Basic Concepts
of Business
It's all about the customer.
It has to be about the customer doesn't it? After
all, the customer pays for everything. They pay for
salaries, they pay the rent, they pay the utilities, they
pay for the costs of delivering your product or service, and
they pay your profit.
At Schooley Mitchell, we have a credo that says
that 'Good is the Enemy of Great'. It's not absolutely
original, but we hope our approach is just that. First of
all, if greatness is to be achieved, focus must be
completely on the customer. We have to continue to strive to
have our customers clamor for our services. If we're
satisfied with being good at it, we'll never be great. I
want to be great. We want to be great. Our focus must be
entirely on the customer to achieve that goal.
Purpose of Business
O.K, so let's look at the purposes and objectives
of business, regardless of whether the goal is to be good,
or great. I don't think anyone has a goal to be bad, so
we'll leave that one out. First of all, the basic purpose of
business is to make money. It is not about your way to give
back to humanity. That's a charity. People that wish to be
in business for themselves are doing so in order to make
money. That shouldn't be a surprise to anyone.
So how do all businesses make money? As stated
above, they focus on the customer. Therefore, the purpose of
daily activities, the objectives of business, are to get new
customers, satisfy those customers, keep the customers, and
grow business, either with, or through those customers.
Get, satisfy, keep, and grow. There you have it.
These are the purposes of business. You can't think of a
transaction that happens in business that isn't aimed at one
of these four things. The key is to understand that they are
four distinct things, and they each require distinct
strategies designed to achieve excellence in all four areas
if greatness is to be achieved.
Get
Most people 'get' this one. This is sales and
marketing. Peter Drucker said there are only two things that
create value in business - sales and innovation. The rest
are costs.
I would suggest that many companies tend to
become happy with their existing suite of customers. Sales
departments are all too often in maintenance mode. Or they
land the 'big one' and all is good. I would also suggest
that if there are not constant strategies put in place to
continue to get new customers, to get new blood, then
stagnation will follow. Landing the 'big one' can actually
put the business in a very precarious position. It's called
over-trading. If the business relies too heavily on one
source for its revenues it can be in big trouble if
something goes wrong with that customer.
The solution to over-trading, and to keep
generating a steady stream of new customers in order to keep
any business vibrant and moving forward, is to implement
great 'get' strategies. And never quit. That's certainly not
rocket science, but it is a basic tenet of long term
survival.
General Motors should have been trying to figure
out how to 'get' Japanese customers in the 1970's. That
would have led them to understand how to 'keep' North
American customers. Instead the Japanese came up with Kaizen
- 'constantly improving', as opposed to constantly
disintegrating. Enough said.
Satisfy
A lot of people really miss the boat on this one.
I actually saw a truck drive by me recently that had a
slogan on the side in proud, bold letters that said 'We
Deliver Satisfied Customers'. They seemed to be quite proud
of the fact that they actually provided what they sell. All
customers for all businesses expect to be satisfied or they
wouldn't complete the business transaction in the first
place. Boasting that customers are satisfied is like saying,
'we don't rip you off'. Well, big deal and thank you.
Satisfaction must be a given. It is required for
survival. It is certainly one of the four main purposes or
objectives of business, but it is so often misunderstood.
Satisfaction is what people buy, so they expect it to be
delivered. Michael Vickers, one of our Sales & Marketing
instructors at Schooley Mitchell, says that 'Whatever
company, in whatever industry, sets the standard in customer
service, moves the bar up for all of us.' It's a great
message. We must constantly be wary of what customers expect
in order to be satisfied, and it's an ever-increasing
standard. However, it's nothing to brag about. It's just
what you sell.
In a book called 'If It Ain't broke - Break It!,
Robert Kreigel wrote, Embrace the unexpected. The only thing
that won't change is that everything will keep changing.
Today's skills, knowledge, and products live fast, get old
before their time, and die young. The overnight letter,
which was the innovation of the 1980s, is now used only when
you're not in a hurry. He wrote that message 15 years ago!
It's a clear, and still valid, indication that we need to
continually re-tool to meet customer satisfaction goals.
Keep
If satisfaction is a constantly moving target,
and satisfaction requires ever-increasing effort and
commitment, then to keep customers requires more than just
satisfaction. Customers expect satisfaction. They buy
satisfaction. People will copy satisfaction. If that's all
that is provided, then it comes down to price, and that's a
losing game no matter what business is at hand. Therefore,
strategies are required to provide more than what the
customer buys, in order to maintain long-term trusting
relationships. Michael Vickers says to take a standard
service offering and up-level it. That defines the 'keep'
strategies that a business must employ. Ignoring this one
will again create stagnation or denigration.
Grow
Most of us have heard that it is less expensive
to do more business with existing customers than to obtain
new ones. It is my belief that you must do both.
In order to do more business with existing
customers, there have to be consistent strategies in place
to educate them about new products and services. In
addition, you must understand their business, particularly
as it changes, so that it becomes apparent when your
products and services can be provided. As your customers go
through changes, their stress levels increase. If you can
find ways to understand and address their stresses, you will
have a winning formula with longevity.
You must also put practices in play to ask for
more business. Complacency is too often the norm when
opportunities are in front of us. Companies that implement
processes to ensure these things are managed will continue
to grow business via the grow strategies.
The grow strategies also include asking existing
customers to support you in your business growth through
others. It's surprising how many people would be willing to
help if they are requested to do so. Things like referrals,
testimonial letters, agreeing to act as a reference, and
introductions to their association are all offshoots of this
strategy.
So there you have it. These are the four basic
objectives of any business. Business needs strategies and
formulas to continually get new customers, satisfy them,
which is an allusive and demanding standard, keep them,
which requires more than delivering what you get paid for,
and grow business with them or with their help. These are
the basic concepts of business, and they must be at the
heart of every good business.
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