June 19, 2009
The rapid expansion of the economy post 1998 resulted in many entrepreneurs taking advantage of the blossoming internet market. Computers were becoming mainstream, technology was rapidly advancing, companies were sprout overnight to take advantage of Web technologies, hardware manufacturers continued to compete the strongest of their ability and in the year 2000, the Internet was such a strong force that almost anything was available and was willing to be bought or sold.
Venture capitalists continued to inject money into any business that could “potentially” make money, and in post 2000 this bubble crashed. Thousands of companies disappeared or merged, and then the CEO’s started looking for what their customers wanted, not what they thought they wanted. The disconnect between what the customer values (individual using the Internet) and the value the company provided (throwing whatever works into the Internet) can change the playing field of any company or industry.
With the technological and data-driven age we are in, there are tons of ways to analyze what the customer wants. Does the customer prefer Brand A over Brand B? What does the analysis say? Does Brand B sell more than Brand A in certain countries? Review the results and come to a conclusion. Should we release Brand C to be the differentiator between Brand A and B? Talk to strategists and come to a conclusion.
But what if, what that company needs is not Brand A, B or C, but Brand Z? Without going down to the consumer level it is impossible to find out. Meeting customers face to face is the emotional part of the data and the part that matters to any successful organization. If a group likes the products or services you provide, but does not love them, it may be enough to keep the organization afloat, but not to succeed and prosper. Nike, BMW, Apple, Intel, Tiffany’s, McDonald’s are examples of customers that have established a brand loyalty with the products or services they provide.
McDonald’s executive team have travelled to different McDonald restaurants all over the world to find out what is working or not working from customers and the line staff. Their executive teams have also gone to their “non-customers” such as Starbucks consumers and gathered feedback that McDonald’s could use a premium line of coffee and drinks. The action for premium coffee was executed immediately (input from the source, output from the top) and has been successful in McDonald’s enhancing their brand loyalty and have customers they never had before enter their restaurants. This effective execution just based on what the customer values has resulted in McDonald’s riding out the recessionary period in 2008 while its competitors have suffered and tried to keep up. (Starbucks is now starting to grind its beans and brew coffee when customers are ordering, to bring back the experience that a Starbucks loyalist wants, which is the smell and taste of fresh coffee in a relaxed atmosphere).
The example above shows that what the customer values does not necessarily need to be about the lowest price. Value can come from high levels of service, swift execution, variety of products, different services of the organization or how effective the product or service is. Any organization that closes the gap between employee perception and customer perception will be able to fine-tune their business to be effective and adapt to the changing consumer and economic environment.
Jorrian Gelink
Management Architect
Author Info
Good to see someone put some serious effort into contents. Nice looking blog too. I have heard of you, (other than this blog) but not sure where from? Mike Young.
Interesting post. I couldn’t agree more about customers wanting VALUE. People don’t necessarily mind spending more if they feel they’re getting good value for their money. (I must say, however, that I have never understood people who drop $5 a day at Starbucks… what a waste of money.)
Jack Berstrand has written an interesting book, Reinvent Your Enterprise, on increasing the productivity on knowledge workers — who are all over the Internet business world! Peter Drucker emphasized that systematically improving this was/is the greatest challenge for the 21st century, and the author builds upon Drucker’s work. Drucker wrote about “what” managers need to do and Bergstrand’s book explains “how” businesses should ally go about these things. Interesting, important stuff.