On April 10, 2013, I published a blog post entitled, “Next Time, Listen to My Wife” (reproduced at the end of today’s blog post). In it, I addressed J.C. Penney’s recent strategic marketing decisions that were proving to be less than well received by consumers. It was not a pretty picture.
Now here is the good news: J.C. Penney listened. Its response to customers’ dissatisfaction was heartening (“Starwatch Consumer: J.C. Penney Apologizes” The Kansas City Star, May 2, 2013, p. A7):
“J.C. Penney is sorry and it wants your business back. That’s the gist of its latest ad, a public mea culpa that the midprice department store put on its YouTube and Facebook pages. . . . [the ad states] ‘Some changes you liked, and some you didn’t. But what matters with mistakes is what we learn. We learned a very simple thing, to listen to you.’”
Companies must learn a very simple, yet very powerful thing, and that is to listen to their customers. Customers are your most important stakeholder. Without them, you have no business.
J.C. Penney responded to this situation better than I thought it would. Of course, we still need to watch for the follow-through. Exactly how it executes the needed changes and revamps its strategy remains to be seen. Nevertheless, I would say from a marketing and public relations standpoint, J.C. Penney is off to a good start.
[Here is the blog post I first published April 10, 2013]—
NEXT TIME, LISTEN TO MY WIFE
Upon learning that the J.C. Penney board of directors had ousted its CEO, Ron Johnson, I have to say, I was not surprised. In his 16-month attempt to reinvent the longstanding retail giant, things did not go well. For the fiscal year, the company lost $985 million.
Johnson’s playbook included the elimination of all coupons, transitioning to a steadier but supposedly lower pricing structure, and installing specialty brand stores. The strategy was rather bold and risky. I am not saying strategies should never be bold and risky. In most cases, by definition, they have to be. Nevertheless, not every bold and risky strategy guarantees success.
Beyond all the strategic analysis, I just wish Johnson had consulted with my wife first. As I recall, she came home one day after a shopping excursion and flatly declared, “I’m not happy with what’s happening at J.C. Penney.” That was when I knew for sure the company was in trouble.
You see, Kathy was one of J.C. Penney’s average loyal customers. Not anymore. When the customer experience for Kathy changed, that alone told me more than all the business and strategy analysis in the world could have told me. It well illustrates a fundamentally important point for all businesses. If you disappoint or alienate your regular customers, that will be your undoing.
Yes, I will admit, Kathy is pretty special to me. I realize J.C. Penney may not feel the same way I do. J.C. Penney may consider Kathy to be just another average customer—no one special. In a sense, I understand J.C. Penney’s perspective; Kathy is just another average customer. But therein lies J.C. Penney’s mistake. Kathy genuinely is someone special. She is someone special because she had a customer experience that portended an ominous message. J.C. Penney somehow missed that.
Every business will miss that unless they understand how special all the “Kathys” are.