Ron Johnson Out: The Customer Experience Files

I was in a cab yesterday with my wife, who works in the fashion industry, and she casually mentioned that Ron Johnson was out at JCP. I can imagine that everyone in the retail and fashion industry was aware of this 12 hours before the rest of us.

This morning I was watching Squawk Box on CNBC and Richard Branson along with Virgin America CEO David Cush were being interviewed. Cush was asked about JCP and replied that the key lesson is that you don’t destroy your existing business model before ensuring that the new one works. This is good advice but I think it radically oversimplifies challenges at JCP and creates false comfort for business executives prone to thinking that methodical change is better than radical change.

JCP is interesting to look at from the standpoint of customer experience and Johnson deserves credit for doing things that ultimately will prove to be essential retailers in all segments. What Johnson got wrong is that brand doesn’t drive customer experience, but rather brand reflects customer experience and a new logo, splashy store displays and forward leaning messaging can’t overcome what happens when actual people interact with the environment you create and worse, interact with other people called employees. If everyone isn’t up to the new task you will end up failing and doing real damage, this is the lesson I took away from the Ron Johnson era at JCP.

Brand Keys Customer Loyalty Engagement IndexBrand Keys is a company that measures brand engagement, specifically the emotional engagement that customers have with the brands they interact with. The 2013 survey was revealing on several levels in that across the 54 retail categories they survey, 39,000 consumers, several consistent themes are evident and all refute what Johnson actually did at JCP, which had a brand engagement score that s between 11-20 points below retail category leaders, they have been demonstrably failing at connecting with customers.

Customers today connect more strongly on brand values than at any previous time and this is critical because even in durable goods categories you don’t purchase things one-off. you come back and buy again, or make purchases of products in adjacent categories that reflect that brand experience you are striving for. Brands that have had consistent brand positions and deliver on that with everyday action also benefit from higher brand engagement, and companies like J. Crew, Apple, and Virgin America are good examples of this.

JCP is a mess and likely will not get better, they have lost connection with customers, who are now shopping at Macy’s and Kohl’s and unlikely to return. The physical retail experience is improved but the integration of digital and physical is weak, impairing their ability to convert customers from other brands, but most debilitating is the demoralized workforce that is the front line of customer experience. It’s a death spiral and I would not be surprised if JCP were acquired in the next 12 months. The new normal is unforgiving and punishing for brands that ignore it.

Customer Experience: The Little Things Edition

I took my children to In-N-Out Burger for lunch today and before we left I wanted to wash my hands. Lunch was enjoyable, the staff was pleasant, and the overall experience was up to their usual standard but the one thing I really noticed was how much paper the automated dispenser gave me when I finished washing my hands.

We have all had the experience in a public restroom where you do the hand wavy thing in front of the red dot and about 3 inches of paper spits out. so you do it again, and again, and yet again before you get enough to complete the drying part of the operation. It is obvious why businesses do this, they 1) never bother to adjust the machine when it is installed, 2) think they are going to save money on paper towels under the belief that we are too stupid to get the machine to give us more paper, and/or 3) just don’t care.

In-N-Out pays attention to the small details because they give you enough to dry off and it is representative of their entire operation, the small things add up and impact your overall experience. It may just be a burger and fries but they have set a standard for fast food that others covet so the next time you think something is too small to care about I would urge you to think about washing your hands.

Customer Service: Getting the Basics Right

Yesterday I needed to stop at the grocery store to pick up a couple of pantry basics, and because my errand path had me away from the store I usually go to for such items I ended up in a Safeway… utterly befuddled and confused. The item I needed was not in the aisle that it would logically be stocked in.

After 5 or so minutes of scanning the aisle in the event I simply missed it, I waited… and waited… and waited in the hopes that an employee would saunter past and offer some help. No dice. So from the aisle I googled the store phone number and called, hoping to get to someone who could send someone over to offer help. After navigating the phone tree I ended up in the general customer service queue, and much to my amusement I could hear the in-store announcement system paging someone to “pick up on 201”. After another 4 or so minutes I was dumped into a voicemail box. Now I was frustrated, not only do they not have someone physically present that can help me but they don’t have anyone on the phone either… I called again, this time short circuiting the phone tree and after another couple of minutes I did get someone, who was subjected to my frustration (not that she cared anyway) and then someone hurried over to aisle 6 to help me.

And then my new in-store helper did something that went beyond the absurd… he started looking through the shelves that I had been staring at for a good 15 minutes. Finally, I said to him “hey buddy, I’m not an idiot, I have pretty much memorized what is on this shelf and what I’m looking for isn’t here”. He ran off and came back, directing me to aisle 3. Success.

I left that store thinking:

1) I hate Safeway, they suck.

2) Did that guy think I was a moron?

3) I will be hard pressed to go to that store again.

Customer experience matters and in Women’s Wear Daily (WWD is a trade publication for retail, they cover a fascinating range of subjects and increasingly are a goto source for me on how social technologies and trends are impacting the retail environment) there is an in-depth article on why customer experience matters more than ever in the face of competition from online retailers. (The WWD is subscription required, here’s an abstraction of the article.)

Customer service is just one element of customer experience, the bigger topic covers everything from what happens when you are in the parking lot to what you do when you are back at home ruminating about how you had to call the store’s switchboard to get someone to help. Bottom line, this shit matters because nothing beats the convenience of shopping online and I will usually get a better price as well… so retailers need to compete on something other than price and promotion.

No segment is insulated, I bought a car sight unseen and had it shipped across the country, the bathtub, hardware, fixtures, and tile for our new bathroom all came from online sources, when Amazon Fresh arrives I will shift grocery spend to them, and I haven’t stepped foot in a Best Buy in years.

Lastly, over the weekend there was an article about Virgin America (still growing but still losing money) and what was interesting was the comment thread. The overwhelming majority of comments highlighted the great customer service the company delivers… the total customer experience that focuses on getting more money – repeat business – from the customers they already have in addition to acquiring new customers.   This is a great close to my post, retailers need to focus on:

1) Total customer experience: From parking lot to what happens when someone asks you what you think about x, y, or z months later.

2) Use technology to deliver in store help in addition to in person help.

3) Physical aesthetics matter.

4) Empower employees to be decisive and actionable, values matter more than controls.