Thursday, June 10, 2004

Business Philosophies: Which path is the right path?

One of the issues that has been on my mind, is trying to understand different philosophies that companies have adapted, in how they sell their products/services.

Whether that be online or offline.

The reason it strikes me so harshly, is that I have experienced bad to horrible experiences that help me learn from other people's philosophical mistakes.

Working for companies, going down the path of destruction, and prefer to avoid dealing with it, and sticking to current practices, rather than trying to change.

I definitely experienced that at my last job, a dot-com that went down hill.

Or companies that seem to do well, but seem to miss the path of understanding their customers and how to keep them as customers.

There seems to be a common trend to see companies as marketing companies, rather than companies who sell products or services.

It is sort of a subtle difference, but if you've ever been at a store that had good practices vs bad practices, you can easily tell the difference.

I myself, in my retail/fast food experience have been taught that the goal of any business is to extend the customer life cycle, by making sure the customers stay happy.

I remember the old story of this one grocer, where he taught the value each customer.

He taught that if even 1 customer was dissatisfied, how that can add up to millions of dollars in lost sales. Each customer who did not buy or was not satisfied was a loss in sales and profitability.

So they focused on how to improve customer retention, not always by marketing promotions, but by making sure every aspect of their operation was top-notch.

Each industry has it's idea of what those top-notch things can be.

Such as for the ecommerce industry, here are some examples:

1. Demonstrating trust in your customers, do not hide anything
2. You directly ask customers how you can improve the site, the functionality, usability
3. No errors at all
4. No interference between the customer and the customer's objective, let them get what they want.
5. Making sure your fulfillment and inventory processes, provides the products, the customers of your industry expect to see at any store. Inventory, in terms of offering products, you consistently do not have in stock does not make you look good.
6. Take pride in the effort and work of you and your team, in the products, functionality and customer service attitude.
7. Urge for more competition, so that you can use competition, to urge mutual competition for higher standards of service.

Now let's look at the marketing approach.

1. Identify and understand the demographics/purchases/data of a customer
2. Present promotions/marketing material to entice customers to purchase
3. Design is about branding, and about having space to promote and market
4. Indirect Analysis of customers buying behavior
5. Invisibility to your competition is the key

The marketing approach sounds like the correct approach, except it's not about what the customer wants, but what the seller wants.

To me it's obvious, you always want a satisfied customer that is a repeat customer, emphasis on extending the customer life cycle.

I know there are other approaches, but let's here what you have to think about this.

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