October 6, 2008

How many employees is one customer worth?

Filed under: For Managers

Company CEO’s love to say, “People are our most important asset!” Uh, except when it comes to investors. Then the CEO proclaims, “Customers are our most important asset!”

So, which is it? Rob Preston asks in InformationWeek, Should Your People Come Before Your Customers? He lends his own logic and analysis, and his article is well worth reading, but I’ll tell you how I look at it.

  • What’s your company’s product?
  • Who builds/creates it?
  • Who improves it and adds value to it as the market becomes more competitive?
  • Who pushes it through the sales-and-distribution pipeline to generate revenue?
  • Who picks your company back up when it falls down?

Employees, of course.

Now, we must also ask, who forks over money (aka, revenue) to your company? Customers, of course.

Ah, but who finds, gets, brings, keeps customers?

Obviously, we need both to run a successful business. Since companies have limited resources, they must decide where to deploy those resources. They must decide whether to be more employee-centric, or more customer-centric.

Now, how many employees is one customer worth? And, which would you rather have tomorrow — a great employee, or a great customer?

My vote is easy. I go with the employee, because one employee can bring me many customers. Customers don’t bring me good employees, and good employees are hard to find. Am I nuts?

7 Comments on “How many employees is one customer worth?”
By Bill
October 6, 2008 at 3:44 pm

I know this is a false dicotomy, but I’d rather pay an employee than empower them. 360 reviews, etc are gimmicks if the employees aren’t paid well.

By Kordell Norton
October 6, 2008 at 4:21 pm

In fact, not only are the employees more important than the customer they are 1.) an internal customer and should be customers of your organizations products and services (at least if it is any good) and 2.) they more than deliver the goods and services . . .they need to be part of the production that goes into the “stage play” that should occur when the customer experiences the goods. When customer service and the customer experience is at it’s best. . .there is an interaction and dialog that occurs. Call this personalization if you like but it is where humor and fun are created. And that has to be done one customer at a time.

Kordell
http://www.KordellNorton.com

By Ray
October 6, 2008 at 5:03 pm

Your focus depends on how far up the line you are. At the top, companies should not focus on customers. They should focus on good employees – finding, training, respecting, rewarding and keeping them.
Good employees will always focus on customers.
Everybody wins.

By John Zabrenski
October 7, 2008 at 8:04 am

Good employees focus on the customer since he is the ultimate source of their paychecks. Good managment should focus on enabling the employees to serve the customers.
This sounds easy, but is rarely executed anywhere for a prolonged time. For public companies, the trouble starts when the large, institutional investors want more than the company can sustainably deliver. Then the downsizing, forced retirements, etc used by management to deliver a short term boost in earnings, corrodes the organization resulting in long term underperformance.

John Z

By Nick Corcodilos
October 7, 2008 at 8:57 am

John Z.,

Bingo. “Management by Investors” is a tragedy. Investors can quickly and easily shift their investment if a business hits the skids. (Or, when “management” drives it into the ground.”) Employees and management can’t. Look at the very public corporate disasters out there. Investors are managing those companies for short-term stock price benefits. We used to call it carpetbagging.

By Charles Bosse
October 7, 2008 at 10:31 am

I was a devoted IT employee of 10 years for my previous employer (parent company relocated our office to another state as part of an acquisition this year, I and most others couldn’t go). However, it was hard for me to watch how disengaged the management team in our office was for the last 3 years I was there, we weren’t sure why. The troops in the trenches seemed to care more about the success of our company and the servicing of customers than members of the management team; they all seemed to have their own agendas and rarely confided in each other as a team. Which may have explained the closing of our office.

The “family” spirit of the company established by the original partners (faded after our parent acquired us in 2004), played a big part in how we treated our customers and that spirit stayed with us employees. It was this family spirited sub-culture we had that resulted in our success as a company (treated customers like gold)for many years. It was hard to get that same spirit infused into the new employees we needed to train when the office closed. So, we were an example of an employee centric company that migrated to a mostly investor centric company. Sad.

By JB King
October 9, 2008 at 1:41 pm

I wonder to what extent is “People” subject to interpretation. Usually, a company means their employees, but aren’t people potentially every human being on the planet? The “People are our greatest asset” lends itself to picking employees or customers. Somehow technology and other non-human elements aren’t counted as an asset…. maybe all tech is just a commodity that anyone can get, eh?

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