Best Buy’s Growth Plans Neglect Customers July 24, 2008
Posted by Bruce Temkin in Customer experience, EBD #1: Obsess About Customer Needs, Experience-Based Differentiation.Tags: Best Buy
3 comments
Mike Vitelli, executive VP of the Best Buy’s customer operating group, outlined this five point plan for the retailer’s growth:
- Continue to benefit from the CE industry’s steady growth of 6 percent over time.
- Open new stores and develop categories where it presently has limited share. These include Apple computers, a relatively recent brand addition; major appliances, which are benefiting from a differentiated assortment and a dedicated sales force with increased training; and mobile phones, which have been reinvigorated by a new business model developed with Carphone Warehouse.
- Introduce new categories, such as musical instruments. While all Best Buy stores carry a smattering of keyboards and guitars, the company is experimenting with extensive, “top-shelf” collections in several locations around the country.
- Develop completely new business models, such as the planned national rollout of Pacific Sales, the company’s West Coast chain of premium appliance stores.
- International growth. Best Buy has already established itself in Canada, China and Europe, and soon plans to open its first stores in Mexico and Turkey.
My take: None of these 5 points focus on customer experience. So I am very concerned about a degradation of Best Buy’s customer experience.
Later in the article it says: “Separately, Vitelli said the company is working hard to engender more personalized service on the store level in order to combine the scale benefits of a national chain with the hands-on attention of an independent dealer.” But if Best Buy does not see customer experience as one of the core components of its growth, then it will under-invest in this critical area. As it says in the 6th law of customer experience: You Can’t Fake It.
In Forrester’s Customer Experience Index, 2007, Best Buy was ranked #34 out of 112 firms — and 23rd out of 27 retailers on the list. So the retailer needs to adopt the 1st principle of Experience-Based Differentiation: Obsess About Customer Needs, Not Product Features.
I’d like to see Best Buy invest in several areas as a core part of its growth strategy: (1) Product training for employees (similar to The Container Store’s commitment to training); (2) Voice Of Employee systems (to capture and attack problems and issues at the front line); (3) Product selection tools (to help customers make product decisions in major categories); and (4) Improved Web-Store cross channel experiences.
The bottom line: Customer experience needs to be a core objective.
Customer Experience Innovation: As Simple As 1-2-3 February 28, 2008
Posted by Bruce Temkin in Customer experience, Disruptive customer experience strategies, EBD #1: Obsess About Customer Needs, Innovation.1 comment so far
I just published a research report called “Customer Experience Innovation In Three Steps” which describes the following three-step process for creating breakthrough customer experience innovations:
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Uncover the needs. Let’s start with an assertion: In every industry, customers have a lot of unmet needs. Why else would digital video recorders (DVRs) like TiVo gain momentum when there was no shortage of mature VCR options? The first step in the customer experience innovation process is to understand exactly what current and potential customers really need through end user research like ethnography.
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Design a disruptive strategy. After understanding what customers really want, firms need to define potential offerings. Although ideas for new products and services can come from anywhere, firms should consider designing solutions based on one or more of Forrester’s five disruptive customer experience strategies.
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Evaluate the opportunity. Not all innovations are worthy of investment. To decide which ones make sense to fund, firms can use the R-W-W (real-win-worth it) framework. How does this work? Only go ahead with proposals if you can answer “yes” to all three of the following questions: Is the opportunity real? Can you win? Is it worth doing?
The bottom line: Make sure that innovation is on your agenda.
What Do Customers Want? Professor Kano Knows September 5, 2007
Posted by Bruce Temkin in Customer experience, EBD #1: Obsess About Customer Needs, Experience-Based Differentiation.1 comment so far
I’m guessing that many of you weren’t sure what this post would be about given the title. That’s because most people have never heard of Professor Noriaki Kano. But anyone who deals with customer experience (or product development) should definitely learn about his work. Professor Kano is probably best known for creating the Kano Model (developed in the 1980’s) that classifies customer preferences into five categories:
- Attractive (unexpected value)
- One-Dimensional (the more, the better)
- Must-Be (need to have these)
- Indifferent (no impact)
- Reverse (negative impact)
It’s critical that companies understand what attributes matter most to customers — and in what way. By classifying product/interaction attributes using the Kano Model, priorities become much clearer. Here’s how you make decisions:
- Meet the minimum requirement for all of the must-be attributes
- Add value with the one-dimensional attributes
- Infuse a few attractive attributes to really enhance the experience
- Make sure that you’re not investing in any indifferent attributes or creating any reverse attributes.
I included the following graphic about the Kano Model in my report ”Experience-Based Differentiation” because I think it’s important for people to understand this classification system. Here’s the graphic (split into 2 Powerpoint slides) that I showed in the report:
The bottom line: Not all customer preferences are equal. Use the Kano Model to (wisely) pick which ones to serve.
Words Of Wisdom: Stanley Marcus On Customers As People September 3, 2007
Posted by Bruce Temkin in Customer experience, EBD #1: Obsess About Customer Needs, Personas, Words of wisdom.add a comment
Stanley Marcus, who was president and chariman of the board of Neiman Marcus, was quoted as saying:
Consumers are statistics. Customers are people.
I think he was telling us that great experiences need to accomodate the specific needs, wants, and aspirations of individuals — who just happen to also be customers.
My take: Unfortunately, many companies don’t seem to understand this concept. I often find that firms either lack any real understanding of their customers or they rely almost completely on analyses of their data warehouses. That’s why I often find myself telling clients…
“Your customers don’t live in spreadsheets; you need to go out and talk to them to understand who they are as people. That is, of course, unless each of your customers is really a 55% female with 2.3 kids who is 48% from a suburb and is 11% hispanic.”
It’s not that analytics are bad (they’re actually quite helpful), but they don’t provide enough of an understanding of “people” to design and deliver great experiences. That’s why companies should use design personas — as I discussed in my previous post called “Get To Know You Customers Persona-lly“
In order to get a sense of what we mean by a design persona, here is a an example from WHITTMANHART that was shown in an excellent Forrester research report called Best And Worst Of Personas, 2007 by Moira Dorsey (Note: This is only a partial view of the persona).
The bottom line: Experiences need to satisfy individual people, not consumers.
Get To Know Your Customers Persona-lly August 7, 2007
Posted by Bruce Temkin in Customer experience, EBD #1: Obsess About Customer Needs, Personas.1 comment so far
In a recent post, I mentioned a common affliction of many companies — self-centeredness. One of the best ways to beat this problem is with the use of design personas. At Forrester, we’ve published a long stream of research on the topic of design personas that goes back several years (sorry, but the full research is only available to Forrester clients). In a report that we wrote in 2003 — Executive Q&A: Design Personas – we defined design personas as:
A composite description of a real person who represents a primary customer segment. These descriptions contain detailed information on the motivations, goals, and preferences of a representative customer.
Why are design personas valuable?
Design personas help companies make informed, fast design decisions. By creating a shared, vivid picture of target customers’ behaviors, project teams can better evaluate how to satisfy customer needs. The impact: less scope creep from unwanted and unnecessary features, faster consensus across the team, and none of the pitfalls from self-referential design.
How do they work?
Let’s say that one of your design personas is named “Jill Morgan.” The discussions in your company would change from ”I want this” and “I like that” to “what do you think Jill would want?” In this way, design personas push companies to shift their focus from inside-out to outside-in.
There are three key pieces to a good persona:
- Primary research. Valid personas don’t come out of the blue. They emerge from user research — often requiring ethnographic techniques (sorry, but spreadsheets and data warehouses do not provide enough information about your customers).
- Compelling documentation. The research needs to come to life in documents (sometimes online) that help people feel like they ”know” the persona.
- Active usage. Design personas should be incorporated within decision making processes — from initial funding requests through detailed design tradeoffs.
If you’re interested in knowing more about design personas (and I think you should be), then read several of Moira Dorsey’s recent reports:
- Best And Worst Of Personas, 2007
- How To Choose - And Use - A Primary Persona
- Common Persona Misconceptions Debunked
The bottom line: Now that you know about personas, there’s no excuse for self-centeredness!
Your Customers Don’t Really Care That Much About You August 2, 2007
Posted by Bruce Temkin in Customer experience, EBD #1: Obsess About Customer Needs.1 comment so far
Many times when I’m working with companies on their customer experience efforts, I run into the same problem: “self-centeredness.” This isn’t a character flaw of Forrester clients, just a bias that’s shared by many people involved in making decisions about how companies should treat their customers.
What do I mean by “self-centeredness?” It’s when we (it happens to all of us) think that customers look more like us than they really do. It’s a natural bias that people have when they don’t posses a clear picture of their target customers (a more technical term for this type of bias: self-referential design). As a result, companies often make decisions based on the misconceptions that customers:
- Think about their company more often than they really do
- Know more about their products than they really do
- Understand their product nomenclature more than they really do
- Care about how the company is organized more than they really do
- Understand the domain more than they really do
You spend 40+ hours per week in your job and probably another 20 hours thinking about it when your not at work. Do you really think that your customers are spending even a fraction of that time thinking about you? No way!
My advice:
- Keep an eye open for self-centeredness. It’s impossible to totally eliminate personal biases, but if you recognize that they creep into decision making processes, then you can spot and minimize them. But don’t just look for them in what you do — your co-workers are also prone to be self-centered.
- Develop a compelling picture of your customers. If people have a vivid understanding of their target customers, they’ll be less likely to be self-centered. That’s why we often recommend that companies create and use design personas to develop a clear picture of key customer segments (you’ll certainly hear more about personas in my future posts!)
The bottom line: If you assume that your customers don’t know very much about your firm — you’re bound to be more right than wrong.
