After posting this somewhat old story (which I somehow totally missed), it will likely seem that I am not a big fan of Best Buy. ![[© 2003-2006 Best Buy]](http://dustin.eponym.com/_photos/BBlogo.jpg)
The truth is different though: not more than a few years ago, I spent a fairly ridiculous amount of time drooling over high-end electronics, compiling a list of DVD's and CD's I wanted, and generally wasting time with my like-minded buddies in our own local Best Buy. We also were distinctly aware of the Sunday Best Buy Ad in our local newspaper. We would nearly fight over the chance to have the first look at this deal-filled piece of paper. If there was really good deal on something, we would rush to the store, as soon as possible, to buy whatever it was that we didn't really need. We did this simply because it was “such a good deal”. However, a few things I experienced there make a lot more sense to me now that I have read this article I found on R. Alex Whitlock's blog whom got the below quotes from “The Customer Isn’t Always Right”, Gary McWilliams, The Classroom Edition
of The Wall Street Journal, January 2005. :
(Mr. Anderson is the CEO of Best Buy)
consumer-electronics giant by snapping up high-definition televisions,
portable electronics, and newly released DVDs without waiting for
markdowns or rebates.
The devils are its worst customers. They buy products, apply for
rebates, return the purchases, then buy them back at
returned-merchandise discounts. They load up on “loss leaders,”
severely discounted merchandise designed to boost store traffic, then
flip the goods at a profit on eBay. They slap down rock-bottom price
quotes from Web sites and demand that Best Buy make good on its
lowest-price pledge. “They can wreak enormous economic havoc,” says Mr.
Anderson.
Best Buy estimates that as many as 100 million of its 500 million
customer visits each year are undesirable. And the 54-year-old chief
executive wants to be rid of these customers.
Mr. Anderson's new approach upends what has long been standard practice
for mass merchants. Most chains use their marketing budgets chiefly to
maximize customer traffic, in the belief that more visitors will lift
revenue and profit. Shunning customers — unprofitable or not — is
rare and risky.
So basically, I'm a devil, because I am/was a frugal shopper (or I like to think I am). The truly interesting story here is that the “Angels” and “Devils” are treated totally differently by the Best Buy employee's… and that treatment is encouraged:
desirable customers according to their shopping preferences and
behavior. High-income men, referred to internally as Barrys, tend to be
enthusiasts of action movies and cameras. Suburban moms, called Jills,
are busy but usually willing to talk about helping their families. Male
technology enthusiasts, nicknamed Buzzes, are early adopters,
interested in buying and showing off the latest gadgets.
Staffers use quick interviews to pigeonhole shoppers. A customer who
says his family has a regular “movie night,” for example, is pegged a
prime candidate for home-theater equipment. Shoppers with large
families are steered toward larger appliances and time-saving products.
“Culturally I
want to be very careful,” says Mr. Anderson. “The most dangerous
image I can think of is a retailer that wants to fire customers.”
From the reading I've done about this whole thing, it comes down to one simple truth: dumping the 20% of customers referred to as “Devils”. What a strange and delightfully interesting way to do business.
The only question I have remaing is how do they dump all the “Devils”?
Tagged: best buy angel devil
July 19th, 2006 at 1:34 pm
Customers who go for deals and sales shouldn't be put in the same category as those who frivously return products for whatever reason.
July 19th, 2006 at 2:17 pm
I agree. That's what doesn't make sense. Wonder if this policy is still in place? I wish I knew someone who worked at Best Buy.
- Dustin