When Ford Motor Co. reported a third-quarter profit of nearly $1 billion this week, analysts cited a number of factors, including the government’s cash-for-clunkers program and the automaker’s ability to siphon business from its bankrupt and bailed-out rivals. But to continue its turnaround, Ford must do something far more fundamental: prove over the long term that it can provide customers with products that they genuinely value. In this edition of Drucker Apps, you’ll find tools to help you understand why creating a customer should be the primary concern of every business, why consumers themselves are the only ones who really know what they value, why companies often misunderstand the market, and why hard work doesn’t necessarily mean a great product. These insights—at once timely and timeless—are based on the ideas and ideals of the late Peter F. Drucker, the father of modern management.
The purpose-driven business
“There is only one valid definition of business purpose: to create a customer.”— Peter F. Drucker, Management: Tasks, Responsibilities, Practices
- Why “the customer is always right” is more than just a cliché. Read more here.
- Has Starbucks compromised what its patrons most want: a “sense of affordable luxury”? Read Rick Wartzman’s BusinessWeek column here.
Excerpt from Management: Tasks, Responsibilities, Practices reprinted by permission of HarperCollins. Copyright ©1973 by HarperCollins: all rights reserved.
The value proposition
“The question, What do customers value?—what satisfies their needs, wants, and aspirations—is so complicated that it can only be answered by customers themselves.”— Peter F. Drucker, The Five Most Important Questions You Will Ever Ask About Your Organization
- Why organizations must pursue a “systematic quest” for customer feedback. Search for needs, wants and aspirations on page 39 here.
- Listen to Intuit founder Scott Cook recall how he became a believer in online user reviews
The marketer’s blind spot
- How “the customer rarely buys what the business thinks it sells him.” Read more here.
- Hear Rajiv Dutta, former president of eBay Marketplaces, discuss the ultimate customer conundrum: wants vs. needs.
Excerpt from Managing for Results reprinted by permission of HarperCollins. Copyright ©1964 by HarperCollins: all rights reserved.
Your sweat doesn’t always equal their satisfaction
“Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for.”— Peter F. Drucker, Innovation and Entrepreneurship
- The consumer as quality-control inspector. Read more here.