Earlier this week, J.C. Penney announced that it was going to undergo a major overhaul in the way it does business and communicates with its customers. As we watch this change unfold and wait for customer reactions, here are some of the more positive things business owners can pull from the strategy.
Simplify, Simplify Simplify
This is the best part of the strategy, even though the J.C. Penney strategy is really not simple. They have a three tags system: red for everyday low prices, white for monthly value and a blue tag for the cheapest price. What is simple is creating a normal price tag with the everyday low prices, showcasing the monthly value in a sales display and simply letting the customer see for themselves that the monthly value merchandise is the cheapest. The customers are going to continue to comparison shop. They don’t really need you to do it for them. The lesson in this is don’t complicate the simple strategy, if you say it’s easy then it should be easy.
Whether the changes are simple or not, J.C. Penney is doing the right thing by communicating the potential changes with its customers. Many CEO’s forget that they are in business because of their customers and when customers stop seeing that you are fulfilling a need, they go somewhere else. Communicating changes before they happen also puts J.C. Penney in a position to perform a litmus test for the strategies, if customers like it they can move forward and if they don’t they still have time to adjust it. I think this is a great strategy.
Acknowledge your weaknesses
The most important thing to take away from J.C. Penney’s new strategy is that they weren’t afraid to acknowledge what was wrong. This is not an easy thing for a company to do because it creates the potential for criticism and staff confusion. It’s a good thing because it creates an opportunity and that’s what business is all about. You get to step out of your role and say ‘well, that didn’t go well. How do I fix it?’ This is a powerful opportunity and running a business is an intimate relationship with your customers. To fix a problem you have to acknowledge it, and that’s exactly what they have done.
Strategy is a tricky part of business, but it’s also a chance to innovate in ways that your competition isn’t aware of. This is where the spirit of an entrepreneur is alive and well, and this is where we shine.