Depend on a Concept, Not a Customer

Thoughts on Excellence Free E-Newsletter Series
Volume 10, Issue No. 8
November, 2011

By Dan Coughlin

 

 

In tough economic times, the temptation is to land a truly great customer and then do whatever the customer wants in order to keep the revenue coming in. The thought process is, ‘We can’t afford to lose this customer so let’s do whatever they ask.’

Then with no bad intentions whatsoever the one great customer keeps asking your business to do all sorts of different things. Before you know it, 85% of your revenues are coming from this one customer and you have strayed dramatically away from the value that you want to be known for delivering. There are only two things that can happen at this point. The customer continues to be your customer and the survival of your business grows even more dependent on this customer, or the customer decides to stop buying your products and services and your business collapses dramatically because you have not established the value that you want to be known for delivering. No one else knows what you have to offer, and you haven’t been constantly improving the value that you do have to offer. When you go out into the broader marketplace with a weak brand and outdated capabilities, you will face a massive challenge.

In the enormous outpouring of articles and books about Steve Jobs, I think there is one insight that stands out above all the others: he never changed his concept. The concept that governed his two tenures at Apple was, ‘build electronic devices that are remarkably useful in people’s day-to-day lives, make them easy to use, and make them look stunningly attractive.’

The Apple II may be extremely primitive compared to today’s standards, but at the time it was mind-boggling. I was a freshman in high school in 1977, and my school purchased a few of those computers. I was used to seeing an entire room full of giant machines that used punch cards. I was a senior in college in 1984 when the first Macintosh came out. When my classmate down the hallway bought one and I got to borrow it, I thought it was amazingly useful to write an engineering report, save it, and come back later and make corrections. I was the official typist on our team engineering project that year, which might explain why I never actually used my degree in mechanical engineering. I do remember my professor saying that I was remarkably fortunate to be on the team that I was on. I don’t think he meant that as a compliment to me.

Obviously from 1997-2011, Steve Jobs stayed true to his concept with the creation of the iMac, iPod, iPhone, iPad, and iCloud, which pulls everything else together into an even easier format for people to use the devices.

Be Customer-Driven, Not Customer-Dependent

The greatest companies in the world are customer-driven, not customer dependent. McDonald’s serves food to millions of people every day. Ray Kroc built his first McDonald’s restaurant in 1955. That’s 66 years of staying true to a single concept: QSC&V. From the very first restaurant to the 14,000 restaurants in McDonald’s USA, the concept has been to provide quality food with fast, accurate, and friendly service in a clean environment at a reasonable price.

The great companies are driven to always deliver the very best value they can within their concept to their customers. However, they are not dependent on the customers in terms of having the customers tell them what to do.

If your business is reaching that unhealthy point, then I encourage you to seriously pause what you are doing and think through the next stage of your business.

Clarify Your Concept

Most importantly, clarify the value that you want to be known for delivering. The only way to build a sustainable brand is to consistently deliver the same type of value to all of your customers. Once you’ve clarified the value you want to be known for delivering, then make sure that every customer relationship falls under that concept. If you are just doing things to generate a short-term revenue, then you can easily allow your customers to take you all over the board and then you won’t be known for anything. And that, my friend, is a very scary place to be in a highly, highly competitive global marketplace.

Innovate within Your Concept

Once you define the concept of the value that you want to be known for delivering over the long term, you are in a great position. You can now effectively innovate every day. I define innovation as ‘creating greater value for other people and delivering it with more appropriate values based on a better understanding of them.’ The problem with innovation is that you can literally do millions of things for other people that could be of great value for them, but if you try to do every good idea that you come up with then you won’t be truly great at any of them.

Start with your concept. What is the value that you want to be known for delivering? Then ask yourself, ‘Within our concept, how can we create greater value for our customers and deliver it with more appropriate values based on what we know about them?’

This is exactly what Apple has done and continues to do. They don’t make cookies, they don’t sell real estate, they don’t write books, and they don’t make clothes. They just make very useful electronic devices that are easy to use and that look great and that work together seamlessly.

New White Paper

The concept I’ve built my business on is teaching practical ideas on managing for long-term business success. Here is a link (https://www.thecoughlincompany.com/major-white-papers-on-business-acceleration/) to my newest white paper, No Shortcuts: tackle the world’s greatest business challenge by mastering the basics of leadership, branding, and innovation.


To learn how to work directly with Dan Coughlin as an Executive Coach, click here.