Dec 7, 2005

The customer is king. No, really, she is.

I had the good fortune today to view a 60-minute video of Fred Reichheld from Bain and Company.

His rap is fairly simple and completely brilliant. Passionate and loyal employees engender passionate and loyal customers, and companies that have both grow and prosper.

The key to passionate and loyal employees is to compensate them for creating passionate and loyal customers. The key to creating passionate and loyal customers is to make them feel wanted, important and unique by following the Golden Rule. He offers a surprisingly simple way to achieve this goal: Ask a few questions and act on the answers.

It's a far more sophisticated and developed take on something I wrote about awhile back. Namely that marketing upsupported by an excellent customer experience is just so much blah-blah-blah. And that blah-blah-blah, when customers finally uncover it, can take your business down the tubes.

What I find so interesting about this approach is its counterintuitive aspect. Now, you might not think it so, but many hard-core business folks concentrate solely on profits, which can lead to short-term thinking, customer gauging and the type of arrogance I've experienced at companies like cell phone networks, banks, cable providers and fast food restaurants.

To many of us, treating the people who ultimately pay your salary with respect, and doing your best to provide services and products they want, seems like common sense. I guess it is. At least according to the data Mr. Reichheld uses to make his point.

This theory isn't an aberration, a case of high-powered, Harvard-Business-School-educated consultant with a wacky idea. It follows the movement of today's business environment. Nearly unlimited choice means the customer runs the show. Forget that and your particular show might be soon over.

3 comments:

EVK4 said...

The marketing gem left unexplored in this opus:

"He offers a surprisingly simple way to achieve this goal: Ask a few questions and act on the answers."

What do high-priced MBA consultants spend much of their time on? yep, focus groups and surveys. Self-serving high priced MBA consultants.

EVK4 said...

Oh, good to see you back.

Tim Rickards said...

EVK4,

"What do high-priced MBA consultants spend much of their time on? yep, focus groups and surveys."

True. And that's also the point. Make the questions you ask simple and meaningful, and tie your compensation/R&D/marketing strategy to it.

Still sounds so damn harsh, though. Guess that's why I'm not an MBA consultant!