Circuit City Cuts Off Nose, Spites Face
Ian Lurie Apr 17 2007
Circuit City is, of course, imploding. They decided to reduce costs by firing the higher-paid salespeople at their stores.
Kevin Hillstrom at The MineThatData Blog asks whether Circuit City is correct when they state:
“There is no data in the company’s analysis that the service level has dropped due to the absence of the top paid employees.”
There’s no way that Circuit City can provide the same level of service. CompUSA tried the same thing when faced with competition from Best Buy. Now they’re closing some 50-odd stores around the US.
If I were Circuit City, I’d do three things:
- Hire the best salespeople I can find.
- Do a once-a-week, one-hour training session in every store where salespeople get to learn about the latest technology. Make the stereo people listen to a talk about WiFi. Make the computer people listen to a talk about HDTV. Make all of my employees enthusiasts.
- Host a series of â€œwe want you backâ€ events. Invite customers to come meet the staff, tour the stores, and enter for a free HDTV or some such.
Right now, Circuit City is entering a race to the bottom. Best Buy, Fry’s and web-based retailers like Amazon have more cash in the bank. They’ll win that race. So start a new race, based on top-quality service and an enjoyable shopping experience.
Oh, and if the problem is cash, close stores and consolidate. Then follow the 3 steps.
Ian Lurie is CEO and founder of Portent Inc. He's recorded training for Lynda.com, writes regularly for the Portent Blog and has been published on AllThingsD, Forbes.com and TechCrunch. Ian speaks at conferences around the world, including SearchLove, MozCon, SIC and ad:Tech. Follow him on Twitter at portentint. He also just published a book about strategy for services businesses: One Trick Ponies Get Shot, available on Kindle. Read More