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.

Customer Experience at the Speed of Trust

Nothing is as fast as the speed of trust. These words resonate from a best-seller written by Stephen M. R. Covey back in 2006. Speed happens when people trust each other. Obstacles are reduced, if not eliminated. Information is shared openly. There is a high degree of accountability. Costs go down. Sounds like customer utopia, no?

Trust is the basis of customer loyalty, the holy grail of customer relationships. But organizations are at different points in their quest for loyal customers. To create a sustainable competitive advantage nowadays, Customer Experience needs to be part of the organization’s overall strategy; otherwise, commoditization becomes the norm, and price wars prevail. However, in many cases it may take years before an organization can become customer-centric. One question on the minds of most executives is: can we get there any faster? Can we somehow reduce the length of the journey?

They say it takes 28 days to break a bad habit. What if the strategy of being product-focussed is not a deliberate strategy, but nothing more than a bad habit which has been taken for granted? You think we could break it in a month? I highly doubt it. But even if we could, imagine how long it would take for your customers to not only detect the change, but also for you, as a company, to begin to put your customers at the centre of your world and have them feel that you truly care about their best interests. Changing people’s attitudes; their belief system, transforming a culture…such transformations are journeys, often taking years for an organization to reap sustainable benefits from. (That’s not to preclude short-term gains being made along the way that show progress and keep the momentum going.)

Your organization is going through transformational change. Why should I as your customer, trust that you’ll change for the better? Why would I trust that the path you take will work…for me?

I like how Simon Sinek defines trust. He says: trust is a feeling. It comes from a sense of common values and beliefs. Trust is important because when we’re surrounded by people who share the same beliefs as we do, we’re more confident to take risks; to experiment and make mistakes; to go off and explore. We know that there’s someone from within our community who believes what we believe, will watch our back, and will help us when we fall over.

Think about it. When we truly trust someone, we let our guard down. We simply believe. In a business setting, when we meet someone who is trustworthy, are we as rigorous about doing background checks? Are we as concerned about the details of the contract or statement of work they present us with? Are we as rigid with our budgets or can we be more flexible? Our gut tells us that they’ll be fair with us, that they’ll be reasonable, that they have integrity. Think of all the measures we put in place because we don’t trust people. Think of all the money that’s wasted on legal reviews and compliance; think of all the time we spend developing policies and procedures to protect ourselves. Now think about how easy it is to do a deal on a handshake when you trust the other person.

Think of all the measures we put in place because we don’t trust people. Think of all the money that’s wasted on legal reviews and compliance; think of all the time we spend developing policies and procedures to protect ourselves.

When we trust a company that we’ve bought a product or service from, we’re more likely to recommend them to our friends and family. We’re confident that by recommending the brand or the organization we’re going to maintain our own integrity. We’re putting our good name on the line. We want the other person to feel just as good about the experience as we did.

Social media is a huge boon to trust. Social media opens up a window into an organization. When an organization puts itself out on Facebook, Twitter, YouTube, LinkedIn, and blogging sites, their personality comes through. They become transparent. We catch glimpses of their communication style, the openness of their leadership, their integrity as an organization, and their approach to giving and receiving feedback.

Most of us know of companies that have implemented a well-executed social media strategy; you don’t have to look very far. Companies like JetBlue, Dell, Best Buy, Ford, Zappos, and Starbucks, to name a few, understand the importance of transparency. We probably have come across others that may have hired interns, outsourced their social community management, or jumped into Social because it’s “free”, and have failed miserably at portraying themselves as a trusted brand; i.e., they’re not responsive, they don’t share content that is meaningful, they don’t engage their customers, and they blatantly try to sell. When we think about how we’ve tried to engage with these companies that have missed the social sweet spot, how do we feel? Are these companies that we would trust to deliver a great experience to a friend or family member that we care about?

Social media is a huge boon to trust. Social media opens up a window into an organization. When an organization puts itself out on Facebook, Twitter, YouTube, LinkedIn, and blogging sites, their personality comes through. They become transparent.

I was intrigued just last week, by our Toronto Transit Commission (TTC). Under pressure by citizens to improve customer service even at a time when budgets have been cut back, the TTC had its first Town Hall meeting, guided by their leadership, that besides being open to the public, was live-streamed, televised, and simultaneously tweeted about. The recently hired Chief Customer Service Officer, obviously socially savvy, responded to each and every Town Hall tweet over the weekend. Since when do you see someone in the public service working outside of regular business hours? The TTC is a very bureaucratic, mistrusted, often-ridiculed public service. Citizens are clearly angry about upcoming service cut-backs and wait times. Yet, the TTC opened up. We think of them as very “old school”, yet they’re taking positive steps to becoming transparent. They are building trust. And while trust isn’t earned overnight, it’s a first step in becoming customer-centric.

Charlene Li, in her book Open Leadership, writes about leading in this socially-connected world. She describes openness as being the new normal. She talks about the importance, as a business leader, of being able to let go of command and control. When you start to dig a little, you often find that the companies that have truly grasped the concept of transparency and its link to trust, have leaders who, according to Li’s definition, are “open”. These same leaders have created a culture founded on trust, among other brand promises, and seem to recognize the importance of having a “customer-first” culture. Li is saying: “Open up or die”. Jack Welch, the former CEO of GE, once said: “If you’re not fast, you’re dead”. There appears to be a clear link between openness, trust, speed, and a fanatical devotion to the customer. While you don’t necessarily have to be open to be customer-centric (look at Apple, for example), Social Media is clearly a scalable lever that can be used by a company to become open and transparent. Transparency builds trust. And trust is the foundation for delivering an enhanced customer experience. An organization that is trusted by its customers is one that has eliminated many obstacles for doing business with them.

So go ahead, get Social, especially if you’re sitting on the fence; but do it strategically. Everyone’s telling you the time is now. Even if your research is telling you that the customer segment that would engage with you via Social channels makes up a very small portion of your overall customer base, it’s more important to show the world that you’re an organization that can be trusted. And who knows, your transparency may be picked up by a blogger, a journalist for a major newspaper, a Gen Y’er who decides to make a video about you that goes viral. It’s all in your customers’ hands now. Remember, the sooner you open up, the sooner you’ll be able to establish trust, and the sooner you may move the needle on your Customer Experience strategy.

Putting the Tactics before the Strategy in Customer Experience

Human nature is to want immediate gratification. We want the “quick fix”. Whether it’s that shiny new bike (I’m into cycling) or the new coffee maker (because we didn’t do a great job of de-scaling the old one). Whether trying to change a culture by listening to a motivational speaker at a trade show, or driving business through your restaurant using a Groupon-type scheme, we are an impatient bunch. When it comes to the Customer Experience journey, we are no different. We want to shorten that journey so that it’s completed in a quarter; so that we can show quick return in our financial reports. Problem is, it’s a journey, and beginning a journey at the mid-point is like making a peanut butter and jelly sandwich and cutting the sandwich in half before you’ve put the jelly on the bread. It’s not how it’s done.

Earlier today I connected with two potential clients in completely different industries, but linked by a common thread. (Besides the consulting work I do, I’m also charged with developing new business for the CE Strategy firm I work for.) In both cases, neither organization I spoke with had developed their Customer Experience strategy – the first, a large insurance company, owned by a major global brand, was preparing to implement NPS (Net Promoter Score) as the new standard to measure customer experience. The second organization, a national energy company was working on developing metrics to measure the effectiveness of its customer-facing staff.

…beginning a journey at the mid-point is like making a peanut butter and jelly sandwich and cutting the sandwich in half before you’ve put the jelly on the bread.

The point is, neither organization had even thought through a strategy of how Customer Experience could be designed and rolled out across the company. Neither had considered the economic implications of becoming a customer centric organization. Nor had they considered overall objectives of such a journey – they were just jumping right into measurement. Why? Probably because it’s something that people can wrap their heads around…it’s not that difficult to explain, and it provides something immediate…numbers. And people understand numbers.

It’s not like organizational change, which is “touchy-feely” stuff, requires major committment from all levels in an organization, and will most likely take years to see results with.

I used to be in the Customer Experience measurement business, providing one of those online data collection solutions to capture voice of the customer and transactional feedback. You know the kind…”Go to our website or call our 1-800 number and tell us how you feel to be entered to win our grand prize.” We sold and ran our measurement program to customers in Financial Services, Travel and Hospitality, Healthcare, and Retail. One of the key reasons I got out of it was I didn’t believe it was the right starting point for raising the bar with customers. Yet organizations were jumping on the bandwagon. Why? It was sold as if it could solve the customer satisfaction problem. And it was a technology, and it was cool.

We want to do Customer Experience, we want to have better satisfaction scores, let’s put in a measurement system and surely we’ll be able to raise our customer sat scores in less than a year. We’ll tell the world of our success, our customers will see higher scores, and buy more from us.

But time and time again, it didn’t create real organizational change. It really never transformed the organization into one that truly put the customer at the centre of the world – but rather, it created an environment of hypocrisy, some management distrust, and even some passive aggression. Guess what though? The executives signed off on it and they even sold it internally to the rest of the organization. It must have been perceived as a “quick fix”. “We want to do Customer Experience, we want to have better satisfaction scores, let’s put in a measurement system and surely we’ll be able to raise our customer sat scores in less than a year. We’ll tell the world of our success, our customers will see higher scores, and buy more from us.”

Adopting a strategy of becoming a customer-centric company often requires cultural change. It starts from within. It starts with employees who trust the organization’s management, and who believe in the company’s brand promise. And it impacts all levels and departments within an organization. Of course there are small steps a business can take in the short-term, to improve customer engagement, to make it easier for customers to do business with you, to respond to customers faster. But in order to truly change, and for your customers to experience the positive change over time, and with consistency, we really need to move things up a notch and shift from jumping in and trying to fix our problems with tactical solutions, to considering the customer from a strategic viewpoint. And this takes time, it takes investment, it requires authentic buy-in, and it takes leadership that recognizes the inherent value of long-term customer relationships. There is no quick fix.