Purpose, profit and brands
Nowadays, it is fashionable to talk about being customer centric, easy to say but not so easy to live up to. Not easy, because it’s actions, not words, which reveal the truth about a company.
The news is never short of stories about companies suppressing data, charging outrageous prices or behaving in a way that suggests there is something more important to them than being customer centric. That something is almost certainly profit and of course, in a capitalist society, there is nothing wrong with profit. Return on shareholders investment is what keeps the show on the road.
Nonetheless, it is obvious that if a business is to generate a satisfactory return it must have happy customers. Indeed, some 50 years ago the renowned management guru, Peter Drucker, defined the purpose of a business as being to create a customer. He saw profit as the consequence of a business successfully fulfilling its purpose. When Drucker used the term customer he meant someone who keeps coming back. To create a customer a company must therefore deliver on a promise that offers more than its competitors and keep on doing so. Today, we would call this building and maintaining a successful brand.
Unsurprisingly, marketing people get this but events suggest that too often others in the business may just give the idea lip service. Deep down, perhaps they believe that to define the purpose of a business in this way is fluffy. They may perceive maximizing profit not only to be more substantial but to be more virile too. Such people will only learn the lesson the hard way. A brand that ignores its customers or worse treats them with contempt will destroy the very profits they serve and you don’t need to drive a Volkswagen to know that!