APOLOGIES WORK: Why JCPenney Is Using Domino Pizza's 'We Suck And We Admit It' Strategy
It's a huge gamble, but it has a great chance of working.
The backstory: Former CEO Ron Johnson tried to remake the apparel discount store as a cheap-chic destination a la Target — but customers stayed away in droves and revenues tumbled 32%, losing $4.3 billion in sales in Q4 2012.
So the company has taken to Twitter and Facebook, literally begging forgiveness from its customers. It's also running an extraordinary ad which says, "what matters with mistakes is what we learn. We learned a very simple thing: to listen to you." The company has polled its readers on Facebook and is bringing back the St. John's Bay brand as a result.
This type of U-turn — a full confession of failings followed by a mea culpa ad campaign — is extremely unusual for a company the size of JCP. Billions of dollars are at stake: If it works, JCP will get its loyal customers back. If it doesn't then the re-(re)branding will leave remaining customers even more confused than ever, and probably drive more away.
Here's why JCPenney's big bet on saying "sorry" is the right play:
We know this because Domino's Pizza did the exact same thing back in 2010. The company released a video in which executives and customers described Domino's pizza as "cardboard" and "the worst excuse for pizza I've ever had." It shows focus groups berating the product: "the sauce tastes like ketchup," says one member. "That's hard to watch," says one Domino's exec with a lump in her throat:
Sales at Domino's leapt almost immediately. The stock responded too:
In fact, Domino's just re-upped the campaign with a live-stream video of pizza being made in Utah, so consumers can see the pies being made fresh.
Apologizing works because consumers actually root for their favorite brands.
Right now, JCPenney loyalists are quietly cheering their victory over the company's wrongheaded management. They want this U-turn to work.
One told the company on its Facebook page:
That was followed by:
The lesson: Companies don't own brands, consumers do. Take the core of their brands away and they'll abandon you. Apologize, and they'll come right back.