For a while in the 1990s, gurus on how to make a company great pushed aside traditional management chestnuts on command and control, mass advertising, and shareholder value. Instead new recipes on customer service marketing were all the rage. “The customer is king” was the motto. Company execs, especially CEOs looking to score in the newly fashionable customer sensitivity ratings, signed up for every manner, and style of customer surveys, slogans, service metrics, and training courses. Even some emboldened company bosses launched no-excuses warranties where customer claims for defective products, late deliveries, pricing mistakes, and even customer errors in applications were instantly
As United Airlines discovered, half a billion dollars of market value can vaporize in the flash of an eye. The cost of reacquiring a customer is estimated to be at least six times that of keeping one. Word to the wise!
Aaaand let´s not forget...sometimes customers can be real jerks. All it takes is a few. (I had a retail store. It was mine and I owned it and when we finally closed it I made the vow to NEVER ever work in retail ever again. Not even for someone else. I don´t want to go to jail.)
Companies do not detest customers. The business will not survive without them. The author seems to have a bias against accountants, engineers, marketers, CEO´s. He should start a business, and see what he can do. Then I think those biases might turn to reality.
10% of people, whether customers or employees/owners, make life difficult for the other 90%. This is true throughout society. I look for a product that offers value. I shop where I am respected as a customer not slobbered over as the most precious being on the planet. I repeat my business where those qualities exist.
I currently work at a popular department store - and let me tell you, customers run amuck. I have concluded that Customer-first policies like you-can-return-anything-no-matter-how-often-you-wore-it-and-stunk-it-up-with-cigarette-smoke-and-it´s-5yrs-old ----- they just encourage the worst of shopping behavior- customers literally trash the women´s clothing racks, clothes left fallen on the floor, folded things just heaped in piles, black footprints on clothes that people stepped on in the fitting rooms - Now I can blame the fact that the store doesnt put enough employees on the floor in these big sale days to keep up with the shoppers, too. It´s a vicious cycle of mess breeding more mess. But I believe the ridiculous return policy caters to people´s worst instincts of and fosters disrespect.
I do most of my shopping on line-HSN-they have the best Customer Service-I can keep anything for 30 days and return it if it does not fit or work-no matter what condition it is in. As a result I buy most of my household and fashion purchases with them. And it helps that I pay over time! Gone are they days you can even FIND a salesperson to wait on you in a store, let alone have them be helpful.
I never accepted the customer first BS. It´s all about unabashed self interest maximization of shareholder value. Pardon my inner Ayn Rand.
However; you can´t faithfully or effectively pursue shareholder value without serving customers. Delighting customers is a means not an end. The end is shareholder value.
Most trade offs that appear to exist between serving customers and maximizing profits boil down to timing. Short term customer be damned squeeze the last half a percent on margin takes care of the quarter not the seven year strategic plan.
Too often management lines their own pockets espousing customer service and strategic thinking while cannibalizing the company yet looking great doing it then moving on to the next success before paying the proverbial piper.
I can tell you that bean counters, who know nothing about the business, can ruin a company. I´ve seen it happen. We also had corporate management who knew nothing about the business, only sales. An example, the CEO of a major market TV show, during a big local telethon dashed in to master control, because our transmitter went off. He wanted the crew to broadcast a "Technical Difficulties Sign". But, sir, we are off the air. He retorted, well make an announcement. True story.
Sir Richard Branson is correct ... the customer doesn´t come first, your people come first. And when that happens, your people treat the customers with respect.
But there are too many middle and upper managers who treat customers like they are an imposition on their time. I worked for at least one manager (and one company) that had that attitude and it was miserable.
Reply 15 - Posted by:
mc squared, 4/18/2017 11:34:08 AM (No. 11225509)
Post above are correct in that some customers are a real PITA. On the other hand, some employees think they are the first & last word of their company. Loyalty is a good trait, but equally important is the ability to solve a customer´s legitimate complaint without getting huffy and storming off.
Reply 16 - Posted by:
Donna M, 4/18/2017 11:46:25 AM (No. 11225522)
Too many companies devalue their employees from the time they are candidates on. Then the culture of fear reigns driven by the bean counters and compliance watchdogs, and guess where all the stress winds up on? The customer.
People.... customers, sales staff, store designers, product engineers, production workers, supervisors, management, and management consultant gurus.... all run the gamut from the very best to the very worst.
I recall a wry saying when I was in engineering school (which was the hardest subject offered at the university that I attended)... "What are you studying?"..."Engineering".... "Oh, you mean Pre-Business Administration." The gist being that those who were failing in engineering, the hardest course of study, would often switch to business administration, widely regarded as the easiest course of study, to get their grade average back up into the ´passing´ range. Having many companies run by these business administration graduates (would ´flunkies´ be the right term?) has, in my opinion, resulted in- after the many management ´fads´ have run their course- the poor condition of many companies today.
As an example, I recall that GM´s management forced the engineers to design and install the dangerous (but cheap-to-manufacture!) ´swing-arm´ rear axle design on the original Corvair. After the resulting disaster, and after the car´s reputaion was damaged beyond repair, the management ´allowed´ the engineers to design and install an excellent trailing-arm style rear suspension. A few years later, about the time that a new generation of buyers -people who had never heard of the Corvair- went car shopping, GM presented them with the ´Vega´, a ´60-thousand mile disposable car´, which was of such poor quality that it was the best possible present that GM could have given the Japanese car makers. I know of several people who bought a Vega as their first car..... and then vowed to NEVER buy another American car -not another GM car, but another American car- EVER. GM of course is still around, but it is a mere shadow of it´s former self.
This is true. I´ve been in large corporations for over 30 years and my career has been one of moving from one management fad to another. A colleague of mine once quipped, "The worst thing to ever happen to American business was the invention of the Harvard MBA."
What most don´t understand is that every time some whizzbang article is published in the Harvard Business Review by some "Management Consulting Firm," or a couple of Wharton business school professors, lemming-minded American execs go gaga to try it out as a sure cure for their own poor management. What´s more, they even make it part of their "CEO Management Incentive Bonus" to roll it out. Yes, the CEO rakes in millions seeing to it everyone has to do whatever silly thing it is.
After reading an insightful book on Management Consulting firms years back, I finally understood the mentality. Execs of big corporations will hire their "convenient scapegoats" in the event something goes horribly wrong. If it goes right, they reap the massive bonuses. Enron, WorldCom, etc. are just a few who went down the path of ´witchcraft´ cooked up by 30-somethings who had no clue about the business they were consulting on.
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