|JC Penny Back To Issuing Coupons In 2013|
Just in case you're not aware of the JC Penny story, here's the Cliff Notes version. About 17 months ago (November 2011) they hired Ron Johnson as their new CEO. Johnson was basically hired to attract younger, richer customers. Ron was "a good bet" too, because he used to be Apple Inc.'s senior vice president of retail and helped create that company's very successful retail stores.
Under Ron's leadership, JC Penny rolled out their "fair and square" advertising campaign. Instead of advertising specific products, and a temporary price reduction for those products, this new ad strategy instead emphasized the convenience of Every Day Low Prices (referred to as EDLP in the retail world). "In one spot, a dog jumped through a hula hoop held by a little girl. The text read: 'No more jumping through hoops. No coupon clipping. No door busting. Just great prices from the start.' (SOURCE: http://www.9news.com/money/333745/344/JC-Penney-ad-apologizes-to-customers)
To make a long story short, the switch from coupons and sales to Every Day Low Pricing simply didn't work. The company's sales dropped faster than Lance Armstrong's popularity after he admitted using performance-enhancing drugs. In early May 2013 JC Penny released a commercial confessing to the blunder: “It’s no secret,” begins a new J.C. Penney television ad, to a soft piano soundtrack and nostalgic images of old storefronts. “Recently, J.C. Penney changed.” In the ad, the company shies away from directly addressing Johnson’s upgrades, including Denim Bars to help J.C. Penney shoppers find the perfect jeans, not unlike Apple’s Genius Bars.....these and other missteps (including, presumably, the chain’s much-derided moratorium on discounts and sales) are glossed over as “changes” in the ad" (SOURCE: http://www.forbes.com/sites/clareoconnor/2013/05/01/j-c-penney-releases-apology-ad-begging-shoppers-to-come-back/)
Okay, so what's the take-home message for small business owners like us? While many business lessons can, and will, be taught from the JC Penny story the salient point here is that customers LOVE a sale. Always have. Always will.
Maybe you've seen the bumper sticker that boldly states "You can have my gun when you pry it from my cold, dead fingers." This classic American quote has been around for decades, becoming famous when it was featured in the movie 'Red Dawn'. It's not a huge leap of the imagination to see JC Penny customers shaking their collective fists at Ron Johnson, screaming out their mantra: "You can have my coupons when you pry them from my cold, dead fingers".
Taking away their coupons was probably the death-knell for Ron Johnson.
So, as a small business owner, are YOU offering coupons and sales to your customers?
Be honest. When was the last time you ran an ad in the local newspaper that had a coupon for $___ off the usual price? When was the last time you ran a radio ad offering $___ off for the next 10 people who called your business? When was the last time you announced (on your Facebook page) that you were offering a $___ discount today only? Have you grown complacent and quit sending out coupons?
If you quit sending out coupons, and quit offering sales, you do so at your own peril.
After all JC Penny is back to issuing coupons in 2013 and THEY had to learn this lesson the hard way.
Take a lesson from Ron Johnson and issue some coupons in 2013.....because customers LOVE a sale. Always have. Always will.