JC Penney: If you don’t listen to your customer...you lose

The Challenge: Few companies know as much as they should about their customers and their expectations for meaningful engagement.

Being arrogant in disregarding customer expectations is dangerous. This is a lesson JC Penney found out the hard way when sales dropped 25 percent in 2012.

This is reinforced by the Accenture Study on customer-centricity in which they noted, that for too many companies, providing a tailored experience is an elusive goal; “...failing to deliver a high-quality customer experience can result in a staggering erosion of a company’s customer base—a loss of as much as 50 percent over a five-year period.”

Some of JC Penney's missteps included:

•  Customers have come to expect promotions around holidays. But the company did away with these sale events. They are bringing back event promotions 26 times a year, often around holidays like Mother’s Day.

•  Customers associate a company with the merchandise or services they traditionally provide. When the selection changes, it causes confusion. JC Penney will be returning to basic clothing and favorite brands.

•  Knowing your customers means knowing demographic aspects meaningful to sales. The company switched its focus to a trendier, younger and generally thinner audience, alienating longtime Penney customers who could not find items to suit their size or style.

Penney has been hurrying to welcome back customers. A few weeks ago, it apologized to customers in an ad that said: “Come back to J. C. Penney. We heard you. Now, we’d love to see you.”It then ran a second ad thanking customers for returning. New marketing materials also specifically state, “you asked, we listened” as well as “you can have it all”.

5 Takeaways:

» If you think “the customer doesn’t really know”, stop! You disregard the wisdom and preferences of your customers at great peril! Your business starts and ends with the customer.

» Build your value promise around the wants of your customers. Then, put measures in place at every level of the organization to deliver on that promise.
Customers should have a consistent experience with every employee and every situation. And every employee should know what you have promised.

» When is the last time you really asked your customers what you could do better? Before you add, change, or “improve” anything, make sure it is something that will be wanted and embraced by the people who count; your customers.

» If you have not recalibrated your strategies within the past 12 months, you are likely out of date with the needs of today's rapidly changing and greatly empowered consumers.

» Constantly monitor customer service complaints and sales statistics to identify and quickly resolve “hot button” issues.

Honoring Brand Promises Is Critical To Your Survival

The Challenge: Companies have always made promises to customers and prospects. But with today's socially empowered consumers, companies are made or broken based on how well they keep their promises. Is your company trustworthy enough?

Historically, companies have always over promised and under delivered.

But will that behavior fly with today’s savvy consumer? “The dirty laundry is out there because of social media,” says Loni Kao Stark, director of product marketing at Adobe’s Digital Marketing Solutions.

As a result, companies now have a greater responsibility to deliver on promises and live up to expectations.

This doesn't just affect existing customers, but corporate reputations, thus, their continued viability. As Stark says, "In the world of social media and digitally connected customers, only authentic brands will survive."

One company that consistently delivers on brand promises is the high-end men’s retailer Harry Rosen. The company consistently maintains brand promises by utilizing a three-point strategy involving observation, feedback, and training. Associates contact customers, use feedback to establish customer needs, and then respond to those needs throughout the customer lifecycle.

The retailer then strengthens its customer relationships by informing them of events relevant to their interests – such as shipments from their favorite designer – and trains associates to provide great service at every touchpoint. To ensure promises are maintained, Rosen also contacts customers within 30 days of purchase to ensure their satisfaction.

Key Takeaways

1. Understand customer expectations.
Organizations should realize customers no longer compare them only to their competition. Customer experience is also measured against online customer service dynamos like Zappos. In order to compete, brands must maintain ongoing dialogues with customers to gather feedback, and use that feedback to keep improving the customer experience. This dialogue should take place via surveys, CSR conversations, social media, and follow-up e-mails after purchases.

2. Keep promises throughout the customer life cycle.
Every experience that customers have with a company is a reflection of that company’s brand promise. Ensure that staff at every touchpoint in your customer lifecycle are trained to respond to customer feedback appropriately. Customer service reps should be knowledgeable and helpful. Sales associates should be attentive and aware of customer needs. And management should ensure that high levels of performance are being maintained. This applies to people and processes!

3. Ensure your brand promise is consistent across all channels.
Today’s consumer sends and receives information across multiple channels on a daily basis. If you promise one thing in TV ads and another on your social media feed, customers will notice. And that inconsistency can quickly paint you as an organization not to be trusted. Establish what specifically you want your brand promise to be, build your campaigns around that promise, and ensure that messages and experiences are consistent across your multi-channel mix.