What we can learn from the recent JC Penney Debacle

 

What happens when plans go terribly awry as they recently did with the venerable JC Penney “strategy.”  We can learn some valuable lessons here. Especially the one about the “Retail Drug” the non-strategy “Low Price Strategy.
hbrJCP doesn’t need someone who can “execute” successfully, get back to basics, or any such thing. Just as it needed two, five or ten years ago, JCP needs a strategy. It needs to decide where it is going to play — with what set of shoppers, in what range of merchandise, through what physical and digital spaces. And it needs to decide how is it
going to provide a superior value proposition to competitive alternatives in that chosen space. This is a tough task. The department store business is a brutal one. This is not a business in which half-witted strategies can be profitable.
But if JCP doesn’t figure out an answer to these questions, it will revert entirely to the retailing drug — the “low-price strategy.” This is actually a non-strategy. There is a real strategy called “low-cost,” which can facilitate more attractive prices than competitors. But low prices unaccompanied by low costs is an approach to liquidation — which is where
JCP will be if it doesn’t start to think intelligently about strategy.

Marketing Segmentation: not what you were hoping for

Like you, I have sat through too many powerpoint presentations about market segmentation. Somehow it didn’t ring true to me. Or, at least, if it is true, I find it almost insurmountable logic to believe that you can be quite as granular as you think you can.

There was a time when the air force thought it could win all future wars and infantry was obsolete. It took a while for them to realize that they needed the “boots-on-the-ground.” So it is with hard and fast “solve it all” “magic bullet” answers.  Life is hard work.

This blog post has a new slant on segmentation you might find interesting.

 

hbrHer confession was blurted out in the midst of our first conversation about the new digital marketing strategy which we would eventually advise them on: “You know, I don’t think I believe in segmentation anymore.” She said it fast and softly, almost in hope that the sounds around us would make it inaudible. But we did hear it, and responded, “Well, we don’t either….”

…Once the taboo was lifted in our minds and in our conversation, our client, a senior marketing executive in the telco sector, with decades of operational experience, explained that in some of the countries she managed, her marketing teams were simply shelving the results of the segmentations they felt obligated to perform out of routine, or because they felt it was expected of them as serious marketers. They just ignored them. In others, marketers were still adamant that segmentation was the only way to go, but couldn’t explain its benefits. Voodoo indeed.

We agreed to work on a new kind of segmentation based the combinations of jobs that customers need to get done. Here’s how the “jobs done” segmentation works:More Reading

My thoughts:

I can remember almost 30 years ago being shown the results of what may have been the first market segmentation in funeral service. All I can remember were “station-wagon moms” I guess they have been succeeded by soccer moms. Anyway I have noticed something about the results and the reality. Virtually every study indicated the majority of people don’t want to talk to a funeral director BEFORE there was an actual body. On the other hand experience has shown me that when there is an actual body they don’t want to talk to anybody BUT a funeral director. I like the thought process in this article. It makes more sense than putting people in slots.

 

DIY Marketing Why It Can Work Against You

As I have grown older I have discovered I like being creative.  I also have strong opinions.  Somehow that has convinced me that I know how to market myself.  Then I ran into somebody that actually had training and was gifted in that area.

Life is an expensive university.  Here is why “Do It Yourself Marketing” isn’t always a good idea.

 

Because you’re not spending money on outside resources you might think you’re saving tons of money with a DIY approach. Just remember this…it’s not just what you spend, it’s what you spend and get back on what you spend.

, like Steve Jobs did, like Nike’s Phil Knight did, and like every successful business owner does. And, they didn’t just do it when they were big successful companies with huge marketing budgets. They did it from the very beginning of their companies, only months after they incorporated….More at 5 Reasons Why Do-it-Yourself Marketing Can Actually Hurt Your

One more thing.  Recent research and long term experience of most you, dear readers, is showing us that conventional DeathCare advertising is working against us not for us.  Personally, I would look outside the industry for help.  And I would take a few risks…like using humor for instance.

Conventional Marketing Is Dead

I have been talking with a lot of funeral directors about their marketing in the last year.  Just to get a sense of what they are doing and how it’s working.

Well it turns out it’s not.  There is a great deal of frustration out there.

The reason, I think, is that our world has changed and we haven’t seen it.  It hasn’t just changed for us.  It’s changed for everyone and the conventional one-way media strategy is outmoded.  In the near future I will be writing more about this in The Creedy Commentary.  But for now suffice to say that markets are no longer segments as we once understood them they are conversations.  The only question you have to respond to is: “Will you participate in the conversations about you or not?”

This is a huge threat to conventional marketing firms as they struggle to retain their position.  Their paradigm is to “speak at” rather than “speak with”.  It’s a huge difference.

In this video the Chief Marketing Officer of American Express talks about how they have been impacted and some of the ways they have begun to respond.  Yes, this is a mega corporation.  But its size doesn’t mean you are exempt.

Courtesy Mckinsey & Co. 

The World of Market Research is changing

Not only is methodology changing but so is the way we access data.  Power to the people.

In this interesting articel HBR discusses how free research tools available through Google often outperform costly conventional research.

“The only thing quote-unquote wrong with the Google data is that it’s free,” said Eugen. “That’s why I always smile when I hear you agonize over whether to rely on it. I think the reason you trust traditional market research is that you have to pay for it out of your budget.” Stefanie was indebted to Eugen for his brilliance, but that grin was beginning to grate on her….More at Ignore Costly Market Data and Rely on Google Instead? An HBR

 

Speaking of Dying

The antipathy that often underlies the relationships between clergy and funeral director is well known.  Dealing with death in a society that is increasingly unchurched creates too many unfortunate stories for which the funeral director feels blamed.

But there are signs of a new awakening within the church and I believe this awakening will lead to a greater receptivity on the part of the clergy to our expertise.  This blog review of a new book directed at the church’s failure to properly care for the dying is one excellent example.

“Victims of the Wrong Story”. It describes congregations and pastors who lived inside a story that is not the story of the gospel. As they write: “A brief diagnosis of what went wrong in the dying of the ten pastors is that the entire approach and handling of illness, care, and final end of life were outsourced … Death is a condition, a state, but dying is a story … Just what story is at work here?” Read more…

What I would Do:

I would order the book and read it.  If it is what I think it is I would then proceed to schedule a lunch with pastors in my area (I might even target the more obstreperous).  I would give them the book as a gift and explain that I am concerned that our society is not meeting the needs of the dying and that we believe we can help.  I would point to initiatives like The Conversation Project at Harvard.  Then I would offer to help in setting up programs to help people talk openly about dying.  I WOULD NOT HAVE A SELLING AGENDA, ONLY A RELATIONSHIP AGENDA.

6 Ways To Differentiate Your Business

Like it or not most consumers see funeral homes as all being about the same.  You, and only you, have the responsibility of consciously differentiating yourself from your competition.  Here are 6 ideas for starters.

You can purchase goods from larger retailers, buy or consume food from chain stores and restaurants, or patronize local small businesses. Very often, you have the luxury of choosing any and all of these. Take, for example, the pet store market. Many towns now feature large national chains at one end of town and smaller, independently owned pet stores at the other.

With so much choice, commoditization and budget-driven buying behavior, how can this small business owner stand out? For many consumers, even in a budget-conscious economy, the answer lies in the customer experience.

Small businesses are in a unique position to create valuable customer experiences. Their products and services are often niche and business operations are agile and unconstrained by big business rules and processes. When was the last time you called a small business and got put through to an automated call center?

These seemingly small things come together to create a hugely competitive value proposition.

Here are some things you can do to focus your sales, marketing and operational efforts to create a unique customer experience and capitalize on your small business value:…More at 6 Ways to Stand Out Using Your Differentiators – Small Business

What I Would Do:

Within the past few years some funeral homes have been putting on their websites and in their literature statements entitled “Why Choose Us” I like that.  I would definitely create one of those.

It’s a Brave New World Out There

I don’t know about you but the growing transparency forced upon us by social media seems more like a curse than a blessing.  But I guess I don’t get to vote and neither do you.  This brief article shows how other industries are responding and effectively using social media to reduce advertising costs and engage customers as allies.   Seems like a lot of work.  But I don’t think we can afford not to be part of the converstation

 Social media platforms allow customer networks to be bigger, faster and better organized. They increase the downside of getting service wrong and the upside of getting it right.

The effects are both direct and indirect. Zappos generates so much buzz with its fantastic service experience that the company can spend significantly less on marketing than its rivals. This virtuous service cycle spins faster because we get to trumpet our delight on Facebook.

In other words, social media improves service by making the market for peer-to-peer opinion more efficient. This is good news for good service and bad news for bad service. End of not-so-complicated story.

are in the game of helping you become a better architect of the social chatter….More at Use Social Media to Partner with Customers and Improve Service

The Social Life of Brands: Understanding How Customers Think About You

 

Connecting with customers used to be easy, now it seems incredibly complex.  So complex that, if you are like me, you start to shut down.  This article, entitled The Social Life of Brands, is not an easy read, but it is worthwhile if you want to start seeing your customers in a new way and a new perspective.

…this trend — the increasing use of social engagement by marketers — to the rise of online social media: Facebook, Twitter, YouTube, fan sites, and social marketing websites (also known as private-label media) created by companies themselves. But the trend represents a more fundamental change in marketing practice, linked to insights from social psychology, behavioral economics, and neuroscience and brain research. Every form of interaction between companies and consumers — taking place online and offline, in stores and over mobile devices, in branded content and by word of mouth, and indeed through all direct consumer experience — is now understood to be shaped by the social nature of brands.

As marketers put this insight into practice in sophisticated ways, a one-way message or image can no longer compete. The value of a brand is linked to the relationships it fosters: the social connections among people who buy the product or service. Managing these connections at every scale, from an individual contact to a message that reaches millions of people, is the fundamental task of marketing today.

With the right conditions in place, a brand can move beyond a purely transaction-based relationship to become a platform for an experience that feels like friendship. Great marketers have known how to do this for decades, of course, but it is now possible to make authentic connections more consistently. Tapping into the social nature of a brand this way means thinking differently about the expectations that consumers have for the product or service, their view of the company that produces it, and the values they share about it. Some marketers, like Whole Foods, Ikea, and eBay, are consciously evoking a shift in attitude that grew more prominent in the Great Recession: a desire for less acquisition of goods (or even experiences), and for more meaningful, lasting forms of fulfillment. Companies that promise simplicity, connection, and sustainable benefits can gain the most from this shift — but only if they deliver….More at The Social Life of Brands – strategy+business

What I Would Do:

Years ago a couple of fellows by the names of Ries and Trout wrote a book named “Positioning”.  It’s a classic strategy book and I recommend it strongly.  In it they describe what they call a consumer ladder.  Basically, all vendors are given a rank by consumers on a preference ladder with the vendor or product on the top rung typically holding twice as much market share as the next product and so on and so on.  I talked once with Al Riess and asked if they had ever done any work in funeral service.  He said they had and it was among the most interesting they had ever done.  It was the only market where there was only one rung on the consumer ladder.  A funeral home was either on it or not.  So “top-of-mind” awareness is king.  I understood right then and there that regular unabated advertising, not buildings, was the key to building market share…assuming you have the right message of course.

Engagement Is Less Important than Simple

 

Recent research shows us that we may be approaching social media with the wrong idea.

On top of trying too hard to engage with consumers via social media, marketers are generally pushing out too much information, causing people to over-think purchase decisions and making them more likely to change their minds about a product, be less confident in their choice and less likely remain loyal to the brand.

, we surveyed more than 7,000 consumers and interviewed 200 marketing executives across consumer brands and industries to find out. The answer: Simplify the decision-making process, so much so that consumers actually think less about the decision. Marketers can do that in three easy ways by helping consumers:…More at Marketers Have It Wrong: Forget Engagement, Consumers Want Simplicity – Forbes

What I would do:

I would figure out how to use social media to lead back to my website and then have pages there to make the experience easy in the three ways the article addresses.