or to find opportunities for improvement in their operational procedures.  Instead, they are treating Twitter (and their CityCenter blog) like any another advertising channel.  There is no conversation, just one-way messaging.  There is no “How Can I Help You?”, there’s just “Here’s some more stuff that you should buy”.   Most of the tweets are links to posts on their blog which is focused on products that Circuit City sells.

One could argue that Circuit City does not have as many detractors as Comcast, but there are clearly opportunities out there.

Earlier this week, I saw a Twitter user contemplating going to Circuit City to purchase a wireless card (see the accompanying Twitter thread).  When he tweeted “Circuit City sucks!  Why are they still in business?“, it would have been a great time for Circuit’s Twitter team to step in and try to salvage this experience.

Unfortunately, Circuit City isn’t listening, they are just talking.  Business as usual.

No Bars in More Places Than Any Other Network

Make a claim which is true only because of a small disclaimer. Then, repeated it to the point that people take it on face value. Its one of the oldest marketing ploys in the book and it’s what AT&T is doing with their “More Bars in More Places” campaign. You’ve seen them. TV ads that present a humorous situation, often based in the US, where someone isn’t receiving an important call because they don’t have AT&T. The disclaimer at the bottom clarifies that “More Bars in More Places than any other Network” is based on Global coverage. So yes, technically AT&T has more bars in more places, but does the target domestic audience really care that I can get AT&T Wireless coverage outside of the US. I don’t think so. Without the disclaimer, their domestic coverage does not live up to the claim. From Ad Age:

Consumers ‘equate bars with satisfaction and quality. It might work if people believe it.’ “Consumer Reports doesn’t. In its 2006 telecommunications survey, which was conducted last September and tallied the surveys of 42,000 readers, AT&T, formerly Cingular, had average or worse scores for dropped calls in the 20 cities it surveyed. As for ‘more bars’ or, as the Consumer Reports survey put it, no service,’ Cingular also was rated as average or worse in each city with the exception of Dallas, where it was rated better than average.

This campaign replaced the “Fewest Dropped Calls” campaign which ended last year. AT&T was unable to support that claim, even with a disclaimer. It seems AT&T has a history of using deceptive marketing tactics to make their product sound better than it really is.

As a customer of less than a year, I am constantly frustrated by seeing “No Service” on my phone in places that should (and according to AT&T’s coverage map, do) have coverage. Perhaps they should have another disclaimer that says “as long as you are not inside a building, like your house”! It’s bad enough that their service does not live up to expectations. What irks me the most is the frequent running of those TV spots which are clearly meant to put lipstick on a pig. Every time I see one of those ads, I feel compelled to requote the tagline, “No Bars in More Places than any other Network”.

What Do You Get For $240Million?

facebook-gates.jpgOn Wednesday, Microsoft announced that it will spend $240 million for a 1.6 percent stake in the #2 social networking site, Facebook. As part of the deal, Microsoft is now Facebook’s exclusive advertising partner worldwide until 2011. Facebook is expected to earn $30 million in profits on $150 million in revenue so $240 million sounds like a really big chunk of change for 1.6%. To put it another way, that deal effectively values the privately-held Facebook at $15 billion (that’s billion, with a “B”). As with similar deals in the past, there will certainly be those that scratch their heads and say this is crazy.

If you are in that camp, I recommend that you read Jeramiah Owyang’s post, “How Microsoft Got Their Passport Afterall“. Facebook currently has 50 million users and a userbase that doubles every 6 months. Those users voluntarily provide all sorts of detailed information about themselves. Owyang writes:

  1. Facebook knows who you are: your name, your gender, where you live, your martial and political status, sexual preference, age, where you work, the list goes on. The funny thing is, you’ve voluntarily given that information up.
  2. They also know who you connect to, who you talk to, and what you say to them (you don’t own those private message ya know).
  3. Sure, up to one third of all profile information is bogus, but what about those unsaid gestures: What people do is more important than what they say. What apps you use, how frequent, what and who you click on.

Forget the fact that Microsoft was desperate to beat Google at something. Microsoft wants to be a player in the lucrative on-line advertising business.  This new partnership gives them access to goldmine of personal data with which they can potentially build highly efficient advertising vehicles .  Owyang reminds us that advertising is all about accuracy and margins.  The more accurate an ad is at hitting the target group, the lower the cost.  He also points out that where “Google sells ads based on keywords, FaceSoft can now sell ads on something far more accurate: people“.

Owyang goes on to discuss what the next generation of on-line advertising might look like, suggesting that it will become much more targeted and much more social, and with that comes the risks associates with giving up control.

I think Jeremiah nailed it.  What do you think?

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