Public Perception Is Influenced by Internal Brand Ambassadors

The announcement by Circuit City on January 16, that it would close 567 stores and liquidate after failing to find a buyer or financing, is another sad chapter in the decline of the American economy. It is also another failure by an American corporation to take care of its brand ambassadors, the veteran employees that represent them in the community and fulfill customer needs when they are on the premises.

 Over the next couple of months a fire sale will be conducted in the remaining stores and over 30,000 additional workers will be unemployed.  Sure, competition from the nation’s leading electronics retailer Best Buy, which always seemed to have a better deal as well as WalMart, helped lead to Circuit City’s downfall. However, I believe that Circuit City’s real decline began in 2007 when the company fired 3,400 veteran employees in order to replace them with cheaper workers.  There was a great outcry from the general public then.  Instead of someone who could provide advice and expertise to a prospective customer, consumers were left with a young entry-level staffer who had no answers.  The veteran workers took pride in their jobs and their ability to being a great resource for the customer.  Their replacements, like any other fast food employees, were there to punch a clock until they could move on to something that paid better. Lacking the service they received in the past, many Circuit City customers went elsewhere.  I believe many fled strictly due to the decision by Circuit City to eliminate these experienced employees.

This was an example of when managing public relations is more than how you communicate through press releases, advertisements or special programs.  It comes down to managing perception and how the general public relates to you and your brand.

The Home Depot a few years ago under then CEO Robert Nardelli, made similar decisions, lowering the hourly wage for thousands of older workers, many of them retirees who were more than happy to share their experiences with customers. Back then, you never had to look more than a few feet before seeing a Home Depot employee. And, you could be sure that your plumbing question was answered by someone in plumbing. You didn’t have to go looking through aisle after aisle to find a person that could give you a competent answer. 

The general public’s connection with a mass retailer like Circuit City and Home Depot is largely experiential.  Stores that provide good value in price and selection, are convenient to get to and most importantly, offer great customer service, are the ones consumers make regular stops at.

When that connection is damaged, such as the perception that it is no longer a store that cares for people, then consumers find alternatives. They also let others know why they did so. In the case of Circuit City, there were plenty of other places to go. 

 Tom Cosentino



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