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Circuit City Closing Its Doors Nationwide
Jan 26, 2009

567  Circuit City stores will be closed and an estimated 34,000 employees will lose their jobs. Read Article  .There are many contributing factors to their demise. This was a company that was 60 years old, and had a lot of heritage and history.  They were in an exploding field of consumer electronics, telecommunications and in-home media. They started to experience heavy competition from Wal-Mart and Best Buy.  They found themselves over stored.

To make matters worse instead of building on their relationships with those they served, they made serious mistakes that impacted their customer service:  In 2007 they let 3,000 of their best people go.  These moves contributed to their building a reputation for poor customer service, at a time when Best Buy was emphasizing customer relationships by hiring people who were capable of explaining the features and benefits of computers, cell phones and digital televisions. Circuit City destroyed the loyalty they had built up over their  60 years by disregarding their customers.

Meanwhile, Best Buy is now America’ s largest home entertainment, music and electronics retailer.  Several years ago, much to their dismay, they became well known for their rigidity and dispassionate attitudes in their interactions with customers.  In response, Best Buy instituted a program they call ROWE (Results Only Work Environment).  It was designed to eliminate the bureaucracy that was translating into inflexible rules, and creating customer and employee dissatisfaction.  The result; turnover has fallen dramatically and productivity has increased 35% since 2005.  Further, they dealt with the '"complexity" of the new world of consumer electronics by forming their much applauded "geek squad"; another customer service initiative that brought them much praise.

Two companies operating in the same space, took two different directions in relating to their customers and have achieved two different outcomes.


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