If you Google “the purpose of a business” you’ll find many statements about what a business is supposed to be about. One example says the primary purpose of a business is to “maximize profits for its owners or stakeholders while maintaining corporate social responsibility.”
I kind of like that one, I don’t disagree with any of it but there is a huge hole in that statement.
The great business guru, Peter Drucker, fills that hole with his statement that “the purpose of a business is to create a customer.” I wholeheartedly agree with that but it’s an over simplification. Placing your sole focus on creating customers is not a sustainable business model, especially these days.
If I were to answer the question, “what is the purpose of a business?” I’d say it is to create customers and nurture a sustainable and profitable relationship with those customers over a very long period of time. All this while adding real value to the communities where your business is conducted, be it in your neighborhood or around the world.
There is a lot to that statement. The customer for instance is the final arbiter of whether or not the relationship is “profitable” for them. They determine whether or not the products or services they receive in return for what they have spent is of value. Ultimately the customer is the only one who gets a vote in this.
Similarly, it is the communities where the business is conducted that get to decide whether or not the business is adding value to ALL members of the community. Even the members who may not be customers of that business.
Customers are the center of every business. Every business. Up until very recently I would have thought this was common knowledge. But as is often the case I was wrong.
In a recent conversation with a business person, a person very high up in their organization, it was explained to me that it’s possible for a business to “mature” to the point where they no longer need customers. In fact, they may be better off without them.
I’m seldom at a loss for words but I was completely flummoxed by this statement. Rather than respond immediately I remained silent while I tried to digest what I just heard. I figured there must be something I missed, or I was misunderstanding what was said.
Instead of replying I kept in mind one of Dale Carnegie’s principles that says “the only way to get the best of an argument is to void it.” I said I must have missed something and I asked for clarification.
The statement was repeated almost exactly as it was said the first time.
This is from a person positioned high enough within their organization to affect every decision where a customer is concerned. I’m not at all certain that they realize that the profits their company uses to stay in business come ONLY from the customers they claim not to need. Anybody else see a problem with that?
If you’re ever tempted to adopt the same philosophy you need to keep this most indisputable and basic fact in mind. When you lose your customers your business ceases to exist.
Let me repeat that…when you lose your customers your business ceases to exist.
It doesn’t matter if your business is new, old, or as this person says, “mature,” without customers you have no business.
Companies that lose sight of the supremacy of the customer will eventually lose those customers. No business can afford the mindset of “win some lose some” when it comes to customers. Every lost customer must be understood to be a significant failure on the part of the business. Every effort must be made to understand why that customer left and what can be done to prevent it from happening with another customer .
The focus these days seems to be on CX Hubs, and something called “Customer Experiences” and a ton of other buzzwords going around. All of them seem intent on providing more cost effective customer service. All of them also seem to ignore the absolute supremacy of the customer when it comes to even keeping the business open.
I’ll close this with another rather simplistic statement regarding customers…but one that happens to be true. “Businesses that take care of their customers will always have customers who care to do business with them.”
Never never never lose sight of that fact and your business will be around a long long time.
On a another subject…I’m trying something new over on Twitter. It’s called “Super Followers.” For $5 a month, that’s 17 cents a day, people can follow a part of my Twitter stream that is for subscribers only. It features short videos of me discussing leadership topics, sales tips and ideas for better overall relationships. I’m assuming there will be far fewer Super Followers than regular Twitter followers. That will give me the opportunity to answer questions more throughly than I can on regular Twitter. Most of the answers will come in the evening cause we all have day jobs, right? Think of it as ”mentoring on demand!”
My goal with SuperFollowers is to build a better connection, one where I can perhaps help more and have a greater impact. I’m hoping it gives me a chance to mentor to a wider audience. It’s still new, we’ll see how it works. It’s a $5 dollar investment that may just be the extra “push” you need to get to where you want to be. I’d be honored to be able to help get you there.
You can find more information by clicking the Super Follow button on my Twitter profile page IN THE TWITTER APP. http://twitter.com/leadtoday Give it a try if you’re so inclined, and if you are, be sure to let me know how I’m doing and how I can be of even more help.