Best Buy CMO Barry Judge recently spoke at the Minneapolis College of Art and Design (MCAD) about the future of advertising. This conversation was especially interesting because for the first time in the company’s history, Best Buy announced it would be laying-off hundreds of workers and closing 50 stores. Moreover, Standard & Poor’s Ratings Service placed the electronics retailer on credit watch, threatening to drop its BBB- rating to BB+–equivalent to junk status.¹
While customers complain about its less-than-knowledgeable and pushy sales staff, Best Buy is facing mounting competition from online retailer Amazon.com. This is no surprise, as Amazon has become the model of the future of online engagement marketing.
Amazon has done this by creating a near perfect user experience, offering customer product reviews, shipping discounts, their own credit card with bonuses, Amazon Prime membership, 1-Click ordering, and product forums. These are all effective ways get the customer involved in the buying process.
Much more than an e-commerce site, Amazon’s goal is to create a user experience that people will want come back to again and again.
It is in this context that I read much of Barry Judge’s comments. Here are some of his main points:
FORM DEEPER CONSUMER RELATIONSHIPS
Judge recognizes the critical need to listen to consumers in order for Best Buy to provide a better customer experience. He wants to create a passionate online user-base that will defend Best Buy against negative reviews and deflate online criticism.
In short, Judge recognizes the power of user-generated content (customer reviews, testimonials, case studies) especially to the Millennial generation. Accounting for 25% of the US population, the Millennials are estimated to be the largest consumer group in US history.
Given their use of social and mobile, user-generated content is especially important to Millennials. In fact, more than 80% say user-generated content from people they don’t know influences what they buy and indicates brand quality, with 51% admitting it is actually more important than the opinions of their friends and family.
BUILD BRAND TRANSPARENCY
With the power of social media on the rise, companies can’t afford to pass off shoddy products and customer service. In our consumer-driven era, companies need to operate transparently. Recognizing this, Best Buy is planning on providing consumers all warranty usage data so they can make informed decisions.
They are also setting up an Intranet social network for employees to encourage employee feedback and ideas. This will not only help Best Buy with employee retention rates, but likely turn employees into brand advocates. After all, Best Buy CEO Brian Dunn started as an in-store sales rep.
TURN WEBSITE INTO INFORMATIONAL HUB
This inbound marketing 101 best-practice establishes a brand as a trusted resource as well as an industry thought leader.
To this end, Best Buy wants to invite top industry bloggers to post objective informational content their audience will find informational and useful. This will help build transparency and establish Best Buy’s website as a go-to place for information much like Amazon.
CREATE 360-DEGREE CUSTOMER EXPERIENCE
Best Buy wants to create a complete 360-degree customer experience that starts with online search but ends with a positive in-store experience. They can do this by encouraging user opt-ins to their rewards programs and social media channels at check-out.
Apparently Best Buy doesn’t make big margins on retail sales, but rather on mark-ups to manufacturers. To the extent they can create an online user experience that drives repeat traffic to their website, Best Buy can earn additional revenue by cookie farming, i.e. collecting accurate buyer behavioral data from consumers, and sell this data to their manufacturers. Cookie farming is an increasingly widespread revenue stream for many companies with large online followings.
Responding to changing consumer demands, top executives from Fortune 500 companies such as Best Buy understand they must listen to consumers and engage them on their terms or be left behind.
How are they doing this? By implementing fundamental inbound marketing principles:
- Re-tasking their website into an online marketing distribution hub that provides content their target audience finds relevant;
- Blogging to publish useful information that solves pain points and establishes thought leadership;
- Encouraging user-generated content and social media to build brand advocacy, control messaging, and engage more deeply with consumers.
There is a major sea change happening in marketing today. I liken it to a tsunami: you don’t see it coming until it’s too late. As inbound marketing leader Hubspot’s CEO Brian Halligan noted in a recent interview with Forbes magazing, “Traditional marketing is going to get obliterated in the next ten years. The whole industry is just going to get ripped apart.”
By the looks of it, CMO Barry Judge agrees with this assessment, and is doing his level best to make sure Best Buy doesn’t get swept up in the inbound marketing tsunami.
How is your company adjusting to the inbound marketing evolution?
¹ Forbes, “As Best Buy Closes 50 Stores And Faces Threat of Junk Bond Status, Richard Schulze’s Fortune Shrinks…Again”