A couple of weeks ago I had the opportunity to hear Ron Johnson–JC Penney’s new CEO–present an outline of his transformational strategy. Short version: take a heaping tablespoon of Apple, add a dash of Target, fire the deadwood, stir, and then… a miracle happens.
To be fair, there were plenty of bold, inspiring new ideas presented–and I absolutely agree that Penney’s needs much more than a modest upgrade.
But the scariest thing was Johnson’s insistence that it was sensible to do zero consumer research and eschew any real customer analysis (in fact, one of the first things he did when he took the helm was to blow up both the strategy and the customer relationship management groups). He glibly mentioned the collective experience of his new hires and said that was sufficient to decide on the new strategy.
While reporting dismal quarterly results yesterday, Johnson and team said they were surprised how hard it has been for their new strategies to take hold and by the degree of the corresponding sales decline. Really? They were only surprised because they failed to do the analysis before they boldly swung for the fences.
Consumer research and robust customer data analytics are not the be all, end all. As the name of this blog suggests: customer-centricity is both an art and a science.
Of course, history shows us that consumers are often not very helpful in reacting to innovative new products or programs. But history also shows us that some of the most successful brands have embraced deep customer insight and competing on analytics not only as a foundational element of their strategy, but as a major source of competitive advantage.
You may be able to thrive on gut feel when you have a superior product line, little direct competition and a simple operating model. But in most businesses, customer-centricity means developing deep customer insight, robust analytic capabilities, actionable segmentation schemes and a commitment to treat different customers differently.
For Penney’s leadership it’s time to get humble, admit you have a problem and take the steps to get back on track.