November 29, 2003
Improving the Retail Experience Through "Peer Sales"

On Thanksgiving Day, Don Park posted an interesting idea to his blog about one way to improve the abysmal experience of shopping for electronics at retail: a model he’s calling “peer sales”.

The core idea is to let customers sell to each other in return for discount coupons.

If I am really excited about a newly released laptop from HP, I would have scoured the net for information about the laptop and would be far more informed than your average sales person pushing HP products at stores. Chances are also pretty good that I would be more informed than an employee of HP. All those hours spent learning about the product are valuable. Geeks are like that.

Now I walk into Best Buy to buy a laptop. At this point, I know which laptops they carry and which ones I am interested in. Only remaining issue at this point is the price. If Best Buy offered me a $100 discount coupon on any product I help them sell, I would be looking around to see if anyone else is looking at the laptops I know about.

Be sure to read the comments thread too, in which his readers chewed on the idea with him and started refining it in all sorts of interesting ways.

I’m at home for the holiday, and I discussed Don’s idea with my father, a long-time tech veteran himself. We started from opposite poles on it; I thought it was super-cool, Dad thought it was super-impractical. But, after discussing it back and forth between ourselves, we devised a refinement of the idea that I think may preserve much of what’s good about Don’s brainstorm, while avoiding some of the impracticalities.

My father’s biggest objection to the peer sales model was that it depended on people hanging around the store, which he thought (and I tended to agree) people were unlikely to do unless (a) they were insanely motivated or (b) they were insanely well-rewarded for doing so. So, we came up with the idea of getting around this by making an entry level of participation that is handled completely by phone.

Here’s how it works. Say I walk into Best Buy to buy a video card for my PC. I start peppering the sales guy with questions (“Does this support AGP 8x? How about DirectX 9 in hardware?” etc.) that indicate that I know my stuff when it comes to video cards. The sales guy calls his manager, who comes out and makes me a proposition: “Sir, you seem like someone who has done a lot of research on this subject. Would you be willing to accept five calls per month from Best Buy customers seeking advice on what video card to buy in exchange for a $50 gift certificate every month?”

If I say yes — and why wouldn’t I, everyone ends up asking me for that kind of advice anyway, five more people wouldn’t kill me — then, when a less-informed customer comes in, the sales clerk gives them the standard spiel, but also gives them a list of phone numbers and says “These are actual people, not Best Buy employees, who know a lot about video cards. They can help answer any questions you have. Feel free to give them a call.”

Then, once the customer has called me, Best Buy asks them if they were satisfied or unsatisfied with the advice they got from me. If they were satisfied, I get a point in Best Buy’s database of smart customers; if they weren’t, I lose a point. If I rack up enough points, eventually they sweeten the deal in exchange for more involvement — “would you be willing to come in for a couple of hours on Saturday afternoons as well, if we up the gift certificate amount to $150?”

This modified peer sales model does several things well:

  • It builds trust between Best Buy and its customers, in the same way that Progressive Insurance’s willingness to provide rate quotes from other insurance companies shows that they believe that most of the time their rates will be better.
  • It connects customers to each other, building community and helping remove some of the depersonalized feeling you get when shopping in a “big-box” retailer like Best Buy.
  • It requires a minimal commitment of time to get started in, so the barriers for getting people involved are low (the points system should weed out the losers pretty quick).
  • It creates a team of unpaid customer evangelists for Best Buy — people who will spread positive word of mouth about the company to their friends and associates.

There are obviously downsides too, but I’ll leave it to anyone who cares to use the comments section to point them out :-)

In brief, though, I think Don’s on to something, and he’s started a conversation about the customer experience in America that is definitely worth continuing.

Posted by Jason Lefkowitz at November 29, 2003

Cool ideas here Jason!

Posted by: Jim Cashel on December 2, 2003 1:12 PM

Nice idea! Something fresh and new!!!

Posted by: Marina on August 19, 2004 9:29 AM
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