Filed under: Customer Feedback
Circuit City is sliding faster and faster down the slippery slides of a porcelain bowl. Why? Two basic choices: 1.) Circuit City self-destructed from assuming customers are stooges who will put up with whatever stores dish out; or, 2.) Best Buy has eaten Circuit City’s lunch, every crumb of it, by meeting customers half-way.
Currently, Circuit City is trying to fend off an unwanted if not technically hostile takeover tender from Blockbuster. Venture capital firm HBK, with almost 10% ownership of CC, is pushing management to be more receptive. And HBK itself has said it might enter the fray in an attempt to take the chain private. But you know what? In traditional fashion, both parties are apparently viewing CC’s troubles as financial. Too bad financial suffering’s the symptom not the cause—the cause being either : treating customers so horribly that buyers gave CC the “rats leaving a sinking ship” treatment; or, suffering so badly in customer relations relative to BB that customers went where they could get more respect.
Hey, either way, customer relationships are the root cause, so who cares?
Potential buyers had better care. “Just” reversing bad customer relationships to become “above average” can be accomplished. BB itself proved that with a near miraculous recovery from being on customer black lists. But gaining parity with BB will require becoming well above “above average” with customers—and for potential acquirers wanting a relatively quick cash out on buying CC, that should be a big red flag. That would be a miraculous recovery, one requiring heavy investment in CC’s business.
No matter. Almost any entity that does the deal will have its nose stuck in spreadsheets, with the customer aspects of the business just a minor factor.
Know what? I hope whatever buyer “wins” CC gets fried for forgetting about customers. Which will happen.
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