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The Curse of Being Customer-Driven

Wait a minute, what curse?! I thought we were supposed to be customer-driven…isn’t that a good thing? Everything I read says that customer-driven companies are more successful, not less. Nope, being a customer-driven company is detrimental to creating value for your company and your shareholders.

So, if not by our customers, how should our companies be driven? We have to drive our own companies. If we let customers drive and make our decisions for us, our companies would all be commoditized. Who would really make decisions for us? Procurement. Now, you’re starting to see things my way, huh?

So, just ignore the customer and run things our way, right? Hardly. We should be running our companies in a very customer-focused manner. It might sound like a fine line between customer-driven and customer-focused, but simply put, run your business by bringing your customers’ perspectives into your decision-making and strategic-planning processes, run your business to help your customers succeed, run your business with customers in mind and always to deliver value to them; just make sure you are running your business and not your customers.   
     

The above chart is a great analysis of the impact of taking a good thing too far. In Customers at the Core by Schieffer and Leninger, they discovered that companies that were customer-driven (“customer controlled” in the chart) were far less profitable than those that were customer-focused (or, “customer insight controlled”).

Two good indications of being customer driven can be seen in how your company responds to price pressure and how certain account managers act during confrontational moments with customers.

When price pressure arises, does your company sound an alarm and figure out what you need to do to buckle to the pressure? Is it a foregone conclusion that you will acquiesce to the demand for a lower price? Or does your team work to better understand what your customer is trying to achieve and design a better solution then work to describe and document the value being delivered to your customer?

What about those confrontational moments or courageous conversations with your customers? Do your account managers handle those like they work for the customer, or like they work for you with the intent of helping your customers succeed? Ever say, or hear someone say, “Sometimes I wonder whether he works for us or for the customer”?

It may be a fine line, but working to help our customers succeed is a recipe for mutual success. Letting our customers drive our businesses and make decisions for us is one that will surely result in failure for our companies.

About the Author

Phil Bounsall

Phil Bounsall

As president at Walker, Bounsall is focused on the development and execution of strategies and operating plans designed to enhance Walker’s position as a global leader in customer intelligence. Bounsall also works with Walker’s client service teams to help meet the needs of Walker’s clients.

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