Saturday, November 23, 2013

There Are No Irrational Customers

Here in the U.S., retailers mark the day after Thanksgiving as “Black Friday,” the day (supposedly) when a store’s accountants begin using black ink to note that the company is finally profitable on the year and “in the black.” (There are other definitions.)

So in the rush to open retail stores earlier and earlier on the Friday after Thanksgiving—and beat the fierce competition—some enterprises are planning to open on Thursday.

“It’s what our customer wants,” is the spin. 

Frankly, whether it’s spin or not, it’s an excellent response.  In Peter Drucker’s quick-read book, The Five Most Important Questions You Will Ever Ask About Your Organization, his third question asks, “What does the customer value?”  He writes:

“The question, What do customers value?—what satisfies their needs, wants, and aspirations—is so complicated that it can only be answered by the customers themselves.  And the first rule is that there are no irrational customers. Almost without exception, customers behave rationally in terms of their own realities and their own situation.  Leadership should not even try to guess the answers but should always go to the customers in a systematic quest for those answers.”

As a loved and admired graduate school professor, the father of modern management added, “I practice this. 
Each year I personally telephone
a random sample of 50 or 60 students
who graduated 10 years earlier.
I ask, ‘Looking back, what did we contribute in this school? What is still important to you? What should we do better? What should we stop doing?’ And believe me, the knowledge I gained has had a profound influence.”

Preach it, Peter! Several years ago, in preparation for a senior team/board strategic planning retreat, I asked the participants to read this short Drucker book and to conduct one-on-one interviews with at least two customers of the ministry.  Like Drucker, board members especially affirmed, “the knowledge I gained has had a profound influence.”

You might try that with your board. What could be more important in Christ-centered governance than the board being assured that the ministry knows--and responds to--what the customer values?

QUESTION: What does your customer value—and what is your systematic quest for those answers?


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