|JC Penney Needs to Win Back Its Loyal Customers
By: Andrew Turner
JC Penney’s new marketing campaign has done a lot to help build their brand, but it confuses consumers. Penney’s has fallen into a common branding trap of trading brand equity for actual profitability. In building its brand with catchy yet utterly irrelevant commercials, the company has overlooked the importance of turning a profit.
Behind the new campaign is a new pricing strategy aimed to provide customers with deals on a more consistent basis. The ads, in turn, are supposed to promote this; however, JC Penney has reported a $163 million loss in the first quarter. In all of JC Penney’s communications they say that the reason for the loss is a combination of the new pricing platform and the new ad campaign. It is my contention that JC Penney is failing on a more cellular level.
JC Penny’s Facebook brand page has seen an increase in outspoken customers, irate over the loss of the long-held JC Penney tradition of coupons. The number one rule of marketing is treating your best customers the best because it’s much more profitable to make repeat customers than to spend money finding new ones. JC Penney’s has seemed to completely disregard this golden rule of marketing. In ignoring their loyal customers in lieu of new ones (which the hip new ads are aimed at), the company has offended its brand loyalists.
This is the molecular fundamental reason JC Penney will see their current profits decrease. If they do not reach out to their old brand loyalists, they will continue to see loss. Not to mention the ads are not doing too much to generate new business. The new marketing campaign seems great for building brand awareness, but it does nothing of getting people into the stores. Why didn’t JC Penney’s roll out the new marketing campaign and adjust their pricing structure over time? This would have helped build their brand without offending their loyal customer base.
Another reason JC Penney is suffering is because they overhauled everything except the actual layout and design of their stores. This creates a glaring juxtaposition for consumers who walk into JC Penney expecting to see a trendy new department store but see the same exact store they have seen for decades. Branding is about creating a visceral connection with the consumer, and JC Penney has failed to do this. Unchanged, this will be the reason JC Penney will continue to struggle. The visual of change in the brand must be coupled with the visual of actual change in its stores.
It is the opinion of this brander that JC Penney created a three-pronged branding campaign but disregarded the third prong: creating the visceral connection with the consumer through its stores. Instead, it told new and loyal customers that they had changed but in reality didn’t change enough to get new customers and changed just enough to lose the loyal ones. JC Penney provides a great example of how branding campaigns can go wrong just by ignoring the process and human emotions.
Consumers hate change; they look for deals and coupons, and those have endeared them to JC Penney. Had JC Penney created a new ad campaign to build its brand and then changed its stores to mirror the trendy new shift, it would have prepared the loyal customers and the new customers for the ultimate change: pricing. In today’s economy, people care most about money. That is why, when altering brands, pricing changes must come last.
Is this the end of JC Penney? No. They have done many things wrong. They need to create a better brand message, rather than just nonsensical commercial; something that says, “Hey, we’re getting trendy, but we still have the same great deals.” They have some work to do to better clarify their message and regain their customer base. Eighty percent of their Facebook comments are negative, which means the customers are still there. And there is still time to make it up to them before they leave forever.
JC Penney provides a great example of how branding is a much more than just new ads. It needs to be a holistic change throughout the company. It’s a case study of how important it is to embrace all three prongs of change in creating a stronger brand and instituting change on a molecular level.
is a marketing professional, copywriter, and graphic designer from Philadlephia. You can contact him here.
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