How Best Buy Won Over Women

"Solutions" is one of those mushy business-speak words that can set our teeth on edge, but when Harvard Business School professor Ranjay Gulati uses it, it suddenly makes perfect sense.

In essence, Gulati preaches that our job as creators and sellers of products and services is to understand our customers in terms of what problems they need solving, not what products they should buy. This understanding was crucial to a revival at Best Buy, which had learned that although 55 percent of its customers were women, they "loathed" shopping at the consumer electronics giant.

When buying electronics stuff, women want a solution, not a product, Gulati writes.

"Men look for a specific product at a discount price. Women want not just a digital camera, but a printer, cable, and other accessories -- and they care far more about these things than price. Equally important, they want help with installation, while most men prefer to try to put things together themselves."
With this understanding, Best Buy:
  • Bundled related products together.
  • Added play areas for kids to allow moms to browse.
  • Acquired Geek Squad to help with customer support and installation.
Most companies believe they are customer-centric, but are not, Gulati says. When they do surveys with customers the questions are often about satisfaction with products, and desired improvements. But had Best Buy just followed the "what do you like or don't like about our products?" road, it would not have learned what it needed about its customers, especially women, for a revitalization.

What about your company? Are you truly customer-centric? Are you in the business of selling solutions or selling products?

Gulati's post, Inside Best Buy's Customer-Centric Strategy, is the first in a series of blogs from HBS faculty.

Related reading:

Think You're Customer-Centric? Think Again (BNET)

(Best Buy image by Ian Mutto, CC 3.0)