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Takeaways for Your Credit Union…From JC Penney’s Overhaul

By Laura Enock

Throughout the years, credit unions have taken a page from retailer playbooks, with cutting edge facilities designed with member experiences in mind. Retail, however, has changed, too. Consider Apple, for example, with their almost community feeling and un-store settings. My favorite recent overhaul (make that very recent overhaul) of a retail experience is that of one of the most venerable of retailers, JC Penney.

Personally, I shop JC Penney for curtains and towels as well as the occasional accessory. But my teenage daughters’ love the clothes JC Penney sells, the prices always seem reasonable, and so it’s usually our first stop at the mall. As of Feb. 1, when Ron Johnson, a former Apple executive, implemented the new look and feel, JC Penny has become a whole new experience.

As senior vice president of Retail Operations at Apple Inc., Johnson pioneered the concept of the Apple Retail Stores and the Genius Bar. He joined the company in January 2000, but left to join JC Penney in November 2011. Before Apple, Johnson was vice president of merchandising for Target.

Under Johnson’s direction, Apple’s retail stores achieved a record level of growth. But forgetting about Apple for now, how do his dramatic improvements to JC Penney translate to strategic marketing and development ideas you can bring home to your credit union?

Let’s start with the new catalog that arrived in the mail. Looking more like a magazine than a catalog, (though not at all like a magalog, which has its own problems) my kids loved it, and so did I. Featured outfits were interspersed with stories that had nothing to do with JC Penney, but were of interest to me, the customer. Unlike most junk mail fliers, the new catalog sat in our magazine rack for a few days. When the new flier/catalog arrived a day before March 1, I knew I had to hold onto it so everyone could read it.

Your credit union, of course, is not selling clothing or home décor items. However, your newsletter/magazine doesn’t need to limit discussion to your products and services. What about tips and ideas on how members can better handle their finances? What about stories that interest your member—and make them want to hold on to your publication? What about brain teasers, financial cartoons, and provocative questions that get them started talking (or at least thinking) about money management in their own homes?

I’ve seen this done. It’s why I established almost a decade ago. And I’ve seen credit union newsletters transformed from almost 100 percent promotional towards the ideal of 80 percent informational/educational/entertaining and 20 percent promotional. It can be done, and members are hungry for this type of information!

How does your current newsletter stack up? Objectively speaking, could it be considered—by members—as junk mail? (ouch.)

Another big change taking place at JC Penney is more basic—something as fundamental and old fashioned as a goal. Their goal is wonderful for several reasons. Success factor #1: JC Penney is not shy about sharing that goal with all of us. It’s not corporate babble, discussed at annual meetings among company executives and then forgotten about. It’s in clear, concise language that we can all understand and relate to. And success factor #2, that goal really shaped what they’re doing.

JC Penney doesn’t want to be the biggest store or the best-priced store. They want to be your favorite store.

Don’t we all want to be the favorite “bank” of each member? Can you share that vision with your members–and then ask them what it would take?

Think about it. This means you don’t necessarily need to be open on the weekends, offer products you currently don’t provide, or have 3,000 branches across the country. If your members love you, if you’re their favorite financial, if you’ve thought about what’s most important to them, then, folks, you’ve done your job.

How about promotions? JC Penney ran 580 promotions in 2011, and will be running just 12 in 2012. Wouldn’t it be great to save on all the expenses and busy work that comes with each promotion? And, doesn’t it get kind of watered down after a while, when there are more promotions than days of the year? While your credit union probably doesn’t have nearly as many promotions as JC Penney hosted in 2011, is this an area where you might want to look at the possibility that more is truly less?

Next is what they call ‘fair and square pricing’. When Mr. Johnson joined JC Penney, he couldn’t believe the complicated pricing. Sales were an everyday occurrence, and pricing models were complex. His response? Solid, “fair” pricing in the first place, so there’s no need to wait for a sale. Even though Americans have been conditioned to wait for sales and expect prices to drop continuously, JC Penney is transparent with pricing. Consumers know how and when to expect sales, but the original price is “fair,” so why not buy it now?

It’s way too early to look at results, of course, but as a consumer, seeing what they’ve done to a store that was dated is inspiring. I’ve always considered JC Penney’s merchandise to be a good value—you get your money’s worth. Even though they may not have the glossy ads of a Bloomingdales, or even the latest styles, they sell quality goods at a good price. Can you see the parallel to credit unions? For many people who have never heard of a credit union, the reputation of that small table in the church basement still lingers. For some members, the credit union is okay for some products, but you’re not their “favorite store.” However, your credit union has—or should have—the best deal in town. There’s value. Better rates across the board—fair and square!

JC Penney’s turnaround and revitalization didn’t create something new. It simply polished and showcased what was already there in a better—much better—way. The concepts are excellent. It’s exactly what credit unions, as a movement, need. Maybe it’s what YOUR credit union needs. If so, take a careful look at what they’re doing, and follow their progress. I’d love to hear how you’ve taken their strategies and applied them at your credit union.

How many of JC Penney’s strategies are you planning to implement? Please, share at!

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