Customer Obsessed Companies
That’s what I want to invest in going forward. That’s where you can make money. It’s going to get harder and harder to build value in core technologies that have broad horizontal markets. The value is going to get created in providing technology-enabled solutions for customers. And if its the customer that matters most, instead of the technology, then I want to invest in customer obsessed companies, not technology obsessed companies.
I was with the CEO of a company that I’ve invested in today. He is about to close a round of financing and start to invest in people and resources to grow the business. He was asking me where he should focus most of his energy and talent and hiring in the next 6 months. I told him in the customer facing side of the business and in particular account management and customer service which are the “eyes and ears” of the organization and in product management (the “soul” of the organization) to synthesize this feedback into new and better products.
I was reading Ross Mayfield’s notes from the Enterprise Software Summit today and he quotes extensively from the panel on “White Spaces in Enterprise Software“. While he doesn’t give us any insight into new emerging white spaces, he does talk alot about customer obsessed companies. Maybe customer obsessed companies are the white space in enterprise software.
Build your organization around your customers. Only 10% of it is technology, creating efficiencies comes from this focus, the people, business processes and business rules.
Why are 80% of CEOs claiming its (the it being customer service) the top priority while only 40% are surveying their customers on a regular basis? Most CEOs visit the customer service center when it opens or closes. The average CSR gets 5 hours management attention per month. 56% of consumers believe good service as the greatest impact on customer loyalty, the largest factor. Good service can make up for product problems and provides differentiation in commodity businesses. 80% of consumers say customer service has a major influence on their impression of a company, 85% would drop a product after a bad experience, 56% have stopped using one. The younger the people the stronger the response. Loyalty, revenue, reputation and market share can be easily taken away.
I like to say the way you start a company is you build something for not a lot of money, sell it to a few brave customers who you then develop deep relationships with, listen to them very closely, follow their lead and improve your product and develop new products around your customers feedback, and soon enough you’ll have a good business that will be profitable and loved by its customers. It’s not easy to do but that’s the model I like best.