BestMark News

J.C. Penney fair and square pricing plan leaves questions about loyalty

After J.C. Penney acquired Ron Johnson, Apple's retail business leader as its new CEO, the company launched a new pricing campaign called Fair and Square. The program plans to drop coupons and deep price cuts that have left customers unaware of products full prices, which often leads to an unwillingness to pay them. Instead, J.C. Penney said it would offer the same low prices all the time with just two monthly sales to clear out-of-season merchandise.

The campaign, which was meant to drive customer satisfaction and loyalty, might be missing the mark, according to Retail Customer Experience. J.C. Penney needs to first identify what its customers love most about it and then build the program accordingly to drive loyalty.

J.C. Penney's campaign difficulty could be part of a larger trend. Only 24 percent of customers say loyalty and retention programs are very effective, according to a recent study called the Challenges of Building Loyalty and Retention: The New Strategic Imperative.

The study found that effective loyalty and retention strategies aren't simply based on keeping customers at all costs. Rather, strategies should be focused on creating and rewarding advocacy behavior in their customers, which will ultimately help the companies drive the program's success.