Big Picture Strategy

5Bodies: The Customer Focus

What Is a Customer?

The word customer is derived from the Medieval Latin word custumarius, which means “pertaining to a custom or habit.” And companies do think of their relationships with customers as habitual: customers buy and pay for a brand, use it, and come back for more.

The importance of customers to the health of a business is hard to overstate. I have never spoken to anyone who disagrees: whether nonprofit or for-profit; whether we call them customers, clients, or consumers. If people are not demanding the goods and services that we offer, our enterprise will not survive or prosper.

Brands are only as successful as their customer relationships. And yet, most of the companies I have worked with, use a managerial approach that de facto places products ahead of customers.

The product-dominant philosophy traces its origins to the Industrial Revolution conceptualization of a business: the company uses ingenuity, labor, and capital to build products. Those products are embedded with value, and that value is transferred to the customer when money changes hands and the customer takes possession of the product.

In product-dominant organizations, value is associated with the product, so the business is built around product lines. Prices are determined on the basis of product costs and margins. And competitors are judged on their ability to generate comparable or superior products. The goals of the business are to drive product sales volume and market ...