At Best Buy, Success Comes from "Living"
Customer Service
Finding simple yet effective ways to respond to shoppers' comments and
criticisms is ingrained in electronics retailer's corporate culture
Every month Best Buy elicits feedback from more than 10,000 shoppers. Telephone surveys
conducted by the Gallup Organization are intended to probe what customers liked about their
most recent shopping experience, what they didn't like and what suggestions they might have for
improvement.
It's no doubt a costly way to stay tuned in to their shoppers' wishes. But Brian Dunn, senior vice
president and business group leader, considers it a high-yield investment.
"We've adjusted any number of policies and procedures based on customer feedback. This is not
a company that talks about customer service -- it's a company that lives it," says Dunn.
Rebates provide a recent case in point. A dizzying array of small electronics, appliances, software
and home office products sold by Best Buy are accompanied by cash rebate offers.
Unfortunately, most customers consider rebates a colossal hassle -- from hunting down the
rebate forms in the store, to making a copy of the receipt and, eventually, mailing it in.
Rebates were also a headache from the store perspective. Finding an attractive way to display
the rebate forms was nearly impossible, and those charged with dealing with the administrative
side of the program described it as a nightmare.
"This is an area where the feedback was overwhelmingly negative. Yet, we recognized the need
to maintain the rebate program to stay competitive," says Dunn. "It became imperative for us to
find a way to turn it into a positive."
Best Buy did just that by automating the program. Today, when a shopper purchases an item that
has a rebate, the rebate form and a second receipt featuring that item are printed at the point of
sale. All the data is captured by the store POS system, thus simplifying the process on the back
end. More important, shoppers have responded positively.
"It's not confusing anymore. It's simple. It's all there for customers and they just fill in the personal
data and put it in the mail," explains Dunn. "Customer service really isn't complicated. It's about
listening to what your customers are saying and responding. Shoppers are pleasantly surprised
by our approach to rebates and they leave Best Buy with a smile on their faces. In the end, that's
what customer service is all about."
CORPORATE CULTURE
In the hypercompetitive consumer electronics business, in which retail chains frequently offer a
nearly identical mix of brands and product at similar prices, Best Buy has distinguished itself as a
leader in customer service. Finding simple yet effective ways to respond to shoppers' comments
and criticisms is ingrained in Best Buy's corporate culture.
Customer feedback sparked what executives at the Eden Prairie, Minn.-based retailer describe
as the most pivotal change in the company's 35-year history -- the 1989 debut of the Concept II
store.
In an attempt to break away from the superstore approach of commissioned sales and
showroom-style retailing that was common at that time, Best Buy conducted focus groups,
amassing piles of research on shoppers' likes and dislikes. Customers told them that the hard-sell
commissioned sales approach was a turn-off, and that self-serve merchandise displays were a
better fit with their increasingly time-crunched schedules. The desire for a more efficient shopping
experience was obvious.
Taking a calculated risk, Best Buy revamped its strategy. When the first Concept II store debuted
in Rockville, Ill. -- complete with its non-commissioned, mass-merchant style format and grocerystore checkout lanes -- it sent shockwaves through the retail and manufacturing communities.
Yet, while the industry watched the "experiment" with a cynical eye, shoppers' acceptance was
overwhelming. Best Buy revenues grew from $500 million in 1989 to more than $3 billion in 1994.
Today, Best Buy is a $12 billion consumer electronic specialty retailer operating more than 400
stores in 41 states coast-to-coast. Though substantially smaller in terms of store count than rival
Circuit City, Best Buy was only slightly smaller in terms of total corporate revenues last year. The
company's average of nearly $40 million in sales per location is well above Circuit City's,
according to Best Buy executives.
For the first nine months of fiscal 2000, Best Buy's total sales were $9.8 billion, up 21 percent
from a year ago; comparable-store sales increased 6.7 percent.
TECHNOLOGY FRONTRUNNER
Over the years, Best Buy also has been a leader in the use of technology to support customer
service efforts. The company claims to have been the first consumer electronics retailer to use
point of purchase UPC scanning, and the frontrunner in implementing high-tech interactive
displays in all departments.
According to Dunn, Best Buy was the first retailer to introduce full-motion video Answer Center
kiosks, intended to deliver more product information on the company's growing assortment of
high-tech merchandise and to provide an expanded product selection.
While improving the shopping environment and providing customers with interactive means of
acquiring information are clearly important to Best Buy's customer service initiative,
knowledgeable sales associates are fundamental to the company's success.
"The key thing we try to stress to our associates is that they treat our shoppers the way they
would a friend to whom they were offering advice," says Dunn. "Purchasing electronics can be
intimidating for some. We want our shoppers to feel comfortable about asking questions and
asking for an opinion."
Finding associates who can deliver friendly, knowledgeable assistance begins at the point of hire.
Typically, a human resources specialist will spend some time with new hires, determining where
their interests lie. Do they see themselves as computer geeks? Do they have a passion for
music? Is digital photography a hobby? Every attempt is made to place the new employee in the
department he or she is most interested in.
Training consists of the requisite new employee instruction on the company, its values and what
is expected of them. Time is allotted for basic training about the product they'll be selling. Then,
new hires are paired with an experienced sales associate in their department for anywhere from
four to 16 hours (depending on the complexity of the product category) so that they can observe
and learn.
"Having a new worker shadow a veteran has worked extremely well for us. It's the people on the
selling floor who really know which questions are most common and how to answer them,"
explains Dunn. In addition, this buddy program builds camaraderie and underscores the company
culture of treating others like friends and sharing information.
Training is ongoing for all Best Buy employees, with monthly sessions in each category designed
to keep employees' skills sharp. Every week, associates receive printed data, stressing new
products and providing additional data on certain items. Interspersed in the mix are training
sessions hosted by manufacturers.
Dunn finds it difficult to put forward a precise definition of customer service. "It's not just about the
way you treat your customers, or about whether you deliver consistent value. It's those things and
much more," says Dunn. "Our aisles are wide and our stores are bright, and that's part of
customer service. We have interactive displays and an integrated website that gives shoppers the
choice of picking up product in a nearby store or having it shipped ... and that's customer service
too."
Best Buy's receipt envelope, introduced about two years ago, is an example of a small, simple
change that has proven to be very beneficial for shoppers. When shoppers purchase items at
Best Buy, they are handed their receipts in small envelopes. Tucked in with the receipt is
pertinent store information, data about Best Buy's return policies, warranty information and rebate
forms.
Like many other innovative programs and policies at Best Buy, the receipt envelope is a byproduct of customer feedback. "Shoppers claimed that it was difficult to keep all the paperwork
together, especially if they were making several purchases," say Dunn. "This just keeps
everything organized for them. It's so simple, yet shoppers find it so beneficial."
WEBSITE FEATURES
Best Buy's passion for taking care of shoppers extends to the company's e-commerce business,
which was launched last June. Dunn notes that the company invested lots of time in developing
tools that make the site user-friendly and service-oriented. Two features on the site that exemplify
that effort are the Shopping Assistant and the ThinkAbout folder.
The Shopping Assistant uses a drop-down menu format to zero in on the type of item the shopper
is looking to buy. Assuming customers have narrowed their choices but are not quite ready to
make a purchase, they can save their picks in the ThinkAbout folder. Items stored in the
ThinkAbout folder are controlled by the customer and can be easily referenced over and over.
While initially pleased with customer service efforts on-line, Dunn maintains that the Internet
offers great opportunities for Best Buy to expand its service capabilities. The company is
expected to explore real-time web store assistance in the near future.
Back in the stores, Best Buy recently layered on two new software applications that enhance the
customer service initiatives. A front-office application from Clarify debuted in the fall of 1999.
Dubbed the STAR program internally, the application is designed to do a number of things,
including helping the retailer handle customer product service and repairs, as well as the set-up
of complex products.
Using STAR, which can be accessed at the point of sale or with a hand-held scanning device,
employees can easily check in products in need of repair, pass service requests to a service
center and determine how long a repair job should take. It's also possible to quickly ascertain the
status of a service request or the repair history of a product.
Another solution, from SAP Campbell Software, is used for workforce management -- an area
that is closely linked with customer service. The solution relies on advanced technology and
mathematical optimization to weigh millions of scheduling variables in an effort to manage staff
scheduling more efficiently.
Despite all the effort that goes into providing customer service that surpasses shoppers'
expectations, Best Buy executives acknowledge that something is bound to go wrong. The key,
they say, is to try to resolve the problem quickly.
"First-time resolution is the battle cry," says Dunn. "We've empowered our employees to find a
solution for the customer -- and not to create roadblocks. We believe that our ability to resolve
problems quickly is a key measure of our credibility."