The customer is king but the customer is not always right. Expressing the sometimes unreasonable demands of customers, the owner of the world's most famous car group Henry Ford once said: "If I ask my customers what they want, they will answer that they want a car. Horses run faster.”
The concept of "customer is king" is completely wrong
In fact, many of the world's leading corporations have made the mistake of listening too much to customers. Originally a company specializing in computers, within just a few years of the appearance of personal computers (PCs), IBM did not hesitate and completely wiped out this traditional PC product line.
This action stems from the judgment of customer-centric data managers that: After the birth of Laptops, PCs will have no future. However, the worst consequences have occurred, when it seems that the above judgment from customers came several decades early.
Both stories just told clearly illustrate the boldness and risk of listening to customers, especially consulting them about innovation and market fluctuations. We have seen quite a few such ventures and it certainly won't stop in 2010.
Most businesses look to customers for deeper insight. The "Let the customer speak" research projects have marked today's popular production structure. Accordingly, companies that use customer resource management programs (Salesforce.com ( CRM – news – people ) is one of these) often seek out customers who can provide the greatest amount of input, Because according to Pareto's law, 20% customers will generate 80% of revenue. But there is also no reason why these customers are especially well-aware.
In fact, customers rarely know what they need other than wanting more, better, faster and cheaper. Consumers, especially large customers, are locked into the policies of businesses: they do not want to find anything truly new, especially when it means they will have to invest in new methods, systems, and solutions. new system and new cycle, and that, change is not what they seek.
Consumers mainly want the balance to tilt in their favor to gain an advantage in the buyer-seller relationship, in the hope that they can save costs. On the contrary, businesses mainly want to sell more products.
“Find out customer tastes” is just a short-term strategy. It leads to greater volume discounts, consistent and competitive pricing, improved product quality, improved service, reduced inventory and more automation – all for the sake of exchange with more Larger orders. However, these only promote businesses in the short term.
Most managers are content with getting opinions from their customers. This sounds reasonable, helping to protect and expand current business. But in reality, it doesn't tell them how to take advantage of market changes, and changes can even cost businesses customers, profits, and income.
For example, when the market fluctuates, customers whose opinions have been asked will quickly ignore the solutions that the business offers, quickly give up doing business with that business and blame the lack of speed. sensitive to transformation from this business itself. Therefore, an advice given is:
To go further than just short-term plans, don't absorb too much from customers, especially big customers. They will only say what the business already understands. Instead, focus your attention on your competitors, especially weaker competitors.
Businesses do not see the danger of consulting customers
Tribune Group, a media powerhouse in 2000, had a strong position in television, owning local stations and many cable television divisions, including the Food Network. This is an early leading enterprise on the Internet, has investment capital in American online and is a co-founder of CareerBuilder.com, Cars.com and many other websites. But the focus of success is largely thanks to newspapers, led by the Chicago Tribune.
By the second half of the decade, newspaper subscribers began to get much of their information from the Internet. Tribute feels ridiculous at the idea that people will replace reading paper newspapers with electronic newspapers and reporters will be replaced by bloggers (people who write electronic diaries). They cannot imagine that the number of their customers has really declined.
Tribune assumes that there will be regulations restricting the posting of advertisements in newspapers in the advertising section and that many other advertisers will also be subject to this regulation, such as manufacturers, agents or retailers. cinema distributors along with their advertising.
For example, online advertising companies like Craigslist (a centralized network of online communities, allowing free classified ads) are currently used mainly by prostitutes, given by a Tribune executive. when he expressed his opinion about posting ads online without realizing that posting ads itself had the risk of ruining his business.
eBay was also given as an example, he said eBay is now more like an online sales garage and not a place where people can sell valuable items like a car (in fact, eBay is worth should be “bustling commercial area”only sells high-end items online).
Google is the exact opposite. The ads on this site are absolutely no threat to any business because they are not “local advertising”. It can be said that because most people use Google, this company can issue strict regulations for advertising on its website.
Then the advertising customer classification is removed. In 2006, auto companies spent 25% of their newspaper advertising budget on online advertising. Instead of advertising in newspapers, film studios also spend more money on their online advertising tapes.
Sam Zel, head of Tribune company in 2007
When Sam Zell led Tribune in 2007, he repeatedly said he read up to four newspapers a day. He is sure that people will continue to read and businesses will continue to buy space to promote their products to customers.
In fact, he was completely wrong. In just 2 years, Tribune went bankrupt. Asking what customers want does not help managers cope with market fluctuations, but being wary of competitors in the media field will help businesses clearly see upcoming force majeure changes.
CSC, EDS, and other IT service providers have heard their service affiliates explain why they prefer to take a proprietary approach and why they want “successful” locals. proficient” in their services. They ridicule foreign suppliers for not understanding customers.
Then, Tata Infosys consulting services deployed a global distribution system, which used trained workers at a cost 10 times higher, specifically eliminating services providing information and communications technology. system.
In an effort to protect their companies, old businesses have withdrawn to handle large but ineffective contracts, avoiding competition from international companies. CSC survived thanks to government contracts and EDS almost failed before being acquired by HPQ.
To be successful, businesses must always look at their competitors. The market will automatically reveal information that customers do not mention through competitive activities. It's easy to see that foreign IT centers are emerging rapidly, but by focusing on existing customers, especially large ones, companies are ignoring changes that could rob away a large amount of profit.
Focusing on competition in the market will help businesses survive and develop sustainably. Watch your competitors grow as well as not grow; Observe your customers' attitudes, not just what they say, and see how your competitors' revenues move even when they are weak. Only then can businesses maintain competitiveness and have deeper insight than all strategic customer organizations in the world.
According to Doanhnhan360
