LI June2012

How to Alienate Customers And Lose Money

It is time to talk about JCPenney and their new marketing strategies under Ron Johnson. It was possible to hope for a different outcome, but cracks started to appear before the fresh coat of paint was even dry. How effective is their aggressive jump into a new branding and sales campaign!

In a rush to implement new marketing strategies, like changes in pricing structure and store design, JCPenney forgot about their consumer. No doubt they were trying to attract a new shopper, or at least get her to shop more often. And in the meantime, they completely alienated current customers with a sudden shift in pricing and no incentives (coupons) to drive purchases. Sales have suffered and the perception of the previously solid retail brand has been damaged. JCPenney is suffering from an identity crisis. Not only are the trying to redefine what the retailer looks like, they have completely lost sight of who was buying items at their store in the first place.

How can you avoid this kind of marketing melt down? Here are a few ideas:

Know Thy Customer

Tom Tumbusch, a writer and colleague, has developed a complete picture of his perfect client. Not only does she have a name, but her framed photo sits on his desk, along with a complete dossier of her likes, dislikes and motivations. By defining his reader so clearly, Tom finds that it is easy to stay in touch with her needs–and through her, the needs of the larger audience she represents. I love this idea. Who’s staring back at you when you’re broadcasting your message?

Silence is Golden

Listen, listen, listen to your customer. Your customers will tell you exactly what they want, and how they want it in clear, concise and even blunt ways. One of my clients, Moore Disposal, has experienced firsthand this customer-driven expansion and it’s helping them grow. All it took was listening to the phone calls from current customers asking for front-load dumpsters, a service that they didn’t yet offer. But the new front-loaders fit nicely into their business model. And since customers were already asking for it, the expansion made even more sense.

Do Your Homework

Even with a discerning ear, and a well-formed understanding of your customer, it’s important to make sure that you know what you are talking about. In visits with lots of architects and engineering firms, it’s extremely rare to find a firm that doesn’t specialize even if they aren’t overtly positioned. For instance, the needs for municipal buildings versus retail centers are dramatically different, as are the requirements for residential versus commercial space planning. Your service to the customer is stronger when you narrow your focus and do a few things really well over and over again.

The End of the Story?

Will JCPenney return to proven marketing strategies during a sluggish economy? Or continue to blaze new trails in search of that elusive new customer? The schedule of the January launch of the new JCPenny branding was impressive, so there is a reason to think they can pull it off again.

What do you think? Will JCPenney survive this latest challenge, or are you planning what to wear to the funeral? Tell us.

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