Who’s the customer?

In the November 2010 issue of the Harvard Business Review there’s an interesting article about business strategy that discusses the importance of ‘knowing your customer.’

“Who is our real customer?” may seem like a rhetorical question, but Harvard Business School professor Robert Simons suggests that the right answer isn’t always obvious. For example, do you think you know who McDonald’s targets as its most important customers? You may be surprised at what Simons found:

“In the 1980s and 1990s, McDonald’s considered its primary customers to be not the people who ate in its restaurants but multisite real estate developers and franchise owners. By focusing most of its resources on those customers through centralized real estate development, franchising, and procurement functions, it opened as many as 1,700 new stores a year.”

Often the answer to the question of ‘Who is the customer?’ seems obvious. But is it? Defining tomorrow’s most productive, potential customers may require a more strategic look at your products and services, and where their value lies.  Because McDonald’s saw its primary customer in its key growth years, as developers, it focused its resources on selling them on the value of building and running its restaurants. That focus helped ensure that McDonald’s corporate revenues, which come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants, would continue to grow.

“Who is the customer?” is more than a rhetorical question. And it’s a question that must be asked on a regular basis, as the business environment and business needs change. How you answer this question for your company will shape and reshape its future and determine its relative success.

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