What’s the primary function of your business?
Making profit? Building share? Increasing shareholder value?
Actually, it’s none of the above.
They’re all laudable objectives, of course, but they’re not your primary function – the thing that every bit of your business must be focused on doing, to achieve the objectives in that list above.
So what is it? And why doesn’t everyone know about it?
Well, one reason it’s no longer top of mind with your average business guru these days is the fact that it’s been around since the sixties and is therefore less than new, shiny and digital. The other reason is that it’s blindingly obvious when you say it, but rather difficult to actually implement.
The primary function of your business is the acquisition and maintenance of customers.
The thing that every part of your organisation must prioritise, is getting and keeping customers. Blindingly obvious, as we said. But ask your finance department what their primary function is – what they prioritise in daily operations – and you’re unlikely to hear them mention customers.
Ask your production people. Your HR people. Your R&D people. We’ll wager that getting and keeping customers won’t feature in their replies.
But it should. As Ted Levitt (Marketing Professor at Harvard Business School) first proposed in the sixties, you can’t make money, grow share or build shareholder value without customers. There’s no point in developing or making products either. In fact, you don’t have a business if you don’t first have customers.
“I have sales and marketing for that” you protest. But think about it – why are you delegating the primary function of your entire business to just one part of your business? What might happen if you adjusted targets for every part of your organisation?
What might change or transform if everyone, in every department, believed that their primary function was to get and keep customers? Well, we reckon it could be profit, share and shareholder value.
Think about it – and then when you get a moment, watch the video again!