McDonald’s Learns From Best Buy

In the Star Tribune’s recent “Best Buy Copes with Costs” article, they report that Best Buy’s customer-centric format roll-out (and here) has been scaled back 40%.

The customer centricity strategy has its costs. Operating expenses as a percentage of revenue were 2.2 percent higher at the test stores, the company said. But the test stores’ sales and gross profit rates also outpaced traditional locations.

That’s right – even with slightly higer operating expenses, Best Buy has dramatically increased sales by focusing providing an excellent experience to specific customer segments.

In a related development – McDonald’s has also declared that one brand experience doesn’t fit all

“…no single ad tells the whole story,” Larry Light, McDonald’s chief marketing officer.

He continues:

“We don’t need one big execution of a big idea. We need one big idea that can be used in a multidimensional, multilayered and multifaceted way.”

There you have it – 2 big names declaring mass marketing is not longer effective and moving their organizations to a more individual customer experience model. Is this the end of mass marketing and the return of local specialization and identity as Seth Godin recommends? I hope so.

One Reply to “McDonald’s Learns From Best Buy”

  1. Individualization is the key to “mom and pop” stores. The whole idea behind Best Buy and the Customer Centricity is that they want that feeling of someone feeling important to a company for every customer that walks in its doors. Besides being a $30B company, BBY just wants its customers to know that its focus is no longer on product, but on people.

    Now another great aspect of the new Best Buy that everyone is forgetting, Best Buy is putting a lot of the new decisions into employee hands. Its a great miniture entrepreneurship so that employees (line-levels) can test out their business skills. BBY realized that corporate may lead the company’s stockholders, but part-time and full-time employees lead the customer loyalty.

    Being a part of the change as a BBY employee is a great thing. They are basically saying, “So you ahve an idea. Great. Get it together and let’s see how it goes.”

    What a concept… improve customer loyalty and employee loyalty.

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