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Good To Great To Gone: Circuit City

March 12, 2009 By

For those who have read Jim Collins’ book “Good to Great” (Amazon link), you’ll remember that Circuit City was used as one of the select examples of “good to great” companies. If you haven’t read the book, I can definitely recommend it.

Circuit City basically dominated the stock market—beating average performance by 22 times at its height—for a 15+ year period. However, one of the key traits of a “great” company is that it’s able to withstand setbacks, whether personnel-wise, economic or other. This hasn’t been the case with Circuit City as it closed its doors last week after filing for bankruptcy in late 2008. This obviously baffled me and I’ve tried to find answers to how this happened. In the end, it boiled down to losing the competitive advantage:

  • Their branding model didn’t work anymore. The goal of Circuit City was to become the best at service, selection, savings and satisfaction. However, other market players had mastered one or multiple of these categories in a better way than Circuit City: Best Buy (service and selection), WalMart (savings) and Amazon.com (satisfaction). As a result, Circuit City failed to gain a competitive edge.
  • Circuit City had a tradition of paying their employees well and training them to deliver the best possible service, but cost cutting procedures led to stripping sales commissions from sales staff and eventually to layoffs of these well-paid and knowledgeable employees. This also hurt their competitive advantage.
  • The economic recession wasn’t a key driver but it does magnify the effects and was strong enough to push Circuit City over the edge.

In essence, Circuit City destroyed its business by destroying the underlying foundation on which it was built and failing to reinvent itself.

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Social Media And Your Customer Contact Cycle

October 19, 2008 By

With every product/service you’re marketing, selling and servicing, you’ll have a customer contact cycle. The customer contact cycle consists of touch points that represent moments of interaction (contact) with your consumer. There are roughly four stages:

  • Awareness: When a consumer is first exposed to your product. Examples are reading a review or seeing an ad.
  • Interest: When a consumer becomes interested in purchasing your product/service. Examples are visiting the shop or trying out the product.
  • Purchase: When a consumer buys your product/service.
  • Service / Re-Purchase / Renewal: When a consumer comes back with a problem or with an intention to re-purchase/renew.

Social media provides new opportunities to enhance the customer contact cycle with new customer touch points. Using tools like Facebook and Twitter, it’s possible to have a continuously open channel with customers. Leverage social media as customer touch points to increase interaction with current and prospective customers, create an open brand image and enable cross-selling and up-selling.

Take advantage of social media to enhance your customer contact cycle.

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Social Media Is The MMA Of Technology

June 15, 2008 By

I like Mixed Martial Arts (MMA). While some people see MMA bouts as glorified cock fights, I can appreciate the idea behind it. MMA is what it says it is: a blend of various martial arts.

In the same way, social media can be seen as a blend of various diverse technologies, such as publishing platforms, social networks, web applications and search. Being a proficient social media practitioner requires mastery of multiple disciplines.

Are you a black belt? Go through the various social media disciplines. See where you can sharpen your skills to improve overall performance.

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Hello, Is There Anybody Out There?

April 20, 2008 By

When you’re broadcasting messages to people, do they listen? Do they respond to your ads, do they click on your links, do read your newsletters, et cetera? If the results are underwhelming, try some of these approaches:

  • Content: Rewrite the content to be more about them than about you. While messages should cover what you’re promoting, they should also emphasize the benefits to users. Scrutinize your content and check whether its relevance is high enough for your audience.
  • Form: Experiment with different types of headlines to different audiences. The headline of a press release should catch the attention of a journalist, but at the same time, it might not be enticing enough for a consumer. Play with the layout and the use of images to make your message more attractive or reader-friendly. Make use of consumer (eye-tracking) studies to see what areas should be focused.

Don’t be afraid to throw spaghetti at the wall and see what sticks.

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The Evolution of Content

January 20, 2008 By

We’ve come a long way in how content is being presented. Whereas content used to be published by predominantly professionals, consumers are now able to publish content themselves. The form of content has also evolved from a more broadcasting-oriented form to a more dialogue-oriented form.

Traditional media, such as TV stations and print publishers, are seeing consumption decline as consumers choose consume their content from a more diverse set of channels. Traditional media agencies, such as advertising agencies and PR agencies, are scrambling to keep up and justify their value/existence/involvement. Sometimes, the old business models won’t work in this new day and age, sometimes the talent isn’t available to deal with new media forms or the current regime is reluctant to change or in denial about the consequences. None of these are good reasons to continue “business as usual”. The world is changing and it requires a new approach.

Start preparing yourself to cope with the evolution of content.

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