Roy's Blog

October 18, 2010

The Purpose of a Business is NOT to Create a Customer

I am DEFINITELY going where angels fear to tread. Who In their right mind would even think about commenting on a Drucker Quote other than verbally bowing to its pristine elegance? I am totally a Drucker fan and have been for many years. Read all of his books. Tried to emulate his Leadership principles that resonated with my values. Have always looked to him as my virtual mentor.

And yet…. I feel that we need to have a conversation around the notion that creating a customer is the fundamental goal of a business. In today’s world with crazy competition, empowered customers and fleeting customer loyalty we need to extend our thinking. We need to get more focused. ‘Go get a customer’ without some clarity and qualification will not guarantee success.

Not all customers are created equal....there’s no such thing as a bad customer, but some are better than others, This type of thinking should play a critical role in defining business purpose.

A business needs to create the RIGHT customer. It needs to gather as many RIGHT customers (Tribes as Seth Godin talks about) as it can.

The RIGHT customer is one that:
> has the growth potential to meet the organization’s financial goals. This REALLY important. There is no use targeting a customer that doesn’t have the revenue potential you need to grow successfully.
> who is a fanatic about what you do or what you produce. She really is interested and cares about your products or services.
> is a part of an extended group of fans who communicate regularly with one another and with others to spread your reach.

Organizations need to get more proficient at choosing WHO they want to SERVE. Its not about the quantity of Casual Consuming Followers you get; it about attracting the QUALITY ones who are relentless-re-purchasers who virally spread your word while they benefit from the VALUE you deliver.

Here’s another perspective… Take the emphasis OFF the customer and put it ON what consumption value is derived by someone.
The purpose of a business is to create unique experiences for the customers they choose to serve. If one-and-ONLY relevant and compelling experiences are created, CUSTOMERS WILL COME.

What do you think? Is it time to revise the (rather credible, awe-inspiring-for decades, fathered by THE management guru) current defined purpose of a business?

I SAY YES! Customers have changed, the competition has changed, economies have changed, technologies have changed…everything has changed. To suggest that ‘the purpose of a business’ has NOT changed is both unrealistic and potentially harmful for those who take words (from credible sources) literally.

Time to move on and provide new guidance to leaders searching for the path to success and survival.

Cheers, Roy

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  • Posted 10.18.10 at 12:00 pm by Roy Osing
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