Best Buy Co. Inc.: Customer Centricity

“Best Buy Co. Inc.: Customer Centricity” Case Study

Best Buy business model has started and developed for almost 40 years as “one style fits all” and “everything at the cheapest price”. In 2004 the CEO Brad Anderson decided it was time for a change because he saw customer’s habits changing over time and he was afraid to see his sales slowly declining as it was happening in other business, also due to the growing competitiveness. The new business model was based on clear customer segmentation, great customer service and flexibility and delegation to Store manager and salesmen. The opportunity for Best Buy was to provide a unique service and shopping experience, targeting specific customer segments to encourage retention. Best Buy determined that 20% of its customers accounted for 80% of sales, so they decided to maximize their potential contribution.

Best Buy identified 5 segments of its most important customers and their main characteristics. They introduced segment leaders to deeper understand customer’s needs, shopping behavior and to provide training to salesmen. Special attention was given to business users as they were representing about 30% of total revenue. In order to become more service oriented, Best Buy added new specialized positions such as geek squad, home theater installer and personal shopping assistant.

According to the different region, each Best Buy store would focus in no more than 2 major segments. An extensive training on staff was provided to learn how to deliver customer “complete solution” with attention and know how in order to maximize customer’s potential contribution.

More delegation was given to store managers and salesmen about marketing initiatives and merchandise location in order to get the flexibility needed by the individual stores to be focus on client’s needs,

This big business transformation needed some transition time to allow the whole organization to synchronize to the new strategy. That’s why at the end of 2005 the...