3 ½ Business-Boosting Lessons You Can Learn From J.C. Penney’s Rebranding Disaster

By: Dave Dee on: August 6th, 2013 6 Comments

Last week J.C. Penney Co. hired a new senior vice president of marketing.

Debra Berman, formerly with Kraft Foods, was hired to win back customers and create more frequent sales.

This is the latest in a plan by J.C. Penney’s CEO to reconnect with their customers and revitalize their struggling brand.

Why are they struggling?

Well, the former CEO tried to transform the store to attract a “younger” and “hipper” audience…and failed, amassing nearly a billion dollars in losses.

Can you guess the big lesson?

If you already have a target audience buying products or services from you, it’s not a good idea to abandon them in search of a different audience.

Now, I’m not saying it’s necessarily a bad idea to target new and different customers. But if you are going to do this, test it and do it in addition to what you are already doing. After all, if you are going to go to the trouble and expense of winning a customer over, why abandon them?

Because when you abandon your customers, they will find somewhere else to spend their money.

J.C. Penney has a big task in front of them…

Even though you most likely have not made a major shift like J.C. Penney did, there are a couple of takeaways you can use in your own business.

1) Clearly define who your target audience is. When I started at GKIC, one of the first things we did was to nail this down. The obvious answer is that they are small business owners, entrepreneurs and sales people.  But that is pretty broad, so we dug deeper.

We identified our target audience as being people who are “doers.” They don’t just “talk the talk… they walk the walk.”

They are the movers and shakers.  They don’t want fluff. They want to cut through the B.S. and get to the stuff that really works.

We identified that they want more independence and time to do what they want, working less hours while making more money, unapologetically. And they want a place where they can find other like-minded individuals who understand, appreciate and support their endeavors.

Imagine if instead of trying to go after a new audience, J.C. Penney had spent time getting clearer about what their existing customers want. Instead of creating new products to attract an unproven audience, they could have developed products that were a better match for what their existing paying customers wanted.

Another problem they didn’t think through was that by not spending the time to clearly understand their existing customer, not only did their core customer not relate to their new messaging, but they didn’t necessarily embrace the new type of customer that J.C. Penney was targeting.

Clearly defining your audience makes it easier to create messages that resonate with your customers. It makes it easier to know what types of products and services to develop. And it attracts more customers…partially through referrals because your customers often hang out with other like-minded individuals that will also be interested in your products and services.

2) Identify a strong USP. Have a clear, honest, benefit driven USP (Unique Selling Proposition) in place.

While recently interviewing GKIC members about what has made the biggest impact on their business, one answer that kept coming up was developing a strong USP (Unique Selling Proposition). And for good reason…

In order to succeed in today’s cluttered and competitive arena, you MUST construct a great marketing message that is powerful enough to circumvent the competition.

In The Ultimate Marketing Plan, Dan Kennedy defines a USP as “a way of explaining your position against your competition and against all other choices, actual or even imagined.”  He also says it is “a way of summarizing and telegraphing one of the chief benefits of the business, product, or service being marketed.”

Before their rebranding, more than half of J.C. Penney’s audience was over 55 years old and 87 percent were Caucasian. Two of J.C. Penney’s main competitors are Target and Kohl’s who appeal to younger shoppers. Rather than trying to be more like Target and Kohl’s what if they would have focused on what makes J.C. Penney unique?

Identify what makes you different and then capitalize on this to become the best at it. This will attract more of the right customers to you…people who will spend more money with you because they feel you are catering specifically to them.

A strong USP might even become your theme. Like “Just Do It” (Nike) or “The happiest place on earth” (Disneyland) or “We’re number two, so we try harder” (Avis).

3) Win back lost customers. We all do it: We lose customers. Become aware of it and put a campaign in place to win them back. Let your lost customers know you miss them, that they are important to you, and that you want them back.

J.C. Penney has apologized to their core customer, but they should take it further. Getting to know their core customer better, targeting their messaging to them and creating an entire marketing campaign around winning them back will go a long way towards bringing this customer base (and their wallets) back to the store.

The lost customer reactivation system we teach at The Fast Implementation Boot Camp is a campaign that many GKIC members say has been enough to revitalize their business and create an immediate surge of cash in their business.

Learn from the successes and failures of other businesses. Understand and clearly define who your best customer is. Then make your business the clear and only choice for your customers based on what you discover.

And if you’ve lost some customers, don’t just let them go. Do everything you can to win them back—even ask for forgiveness. When you do, you’ll maximize your results and find money in your business you didn’t know existed.

NOTE: Get “The 10 Rules to Transforming Your Small Business into an Infinitely More Powerful Direct Response Marketing Business” for FREE. Click here to claim your customer-getting, sales-boosting tactics.

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    ABOUT THE AUTHOR:

    Dave Dee is one of Dan Kennedy's most successful students. Dave saw Dan speak over 16 years ago at one of the Peter Lowe Success Events when he was a struggling magician. He bought Magnetic Marketing and as you will hear when he tells you his story, his life changed in less than 90 days. Dave became a very serious student of Dan's by attending my seminars, joining his coaching group and most of all from implementing what he learned. For more money-making marketing tips, tactics and strategies, go to www.gkic.com

    6 Responses

    1. Mark Freemantle says:

      Lots of good points Dave. ‘Differentiate or Dye’ is a motto I’ve tried to live as without that USP your company becomes a commodity and lost in the market place. What would you say GKIC’s USP is? Winning back lost customers is something GKIC could do better at!

    2. Mark Freemantle says:

      Ops I mean Die!

    3. Jonathan says:

      great article Dave…awesome stuff!

      Jonathan

    4. Mark says:

      Nice article Dave. Your advice about (A) knowing specifically who your target market is and (B) never abandon your real bread and butter audience to chase after a non existent one! Is awfully good advice!

      And one that cost JC Penney an awful lot! Thanks as always, I learned something practical from studying one of your post!

    5. Several good lessons here,…Not only JC Penny but big and small business alike once they have a customer it seems they spend more time and energy on pursuing new ones rather than taking care and building on existing ones….

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