Business is about customers. Renowned management guru Peter Drucker described the purpose of a business is “to create a customer”. He went on to describe the function of a leader is “to serve the customer so that over time the customer becomes loyal to the product”.
While simple and elegant in concept these principles often get forgotten by CEOs as the constant evolution of change overcomes them and they become consumed reacting to market dynamics, rather than proactively anticipating changes in the market and being at the forefront of change.
Maybe we need to review some of the fundamentals. Every business begins with a solution to a problem. If the solution is successful the founder and their soul brothers get caught up in the euphoria of that success and the business grows rapidly. At some point it will reach the “tipping point” and growth will accelerate. This creates all kinds of problems for entrepreneurial founders who are typically ill equipped to deal with the need to morph into more professional managers. So they either sell the business, or hire professional managers to deal with the natural evolution into a mature company.
The problem with handing over the day-to-day management to professional managers is that they naturally settle into a business-as-usual complacency and are not sensitive to customers and their changing requirements. As a result, technology and more customer savvy competitors begin to pass them by. It is a fact that if customers get to the future before you do, they will leave you behind. That will start any company down the slippery slope to irrelevance.
To make sure that this does not happen to you requires doing everything possible to insure that your customers are pleased with their experience with your brand. The ultimate goal is for them to have an emotional bonding with the brand so that they proclaim “I love it”, and tell others.
How do you accomplish that? By talking to your customers and involving them in the new product development process so that they are already presold when the new product or modification of an existing product is introduced. This is what CRM – customer relationship marketing is all about. If you are not actively involved with your customers you cannot possibly anticipate their changing requirements, do something about it, and continue to migrate with them.
Customers are appreciating assets. It’s the Jeff Bezos – Amazon model. You should be planning on how to increase the lifetime value of a customer, not the volume of individual transactions.
Just take a look at market leaders like McDonald’s, and what they are perpetually doing – delighting customers with new promotions, new healthier offerings, and value. The same basic principles for success apply: quality, price, and service.
Customers are looking for faster, better, and cheaper solutions – give it to them !