Tag Archives: retail

Building Your Brand or Building Business

17 Aug

Ask JC Penney if they got it right. For the last 8 months they’ve invested buckets of cash on “re-establishing their brand” – whatever that entails. Call it an experiment, call it ill-advised, call it what you will, there’s a lesson in this experience for us. Focus your marketing investments on those activities that will drive results first, everything else should follow. It really is THAT simple.

Here’s What Happened

They brought on a new CEO, Ron Johnson, who had previously led the retail group at Apple. On February 1st the company introduced a new logo and a new retail strategy. According to their press release “the new JCPenney logo, combines the elements that have made JCPenney an enduring American brand, by evoking the nation’s flag and JCPenney’s commitment to treating customers fair and square.”  Lofty goals for a logo. Things were looking optimistically rosy. Then reality hit. Sales plummeted, traffic was down, and merchandise was sitting in inventory. President Michael Francis, left after only a few months on the job. JC Penney advertising ‘went dark’ in mid-June — the same time Mr. Francis departed — turning off TV ads and canceling the July catalog (that was already printed). The bottom line: the upbeat, colorful marketing rolled out during Mr. Francis’ short tenure “made people rethink JC Penney and was entertaining,” Mr. Johnson admitted, “but it didn’t reach the core customer and didn’t build the business.”

So, What’s Next?

They aren’t changing their retail philosophy focusing instead on the real culprit, their marketing program. Initially they had expected to reduce promotional efforts from 590 events (at about $2 million per promotion in 2011) to just 12 promotional “months” this year (where the company will spend $80 million monthly). As a result, JCP expected to save $300 million on their overall advertising over the next four years.  Now, JCP will look to newspapers in a much revamped traditional marketing push. By pulling back on ‘branded’ TV spending the retailer has shifted their expense toward 30 newspaper inserts planned for the last half of 2012, including eight in August alone. Wisely, JC Penney is investing much more heavily in what Mr. Johnson calls “traditional traffic-driving means.”

Their Pain is Our Gain

The highly visible failure of an experiment this large in the public’s eye serves us some good as marketers and private practices. We can take away some valuable lessons without spending a dime. Our goal should be to incorporate this learning into our approach and try to remember that experience trumps theory and supposition every time. Meaning, it is important to keep these key points top of mind:

  • Brand development is more than just a nifty logo
  • Customers will tell you what they want from your business — listen to them
  • Spending money on the core media is your fist priority if you want to drive opportunities
  • Sales keep the lights on and everything else should support that objective
  • Advertising may be seductive, but marketing is about driving business
What do you think?

Here at AHAA we’ve been saying this for a while… to be successful in this business we need to create opportunities to help patients (customers) first. That affords the business the chance to treat people with exceptional care and good service. Branding follows, and its a nothing more than a reflection of your ability to reach customers and provide them your care. THAT is why you got in this field to begin with, isn’t it?

Source: AdAge

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