Fast Growth Retailers

In the unforgiving technology retail game, status quo simply doesn't cut it anymore. Some retailers are struggling and some are falling off the map completely. Amid all this turmoil, Hillard, Ohio-based retailer Micro Center has boosted its financials and is clobbering its competition.

In a very difficult retail climate that has some of the biggest brand names struggling to make their numbers, Micro Center spiked its revenue about 148 percent between 2005 and 2007. Industry estimates peg the privately held chain's revenue growth from $379 million to $940 million over the two-year period.

This performance has put Micro Center (Micro Electronics Inc.) at the top of CRN Fast Growth Retailers (see list this page) and earned it the award for retailer of the year to be presented at this week's RetailVision event, Everything Channel's and Vision Events' retail industry event.

How has the 21-store chain done it? By bringing customer service back to its roots, said Kevin Jones, Micro Center's vice president of merchandising, who will be accepting the award for retail executive of the year at the San Diego event. Micro Center sells three times the industry standard to a customer over the length of the customer relationship, he explained.

The key is that Micro Center doesn't focus on the sale, said Jones, but on the buyer—cultivating customers to make the first time someone steps into one of its store the first time of many. It's all about offering them the tools and solutions that best fit their lifestyle, whether that potential sale is for a $100 product or a $1,500 system, said Jones. And sometimes, he said, that requires sacrificing dollar value and focusing on customer value.

Said Jones: "If you continue to focus on the customer—even when it is painful—the customer will not let you down."

Cultivating Relationships
Micro Center is no stranger to kudos. Consumer Reports Magazine named Micro Center the best brick-and-mortar store to buy a computer in 2005, 2006 and 2007; and the second best in 2008 (the top spot went to Apple this year.)

For Jones, an 11-year veteran at the retailer, that stellar growth and recognition comes from Micro Center executives putting customers first, building solid relationships with existing customers and focusing less on getting new bodies through the door.

To Jones, knowing the customer is essential. He said Micro Center has forged unique relationships with technology-passionate consumers to create a one-on-one buying environment. Micro Center retains 20 years' worth of purchase histories, he said, while also keeping records of e-mail and home addresses for 90 percent or more of its customers.

Jones learned early on that listening to the customer, despite its rewards, doesn't always come easy.

Once, he explained, Micro Center ran an ad that included a $100 pricing error for a product that the retailer chose to honor, costing them tens of thousands of dollars. Another time, the retailer offered a joint promotion with a brokerage firm that gave Micro Center customers $400 off for anyone willing to set up a brokerage account with a $10,000 minimum purchase. When Micro Center learned it couldn't legally offer the deal, it still honored the promotion.

Jones said Micro Center never crunched the numbers to see what kind of hit they were taking. It didn't fit into the company's practice to put dollars over customers. "You can't be a part-time customer service organization," he said. "You can't say. 'I'm all about customer service, until it becomes more painful than what I can accept.'"

Micro Center's rapid growth started with a turnaround on the retail ethos, the culmination of a deep-dive investigation five years ago. The probe dissected sales histories and customer buying behaviors in what the company dubbed an "autopsy without blame." The key takeaway, Jones said, was learning to "listen to the customer when it is painful."

Said Jones: "We had kind of lost sight, we believe, of some of the market and the need to be competitively priced even though we offer a very robust service environment."

Essentially, Micro Center learned that its service environment was key and prices were higher than consumers thought reasonable. The information was used to create a stronger game plan based on selling products at the right price points and using old-fashioned customer service. The deep dive answered these questions: "Is this really a customer-centric mix? Or is this an economic mix that looks good for the books?"

Tough questions for Jones, 47, who started in retail nearly 30 years ago as a stock runner for Columbus, Ohio-based Sun Television & Appliance Inc. At Sun, Jones said, "service was discussed on occasion, but was really secondary."

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