Perhaps I’m channeling the inner ukulele player in me, but my all-time favorite cartoon, often considered to be the “Citizen Kane” of its kind, is “One Froggy Evening”, created over 60 years ago.
The plot centers around a mysterious amphibian, one Michigan J. Frog, unearthed in a cornerstone shoe box during the demolition of an 1892 building. Recognize him? Michigan J. Frog.
He comes out of the box, puts on a top hat, carries a cane, and sings popular songs of that era, like “I’m Just Wild About Harry”, "Come Back to Erin", and “Hello Ma Baby”.
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The awestruck construction worker who finds him begins a series of “test market” situations, his exploitive mind bursting with ways to create customer value, and riches for himself, with the multi-talented Mr. Frog. Whenever the two are alone, the frog sings and dances up a storm for the worker. Unfortunately, every time the frog has a chance to perform in front of others, all that comes out is a “rib-it”, while seated, sans top hat and cane, like a green lump of clay.
The cartoon is really a dark comedy about blind, overblown human aspirations and expectations. The plot line has a great deal of similarity to unprepared new or revamped businesses, which trumpet experience promise to potential customers (in the case of the construction worker and Michigan J Frog, even offering free beer), but create value frustration because they never deliver against expectations.
Two of the best, and most public, examples of Michigan J. Frog-type customer value letdown and botched delivery relative to expectations are J.C. Penney and Target in Canada. As reported last year, after only two years operating in-country, Target’s departure from the Canadian market has resulted in the closing of all 133 stores and the laying off of more than 17,000 employees.
Target entered Canada in a very active and assertive manner, with the ad tagline if “Expect More. Pay Less.”; but they significantly underdelivered on experience value, disappointing customers right out of the gate. Customers were led to expect a good retail experience, but got considerably less. Immediately, the perception of Target in Canada was diminished and undermined, especially given their reputation in the U.S.
Real or imagined overpricing, inferior merchandise quality, poor inventory and distribution control (empty shelves and stockouts), terrible store locations and store layouts, and an overall lack of understanding the Canadian consumer’s retail needs and wants were just some of the reported contributors to their demise.
At the end, instead of being seen as a trendy, customer-friendly and affordable store, Target Canada was caught in a hand-to-hand pricing battle with Wal-Mart, which is never a good idea; but Target was still viewed as being more expensive by comparison. This has been a case study in poor senior management decisions, and the disconnect they have (or had) with the actual market. Branded customer experience can be both positive and negative; and, for Target in Canada, the brand and the experience alienated customers.
So, by consensus, here were principal reasons for the failure:
1. Poor Store Locations and Layout (former Zellers discount stores)
2. Misinterpretation of Customer Reception Into Market
3. Early Overpromise and Creation of High Expectations
4. Insufficient Stock and Inventory Planning/Distribution Chain Problems
5. Poor Quality Merchandise
6. Pricing Miscues, Resulting in Perception of Being Overpriced
7. Low Customer Trust/Failure To Meet Experience Basics
8. Diminished Sentiment and Reputation/Image
9. No Internet Shopping Site for Canadians
Any one of these could have impaired Target Canada’s brand image, cut into sales and loyalty behavior, and/or undermined store-level performance. Collectively, they spelled CUSTOMER DOOM; and Target seemed either unwilling or unable to make necessary course corrections in time, or with sufficient effort, to save their investment in Canada.
As one analyst noted: “They diminished people’s image of what Target was. They should have done fewer stores, but better stores.” It took the company less than two years to go out of business in Canada It was a classic Michigan J. Frog plot line.
And, even more like the construction worker was Ron Johnson, during his time as CEO of J.C. Penney from 2011 to 2013. His Michigan J Frog concept, quickly trying to change a long-time discount-oriented brand strategy and making the store a unique destination to shop, and also entertain themselves with a different, ‘mini-mall’ town-square, retail experience (designed to keep them shopping and spending), was an exercise in Value Overpromise 101
Compounding this monumental error in judgment was the decision to roll out the “fair and square” pricing and merchandise concept to all of their stores at once, without benefit of testing. The two decisions were a customer-ignoring failure for J. C. Penney. In-store, shoppers were met with higher prices and a disappointing experience. Metaphorically, the disastrous result was the rush to present a frog who wouldn’t sing or dance, producing dramatically lower store traffic and sales.
Like the construction worker who was booted out of the talent agent’s office when the frog wouldn’t perform, Johnson was quickly ousted by an upset J.C. Penney board. Though, through extensive testing, the chain has since re-tuned many parts of the business (including a major upgrade of Penney’s hair salons, and a greater emphasis on home goods, footwear and handbags), the financial press has observed that this increased customer sensitivity may have come too late. Will the frog ever sing and dance enough to produce sufficient customer value for Penney? That’s a looney tune we’ve yet to hear.
Every parable needs a moral: Even if your value proposition represents real potential value, such as Michigan J. Frog’s unique song and dance routines, you can't get away with not at least meeting set expectations. Yes, you can look like a frog, and someone may take a chance on your talents. But, there are few second chances in life. Just ask Target and J. C. Penney.