For years Best Buy has been the daunting Goliath of the consumer electronics world. With market moving pricing (thanks for killing the entire video segment, by the way!), vast selection and massive buy-now/get-now inventory, Best Buy frequently rolled into towns and quickly dominated other companies right out of business. It's huge, with more than a thousand stores spanning the globe. It's sales are obscene, in the 50 billion (with-a-B) dollar range. It has an ad budget that rivals some country’s GDP (Tuvalu, $31 million) and drop millions each year on Super Bowl spots that cover the globe. And it has so many employees that it can shed over 100 CI company’s worth–650 members of Geek Squad having recently been let go–and barely have it register a blip.
But with all of that, it is failing. (And not all of it can be blamed on 3D.)
Best Buys are becoming sales showrooms for the internet, where customers come in to see the product in action before going off to search for the lowest price they can find; often via smart phone right on the spot. With a tap-tap, click-click, buy-buy and out the door. (Thanks, Best Buy! I got one of these sales from you!) Because when the biggest thing you have to offer someone is a low price, then the guy whose only challenge is to be a bit cheaper easily negates your value.
But on its way down, Best Buy is eagerly scrambling to try and turn things around and save the sinking ship. And many people see that one of their ways to salvation would be getting their operations to a point where they can do what we little guys are already masters of.
This is from a recent business article on twincities.com: “Some analysts think Best Buy's long-term future might rely on turning its business model upside-down. Instead of specializing in selling electronics gear, it could gradually refocus its consumer-electronics business on everything but: instruction, service, support, connections, returns, pickup—all tricky things to do online.”
Tell me if that paragraph doesn’t sound exactly like what you do in your business every day.
We million-dollar-in-sales companies have already mastered and are already delivering exactly what billion-dollar Best Buy is trying to accomplish. And, in my opinion, will never be able to do on the same level that we can.
This could also be called “education.” Typically, big box store education is limited to something like, “Yeah, this wall has all of the TVs we have. See? These ones are big and those ones are, uh, small. I like this one because it’s the brightest. See how bright it is? So, which one you do you want?”
We’ve all heard the stories of clients being told that Plasma TVs were garbage because they run out of gas and need to be recharged (not true) or that a new TV needs a special 240 Hz cable to work (not true) or any number of other “I can’t believe they actually told you that!” fabrications. (Please share any other "classics" you've heard in the comments section.)
Counter that with the amount of time you spend with a potential client before the first dime is even spent in your store. Going over all of the options and possibilities for their new system, explaining infrastructure and aesthetics, often pointing out things they’ve never even considered. “I can control my lights...with my iPAD?! That’s amazing! AND my HVAC? ! AND my door locks?!? Why has no one told me this before?!”
And how much time is spent following the install—the instruction part—going over system operation, tweaking an interface until it works just right, and is easy enough that even the most technophobic member of the family is comfortable?
This Masters level of education among staff is what allows small stores to be regarded as market experts, and what keeps them in business.
Service and Support
A huge part of our company’s success—and just being able to STAY in business during the lean times—is service calls. Four giant file cabinets filled with files of repeat, satisfied customers. Many of them dating years back. These aren't always big jobs. Often the calls are to correct a minor problem, change out a bad component, reprogram a remote, upgrade to some new technology, etc.
But these things all keep us in the client's mind as the go-to-company when any "big" work comes up. And to refer us to any friends that are having problems. "Call these guys, they'll definitely take care of you."
But beyond the “truck roll” service calls, I often help several people a day over the phone at no charge. Holding their hands and leading them through the troubleshooting process—“Is this on? What does this say? Is that on?”—and guiding them to that single, “magic” button press or—more likely—cable box reboot to get their system back up and running.
Think those customers could call in to Best Buy and get someone on the phone to diagnose and determine that their surround receiver had no audio because it was in the “EXT IN.” mode? (The 21st Century equivalent of that infernal Tape 2 Monitor button.) Or maybe because someone had inadvertently turned Speakers A off? Or that maybe the whole, “My system is broken! Help!” issue is as stupidly simple as an IR emitter having been knocked loose? Doubtful.
The difference is that we intimately know the systems that we install. We know how they work and—more importantly—how they’re supposed to work. We aren’t in TVs this week and appliances the next and movies/CDs the one after. We also likely live this stuff in our off time. The most reliable indicator of whether an employee will be successful or not still boils down to this one question: Do you have a home theater system of your own?
Because the ones that do—the ones that are passionate about the gear—are the ones that (historically) have turned out to be the keepers.
I’m assuming this means connecting gear, and not helping clients find Match.com type connections. For installation firms around the country, this is pretty much Job 1. Connecting gear is just par for the course; using the correct, proper length cabling, assigning inputs, configuring speaker distances, channel levels and bass management, making sure all firmware is up-to-date, etc. And then dressing and labeling the wiring so the homeowner isn’t left with a Hydra-battling-Gorgon nest of wiring.
If your company is anything like mine, then you’ve gone behind the work of Big Box installers and seen firsthand the kinds of “connections” that they make. (Here’s some first-hand accounts of 9 installation nightmares for you to ponder.)
Often we find the wrong type of wire, terrible terminations and fittings, wrong settings, and all of the work performed in a hasty, sloppy, don’t-give-a-#$%* manner. The number of HD capable TVs that we’ve rescued from non-HD, composite video, 4x3, 480i connections and settings is too numerous to recount.
Returns and Pickup
My store has almost zero returns. Why? Because we do a great job of educating the client up front and making sure that the product they buy is the product they need and want before we take their money, order the item, and then deliver it to them. When you just push boxes on an uneducated consumer, then what you end up with is people that often don’t understand why they bought something and question if it is the right solution for them. This leads to dissatisfaction and regretting their purchase, which in turn results in returns. When you’ve qualified the person and explained why, out of ALL the other options, THIS is the right product for them for THESE reasons, they are far less likely to bring it back.
And pickup? What’s that? When you hand someone a box, I guess. Because most stores like mine don’t do a lot of pickup; we do a lot of deliver and setup. That way it’s installed correctly. (See “connections” above.) Which also instills the customer with the confidence that their product is working correctly and to its peak potential. Which also cuts down on returns. (Circle of life…or something.)
So, it’s easy to understand why Best Buy would want to tighten up in these areas. Because they are clearly the keys to success.
The thing is, that’s a lot easier said than done.
Have you tried to hire a new employee lately? I have. Just two weeks ago. (Let’s welcome Jerrme to the world of CI, shall we?) And I can tell you, it's not easy to find a single qualified person that can do what we do. And when hiring one good employee is a challenge, think about staffing thousands of stores around the world.
Sure, you could poach other great installers from existing companies, but that is gonna take some serious payola. As Jay-Z says, “Pay us like you owe us…We can talk, but money talks, so talk mo' bucks.” And the Best Buys of the world have been historically stingy in this department. Good people are worth it, and you gotta pay 'em.
Being small, let’s custom install shops remain nimble and continue to adjust to changing market conditions and stay on top of trends and stay staffed with elite crews that can be counted on to deliver an A-1 experience each and every time.
Instruction, service, support, connections. This is where we live. And this is why David will continue to survive against all of the Goliaths out there.
John Sciacca is principal of Custom Theater and Audio in Myrtle Beach, SC.