Marketing Competence :: Editorials

1. The vast majority of businesses are in business to grow value(from customers) by making a profit, indeed, businesses that don't do this tend to go out of business quickly.

Fair enough. Profit and excessive profit are two separate things though.

2. Value is primarily created during exchanges with customers. This value may be subsequently frittered away through inefficient internal business operations.

It most certainly is, but the customers is burdened with a high price anyway, because those inefficiencies are factored into the price, esp. if the company gets profit targets from "their investors".

3. Exchanges with customers need value to flow in both directions in acceptable amounts if future exchanges are to take place. This is the basis of the transactional loyalty that is relevant for the majority of customer management activities. Emotional loyalty is a nirvana that the majority of customers will never reach.

As long as companies treat customers with disdain and disrespect, it will remain a nirvana - that's for sure. You reap as you sow.

4. The customer is best placed to know whether the value they receive from an exchange is acceptable to them. They will often tell you if you ask them, but you do have to ask.

1. Who really asks them?
2. Who acts on the feedback of the customer?
Most of them simply don't care - never have, never will, yet profess to do so in their advertising/marketing material.


5. Businesses are not primaily in business to make customers happy for their own sake. But they are likely to be at least 'fair' to customers to further the business goal of growing value through repeated transactions.

No business that isn't centered around customer satisfaction has a reason to exist. In fact, I would go as far and say it's almost mandatory for the consumer/customer to do everything in their power that this business either changes or ceases to exist. Such companies are out on wanton destruction for their own gain. You probably know who they are!

From my experience down here in South Africa, there are very few companies that show integrity and that are interested in a fair business exchange. And I know why: because subconsciously they know their business model is not sustainable and that will will come to a melt-down or crash, yet while this is (almost self-fulfillingly) in progress, they try to milk the market as much as they possibly can.


The above was inserted after writing this:

Hehe... all fine and well, Graham, ;) but you are starting from the assumption that:

1) the customer is educated
2) the customer has a choice
3) the company would listen to customer comments and adapt accordingly

In my 12 years in South Africa I have found all three assumptions to be wrong, and I have sufficient reason/evidence to believe that the same is true for many other countries. Exceptions prove the rule.

And remember JFR's quote:

Thze object of a business is not to make money.
The object of a business is to serve its Customers.
The result is to make money.

Any business that puts "making money" first is not serving its customers, but is putting processes and procedures into place that keep the customer dumb and powerless - for maximum profit. The South African banking, retail & telecomm markets are three that just spring to mind. Interestingly, the same can be said for most governments. Although we may be drifting off here into the terroir of "conspiracy theory" (Read Nicholas Hagger's "The Syndicate" to understand what I am getting at), it has direct relevance to the subject matter.

If a company makes more than a few million Rands/Dollars/Euros profit, it is by default ripping off the customer. It's as simple as that. There is no justification for this at all. All their opportunity costs, etc would have been factored into that already anyway.

We must remember that most of the money isn't real to begin with, IOW the customer pays for money the bank has created on the computer screen (thanks to the Fractional Reserve system), but the customer pays interest on this fake money with real money, a simple destruction of value.

As a result they have to work harder, get more into debt, etc etc. As a result, children grow up by being attended to by 20-odd year olds in kindergarten with f@**-all idea about life, while the old folk are shoved into old age homes - neither of them cheap or humane options.

Consequently society at large disintegrates and has to deal with an inordinate amount of stress, which then manifests itself in more violence, fraud, desperation - you name it.

And... I haven't even touched on the world of advertising, which in most cases falsely suggests that the customer needs this product or that service. Largely unable to discern and subject to pressure from all corners, most succumb to the system while falsely believing it is actually adding something to their quality of life. As we all know, the quality of life for most people on planet Earth has decreased, while a few (usually those in control) have more and more.

Best example once again: South Africa. The more this rip-off society prevails, the more those with the money have to protect themselves against those without the money. Burglar bars, security companies, barbed wire, high walls, electrified fences, dogs, motion-detectors, the lot! (Case in point: at a conference some years ago one speaker who was about to extol on how to take more advantage of the customer got hijacked on the way from the airport.) Yet they still call this "quality of life" when all they do is live in prisons. And I know that S.Africa isn't the only place like that. Most "rich" in Latin America live like that, and even in places with a more even income spread it is starting to happen. But no worries, it all comes full circle soon.

Off on a tangent? Maybe, but I wanted to point out how all these things are connected, and that a simple over-charging of the customer "by decree" has an immediate and negative impact on society. Send out negativity, get back same.

Finally, if you look at my "Diamond CRM" framework, you'll also see how everything is connected, yet CRM is still largely dealt with on technology ("software") level. Why everyone is surprised that those initiatives are costing more than they generate, esp. in the long run, is beyond me.

I was under the impression that those participating in these forums would operate from a certain level of far-sightedness and vision; that they would be able to see what impact their actions have on society; that they would do everything to prevent society from taking harm; that their actions would be ecologically sustainable and aimed at truly creating a mutually beneficial exchange. Instead many a discussion here seem to have mutated into "how can we use CRM to make even more money from our customers": cross-sell, up-sell, down-sell, sell sell sell!

What a shame, but one with a very predictable outcome. That shouldn't be news to anyone, though. And when you leave work later on today, remember that not so long ago your car didn't have an alarm - you probably wouldn't even lock it. Now you have to. Ask yourself why! The answer - in case it still hasn't sunk in - I gave in this posting.