You may have noticed from the recent blitz of advertising that JCPenney has begun a far-reaching transformation of its business, from its logo to the way it prices its products.
Why change now? Why change at all? As its new CEO, Ron Johnson—the mastermind behind the successful launch of the Apple stores—pointed out at the Jan. 25 launch event, there was no choice if the company wanted to evolve and exist in the 21st century.
Profit was good but sales were stagnant and competition was increasing from online and niche retailers. And the brand had come to represent your mother’s department store—or worse, your grandmother’s.
JCPenney had to change what the company and its brand meant to its audience of current and potential customers.
Changing a logo wasn’t enough. The company had to change the way it does business.
For JCPenney, that means its Fair and Square policy: three basic levels of pricing and returns accepted for any reason (a la Nordstrom).
Said Johnson in the press release accompanying the launch event, “Every initiative we pursue will be guided by our core value to treat customers as we would like to be treated - fair and square.”
Little did JCPenney know that it would be called on to put this into very public practice within days when its newly announced partnership with Ellen DeGeneres was attacked as being against “traditional values” by a group calling itself One Million Moms.
JCPenney consciously aligned itself with DeGeneres knowing it would help them reach her millions of viewers and followers on social media.
And Ellen isn’t just popular; lots of celebrities are popular. She and her show have gained such a large following by representing a new mainstream, one that appeals equally to grandmas and teens, red states and blue. JCPenney’s audience is—or they want it to be—Ellen’s audience.
When JCPenney immediately reaffirmed the choice of DeGeneres as a brand partner after the One Million Moms story broke, the company gained not just her potential audience but a now-outraged community of supporters who began leaving comments on Facebook, Ellen’s site and elsewhere proclaiming that they were going out of their way to shop at JCPenney in response to the criticism.
By treating Ellen “fair and square,” JCPenney was given the opportunity to live up to its new brand promise and thereby connect to its audience not just as consumers, but as part of a community.
What this means for you
- A brand is more than a logo. It represents who your company and organization is and what it stands for. Go beyond the identity markings and think about your core values. Are you living them? Does your audience think you are?
- Audiences are people. Don’t just treat your members or customers as one-time transactors. If they feel connected to who you are and what you stand for, they’ll come back.
- You are part of your community. Your organization or business doesn’t stand alone. How are you connected to your community? How can you do so in a way that is in harmony with your brand’s values?
What you should do next
- Revisit your mission statement. Is it accurate? Do all stakeholders agree? Is it aligned with the way you’re doing business?
- Examine your brand. Does it make sense for who you are? What do your customers say? Have you asked them?
- Prepare in advance. If you make significant changes, be prepared for the potential reactions from customers and the public; plan your response messages in advance. Be willing to own the changes you’ve made, especially if they’re sufficiently different, new or uncomfortable.
- Live up to your brand’s new promise. Make sure your company’s choices and actions align with what you say your brand means now, from customer policies to the face you present to the world, whether it’s a logo, a spokesperson or both.
- Get help. At CDG Interactive, we work with companies large and small, for profit and non-profit, to define their brands, create new identities, and develop a strategy for successfully implementing their brand and business. Contact us to get started with your brand.
Update 10.10.11: Turns out customer backlash (and sagging stock prices) had the final word; Netflix announced Oct. 10 that it would be abandoning the Qwikster plan and site and keeping both DVDs and streaming at Netflix.
Just when you thought Netflix had shot itself in the foot back in July with its ham-handed rollout of price increases on both DVD rentals and streaming, along comes an “apology” email from CEO Reed Hastings—in which he aims for the other foot.
Now you not only have to pay higher prices to watch movies at home, you’ll have to get them from two different companies—one that delivers physical DVDs, and one that delivers online streaming. Oh, and those two companies? They have two different names. And two separate websites. Confused yet?
It would be a slight understatement to say that customers are not happy. In addition to thousands of negative stories, comments, tweets and Facebook status updates (not to mention groups) generated by these two announcements, the company has lost half its value since July.
All of this bad PR has hurt the reputation of Netflix, the company. And that, in turn, hurts the value of Netflix, the brand.
As if that wasn’t bad enough, the new brand Qwikster, which is taking over the DVD rental side, has been thoroughly and publicly tarnished—before it’s even launched.
To loyal Netflix customers, the Qwikster brand now represents a cumbersome annoyance. It’s that new website they have to go and deal with if they want to continue renting DVDs by mail.
New customers will hear about the Qwikster launch through the slew of negative media coverage—if they don’t first stumble on the profane Twitter account of the same name that Netflix failed to secure in advance.
So while Netflix lies bleeding from its most recent self-inflicted wound, let’s take a minute to assess the lessons you can learn from its troubles:
How Your Brand is Influenced by PR and Customer Service
- Brands don’t stand alone. As this example unfortunately demonstrates, a brand’s value is directly related to the reputation of the company behind it, and the reputation of its goods and services.
- Bad PR can kill a new brand. Will Qwikster survive? It’s too early to tell; Netflix’s subscriber base is large enough that it might be able to sustain the hit. But then again, many people thought Blockbuster was too big to topple—until Netflix came along. (And Blockbuster’s now fighting back; they’re taking advantage of the story to promote their own mail rental service.)
- Good PR can make a brand better. Imagine if Netflix’s announcement of Qwikster said that they were renaming their disc rental service to more clearly separate your two queues while keeping them both within the website you already know and love, they were enhancing it by including video game rentals—and that as a thank you for being a loyal customer, Netflix was giving you the first 3 months of Qwikster service free? Would we be telling a different story today?
The takeaway from all of this? Be aware of how PR for your company drives the value of your company’s reputation and brand. Involve your PR and communications professionals in any new brand development and launch. Whenever possible, get early feedback from your customers; once you’ve launched, it’s too late.
- What do you think of the evolving Netflix/Qwikster saga?
- Are you a Netflix customer? Will you be keeping or canceling your account?
- What’s your PR advice for Netflix?
What's in a name?
Would you eat a Patagonian toothfish? You probably have - after it was rebranded as Chilean Sea Bass. Branding Strategy Insider discusses similar efforts to rebrand the asian carp
Click Z has an interesting case study
of why Foursquare has helped some businesses attract a loyal audience while other promotions haven't helped. And the debate online continues over whether you should check in everywhere to collect mayorships or just where you want people to know you are (which may help explain some of the less popular promotions)
Google buys Outlook for hipsters
Google has reportedly purchased a social calendar and planning tool
Google turns off track changes
Google had (emphasis on had) a great little feature called Track Changes
that allowed you to add any page on the web to your RSS reader. This would allow you to receive an update any time the page was upaded - super handy for pages with job postings, news, etc. But apparently not enough people knew about it so it wasn't widely used and now it's gone. I'm disappointed - I found it extremely helpful.
Local Search and blogs
Top Rank discusses the value of geo-tagging blog posts
What must a brand do?
Branding Strategy Insider gives us a Top 10 list for what brands must do to be successful.
Are you ready?
Top Rank offers a check list to help you evaluate the social media readiness of your company and leadership.
Having trouble keeping up with the latest and greatest from Google? Check out Google New. You can sort by product or area of interest or see everything that the Google developers have been rolling out.
How did you want to pay for that?
Facebook hopes that their new virtual payment system - Credits - will become an option as common as PayPal. (Didn't Star Trek used to talk about credits?)
The impossible dream
One app to rule them all? That's the dream of a European project that would allow an application to work on any platform - a web-ready television, vehicle, or mobile device.