Study attempted strategic transformations or turnarounds and you’ll quickly discover that many are rooted in the hopeful–and typically dramatic–shifting of a brand’s customer base.
One frequent theme is the desire to migrate from an older customer to a younger one. The “this is not your father’s Oldsmobile” campaign epitomizes this path.
Another is the desire to “trade-up” the customer mix. The push for a much greater proportion of affluent and/or more fashion forward customers typifies this desired aspirational shift. Sears and a litany of other brands have tried to push this large rock up a huge hill for years.
Perhaps the brand wishes for a less promotionally oriented customer base (JC Penney, plus many others) or to shift from being known for more basic items to be seen as a “solutions-provider” (think Radio Shack).
History reveals that very few established brands are able to successfully execute a dramatic re-configuration of their customer base. Once you get beyond Cadillac and IBM, the list grows short indeed. It’s not hard to understand why.
The more a brand is known for one set of things, the harder it is to persuade consumers to believe something fundamentally new and different. To the extent a company starts to aggressively move away from what made it successful with its legacy segment to cultivate a new group, it risks alienating its historical core. One need look no further than Ron Johnson’s disastrous reign at Penney’s to see how ugly things can get when this sort of strategy is pushed too aggressively and without sufficient customer insight.
Like any trapeze act, the customer trapeze is all about speed, coordination and timing.
Many struggling brands will never survive, much less thrive, without letting go of major elements of their past. Let go at the wrong time, be it too late or too early, and the fall is disastrous.