Introduction - Section 6 - Customer Management

Some alternative terms used to describe customer management:

- customer-led

- customer service

- customer-driven

- customer satisfaction

- customer-orientated

- customer-centred

- customer care

- customer sensitivity

- customer focus

- customer loyalty

- customer retention

- customer relationship management, etc

· · Organisations are only in business as long as the customer allows them to be, ie

" customers, no sales, no profit, no jobs, no dividends, no wages..."

Bill Synnot, 1996

"...we don't make money when we sell things; we make money when we help customers make purchase decisions..."

Jeff Bezos (Amazon) as quoted by Julia Kirby, 2007

When you buy something, a higher percentage of the time
" buy because it says something about you or you want to say something about yourself. It has a certain emotion, it is very customer focused......these things appeal to me..."
Linda Jackson as quoted by Tony Davis 2019

It is important to create and deliver what your customers want, when and how they want it. Furthermore, you have to do more than listen to your customer; you have to lead them.

Need to reverse the pyramid that normally has the CEO at the top, and position the customer at the top.

The aim is to make a customer a permanent or life-long client. Furthermore,

"...There is only one valid definition of business purpose: to create (and keep) a customer..."

Peter Drucker as quoted by Robert Heller, 2000

There are 4 basic ways of attracting a customer

i) creating utility or purpose, ie focus on the needs of the customer

ii) pricing

iii) adaptation to the customer's social and economic reality

iv) delivering what represents true value to the customer rather than cost to the supplier

The last one is the most important.

" the customer pays depends on what makes the most sense to him. It depends on what the product does for the customer. It depends on what fits his reality. It depends on what the customer sees as "value"..."

Peter Drucker, 2001

Peter Drucker elaborates by observing that the foundations of a successful organisation must have customer-based values and customer-based decisions. It will be from these foundations that management policy and management strategy increasingly will have to start, ie the customer must be the starting point.

"...Consumerism..demands that business starts out with the needs, the realities, the values of the customers. It demands that business defines its goal as the satisfaction of customer needs ... it does not ask, What do we want to sell? It asks, What do our customers want to buy? It does not say, This is what our product or service does. It says, These are the satisfactions the customer looks for, values and needs..."

Peter Drucker 2001

As the customer becomes better informed, demanding better value, more choice and faster product turnaround, organisations will need to become more customer-focused, ie learning about individual buyers and tailoring products and services to suit their needs. Furthermore, in general the market is becoming more and more fragmented and consumers more individualistic.

Organisations that are very good at offering excellent customer service are very profitable, ie

"...businesses in the top quintile of relative service quality on average realise an 8% higher price than their competitors..."

Valarie Zeithaml et al as quoted by Harry Onsman, 2004d


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