Sep 9, 2013
Are All Customers Created Equal?
And by the end, which is to say, in the past five years since the crisis, even Chief Financial Officers are wont to admit that it all went a bit too far. That hedge funds and private equity firms are now 'reimagining' their fee structures suggests that they, too, recognize that this jig is up.
But a new shibboleth is arising, promising to be as powerful - and potentially destabilizing - as the last one. We speak, of course, about The Customer.
The Customer is, naturally, not just important but essential. Without customers there is no business. As obvious as this sounds, they did not rank very highly in the canon of Shareholder Era sentiment. From the standpoint of financial eminence, customers were presumed to be malleable creatures wont to do what they were told by their betters. But five years of depressed sales will make a believer out of anyone who is shocked to discover that in the rapidly evolving digital age they can no longer look to Michael Porter or Peter Drucker for every solution to every problem.
What technology has done is give us a lot more information than we have ever had about customers plural and customers individual. This has enabled enterprises to be more focused on what they are attempting to sell, not just to who, but when and where and how. So, not only has The Customer lost its collective meaning, but individual customers may each contain several selves - think multi, rather than bipolar...all with the same good credit rating. Depending on what is being sold in which venue, then corrected for time, location and a host of other factors, The Customer will have different value for alternative businesses. The result is more complication rather than less, albeit with a theoretically enhanced chance of a successful sale.
Which is all lovely. It may improve results, especially market share and margins. But we are left with some lingering questions. A shibboleth is a belief that others find devoid of meaning. So elevating The Customer to the same perch on which The Shareholder once pranced seems fraught with potential for miscalculation. Customers are variously important to different companies selling multiple products or services in numerous global markets at wildly varying times and prices. Which is to say that such attempts at discerning value must now sliced and diced with ever more finely wrought degrees of specificity. There is no such thing as customer equality, if there ever was, but we will all be better - and richer - for making sure we understand the how and why of it. JL
Paul Jarman comments in Wired: