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A recent Wall St. Journal article (subscription required) reports that Best Buy wants to make its worst customers go away. The Inquirer recently had a few words about it, too.

We have a somewhat different take on this.

Best Buy calls its “bad” customers “devils.” Hmmm, what a nice nonjudgmental term! 🙂

Are you a devil? According to the article:

“The devils are its worst customers. They buy products, apply for rebates, return the purchases, then buy them back at returned-merchandise discounts. They load up on “loss leaders,” severely discounted merchandise designed to boost store traffic, then flip the goods at a profit on eBay. They slap down rock-bottom price quotes from Web sites and demand that Best Buy make good on its lowest-price pledge.”

I don’t think anyone ethical would defend the first category of customer. It’s at least understandable that the second category of buyers are gaming the system and often end up taking all the items on sale before regular customers even know they’ll be on sale.

But the third category falls dangerously close to “How dare you use our policies?” Even worse, the article says that up to 20% of Best Buy customers are “bad” customers, and the article implies that “bad” goes a lot further than the above.

“Mr. Anderson [the head of the company] put his chief operating officer in charge of a task force to analyze the purchasing histories of several groups of customers, with an eye toward identifying bad customers who purchase loss-leading merchandise and return purchases.”

That sounds an awful lot like customers who just buy sale items at Best Buy are “bad customers.”

It goes on to say:

“He maintains that Best Buy will first try to turn its bad customers into profitable ones by inducing them to buy warranties or more profitable services.”

In plainer terms, earn your keep or else.

What happens to “bad” customers? Best Buy plans to cut back on promotions and sales tactics that attract the undesirables, and knocking them off mailing lists. There’s nothing terribly objectionable to that.

Word to the Wise: Maybe you ought to double-check the policies of the store before buying anything new there, if you’re counting on price matches or price guarantees. What was the policy before may not be the policy now.

Besides that, though, it also apparently also wants to make the customers it has left more profitable. They want to turn customers into “angels.” Angels are “customers who boost profits at the consumer-electronics giant by snapping up high-definition televisions, portable electronics, and newly released DVDs without waiting for markdowns or rebates.”

“Angels” sound more like zombies with wallets to me, but just how is Best Buy planning to do this?

“Staffers use quick interviews to pigeonhole shoppers. A customer who says his family has a regular “movie night,” for example, is pegged a prime candidate for home-theater equipment. Shoppers with large families are steered toward larger appliances and time-saving products. . . . [At one store using the new approach], on Tuesdays, when new movie releases hit the shelves, blue-shirted sales clerks prowl the DVD aisles looking for promising candidates. The goal is to steer them into a back room that showcases $12,000 high-definition home-theater systems. Unlike the television sections at most Best Buy stores, the room has easy chairs, a leather couch, and a basket of popcorn to mimic the media rooms popular with home-theater fans.”

So salespeople will interview shoppers, and if you’re so unfortunate as to admit you like to watch DVDs regularly, off to the home theater section you go, or so is the plan. Like you buy a plasma every week.

A Wake-Up Call

One silver lining in this cloud is that a policy such as this might tell some people who think they are the most valuable customers in the world that they aren’t.

I see some people talk about themselves as customers like they were deities, that store personnel should prostrate themselves over the extraordinary honor and privilege of selling them something. You often see this when a place misprices an item, it sounds like, “Of course ____ should sell me that $500 monitor for $5. I (who have never spent $100 in the place before and probably never will) am a valuable customer!!!”

Uh, no, you’re not.

My Personal Reaction…

My Personal Reaction

There’s a Best Buy close by. I occasionally go over there. I don’t try to game the system, but it usually takes a sales price to get me over there to buy anything more than a CD, simply because their prices are generally higher than on the Internet, and I have enough patience to wait a few days for anything I might want.

One thing I am not is a zombie with a wallet. I walk into a store knowing what I want to do, and I just want to do it, quickly. For anything above and beyond that, I’m just like Greta Garbo: Leave me alone. Or, if you prefer a more modern version, Get out of my face.

For me, salespeople should not speak unless spoken to. If I wanted to buy a multi-acre TV today, I would have walked over to that section without any assistance at all, and when I ever do that, I’ll probably know more about the systems than the salespeople.

If you don’t want me to buy loss-leading sales items, then don’t sell them. That’s fine by me, no hard feelings. I won’t come as often, but that’s no great loss to you, and that’s OK.

But if you think you’re going to harass me and tell me, unasked, what else to buy in your stores when I’m there for something else because you don’t think you’re making enough money out of me today, well, later.

You know that’s what this policy is going to turn into once it hits the trenches. Salespeople will end up being measured by at least some in the food chain by how many extra sales they can beat out of their customers, and if they don’t do it enough, forget promotions and such. So the salespeople will end up hassling the customers. That’s what happened with warranties, or at least that’s what the employees said happened.

That’s the fatal flaw with this policy, at least for me (and I suspect many others). The store is there for my benefit, not the other way around. Frankly, if I know I’m going to have to go through a gauntlet of salespeople trying to interview me, sell big ticket items to me, or otherwise interrupt and lengthen the time it takes to do what I came to do, well, hello, Amazon. When the day comes when I want that big screen TV, guess who isn’t coming into your store.

In the long run, I think that’s going to hurt Best Buy. They’ll make a mint of out of the 1% of their customers who really are zombies with wallets, and alienate many more other legitimate, reasonable customers who just want to buy one or two CDs or DVDs today.

A Better Solution 🙂

If Best Buy really wants to ensure making a profit from each and every customer each and every time they come in, and they don’t want riff-raff coming in such a great place, why don’t they just charge customers to get in? It works for clubs. If they charged $30 to get into the store, I bet that would keep the FatWallet.com crew away. Far, far away.

Call it Club BB. Get a liquor licence, that ought to improve the effectiveness of the sales pitch. Just change the store hours from AM to PM, add a few chairs and tables, and you’re in business. They sure as hell have enough audio/video equipment for entertainment.

Email Ed

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