Darty – The Contract of Confidence

Darty is a French firm specializing in electrical retailing. Wholly-owned subsidiary of the UK company Kesa Electrical Pl. Currently, Darty is mainly present in France, with 224 stores. The company is quite famous in France, and had revenues of €2921 million in 2011, with a 4.6% positive change compared to 2010 (Platt, 2011). The interesting point of the company is that it is highly focused on enhancing its relationship with the customers. Darty makes this customer relationship management its main argument for sale.

Today, and since its creation, Darty’s originality comes from the willingness of committing in terms of price, choice and service. This customer relationship management is based on what is called the “contract of confidence”, which represents the company’s promise. It is the pillar on which Darty’s strategy relies.

In 1973, the “contrat de confiance” was introduced to French customers. It actually turned out to be a confidence builder with the clients, as the Darty’s sales continued to grow in the following years. This text includes ten different articles that focus on the three commitment items of the company (price, choice, service). Commitments in terms of good prices (market prices), delivery, technical assistance, warranty, after-sale services and customer services are present in the charter. Darty has managed to become the leading company in its sector through customer intimacy thanks to this contract. The company built good relationship with its customers, which has led to a high rate of retention, thus, building referrals and easier recovery for them. That is one of the main reasons why Darty currently leads the market, with about 13% of market shares.

Building Trust

The contract of confidence thus shows the strong commitment of the company, and customer satisfaction is key to the company. To illustrate this point, Darty ends its contract by this following sentence: “Our goal: 100% of satisfied customers”. The contract of confidence, at the heart of the Darty’s strategy, allows its customers to feel that they are listened and understood. It allows a link of confidence between the client and the company.

The company, thanks to this charter, is thus mainly seen as credible by the customers in France. But behind the words, there is also action. After the sale, the company commits itself to actually really continue the relationship with the customer: delivery, start up, after-sale services, etc… The actions and the promises made to the clients are actually kept. As an example, the first article of the contract claims that if you buy an article from Darty and found the exact same item somewhere else, the company will reimburse you the difference between both prices. From my own experience and from little research, this promise is really kept and it is quite easy to get the money back in this situation.

The contract of confidence also allows creating intimacy between the customers and the company. People going to a Darty shop usually feel safe and secure when entrusting a salesperson from the company about a specific product. Indeed, the 224 stores in France are mostly located in the city centers, allowing the customers to be able to visit a store more easily and to be able to see and touch the products they want to buy. In addition, the brand is present in the country for more than 50 years, giving it certain legitimacy; henceforth it is also quite famous. All in all, when a customer enters a Darty shop, I believe he or she feels safe about the service he is going to get from the company.

However, I think the company lacks self-orientation. There is indeed no greater source of distrust than salespersons that appears to be more interested in himself than in trying to be of service to the client. Salesmen are paid a fixed salary (which represents the minimum legal wages in France) and can then earn money thanks to what they sell. It appears that they try to sell the products that would bring them the highest commission. Unfortunately, the company has a bad image in France and it is known that they might try to push the clients towards the products of the salesmen’s interests. That is why they should try to improve this aspect of their business. There might be a concern about how the salesmen are paid, which may create this need to foster some specific sales, but this issue should be improved in order for the customer to understand that the salesperson actually cares about him.

Areas of improvement

But as KESA CEO Thierry Falque-Pierrotin says, “there is still room for getting better in France!”. And I think the company could indeed change and improve some aspects of its customer relationship management. Darty should expand the pie and try to do something more than just a very good after-sale service.  As we saw, the quality of the service when facing a salesperson is not perfect, and I think it is critical to improve on this aspect. As a customer, I would rather go to the competition if I do not exactly know what I want to buy and if I need help from a salesman to choose which product would best fit my needs.

Darty has built its success on its CRM strategy since 1957. This strategy appeals a high number of customers in France. As the society changes with time, Darty has managed to successfully adapt its strategy to those changes. However, there is still room for improvement in its CRM approach. Even if the company is the leader on the market, the CRM can be improved, which would lead to even higher market shares.

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