Monday, November 24, 2008

Good CRM Wasn’t Enough

It seems a shame to start off the week with a downer — especially after last week’s election excitement — but there’s bad news from the B2C consumer electronics sector. In case you haven’t heard, Circuit City has filed for Chapter 11 bankruptcy protection (Steve Gelsi of MarketWatch has it here). Normally this wouldn’t be worth mentioning here, since on the surface the reasons are economic in nature and the bulk of our coverage goes to B2B concerns, but I felt there was something worth saying.

Not long ago I mentioned a retailer in my Pint of View column that had completely turned its sales and customer-service practices around. I left the name of that retailer out on purpose, but it was Circuit City. I used to loathe that store, as evidenced by the unprintable name I used for it in conversation (hint: the second word still sounds a lot like City). The change they pulled off in the last few years amazed me. CC wasn’t perfect — the perfect electronics retailer doesn’t exist — but the chain made the effort to treat customers like something more than cattle, and I appreciated that effort. The 24-minute pickup program they instituted also deserved kudos.

Now Circuit City is headed for receivership, and some are saying one reason is that they weren’t selling. (From the MarketWatch article: “Circuit City had been hurt by having stores in less-favorable locations than those of Best Buy Co. … by increased competition from the likes of Wal-Mart Stores Inc. … and by an earlier move to lay off higher-paid staff who were able to push more profitable sales, according to industry observers.”) My personal experience with Circuit City tells me this isn’t the case. The higher-paid staff couldn’t have sold me a pack of batteries back in the day — they’re the ones who turned me off of the chain in the first place. The people they have today really seem to have a handle on low-pressure, consultative sales, and the stores (including the checkout lines) are always busy when I see them.

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