Long ago Peter Drucker, the father of business consulting, made a very profound observation: “Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”
But what if Drucker was wrong?
- What if the creation of a customer is not an end, rather a means to an end?
What if the purpose of business is to create value, and to deliver (sell or trade) that value to customers, and to capture some of that value as profit?
- That sounds so much more like an end, doesn’t it?
And what if the means to an end, the creation of customers, is merely one aspect? Isn’t it so that the process of serving, retaining and extending customers is equally as important as customer discovery and customer development are to the purpose of a business?
- Does this make sense?
Because if we were to work alongside the customer, helping them to make better informed decisions, while serving them in such a way that they too can achieve a maximum return on investment, wouldn’t this contribute to their willingness to spend more time and money with us?
- Ofcourse it does.
This goes to servant leadership, a transforming theory on leadingship coined by Robert K. Greenleaf (1904-1990). Greenleaf inspired great management book authors, like Norman Vincent Peale, Stephen Covey, Peter Drucker and Ken Blanchard.
Greenleef’s credo was: “If a better society is to be built, one that is more just and more loving, one that provides greater creative opportunity for its people, then the most open course is to raise both the capacity to serve and the very performance as servant [..].”
If we focus our efforts on creating a customer, with the moment of conversion as the ultimate objective (purpose), aren’t we likely to undermine Greenleef’s servant leadership?
I perceive two possible views with regards to the means to an end (purpose):
If our ‘means to and end’ is to create a customer, who are we most likely to reward?
Ofcourse, the sales force.
But if we value those that create a customer above the ones that serve the customer, aren’t we in fact stating, to all of our employees, that we value revenue above customer satisfaction? That we perceive service and those that serve the customer merely as cost ..
+ Just think about this for a while ..
Shouldn’t we in stead consider to reward those, that actually satify the customer’s needs and by doing so increase the likelyhood of future business (the increase of customer lifetime value), at least as much as those that created the customer?
Wouldn’t this give a bold signal to all customer-facing employees? Saying: You are all equally important in the pursuit of fulfilling our purpose: creating value for our customers, and in the process capture some of that value as profit.
+ Would that work for your brand, do you think?
Research by John Fleming and Jim Asplund (HumanSigma) indicates that engaged customers generate 1.7 times more revenue than normal customers, while having engaged employees and engaged customers return a revenue gain of 3.4 times the norm.
Ok, I get it. You’re in marketing. Or in sales. Or service. You have no control over your company’s reward system, let alone influence what is going on beyond your silo-walls.
So you decided it is better to stick to your end-of-the-deal; your side of the wall.
+ Am I right?
As a consequence you started to care about money, about profit, about marketshare and KPI’s. About fingerprinting and profiling. About ratings and attributions. About journeys and conversions. Not about customers.
Most of us stopped to care about ‘the customer’ a long time ago.
No wonder you’ve started to care about ‘you’ instead. About your success. Passion needs to find a way to express itself and if we can’t find it in our job, we’ll find it in our salary and the stuff we purchase with it. Even giving it meaning.
But it won’t last. If will not fulfill you. It will drain you.
I know, I’ve been there. Until I stopped. I walked away from a top job. Or at least I thought it was. Because the business I worked for did not care about happy employees or happy customers. It merely craved revenue. And it was willing to get it in any way possible.
But I wasn’t. Not anymore. Not at the expense of a fellow human …
And then I started to think. And I began to realize that business should never be about making as much money as possible off of customers.
+ I don’t think you feel it should either. You wouldn’t read this otherwise.
Business is about innovating, solving, helping, caring, meaning, pride, .. and equitability.
Drucker was dead wrong.
The purpose of business is to create value, deliver (sell or trade) that value to customers, and capture some of it as profit. Repeat.
Whishing you many happy (customer) returns!