When Brad Anderson took over as CEO of Best Buy from founder Dick Schulze in the summer of 2002, he inherited a company at the top of its game: Despite the slowing economy, the consumer-electronics retailer had reported four straight quarters of healthy double-digit earnings growth. So it's no wonder the board frowned when Anderson approached it about spending $50 million to begin his "customer centricity" strategy, which would evolve into a companywide focus on developing employees into more customer-oriented leaders, and a transformation of Best Buy's more than 650 stores. Each outlet would serve one or two customer segments, such as home-theater buffs (code-named Barrys) or busy suburban moms (nicknamed Jills), who frequent the store most often.
In addition to revamping the stores for these groups (the Jill stores would have personal shoppers, for instance), the plan calls for training to help employees better serve Jill and Barry, too. The board isn't frowning now: In the first quarter of this year, comparative sales increases for the almost 200 converted stores were twice those in traditional stores, and gross profit margins were higher, too. "The intellectual view underlying the strategy," says Anderson, "is that if you're spending on the talents of the employees and [have] faith that that is valuable enough to the customer, you'll get a return."
See the full 2005 Customers First Awards.