Best Buy (BBY) sales have been declining for 5 years. With revenues last year of $40 billion, the nation’s leading electronics retailer is not in any immediate trouble. But the question remains: What’s the strategy for growth?

The company has been aggressively cost cutting, but you can’t streamline your way to higher sales. Real growth comes from innovation, not getting leaner and buying back your stock.

In 1981, a company store (then known as Sound of Music) in Roseville, MN, was hit a by a tornado. The roof was blown off, but most of the stock was undamaged. They slashed prices and ran a tornado sale. The Tornado Sale was so successful, it changed the business model of the company. Best Buy was born.

Over the past 33 years, BBY has grown dramatically and overcome strong competition from other electronics retailers, from Highland to Circuit City to CompUSA – all now closed. Only Wal-Mart offers a significant retail challenge on a national level. But Wal-Mart is not a realistic option for millions of customers who also demand a convenient and comfortable shopping experience.

Amazon is now BBY’s greatest threat in electronics. Except in one area: smartphones. Most smartphone customers prefer to see and touch new phones first hand with a live person to answer questions and set up their new phone (transfer phone numbers, photos, etc).

In smartphones, BBY must compete with the thousands of Verizon, AT&T and T-Mobile stores and kiosks. But BBY has the advantage of offering all of the major carrier plans in one place.

BBY’s smartphone market share has grown, but it’s still only single digits, so there’s plenty of room to move up in a huge market projected to reach $55 billion in 2016. Just a two percent increase in share for BBY would result in more than $1 billion in incremental sales from smartphones alone, not to mention the additional sales of other BBY products from the increased store traffic – a key objective for BBY.

And since smartphones aren’t gender specific, more smartphone sales would generate more store traffic by women – another key to BBY growth.

OK, so how to increase smartphone market share? Let’s go back to Best Buy’s original strategy of offering the best deal. The deals would have to be significant to drive new customers into the stores. E.g. lower price on phones, free or almost free warranty plans (these have huge margins built-in), etc. Whatever it would take to make Best Buy THEplace to get a smartphone.

Margins would be squeezed of course, but the huge increases in revenue could more than make up for it. The result could be much higher total profits and getting the company back on the growth path.

Imagine if BBY increased their smartphone market share by 10%. That would boost sales by over $5 billion for phones alone and probably another billion for other BBY products purchased by customers who rarely, if ever, walk in the door, particularly women. Think of all of the additional tablets, laptops, TVs and large appliances these new customers might buy.

It worked back in the 80’s. BBY became THE place to buy electronics. Sales went through the roof and continued for three decades. Maybe BBY needs to get back to what its name implies by offering the best buy on smartphones.

The writer is a former Best Buy employee, stockholder and lifelong customer.

 

This is a true story. The events took place in Minnesota in 2014. At the request of counsel, the names have been changed. Out of respect for LinkedIn, the rest has been told exactly as it occurred.

LittleBiz Bank (LB) is headquartered in a suburb of Minneapolis with several branch locations close by. LB’s customer base is small businesses. To find new clients, the bank had been sending unsolicited letters to local businesses. Not surprisingly, the results were not what they had hoped for.

The bank had limited resources in terms of budget and sales team so I suggested narrowing the prospect list to just a small number of local professional firms such as CPA firms, law firms and financial advisors – and use them as referral sources.

Each one of these professional firms has dozens of small businesses as clients and has probably earned their trust, particularly with financial advice (such as a recommending a bank for a credit line or loan). By successfully connecting with just one professional firm, LB could potentially gain dozens of new small business customers.

But how to connect the bank with the professional firms?

I suggested LinkedIn. To prove my point, I picked a medium-sized CPA firm in the same city as the bank. I sorted through the CPA firm partners’ LinkedIn profiles until I found one with a common link I could use to “break the ice”.

I first screened for alums of my alma mater, the University of Minnesota. I quickly found a fellow alum who also belonged to the same business fraternity I did. I sent him a “Connect” request on LinkedIn. When he accepted, I thanked him and asked if he had time to talk about how they work with banks. I didn’t try to sell him anything and he agreed to meet.

Our half-hour meeting went over an hour. I told him how LB offers small businesses a quick and simple resource for lines of credit and loans. The partner agreed to meet over lunch with some key executives from the bank. A relationship was started.

Yes, it can be that easy.

For B2B marketing, narrow your focus to the best prospects and use LinkedIn to make the initial connection. Find a commonality with someone at the targeted firm. It might be a college, a cause or even an unusual hobby. Just keep digging until you find a common link. If you can’t find anything, ask someone else at your firm to search the target company. It may take some digging, but keep at it. Most people are generally open to talk to someone with whom they share something.

Give it a try. Could it work for your company? You betcha!