Dick Smith Electronics made headlines last month when it announced it was in receivership and would be closing all of its stores. That’s 300 stores and 3000 employees across Australia and New Zealand. A store selling consumer electronics and a well-known and established brand, in a market where competitors are growing. Why did it fail so badly, and could it have been prevented?
Clearly there are lots of factors at play – and I do not intend to explore them all in this short post. What I am interested in is how customer feedback could have been used better, to stop and reverse the decline of the company. Imagine the difference if the CEO had actually been able to have conversations with customers on a daily basis. Imagine if he’d been able to ask them about their impressions. About how they perceived DSE competitors and about what they tell their friends about DSE. And imagine if frontline staff had been asked what they think could be done to make things better for customers.
Imagine the difference if the CEO had actually been able to have conversations with customers on a daily basis. Imagine if he’d been able to ask them about their impressions. About how they perceived DSE competitors and about what they tell their friends about DSE. And imagine if frontline staff had been asked what they think could be done to make things better for customers.
Companies do not fail overnight. They bleed slowly over a long period of time. Frontline staff and customers are the key people to ask about why that is and about what can be done to make things better. I’m pretty sure that staff at any of the retail stores could have told you exactly why DSE was doomed. And customers will all be able to tell you why they shopped at competitors instead, or why they left DSE feeling disappointed.
Looking through twitter feeds, blog posts and Facebook threads on the subject (of which there are many) common themes seem to be price and stock. Generally Dick Smith products were more expensive than competitors and the stock they carried was not what people were looking for.
A customer voice feedback programme, designed to explore these perceptions, could have helped point DSE in the right direction, and this was needed a long time ago. Listening to customers and empathising with them is the key to understanding what you’re getting right, and where you’re failing to cater to your customer base. To be successful you really do have to understand the needs of your customers. It’s impossible to be successful in 2016 if you don’t! If your products are consistently priced higher than your customers are expecting – that’s a problem that needs a solution. If your “own brand” products are perceived as cheap, inferior, uncool – that’s a problem too. And if your customers are consistently choosing your competitors you need to understand why!
Listening is key to success. Gathering feedback is not enough. Listening, sharing and acting on it is the best insurance policy you can have to ensure your continued success as an organisation.
Dick Smith observed sales figures declining over a sustained period. But they were not able to gain a deep understanding of why this was, and is was that very insight and understanding that could have saved them.
.png){kind=small}