A key driver for financial success and longevity of businesses is the relationship with the customer. By understanding customer needs, successful companies have been able to thrive for periods in excess of 100 years. A recent article in the Journal of Creating Value expounds that no company survives without the customers allowing them to survive. Since no company can exist without customers, embracing the customer as a valued asset should lead to longevity and market leadership. In other words, businesses are powered by customers whether or not they choose to embrace it. Companies must be able to anticipate needs and react to market changes more rapidly than their competitors.
The article looks at companies that have survived for over 50 years as well as some that failed, such as Kodak. Once a market leader, it later fell behind in the market place. Kodak believed in a “coat by the mile and sell by the inch strategy” as making and developing film was once a profitable business. Even though a Kodak engineer invented the digital camera, they chose to focus on the film business which suited their internal needs and culture. They failed, however, to focus on why customers wanted to take pictures and what they valued in the process. On the other end of the spectrum, IBM is famous for its turnaround from a market leader of computer hardware to a global leader in IT solution services. In spite of deep financial problems at the time, IBM was able to make this transition because its service relationships with its customers allowed them to learn more about their customers’ markets and industries. The more they understood, the greater the breadth of services they could offer.
The findings of this article show “relationship” to be the most valuable attribute that a company can provide to its customers. Relationship in business is not about brand value, brand awareness, or links on social media. Relationship in this context is knowing what makes your customer successful in terms of positive outcomes when they engage your company and how you contribute to the value outcome. Your customers evaluate your performance everyday by how they choose to spend their money. They hold the power and are your most valuable asset.
Powered by customers is about new business models and organizations that are required in order for businesses to survive and thrive in the modern global economy by focusing on customer success and new value creation.
History has shown that service has been a key driver for financial success and longevity of businesses. Relationship with customers, that is, understanding their needs and what makes them successful, has been key for successful companies to thrive for periods in excess of 100 years. Services have shown to be a key provider of those touch points and data that foster an ongoing customer relationship for longevity and market leadership.
Click here to read “Powered by Customers: Relationship Is Key to Surviving 100 Years in Business” for free from Journal of Creating Value! Want to know when the latest research becomes available from Journal of Creating Value? Click here to sign up for e-alerts!