Create and Keep The Customer

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

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

Bill Synnot, 1996

"...I would say you can never go too far wrong by thinking like a customer who's new to the business..."

Richard Branson, 2008

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, which normally has the CEO at the top, having the customer at the top

The aim is to make a customer a permanent or life-time 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 creating 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

"...how 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.

A customer-focused organisation is continually gathering unfiltered customer insights and is an organisation that strives to:

- connect with existing and potential customers and anticipate their present and future needs, ie service counts

- translate customer needs into a competitive advantage, using a faster cycle time and a generation of breakthrough products and service

- focus on building sustained relationships

- effectively manage a portfolio of brands

- continually grow shareholders value

Customer intimacy is linked with customer focus, ie need to know and have a good understanding of your customers and their needs (now and in the future). The Web is helping build stronger relationships with customers and allowing a greater capacity to satisfy their needs. With the development of inexpensive, powerful computing technology, organisations are able to interact with customers more cheaply and easily than ever before. Achieving this requires a change in mindset in handling customers: changing the relationship between organisations and customers from essentially mass-marketing to one focusing on the needs of individual customers has resulted in empowering customers online so that the balance of power in the relationship has changed to favour the customer. This means re-configuring the way organisations do business, ie product design, manufacturing processes, distribution processes, etc. Techniques are now available to make things happen in real time such as dynamic, immediate feedback. The Internet has increased the speed and intensity of how things happen.

Never under-estimate the impact of emotions on customers decision-making. Most decisions are based more on how people feel (emotions) rather than what they think (rational analysis).

Never under-estimate the impact of emotions on customers decision-making. Most decisions are based more on how people feel (emotions) rather than what they think (rational analysis).

 

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