The Startup
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The Startup

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Will CFOs Rebel If We Put Customers First?

Many managers know this. Yet few behave as if they do.

Under relentless pressure from above, we feel obliged to produce quick profits by cutting back on services, imposing additional fees, and generally shortchanging our customers and employees.

Customers are the ultimate source of corporate value.

Though corporate accounting practices certainly don’t encourage measuring customer value.

Because the basic purpose of a business is to create and acquire customers.

And the most efficient thing for a company to do is to retain and develop existing customers.

Do you know the lifetime value of your customer base?

We need to focus on customer value as an asset. Not as a means to pursue short-term profit.

  1. The number of gross new customers acquired during the reporting period and net new customers remaining at the end of the period.
  2. The number of existing active customers (existing = customers for 1 year or more, active = have made a purchase in the last 12 months).
  3. Revenue per new and existing customer.

Your goal is to organize around your customer’s needs

That way you’ll only ever offer them exactly what they want.

This improves competitive performance but encourages silos.

And in-group bias — even when inter-department goals are aligned — creates conflict among silos and even members of a team that are pulled from those silos.

Your leadership is critical when you embark on making a shift like this

Because the first thing is to get everybody on board when you want long-term success.

Teach them how the success of this loyalty-based strategy is measured.

Demonstrate how decisions that may depress short-term earnings will bring bigger payoffs in the long run (increased customer acquisition and retention, lower cost to serve, etc.).



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