Archive for the ‘Circuit City’ 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.

PR Lessons Learned: Circuit City

image courtesy of consumerist.com

image courtesy of consumerist.com

Last week, I wrote a post comparing the Twitter presence of Circuit City and Comcast.  I was highly critical of Circuit City for not using the platform to reach out and connect directly with customers.  The very next day, a story broke about a PR debacle at Circuit City.  The first part of this story is a bit of a tragedy but it does have a happy ending, thanks to some fast thinking by a savvy PR guy.

The August issue of MAD magazine featured a four-page spoof tab for “Sucker City”.  The spoof included advertisements for items like HDTVs and video games, including the Nintendo Wii “Guaranteed In Stock … if you’re friends with an employee who hid it in the back for you. Otherwise, ooh, sorry, all sold out.”

In a panicky overreaction, Circuit City management instructed their stores to remove and destroy all copies of the issue (yes, you can get magazines at some Circuit City stores, but that’s a subject for different post).  Of course, the decision was another great example of how Circuit City doesn’t understand the new reality of operating in the age of social media.  A copy of the remove and destroy message quickly found its way to the Consumerist.com who shared it with the world.

That’s when PR guy Jim Babb stepped in to deal with the damage control.  As many of my readers know, I worked at Circuit City’s corporate headquarters and had the opportunity to know Jim and his extremely dry wit, so I’m not surprised with how he handled the issue.  Here’s an excerpt from Jim’s letter:

“As a gesture of our apology and deep respect for the folks at MAD Magazine, we are creating a cross-departmental task force to study the importance of humor in the corporate workplace and expect the resulting Powerpoint presentation to top out at least 300 pages, chock full of charts, graphs and company action plans.

In addition I have offered to send the MAD Magazine Editor a $20.00 Circuit City Gift Card, toward the purchase of a Nintendo Wii….if he can find one!

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.

Your Brand is Defined by the Customer Experience, Not the Slogan

simplicity-guaranteed.jpg

When the 2007 holiday season kicked off a little over a month ago, US-based electronics retailer Circuit City introduced a series of TV commercials focusing on the simplicity of the digital lifestyle. With the ads, Circuit City introduces their latest moniker “Simplicity Guaranteed“. According to Circuit City’s Chief Marketing Officer, the new spots “illustrate how Circuit City makes it simple to Shop (on-line), Buy (in-store) and Enjoy (firedog services) your digital lifestyle this holiday season and beyond”. ”Simplicity Guaranteed” is the latest in a series catch phrases used by the retailer over the last few years. Previous slogans have included “Imagine That” (2000-2001), “We’re with You” (2001-2004), “Just What I Needed” (2004-April 2007) and “Circuit City Makes it Simple” (2005 Christmas Season)

All of these past slogans describe brand perceptions that Circuit City aspired to but failed to achieve. Why? Because a company’s brand is not defined by its catch phrase, logo, aesthetic style or culture. A company’s brand is ultimately defined by the experience they deliver to their customers and Circuit City has been unable to consistently deliver experiences that supported those brand promises.

The latest revival of the Simplicity theme is part of a larger strategic framework that I helped develop for Circuit City a few years ago (you can hear about it here). Making it Easy for customers to shop, buy and enjoy is one of the four key ingredients to the vision my team proposed. We also recognized that delivering experiences consistently supported the “Make it Easy” idea would require significant changes in processes, culture and internal success measurements. Almost two years after those recommendations were made, Circuit City has “re-branded” many of the same operational features that they have been touting for years with the “Simplicity Guaranteed” label, but has not done any of the heavy lifting required to support the long-term strategic vision of sustainable growth through exception customer experiences.

Marketing strategist Scott Glatstein suggests five steps for building a strong brand and optimizing customer experience:

  1. Identify your reasons to believe.
  2. Identify customer touchpoints.
  3. Determine the most influential touchpoints
  4. Design the optimal experience
  5. Align the organization to consistently deliver the optimal experience

Reasons to believe are those things that the customer experiences that support the brand promise. Circuit City has decided that Simplicity is one of their reasons to believe, but they have not executed any of the other steps suggested by Glatstein. Without those crucial components, the customer experience can easily fall short of the brand promise. Here’s an example:

nano.jpgOn Christmas Eve, we decided to purchase an iPod for a relative. In the weekend tab, Circuit City was advertising a free $15 iTunes card with purchase of a Nano priced at 149.99. Electing buy on-line and pickup in the store (A feature that usually does live up to the Simplicity promise) we went to the web to place the order. We were surprised and delighted to see the web price of $142.49, but noticed that there was no mention of the free iTunes card on the web. Here is the first indication of a problem. The tab touchpoint and the web touchpoint are not aligned in terms of the offer. This generates confusion and apprehension for the customer.

nano2.jpg

We made the purchase and left, with tab in hand, for the local store. When we arrived, the iPod was waiting for us as promised, but there was no $15 iTunes card. Our concerns about the conflicting offers are validated and we are now entering confrontation zone.

We showed the tab to the customer service associate who wasn’t sure how to deal with the situation. Someone else was brought over to correct the problem. He suggested to “return” the web order and resell it to get the iTunes deal. The CSA did that, but in doing so, the price went back to the advertised price of $149.99. The CSA called the assistant back and the process of “fixing the order” began. At one point, we were told that we owed another $0.70. At another we were going to get $).09 back. Clearly, the front line associates; the ones that come face-to-face with the customers every day, are not prepared to deal with this problem. The processes have not been optimized to deliver a great experience.

With the line backing up behind us, the CSA team finally found a way to make deliver the transaction with the free iTunes card at the price advertised on the website. The total in-store transaction time was over 20 minutes. Our expectations were not met and the other customers in line behind us got to share our experience as well.

So did Circuit City satisfy their 24/24 guarantee. Technically, yes as the web order was ready in less than 24 minutes. Did the experience reflect “easy to shop, easy to buy”? Absolutely not! Circuit City has not identified and evaluated all of their touchpoints against the “Simplicity Guaranteed” reason to believe. They have not designed optimal customer experiences that include these touchpoints, and they have not aligned the various channels and business functions to deliver an optimal experience. This may sound like an isolated incident, but it is not. Where else is dealing with Circuit City not Simple? How about rebates, scheduling an in-home service or getting a product repaired under warranty if you didn’t buy the extended service plan?

Circuit City was once a retail powerhouse. They practically invented the “Specialty Superstore” concept. Today they are struggling to remain relevant in what has become a commodity market. They have to compete with mass marketers like Wal-Mart and Costco who can price aggressively, niche players like Gamestop and Verizon who can beat them at the “authenticity” game and web marketers like Amazon and eBay who can always deliver a better selection and competitive prices. At $4.62, their stock price is trading a 52-week low and is flirting with a 5-year low. Circuit City will have to find a way to build a truly differentiated brand if they are going to survive. Simply adopting a new slogan that says you “make it easy for me” isn’t going to cut it. They must also consistently deliver a customer experience that supports the claim. Without that, the slogan only serves to set expectations that won’t be met and further erode the brand.

Many of you may have shopped Circuit City in the past couple of months. I would love to hear about your experiences and your ideas regarding how Circuit City could improve the customer experience.

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