Is customer the king?
The cover feature of this issue focuses on the work of two renowned management thinkers—Vijay Govindarajan and Marshall Goldsmith. While one offers a powerful tool to help organizations simultaneously create a new business and optimize the present one, the other tells us how one can overcome ‘triggers’ and become the person one wants to be.
Now, regarding the headline of this editorial, in this issue we present two facets of customer relationship management (CRM). Customers, most people believe, are the purpose of a business. And CRM is a topic that has continued to trend over the years. Jerry Gregoire (formerly chief information officer, DELL) famously said, “The customer experience is the next competitive battleground.” There is war among businesses to acquire customers— good or bad. The ball is truly in the customer’s court now.
Yes, customers are central to the existence of a business, and Yes, they need to be kept happy, and Yes, it is sensible to have a large number of them buying your service/product. But it is also prudent to stop and ask, “What is the cost of serving a perennially dissatisfied or a toxic customer?” No business or industry is immune to customers who constantly complain, change their orders, abuse or yell at employees, or simply refuse to pay for services/products.
If we apply the Pareto principle in this context, then 80% of good business comes from 20% of customers— good customers. But businesses, with a firm eye on the numbers game, fail to realize this. Instead of focusing on this bunch and strengthening the bonds, they keep trying to satisfy a ‘toxic’ customer. Identifying toxic customers and learning to say ‘no’ to them is as important a skill as nurturing good customers. Companies would do well in teaching their managers and leaders in doing this right.
Elsewhere, in our First Serve section, we have BookMyShow. Read how this online movies and events ticketing firm is changing the way it does business, based on customer feedback.
How far should businesses stretch to satisfy customer needs? When should they say ‘no’? Do write in with your thoughts to email@example.com.
poornima subramanian | senior editor