Best Buy Default.
I love making predictions. When I started disagreeing with Barry Judge, CMO of Best Buy, a few years ago about marketing and brand management, implicit in that disagreement was that Best Buy would have earnings troubles. You see, Mr. Judge jumped on the pop marketing band wagon proclaiming “companies don’t own brands, consumers do.” My response was this view was lazy and opened the door for disorganized brand management. Even a number of P&G digitists were agreeing with this fallacious notion.
Best Buy’s net income is down 30% this quarter, all due to price cutting. If your name is Best Buy and you ask customers what they want they’ll say “coupons and low prices.” If you don’t create another value for your customers they default to price. And when customers default to price you’re not marketing, you’re simply selling.
Mr. Judge and his army of Twelpforcers and sales assistants needed a plan. They were in the right neighborhood (providing assistance), but bounding about without a motivation. Had they a plan, had someone at the top managed the brand rather than turned it over to the masses, Best Buy would be killing it now as we slide step out of recession.
The good news for Mr. Judge is it’s not too late to fix this thing. He has more data, more inputs and more mindshare than he knows what to do with. If he organizes his house with some serious brand management chops, next year Best Buy won’t be covering up price tags to fend off the smartphone price scanner apps, they’ll be smiling with gold teeth. Peace.