Wednesday, January 26, 2011

Best Buy's CEO learns to love social media

Here's another good one from the Harvard Business Review.

Brian J Dunn at a press conference in New York

It features Brian J Dunn, CEO of Best Buy (@BBYCEO) sharing his 'How I Did It' experience with social media in general incl. the practical (and successful) use of Twitter. Of how they transformed their customer support team (Geek Squad in blue shirts) into @TwelpForce - a 24/7 hotline of technical experts via Twitter, which increased sales and brand value!

What I found interesting is... here's the CEO of Best Buy, one of USA's largest consumer electronics giants, and the title modestly goes "Brian J Dunn... Learning to love social media". (learning to love?)

The article could easily have been titled "Best Buy shows the way forward!" Their landmark Twitter effort (best use of social media in retail customer service) won the Cannes Lions 2010's Titanium & Integrated Grand Prix - the pinnacle of advertising & marketing creativity in the world. It's like winning Best Picture at the Oscars! Watch the Cannes Lions TwelpForce video here.

Here's the link to the article on (but that's only a sample.) Read the full article below:

How I Did It: Best Buy’s CEO on Learning to Love Social Media
by Brian J. Dunn, CEO Best Buy

I was on an overseas business trip early this year when my phone began ringing at 4 AM. The first person to reach me was Best Buy’s VP of operations, but she wasn’t the last—I received a quick series of panicked calls. The “crisis” we needed to manage involved my Twitter account. Ordinarily, I tweet on a variety of subjects—my experiences in Best Buy stores, my kids, even my thoughts on the Minnesota Twins. But this morning my coworkers back in the U.S.—and my 5,000 or so Twitter followers—had read a rather unusual tweet from me: “I’VE BEEN HAVING A LOT OF GREAT SEX LATELY, AND HERE’S WHY.” It was followed by a link to a website, presumably one offering male enhancement pills. Obviously, I’d been hacked.

It was embarrassing and irritating. I felt violated. Like many people, I’d been using a password that was easy to remember because it was based on something in my life. We never figured out who got into my account, but it shouldn’t happen again: Having received help from my IT team, I now use well-constructed, tortured passwords, and I change them every three weeks. Nobody likes being this security-minded, but it allows me to stay out there online.

Getting hacked wasn’t the only negative experience I’ve had with social media, but I’ve never considered pulling back from using them. That’s the key point: You can’t just dabble in social media. You can’t use them only when things are good. You have to deal with rain as well as sunshine. And I’m convinced that the upside outweighs the downside. I’m a heavy user of Twitter and Facebook, and I learn a lot from the time I spend on those platforms. I interact directly with customers and employees. I watch trends and see news I’d miss otherwise. Ultimately, I believe that Best Buy’s message has to be where people are. Today, that means being on social networks.

Many CEOs disagree. You’d be amazed at the number of people I talk to—people who run big businesses around the world—who think social networking is just a fad, or that what you see on Twitter and Facebook is simply clutter. It’s not. If a company, or even its chief executive, doesn’t have a presence on social networks today, that company risks not being in the conversation at all. Over time, I believe, that can be fatal to a business.

Late-Night Tutorials

Social networking is merely the latest technology trend that I’ve seen take hold during my time at Best Buy. I started working at the company in 1985, when it had only nine stores. Back then, the business was all about console televisions, VCRs, and CD players. Camcorders were just beginning to come on the scene. The business had nothing to do with computers—Best Buy didn’t start selling PCs until the early 1990s. By the middle of that decade, however, we could see that the internet was gaining traction, and we began to think about e-commerce.

At the time, I’d recently been promoted to regional manager. I’d relocated to Columbus, Ohio, and I was running our stores in the Rust Belt—Indiana, Ohio, Pennsylvania. That was the era in which I became utterly fascinated with the internet. We now had access to all these data—even if they weren’t yet packaged in a readily usable form. I spent a lot of time cruising Prodigy. Best Buy sold a service called Onramp that provided access to the internet, and I used that, too. I’m an autodidactic internet guy—I taught myself a lot about it, surfing at night. The next thing I’d know, it would be two or three o’clock in the morning. Time would fly by, because I had all this new stuff at my fingertips.

Some pundits were saying that the internet would kill off brick-and-mortar retailers like Best Buy, but our thinking early on was that e-commerce would complement stores and shopping would become a multichannel process, because the products we sell really need to be experienced. That turned out to be correct: Today our website influences more than 50% of our in-store sales, and about 30% of customers who order online opt to pick up their purchases in a store.

* Best Buy Vital Statistics *
Founded: 1996
Retail Locations: 4027
Current Employees: 180,000
HQ: Richfield, Minnesota
Fiscal 2010 Revenue: $49.7 Billion (as on 27 Feb 2010)
Fiscal 2010 Net Earnings: $1.3 Billion

It’s striking how central the internet has become in our lives since those days. People want the information; they want the services; they want the entertainment and the connection. Even during the worst part of the recession, customers were buying digital devices at Best Buy—that business continued to grow at a double-digit rate. Since 1995 the internet has become a utility, much like electricity. People no longer view it as a discretionary expense, even in tough times: It’s essential.

I became interested in social networking four or five years ago. Back then it was a personal interest, not a strategy. I joined Facebook and found it interesting on a number of levels. One of the things that grabbed my attention when I joined was how quickly many of our employees “friended” me. Facebook turns out to be a very relevant way of connecting with our employees, given the company’s demographics. Today I’m maxed out at 5,000 Facebook friends, most of whom I’ve never met. And I’m still astonished at the things that people reveal about themselves. A couple of days ago, one of these friends posted a status update that he couldn’t believe how much he’d had to drink the previous night and he hoped not to do it again—at least not until the coming weekend. This is what you want to say about yourself in public? Still, it’s fascinating.

Twitter took longer to get used to. In the beginning I was terribly self-conscious about tweeting. I’d read so many banal tweets about everyday activities—“I’m having a taco”—that no one cares about. I had to get comfortable with the idea that Twitter is a way to let people know what’s on my mind and that tweets could be genuine extensions of my thinking. When I tweet, I know I’m communicating with my employees. I pass along the good things that I see in a store or hear about a customer’s experience, and people are thrilled to know that I’m hearing good things about them. I like the immediacy of talking to folks. I like that it’s sometimes mundane—not everything I do is necessarily deep or earth-shattering. I’m interested in baseball and basketball and my kids. I like how posting about these things allows us all to be humanized a little bit.

Sometimes people ask me if I have an intern or a staff member handling my Twitter account. I don’t. I do get help in writing posts for my Best Buy blog, but on Facebook and Twitter, it’s all me.

Moments of Serendipity

These sites have changed the way I consume media. On Sunday mornings at home, my wife reads the newspaper, but I open up my iGoogle page, which has RSS feeds of everything I’m interested in. My news is totally customized. I check Twitter trends every day to see what people are talking about. And I routinely click on links posted by people I follow. Twitter takes me to new places and to publications I’d normally miss or not read because there are only so many hours in the day. Newspapers are still good partners for Best Buy, but I don’t have to read them anymore.

These platforms also let people get in touch with me directly, which can provide moments of serendipity. Here’s one example: On Memorial Day, I tweeted a simple thank-you to U.S. service members for all they do, and particularly thanked Best Buy employees who are making sacrifices to serve in the military reserves. A few minutes later I received a note from Jen Whitacre, a product specialist in one of our stores in Missouri. Over the next hour we e-mailed back and forth through Twitter. She told me that her fellow employees in the store had put together a technology system—using a laptop, a webcam, and Skype—that lets her and her three young children talk with their father, a soldier in Iraq, every night. It’s a vivid example of how the connectivity that Best Buy employees help facilitate really can improve people’s lives. I ended up sending our film crew down to Missouri to capture Jen’s magnificent story, to illustrate to our employees the importance of their work. Without Twitter, I never would have connected with Jen.

I don't care... I need an iPhone 4! (contains rude language but is hilarious!)

A very different sort of connection occurred last summer, when one of my Twitter followers sent me a link to a YouTube video that featured animated characters talking in funny voices. One character was a salesperson at “Phone Mart,” and the other was a customer who absolutely had to have an iPhone. The video made the customer look stupid. I thought it was very amusing satire. It was edgy, and I can see why the language might have offended people, but it tapped into the fact that we’re all very aware of what badge we’re displaying when we carry our smartphones. The brands really matter to people. By the time I saw it, the video had been viewed 1.5 million times. Today it’s been viewed more than 9 million times!

Blogosphere Drama

That Twitter link to YouTube indirectly alerted me to a problem. The video didn’t mention Best Buy, but it was created by a Best Buy associate. I soon learned that he had posted several other videos in which Best Buy was specifically mentioned—in ways that weren’t flattering to our customers. Those videos were taken down, but the issue quickly became a big blogosphere drama about whether Best Buy was going to terminate the employee who created them. We did suspend him for several days while we looked into the details. Ultimately, we invited him back to work, but in the meantime he’d decided to pursue a career in filmmaking.

The whole experience was awkward. A lot of people said negative things about a company I love, and I wish it hadn’t played out on such a public stage. My reaction to the incident was similar to how I felt when I got hacked: You don’t enjoy it, but you have to be out there online, and there’s no way to put this genie back in the bottle. What you can do is try to educate employees about what’s appropriate to post and what’s not, what’s intellectual property and what’s not.

Last year we put out a social media policy that applies to all employees. It requires them to disclose that they’re Best Buy employees if they’re discussing the company online. It requires them to keep nonpublic financial or operational data private. “Basically,” it says, “if you find yourself wondering if you can talk about something you learned at work—don’t.”

Really, a lot of the guidelines are just common sense. For instance, manufacturers like Hewlett-Packard and Samsung regularly show our employees prototype devices that aren’t public yet, and it’s wrong to post pictures of them—it violates the arrangements we make with our suppliers. When I post things, I always remember that I have a responsibility to 180,000 folks who work in our stores. I don’t say or do anything that I wouldn’t want to see published in a newspaper.

A Virtuous Circle

Mostly, though, I tend to focus on the positive aspects of social networking. I get asked all the time, “How are you going to monetize this?” I think that’s the wrong question. The right question is “How am I going to deepen my relationship with customers and employees and deepen the conversation that goes on where they are?” Right now social networks are an important part of the answer. Today when people buy a new device, they often “crowdsource” advice by asking for recommendations on Twitter or Facebook. That practice will become more and more influential over time.

As an electronics retailer, we know that there’s a virtuous circle here: The more people become involved in social media, the greater the demand for connectivity and the PCs and mobile devices that deliver it. So social media are absolutely core to our strategy. I believe that our company is best positioned to give consumers these latest and greatest technologies, and our Geek Squad and our men and women in blue shirts are there to put solutions together for people.

In fact, we’re even using social media to help provide those solutions. On Twitter we have a feed called Twelpforce. Customers can post about their tech problems, and Best Buy associates—or other Twitter users—can post solutions. By monitoring the feed, we’re able to learn a lot about what our customers are doing and to help them with problems in real time. We’re providing advice to the public at no charge, and some people think that’s a mistake, since we also operate Geek Squad for a fee. But I reject that notion: Twelpforce makes us more valuable and connected to our customers, and that’s the only sustainable way of building customer loyalty over time. People are going to shop with companies they think really care about what it is they’re trying to do. Twitter lets us demonstrate that we’re one of those companies.

“Be Smart. Be Respectful. Be Human.” (edited excerpts from Best Buy's social media policy)

Guidelines for functioning in an electronic world are the same as the values, ethics and confidentiality policies employees are expected to live every day, whether you're Twittering, talking with customers, or chatting over the neighbor's fence. Remember, your responsibility to Best Buy doesn't end when you are off the clock.

Disclose your affiliation: If you talk about work-related matters that are within your area of job responsibility, you must disclose your affiliation with Best Buy.

Honor our differences: Live the values. Best Buy will not tolerate discrimination.

Never disclose nonpublic, financial or operational information, internal communication regarding promotional activities or inventory, or personal information about customers.

Basically, if you find yourself wondering if you can talk about something you learned at work - don't. Just in case you are forgetful, here's what could happen. You could get fired, get Best Buy in legal trouble with customers or investors, or cost us customers.

Remember: Protect the brand, protect yourself.

So as the holiday season approaches, I’ll be tweeting frequently. I’ll be talking about how pleased I am with the job our folks are doing. I’ll be talking about the hot products I’m most excited about. I’ll be sharing my impressions as I visit stores. And I’ll probably wax poetic about family and friends and other things I care about. The reality is that social media are where the national conversation is taking place today—and either you’re part of that conversation or you’re not.

To read the latest thoughts from Brian Dunn on Twitter, go to
--- Brian J Dunn has been Best Buy's CEO since June 2009 ---


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