Beyond Profit: The True Purpose of a Customer-Focused Business

The purpose of any business must lie outside of itself. It should be deeply rooted in the community where people live, operate, and interact to thrive and grow.

In essence, the most valid purpose of a business is to create a customer. Without customers, there is no business.

What is a Customer?

A customer is someone who needs or wants a solution to a problem, which can be provided through products, services, or a combination of both. Sometimes, customers might not even realise they have a need, and this is where effective marketing and sales come into play.

Successful businesses always place the customer at the centre of everything they do. They leverage and maximise their core strengths, capitalise on opportunities, and mitigate risks as they develop their products and services.

Two Key Types of Customers

1. External Customers: These are the individuals who consume and pay for the products or services. They often have problems that they cannot solve on their own due to a lack of skills, knowledge, or time. The role of the service provider is to address these obstacles and challenges and simplify complexities. This then becomes the foundation of the value proposition. Customers determine the value of the proposed solutions based on the strength of relationships, timely delivery of outcomes, cost, and other attributes.
2. Internal Customers: These include employees and contractors within the business. Staff have their own needs and wants, such as trust, fairness, clear purpose, visibility of their impact on external customers, appreciation, transparent communication, and opportunities for training and skill enhancement.

A high-performing and engaged team enhances a business’s ability to deliver superior products and services, boosting brand reputation and market differentiation. This, in turn, increases the chances of growth, sustainability, and long-term success.

Conclusion

By focusing on both external and internal customers simultaneously, businesses can foster an environment that promotes growth, prosperity, and endurance over time.

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Teams, Suppliers and Customers

During the 2023 Rugby World Cup, the All Blacks put together a great team performance to beat the Pumas in the first of the semifinals.

In the second semifinal, Owen Farrell nagged and backchatted so much to the referee, that he was marched back 10 metres, making a difficult penalty kick just that much easier for Handre Pollard, who slotted the kick for a vital 3-points.  South Africa then going on to beat England 16-15.  

It is our experience that businesses that treat their Teams, Suppliers and Customers with respect fare better than those who use arrogance as their key management tool.  Generally, if you look after your people, suppliers, and customers, they will also look after you. 

The main advantages of looking after both your internal and external teams are:

• Staff will go the extra mile when required to get out rush orders or make up production after a machine failure.
• When stock is in short supply, Suppliers will supply their good clients first.
• When cashflow is tight, Suppliers will often give their good clients extended turns for a period of time.
• Looking after Customers often means a higher retention rate and a bigger share of the customer purchases.
• When cashflow is tight, offering payment plans to customers who are struggling will often lead to increased sales to those customers when their cashflow and performance improves.

The key to retaining good relations with staff, Suppliers and Customers is good meaningful communication. 

How the Best Businesses Stay ahead of the Pack

They stay in front by having good, accurate and timely information including:

1. Balanced Scorecards – tailored to individual managers.
2. Key Performance Indicators – tailored to individual managers and team leaders.
3. Dashboards – tailored to individual managers and team leaders.
4. Customer Analysis – to understand and stay on top of any changes in the market.

How do they do this?  

The bigger businesses achieve it by employing Analysts and Commercial Managers. 

The smaller businesses engage Business Advisors / Consultants to develop and write these models.  If they do not have the required staff available to update the models on a monthly basis, then they will also contract the Business Advisor / Consultant to update them for them.  Depending on the quality of the financial information these monthly updates will generally take between 2 to 8 hours to update.

Why do they do this?

Because good, accurate and timely information is the key to running a good business.  Any change in the analysed information can identify where both good and bad trends are developing and therefore where management needs to focus its attention.

It should be noted that that these reports do not only contain financial information.  They also reveal key analytical indicators such as utilisation, breakdowns, capacity constraints, delays in producing customer invoices, staff absences, etc.