J.C. Penney just lost a community of 3 Million Facebook fans. Where’s the Strategy in that?

JCP Facebook transitionBowing under pressure, and trying to bring customers back into the stores, CEO Ron Johnson announced last week that J.C. Penney will be bringing back sales. I guess Mr. Johnson’s about-face was as a result of the 50% slide in the stock price over the past year.  Clearly, J.C. Penney has not been listening to its customers.  Yet, the writing was on the wall – Facebook’s wall, that is.  Almost 3 million people are “fans of”/”like”  J.C. Penney’s Facebook Page.  That’s quite the community, wouldn’t you agree?  A following that takes years to build, yet can take less than a day to destroy.   Here’s the message they posted this past Friday on their Facebook wall:

JCPannouncementNew Facebook page everyone!  Time to rebuild.  Time to wipe the slate clean.  New name “jcp”, new gray logo, and best of all… “We did it for you”!   Hmmm, do companies really think their customers are stupid?

As you skim the  posts about the weak brands that J.C. Penney now carries, the bare new look of the stores, and the pricing changes, it’s clear that customers are very disappointed with the Penney transition.  Clearly, the negative comments far outweigh the positive ones.  But every now and then you read a post from a Penney loyalist who’s supportive of the company, advocating on their behalf.   So like most communities, there’s internal discussion going on; people engaging with others from similar “tribes”; agreements, disagreements.   A lot of loyal customers voicing their concerns on the site.  Yet what’s glaringly absent are comments from J.C. Penney itself.   No one from the company is engaging with its followers.  Maybe the brand is listening, but the Facebook fans sure wouldn’t know it.

...the Voice of the Customer

…the Voice of the Customer

One has to wonder if the digital community mirrors the brick and mortar.

Perhaps the new corporate culture, that includes ignoring customers, has trickled down from the top.   At a time when Ron Johnson should be listening to his customers, with the company having lost $4 billion in revenues during his tenure, he may feel he knows better.  After all, few believed that his Apple store concept would make money for the consumer electronics giant. He proved them all wrong.

More likely though, the business probably has so many internal silos that no one realizes the value of the customer data they’ve built up over the years.  They may just think of Facebook as a digital sandbox; a time-waster where people who have nothing better to do post useless comments and try to ruin the reputation of brands.  It’s likely that the J.C. Penney Facebook community isn’t even on any of JCP’s leadership’s radar screens.  At least that’s how it looks from the outside.

More likely though, the business probably has so many internal silos that no one realizes the value of the customer data they’ve built up over the years.

Why change the siteWhat other explanation for shutting down a community with almost 3 million subscribers, and starting fresh?  To re-brand under the new “JCP” acronym?  To rebuild the community under the JCP brand hoping to wipe the slate clean of any negative sentiment?  C’mon…wake up J.C. Penney!  You’re going to piss more people off, and lose a ton of opportunity in the process.

We have to give credit where credit is due, however.  J.C. Penney could have deleted all the negative posts and comments on their original Facebook page.  Instead they chose to ignore customer complaints, they chose not to engage in conversation, and they chose to miss any opportunity to show support for what few advocates they had, and start fresh.

New JCP Facebook page

Link to new JCP Facebook page

Much has been written about the psychology of service recovery; i.e., how resolving a customer complaint is an opportunity to create a stronger relationship with the customer than if the service failure had never occurred in the first place.  Service recovery is an opportunity to build loyalty.  One needs only to Google the term “service recovery paradox” to read the various scholarly articles, white-papers, and blog posts about it.  But customer outreach and engagement needs to be done on a one-on-one basis and it needs to be part of an organization’s overall business strategy.  One might have expected this to be the reason for the new Facebook page, but alas, we are still scratching our heads.

…customer outreach and engagement needs to be done on a one-on-one basis and it needs to be part of an organization’s overall business strategy.

Great customer service is clearly not on JCP’s list of strategic objectives.  Or if it is, some people are pretty good at paying lip-service to the initiative.  And you can be sure that when they considered what the overarching Customer Experience should “look” like, JCP didn’t bother to ask their own customers what was important to them.

Companies pay megabucks to research firms to build consumer panels that they can dip into for opinions on an ongoing basis.  And they pay big bucks to collect customer feedback, typically through surveys pushed out after a transaction is completed with the brand,   All of this is part of a “Voice of the Customer” (VoC) program.  You can be sure that J.C. Penney has this type of program in place.  All big retailers do.

You think the VoC team even knows that a Social Media community exists?  If they do, do you think they’ve even put two-and-two together, and have considered pulling in feedback from the Facebook community?  Social Communities and Social Media Customer Care provide non-invasive, truly unbiased environments for collecting Voice of the Customer feedback.  The sad part is, in many large companies, people don’t communicate very well across departments – the VoC team probably doesn’t talk to the Social Media team and vice-versa.

You think the VoC team even knows that a Social Media community exists?

And so we can only shake our heads in disbelief, as we watch a powerful brand, with a deep-rooted American heritage,  make a decision that makes no strategic business sense whatsoever and throw the baby out with the bath water.

Comments

  1. Mike gibbons says:

    It boggles, no hurts my mind…..I have a small social marketing company Windmill Social Media…it blows my mind how many companies and non profits cold benefit immensely form social relationships – actually set themselves apart from competitors by simply caring….this stuff is not that hard but then again for some it’s the hardest thing in the world. Sad.

    Ps. It’s the guys and gals a the top that screw up the whole thing….If I we’re Ron Johnson or advising him….I’d become known as the top CEO communicating on social media….it’s scary and hard and you have to CARE….great article by the way! Mike

    • Mark Orlan says:

      I know Mike, it’s just glaringly obvious. Almost 3 million in the community and not a peep from JC Penney…no engagement whatsoever. And if you read some of the comments by people, they really care; they really want to help the brand.

      I was saying to someone on Twitter earlier today that you can’t really blame Ron Johnson. I’m sure no one has the balls to sit him aside and explain to him what value he has in this community, and what the opportunity is for JC Penney to leverage Social Media to amplify their goodwill.

      This really boils down to your standard case of siloism in a big company. The left hand doesn’t know what the right hand is doing. Someone’s made a knee-jerk decision without collaborating across the company. It’s really sad, especially considering the huge financial losses they’ve had in the last year.

      Thanks for chiming in!
      Mark

  2. Chris Murphy says:

    This does seem like an inexplicable move from JC Penny, clearly an ill
    informed decision.

    I would love to have heard the thought process that went into the
    decision. I wonder if they were worried about all of the existing
    negative comments and decided to start over. If they made a conscious
    decision to start engaging the fans, then maybe they felt they needed
    the clean slate to start these new objectives. Of course, they could
    have made the decision to do that on the old page to the same effect.

    Your point about this wealth of feedback data getting lost between
    internal silos is probably the correct assessment. It’s too bad. I’ll
    take the 3 million fans if they don’t want them.

    • Mark Orlan says:

      The good news for JC Penney fans is that the company seems to be playing catch-up. Looks like they’re starting to engage on the new Facebook page…but not consistently. I’m thinking someone in Marketing committed to getting the new page up by Feb 1st, to commemorate the 1 year anniversary, and probably planned to begin engagement, but didn’t have the resources in place to do it right. They put the tactic before the strategy, as so many do, because they needed to show some activity. They should have at least announced that as part of the new Facebook page, they’d be starting to listen and interact with fans…you know set some expectations, rather than surprising people.

      Then you scratch your head again when you take a look at their Twitter profile and you have to wonder if the Penney Social folks manning the Twitter account (where they are doing some engagement) are speaking with those managing Facebook. They’re still using the old “guy kissing girl” Facebook branding. It gets you wondering again, for brand consistency sake, if “JCP” was so important, why didn’t they try to buy @JCP from Joseph Poon?

      As you mention, Chris, it would have been interesting to be in on the internal discussions at Penney. What really drove the decision to begin a new page from the ground floor? I agree with your analysis. I think they just wanted to start fresh, turn the page on all the negative history, and rebuild with fans who really cared. So they thought. Problem is you’ll always get a mix of fans who have negative things to say as well. You’re not just going to bring over the positive fans. Brand engagement is driven, to a large extent, by emotion. In the process of cutting over to the new page, they’ve literally cut out a huge subset of their community. Doesn’t matter, they’ll just pay a market research company to make up the difference, I suppose.

      Great points Chris, thanks for your comments.
      Mark

  3. Mark,

    I haven’t invested nearly the time that you have on this, so I may be speaking out of turn.

    However, the move may be indeed be very intentional. The old model and old customers clearly didn’t work. That ship had sailed and the outcome was defined (failure).

    The mantle of leadership often requires making hard decisions, and sometimes unpopular ones. Sometimes, blowing things up and starting over is the best thing to do.

    While JCP may be alienating old (and likely unprofitable) customers, they may be simultaneously acquiring the new and right customers that they believe will fuel the growth of a new organization.

    Again, I haven’t invested more than 5 minutes in this issue and haven’t been in a JC Penney for decades, but there’s a glaring counter-argument here that at the very least should be explored further before drawing conclusions.

    Best regards,
    Brian

    • Mark Orlan says:

      Brian, I’m sure it was an intentional move to leave the past behind and start fresh. And, I agree that leaders often have to make tough, unpopular decisions. But leaders need to have all the information available before they make their decisions. If they’re only given information through lens of a single department head about an issue that could impact other parts of the business, then the decision is made on mis-information. I give you the benefit of the doubt because you haven’t invested much time on this issue. The long and the short of it is, JCP is far from being a social business. They clearly don’t listen to their customers and have done a lousy job with the Customer Experience. They’re a siloed organization trying to turn things around. Right now, I think they’re grabbing at straws, and making knee-jerk decisions in desperation.

      Perhaps JCP thought that by starting fresh they’d only be acquiring customers that would be brand advocates. Clearly though, with the direction the company’s taken over the past year, passions have been ignited. And just reading the many negative comments from people on the original Facebook page, JC Penney should have known that the detractors would jump over to the new site, driven by emotion. I think a better strategy, if they wanted to blow things up and start fresh, would have been to work with the entire community through the old site first…engage with them…listen to their complaints…try to turn the detractors around. Then once they’d shifted a big chunk of the sentiment towards the positive, make a fresh start. Timing-wise, the core of people jumping to the new site would then be weighted towards advocates. If anything, all that JCP has now done is stirred the pot. They’ve ignited negative passions even more, by giving these people a new platform to criticize the company on. What has JCP really accomplished in building the new page? …changed some of the branding, greyed their logo, and kept the UI the same because it’s Facebook. They’ve put lipstick on a pig, and customers know it. To their credit though, they have also begun to engage, but the engagement is not consistent. It’s tough to be consistent and authentic in one customer touch-point, when your culture is not, by design, very customer-centric.

      Thanks for raising some good points.
      Mark

    • Brian, how can anyone make the assumption that their existing Facebook following was “likely unprofitable”? [You wrote: “While JCP may be alienating old (and likely unprofitable) customers”]

      Corporations rarely care what their customers think nor do they appreciate how important their front-facing employees are to their success. Excessive focus on short term bottom line numbers leads to unhappy shoppers that hurt your long term profitability.

      Changes in management often result in change for the sake of change as the new manager seeks to “make their mark”. There are often only two logical ways to do something, so many corporations keep going back and forth between them each time a new manager gets assigned.

      That advertising works and many people blindly do whatever they’re conditioned to do is the only reason brands are still so successful. Name a corporation that actually listens to those who complain. What they are really hoping for is to silence their critics instead. That is what is behind PIPA, SOPA, CISPA, and DMCA takedowns and why most social networks allow them to delete what they don’t like.

      By now many brands have realized customers want to be heard and deleting complaints only leads to them escalating their dislike on additional platforms. There is no way I would recommend starting over instead of fixing the issues in place. This move reminds me of IBM constantly deleting content and moving pages without redirecting them – making them nearly impossible to ever find again. If they didn’t know better what corporation would?

      Either businesses do not know who to listen to or their egos are in the way of their success. That applies to people in government and education, too. If those in the social media trenches with the experience try to make suggestions they often ignore or delete them. Some people just have to learn the hard way by making their own mistakes.

      • Hi Gail,

        Sounds like you have a few axes to grind. Sorry if I hit a sore spot. There are plenty of orgs that listen to customer feedback and are working hard to create a better experience and create more value for their customers. It’s simply good business.

        However, we’re in agreement and on the same side of that conversation that most just don’t get it right and are beholden to a system that penalizes short term losses – the stated reason why Dell just delisted and went private. I shared some thoughts that I’d love your feedback on just last week here http://www.brianvellmure.com/2013/01/31/everybodys-talking-about-customer-experience-customers-still-not-getting-what-they-need/#.URMqOVpdclk) and have made a career helping orgs better align with their customers.

        But, perhaps you’re connecting dots that may or may not be related? The truth is I don’t personally know and am not privy to the data that’s driving the decisions. I’d be interested to know if anyone reading or commenting here is, or if the claims that this is bad strategy is just “rah rah” in an echo chamber?

        To be clear, I’m not saying this is bad strategy or good strategy. I simply don’t know and am encouraging those drawing hard conclusions to perhaps consider other factors and realities that may not have been considered. In order to make an assessment, I’d need to have a much better understanding of the retail apparel and parallel market(s), customer, and organizational drivers, capabilities, and competencies to understand if this move made sense or not.

        “How can anyone make the assumption that their existing Facebook following was “likely unprofitable”?

        I don’t know how anyone could, nor should they make this assumption. Apologies if my comment led you to believe I was making that assumption.

        Along those similar lines of thinking, How can anyone make the assumption that this actually made a significant impact on JC Penney’s ultimate success? That this is bad strategy when they are not privy to the data and drivers that may be guiding this move?

        How important is a facebook fan to the overall success of JCP?
        How much do these fans impact the bottom line?
        What was the average profitability / Lifetime value of an old JC Penney fan?
        What will be the average profitability / Lifetime value of a new JC Penney fan?
        What is the financial impact of creating a new facebook fan page? Positive/negative? What is the range of scenarios that could play out?
        What are the barriers/obstacles for existing fans to like the new fan page?
        (I just tested it. It took less than 2 seconds to click the link for the new page and “pretend” I was clicking the ‘like” button on the new page).

        Might there be benefits to having a brand new opt-in community with rejuvenated fans who buy into the new vision than staying in the legacy conversation with the legacy fans?

        If a retail store moves its location, does it mean they don’t care about all of their previous customers (or simply that they moved and invited others to join them there?) How is this significantly different?

        In summary, I’m not saying that I agree and support the moves by JC Penney. I don’t have the time nor the interest at present to dig deeper to come to any real conclusion(s). I’m merely introducing a series of questions that may help others to consider that running a business requires more than engaging with people on facebook, that it may not be quite a big an issue as some are making it out to be, and that it seems that there are a number of assumptions baked into the conclusions and criticisms that don’t seem to be able to be substantiated with any meaningful data and a complete picture of the realities of the situation.

        JC Penney made $17 Billion in revenue last year.

        What impact will this really have? How much does this really matter? And finally, how do you know?

  4. What JCP essentially did is shut down its old stores and opened new ones as is if there is/was no connection between the two. I can’t see where this has been done before, as usually a retailer does all they can to retain all groups of customer, past, present and future.
    I went in to see their sale and listened to customers. The younger customer JCP wants is slowly arriving and there is still the large population of the customer that has been cast aside wandering about and trying to figure out where they belong. The stores are ugly and uncomfortable to the former customer base, which is by design. I would like to see their data that showed that the younger customer could be trained to shop in this manner.

    • Mark Orlan says:

      Hi Vicki, my sense from listening to Ron Johnson’s interview last week on CNBC, the action they’ve taken with the Facebook page, and other changes I’m sure, is that JCP is doing exactly what you say. They’re alienating their old customer base and trying to reposition with a younger, more affluent group of customers. To borrow and modify a phrase from an old classic film…frankly, I don’t think they give a damn. These actions go against common wisdom that it’s easier to sell to your existing customers than try to attract new customers. But that’s exactly what Ron Johnson is betting the company’s future on as he talks about what’s key to JCP’s transformation.
      I think you hit the nail on the head. Thanks for your comments.
      Mark

      • Hi Mark –

        I’m afraid that revamping a facebook page is not going to change anything at jcpenney,,,people spouting off, good or bad on a social media network does not transfer to sales profits. I’m a sales clerk at a jcpenney and many of the older and yes loyal customers have no interest in fb. These people have been thrown out the door. Mr. Johnson is trying to appeal now to the younger generation…yes, many of these kids have mommy and daddy’s money to shop with, but even working in a college town, most of our customers are middle age and up. The people with money to spend are the baby boomers, and yet they are the ones who are being left out. Over and over again on a daily basis we hear how people just can’t find anything to buy in the store. This from loyal customers of 10, 20 , 30 years or more…they feel jcpenney no longer cares about them. Mr. Johnson at one point made a comment that he felt that we needed to ‘re-educate the jcpenney customer’, like they were idiots and didn’t know how to shop or what they wanted. What they want is a coupon, sales and door busters. They want to see on the receipt how much they saved. It blows my mind when I think about the lay-offs that have begun and the amount of money they seem to be throwing away to try to fix this mess. Yet another new logo, the second one in a year. Can you imagine what that must cost, new signs, new letterhead on stationary, new boxes and bags etc…for 1200 stores! New hand held check out devices ( which are slow and don’t allow the customer to watches as items are rung up, angering customers)…more $ spent. Remodeling of the stores…huge money. I see that the board is going to give Mr. Jonson another year to turn things around. I’m afraid that if they wait that long that I along with 1200 jcpenney stores worth of employees will all be on the unemployment line. I could go on and on. In short, despite the pay, the long commute to work, yada yada, I like my job at jcpenney, I enjoy the interaction with the customers and the people I work with, and it would be a shame to see jcpenney a long standing institution which was built by one man, James Cash Penney in 1902, have to shut down because of the mistakes made by Mr. Johnson and the board of directors. It’s time for Mr. Johnson to either swallow his pride and make the changes that the customers want, or to step down.

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  1. […] Penney’s also took a beating this week by deleting its entire Facebook page with almost 3 million likes. Years of work ruined by a click of the mouse and poor online strategy. The negative comments far […]

  2. […] J.C. Penney Just Lost A Community of 3 Million Facebook Fans. Where’s the Strategy in that? […]

  3. […] Penney’s also took a beating this week by deleting its entire Facebook page with almost 3 million likes. Years of work ruined by a click of the mouse and poor online strategy. The negative comments far […]