Best Buy: Do Numbers Really Matter?

This summer, I am working at Best Buy, exploring leadership in the retail world from the eyes of an employee.

I have continued my work at Best Buy, absorbing firsthand the changes that the novel coronavirus has had on the retail world. While there have been plenty of stores that have continued to suffer due to consumer spending being down, Best Buy has actually thrived, likely because it sells everything that people need right now to adjust to working and going to school from home. In fact, webcams, microphones, printers, webcams, monitors, and even gaming systems have all been low stock of out of stock since March. During their last earnings call, however, Best Buy announced that it has continued to perform well financially. However, since lockdowns have begun to ease in certain areas, Best Buy also becomes one of those stores where people go to just to browse and maybe find something to buy. (I used to do this before I began working there).  This has actually led to traffic levels in the store starting to get close to pre-COVID levels, but while this is great, the number of associates in the store has remained low. I am writing all this to paint a picture of how our stores are experiencing reopening across the country. It comes down to a massive influx of customers with not nearly enough people on the sales floor and not enough product on the shelves. (This also ignores the fact that shipments and online orders from Best Buy have increased by over 200% since this time last year). This leads to long wait times, customers getting upset, and, eventually, issues between associates, customers, and management.

Another piece of context to take into account is how employees are tracked when it comes to their job performance. Primarily I want to focus on the “Front End” department. The front-end umbrella is composed of Customer Service, Checkout Lanes, and Over-the-Phone Support. The Front End also has specific metrics that they are tracked by, including how many credit card applications they process, how much they sell protection plans to customers, and how often they can get people’s phone numbers attached to their purchases. I’ll explain each and show why it sort of makes sense that these metrics exist, and then explain why the metric I haven’t mentioned yet is the least sensible one.

First, we’ll begin with the credit card applications. Any retail retailer that has a store card likely has a metric for their employees surrounding how many cards they are able to convince people to apply for. Home Depot, Kohls, Target, Walmart, Amazon, Lowes, and plenty of other retailers have credit cards, and every time you apply for one and use it, there are benefits for the company. In the case of Best Buy, they are partnered with Citi Bank. This partnership has multiple dimensions, and mutual benefits for both companies, and honestly for the consumer as well. Just to scrape the surface, at the beginning of the fiscal year, Citi Bank basically gives Best Buy a massive loan out to have them as a dedicated store card. The card allows for customers to receive rewards points and certificates (which are not really worth it unless you are spending thousands at Best Buy a year) OR it allows customers to have 0% deferred interest rates for larger purchases (this is the more likely reason customers sign up for the cards). In return, every time a store card from Best Buy is used in-store, the credit card fees that they would normally have to pay Visa are dropped. Also, every time someone applies for a new card, Citi Bank removes a few thousand dollars off of the loan out that is given to Best Buy, reducing Best Buy’s end of the year debt to Citi Bank. On a typical Saturday, my store may have a goal of 14 credit cards. That’s nearly $100,000 wiped off the top of Best Buy’s debt in one store alone. See the benefits?

 

Next, protection plan attachment. While I understand why a company like Best Buy, whose service sector has shot through the roof in the last decade, would want a large number of protection plans sold, it also does not make sense at times. I always get the Geek Squad Protection on my high-end electronics, but that is because I understand what getting this protection plan means. Many customers confuse it for an extended warranty when, in reality, it is an insurance plan. Some items are automatically replaced if there is an issue, like PS4 controllers or most headphones. Some items are sent off for repairs, like TVs and computers. Many customers do not understand the distinction between the two and either believe it is just an extended manufactures’ warranty, or they believe that it is a holy grail and that if they throw their television out the window, we will simply give them a new one (we will not). However, there is no reason to buy a protection-replacement plan that costs $8.99 on a mouse that costs $10.99. Video games are a great example of the failure of these protection plans. Best Buy policy states that we are unable to take an open video games return; however, if you get Geek Squad Protection on it, you can say the game was defective and get a new copy or another game. In reality, very few people return video games, and many skip the protection plan altogether (I have never returned a video game to a store). Yet, when a cash register employee checks out a video game, their metrics go down because they were not able to attach a protection plan to the item.

 

Finally, there is also the metric for attaching people’s phone numbers to their purchases. I actually think this is the most harmless of the group. In my opinion, it is actually beneficial to attach your phone number to your purchases because if you ever lose a receipt, it will be saved under your profile. It also makes online orders much easier, as there is already a profile with your information to simply pull up online. However, there are still customers who do not feel comfortable with having their information in our systems. I don’t believe that employees should be punished because John Q. Customer does not want Best Buy to have his personal info (even though he paid with his credit card).

 

The most notorious of the metrics, however, is what if referred to as NPS, or an employee’s “Net Promoter Score.” The way NPS works at Best Buy is this: you make a purchase, your phone number is attached to that purchase, along with your email. There is a chance that you will receive a survey in your email asking about your experience at our store. You are asked to score between 0 and 10 on two factors, overall experience, and associate knowledge. However, the only time an NPS score is considered positive is if you score BOTH areas an 8. Depending on where you check out, the NPS could affect a specific department in the store, so if you check out in the computer section, then the computer department’s NPS is affected. If you check out at the front register, then the Front End NPS is affected. Also, if a specific associate helps you check out, you are also affecting their personal NPS, not just the department that they work in. One of the most major flaws in the system is that if John Q. Customer has a terrible experience with Associate #1 and a manager calls Associate #2 to help the customer, if #2 checks out the customer and the customer decides to leave a terrible NPS score, then it negatively reflects on #2. You can also imagine how Customer Service’s NPS score may look like when you consider how often people make returns because they are unhappy with their product, and then consider how often people try to make out of return policy returns. (While this may not sound like a big deal, I once had a lady try to return a DVD she bought in 2016 and argued that I should still have returned it in 2020 because she had not opened the DVD and she still had her receipt). Also, remember that currently, stores are working with about half of their sales staff and less than half of the product they would normally have on their shelves. Yet, that does not influence customer behavior or anger. If they have to wait for 10 minutes to see an associate, they’ve waited 9 minutes too long, and their shopping experience has been ruined.

As stores begin to open back up, the consumer experience is something that people will want as a signal for normalcy. It is up to companies such as Best Buy to clearly set expectations on how to model their stores and how much product they are able to realistically have. As recently as this past week, we had customers upset because we had no webcams in stock; I guess not recognizing that the entire country has been buying cameras since March when everyone began to go online to telework. There is an obvious disconnect between the retail world and the consumer world, and I don’t expect that divide to close, but a multi-billion dollar company should also be able to understand what the needs for their stores and employees are, especially for one whose main motto is “Be Human.”

 

NPS: The Ultimate Guide to the Net Promoter Score - Netigate

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