Do Your Customers Care About Shareholder Value?

Anyone who has been following markets and business for any length of time can’t have missed the focus that so many companies have on shareholder value, which in small companies translates to owner value or "that Porsche I really want". 

In our experience of working with companies and helping them get close to their markets, there is one thing that they all have in common – their customers couldn’t give a monkey’s about shareholder value because it rarely equates good value for them.

If you take the time to look at companies where shareholder value was put at the centre of their strategies, they tend to be the companies where customer value is lower and customer dissatisfaction is higher. Just spend an hour or so online looking at this from a customer satisfaction perspective and you’ll find plenty of examples – so for the purpose of brevity I won’t bore you with any.

Its actually a very challenging problem because to deliver genuine customer satisfaction means more investment in ways of understanding them and delivering what they want, while shareholder value comes out of profit, which means controlling what you spend on everything including customer service and so on.

However if you are a small or new business, there is one single truth and it is this. Without delivering your customers what they want, or least most of it, you won’t generate the enthusiastic advocates you need to attract more customers. Why do I say this, well put bluntly the chances are you can’t compete in marketing spend terms with the big players, so you have to work customer by customer to build your business. So every customer that you can genuinely delight is much more likely to help you win another customer.

You might think I am advocating a situation where you toss the idea of profit out the window, but I promise you I am not and over the next week, I will post 3 other entries to help you with some options for delivering exceptional customer value, while still profiting – first one is on Tuesday and will be focused on expectation management.

In the meantime and as always I’d love to hear others’ experiences and thoughts on the content of this entry