Having read this far, you know why customers come back. You understand the five principles of customer loyalty. On an intuitive basis, I believe you were familiar with each of the principles before you read the first word of this book.
You already knew that people do business with people. In your own buying experiences, you feel a kinship when people remember your name and make it a point to know, understand, help, and lead you.
You already knew that differentiators make one business, product, or seller distinguishable from another. In your own buying experiences, you make purchasing decisions based on the differences between competing alternatives.
You already knew that value and assurance are key determining factors in getting customers to buy again and again. In your own buying experiences, you are constantly evaluating the total worth of what you buy and who you are buying it from.
You already knew that effective communication was listening, learning, and responding. In your own buying experiences, you reward those people that talk straight, develop an ongoing dialogue, and are constantly listening to you.
You already knew that little could be accomplished unless sufficient focus is directed to the problem or opportunity. In your own business purchasing experiences, you appreciate and reward those who focus their attention on your specific wants, needs, and desires.
You may have intuitively known the five principles, but you may not have applied them in your business endeavors. On a day-to-day basis, every business is bombarded with challenges. How you define your challenges and what actions you take determine how successful you will be. A mission statement can help you undertake this task. A mission statement begins with the end result in mind and clearly defines a goal so that daily activity will lead to the right conclusion.
Ted is a retired military colonel who spent 25 years in the intelligence branch of the U.S. Marine Corp. Ted is a history buff and finds comfort in understanding the world today by understanding the world of yesterday. Today, Ted works in the training and education department of a major corporation.
Ted attends most of the conventions and general sales meetings of the company for which he works. He shared with me that he was attending a convention and was in the hotel lounge one evening when a couple of his colleagues were discussing the current state of their company. All of these fellows were in agreement that the company seemed to be forever changing marketing plans, target audiences, and generally how the company conducts its business. Ted's colleagues were young fellows in their 30s and held management jobs at the junior executive level. While they had worked at the company for only a couple years they each admitted that the company seemed to radically change its direction too frequently.
Ted asked his colleagues, "What do you think the mission of our company should be?" The young executives responded with lengthy manifestos that described markets, products, and competitive position.
Ted told them. "You fellows are too young to remember, but World War II was the greatest endeavor of mankind. It employed more people, resources, and money than any other endeavor before or since. The outcome of World War II would determine the future of the world. Do you know the mission statement for World War II?" he asked. Neither of the young men knew the answer.
Ted continued, "The mission statement for World War II was just two words: unconditional surrender. The strategy was Europe first. The tactics to be used were land, air, and sea. In order for a mission to be successful, it has to be clear and easily understood by everyone involved. If the mission of World War II was as complex as the mission statements you just offered, we would still be fighting the war. The war effort included everyone. It wasn't just soldiers that fought the war. Every American was involved. People participated in the Civil Air Patrol, endured rationing, and volunteered for all kinds of activities that supported the war effort. Their understanding of the mission was critical to the success of the war. A mission statement should guide everyone involved."
Do you have a mission statement for your business? Is it three pages or three words? Does everyone in your company understand the mission?
Today there is a prevailing belief that the purpose of every business is to earn a profit. This belief is pervasive as well as prevailing. Most people believe profit is the most important function of any business. This belief is widely accepted, but may not be as relevant as you might think.
Henry Ford's life was filled with accomplishments and contradictions. He was an odd fellow in many ways, but he really changed the world by putting it on wheels. Ford used his company as a sort of social laboratory. He adopted a paternal policy to reform his workers' lives both at home and at work. He felt it was his obligation to help improve the human condition.
In 1914, Ford announced his plan to share the Ford Motor Company's profits with workers, paying them $5 for an eight-hour shift. Five bucks doesn't sound like much money today, but at that time a man earning $5 a day could support his family in relative comfort. Five dollars a day was enough money to put food on the table, pay the rent, and set aside a little bit each week toward the purchase of a car. The workers' ability to set aside a little bit each week toward the purchase of cars was the most important issue to Ford. Ford knew that if the typical worker could afford a car, the Ford Motor Company and the entire world would do just fine. Henry Ford's guiding philosophy was "The purpose of commerce is to provide jobs. A byproduct of commerce is profit to a company's owners."
Ford reasoned that if he had all the money in the world, it would not matter one wit if there were no goods or services to purchase. When commerce creates jobs, it also creates consumers. Consumers make the economy and the world go round.
The Boy Scouts of America was incorporated in 1910 with the purpose of building character and physical fitness in young men. Incentives for being a Boy Scout include camping trips, merit badges, and friendship. A camping trip is an incentive, it is not the purpose. Merit badges and friendship are also incentives to being a Boy Scout, they are not the purpose.
The purpose of commerce in any society it the creation of jobs. Without jobs there are no consumers; without consumers, there is no commerce. Every business is a part of the tapestry of commerce, and profit is an incentive of commerce.
Many businesses today operate for the sole purpose of earning a profit to distribute to their investors or stockholders. These businesses reason that the investors, as owners of the enterprise, are entitled to a profit. They believe that profit is not an incentive, it is the purpose. They are saying that there is no other reason to invest in a company other than the belief that a profit will be earned. This view does not fairly recognize all the stakeholders in a business or the value of organizational loyalty.