Alfred McNair III
A friend of mine shared a graphic that sent me down memory lane. I remembered discussing this "customer-centric" concept back in undergraduate school. Though, instead of Amazon or Airbnb, we were discussing an old derelict at that time known as - Circuit City.
It was spring 2001 and I had paired up with 3 fellow business school students in a semester-long marketing competition. The winning team would present in a state competition, and the state winner was rumored to present their pitch to the executive board of Circuit City.
The goal of the competition was to develop a “turnaround plan" for Circuit City’s marketing department.
In the early 2000s, Best Buy was ramping up massive store expansions and was gobbling up customers from the consumer electronics market. Circuit City was feeling the effects of these losses already and was reportedly contemplating massive layoffs to cut overhead and restructure.
During the competition, most teams focused on visible brand elements and adjustments to the integrated marketing mix. - The kids call it Omnichannel marketing now days 👴🏾
My team was apparently tech geeks and data junkies because our first thought was - ask the customers what they thought.
Our local Circuit City was nice enough to let us set up a survey booth, provided we share the feedback. We also pooled our sad, little, college pennies and paid for a survey that took place in some place called the interweb. I joke, but back then we had to download the survey results to an RTF and print them out to analyze.
Still, we found out that a statistically significant portion of respondents was driven to buy from Circuit City because the salespeople were all product experts.
When customers called or brought in products with issues, the salespeople were knowledgeable and eager to help them correct the issues.
My team presented its findings along with a campaign geared to showcase the Circuit City experts. We developed some creatives that could enhance the point of sale and encourage customers to ask for consultations. Most importantly, we suggested spending money on product and customer service training and suggested outdoor media could be used in conjunction with sending electronic experts to the homes of customers to fix problems.
Worried that our approach would be seen as too "operational" but confident in the research, we presented our 20-page document and 5-slide PowerPoint Deck.
Not only did we lose. We got creamed by our professor. He pointed to the winner's presentation, and the elaborate design work they put into rebranding the company. He pointed to the runner up and the detail they put into developing multiple campaigns to run through the year with extrapolated budgeting and sensitivity analysis.
He told us, we put the least thought into our project of any team and gave us a -C.
I didn't follow up to see how the winners did at the state level. But about a year later, Best Buy announced they were starting a "geek squad." Circuit city went ahead with it's planned layoffs and focused on reducing its store footprint and refactoring its locations strategy. I read an article later that bulleted all of the companies major missteps:
It dumped sales of popular appliances.
When it spun off CarMax, it let a lot of talented management go with it.
Stores became too impersonal and too large.
To please Wall Street analysts, it went on a store expansion spree that resulted in too many stores in dicey neighborhoods.
To save money, it stopped paying commissions to its sales force and then fired 3,400 of its most experienced salespeople.
In the end, they ignored the very thing that was keeping its customers coming back. I caught up with one of my old teammates a few years back. She'd recently been promoted to marketing director at her company and was asking me to join her team. I had a few large consulting clients then so the timing wasn't quite right.
Anyway, we talked over drinks about that old project and Circuit City. She said she'd caught her company recently focusing too much on messaging and not enough on the customer. I don't want to fire shots at anyone so I'll just say, her CEO was much like our old professor and didn't approve of her "operational" approach to marketing.
She left them last year for a nice gig out in San Fran. I'm pretty jealous but proud of her. Her old company... is struggling. I hope they turn it around. But ::shrugs:: at least you and I won't make the same mistake 😁
Thanks for reading,
-Alfred E McNair III