If you watched the Olympics, you would not have missed the neon green shoes on the feet of some 400 athletes. Well it’s not the first time that athletes have worn Nike shoes during the Olympics, but it is definitely the first time that they have worn this color. Earlier, Nike used to make shoes that matched the uniforms of the athletes. The shoes ‘matched’, which means that they blended with the uniforms. Nike did not like that for nobody really noticed them. Martin Lotti, the designer at Nike, was not happy just designing shoes; he wanted to be noticed. So he chose a color that was bound to stand out – be it the racing track, the boxing ring, or any other event. He colored his shoes neon green and made every athlete wear them. There was no chance that anyone could miss them. So while Adidas was the official sponsor of the game, it’s once again Nike’s shoes that got noticed.
If you stick by certain basic rules, chances of going wrong are reduced remarkably. Like in the above mentioned case, when people go to watch the Olympics, they go to watch the athletes. So if any brand wants to get noticed, the most logical thing would be to be as near to the athletes as possible. Nike did just that. It thought ‘athletes’ and all marketing and branding efforts were concentrated around the athlete. So while Coca Cola is rumored to have paid $100 million and Adidas has apparently shelled out around $63 million, it is Nike who did not spend any money on sponsorships that got the maximum attention. Branding is all about creating the right impact and Nike was bang on target this time. Branding is also about creating customer satisfaction, but surprisingly, many companies lose this focus and finally lose out in the race.
IT’S FOR THE CUSTOMER, SILLY
Peter Drucker quoted a long time back, “There is only one valid definition of a business purpose: to create a customer.” This simple fact is overlooked by many. First, you have customers, and the rest follows later. However logical and simple the concept, some companies just fail to implement it. For many, the focus is on ‘shareholders’. They rationalize that if shareholders are happy, the company is doing good.
Jack Welch is one of the best examples of a CEO who is known for his capacity to grow shareholder value. He moved GE from a market value of $14 billion to $484 billion; making it the most valuable and largest company in the world. It was the one company that met market expectations every quarter for almost 48 quarters, and it delighted shareholders for 12 years. So if shareholder expectations are the benchmark, then GE should have been the strongest company. But surprisingly, after Jack Welch retired, the company’s market capitalization started going down and today, GE has lost 60% of that value. How could this happen? The answer is simple; the earnings and the balance sheets were ‘managed’. There was no ‘real’ value creation happening in the company. This is one of the reasons why every day, a new accounting scandal emerges in the corporate world and companies that looked so strong and sturdy just disappear.
It’s customer delight and not shareholder delight that makes a company really outperform its competitors. Time and again, it has been proved that the company, which did not shift its focus from the customer, come what may, won in the long run .
The iPhone 5 was launched recently. It’s a phone the world had been waiting for with great anticipation. That’s because this is one company that never cared for Wall Street or the shareholders. It believed in only one rule – delighting the customer. In fact, Apple’s iconic founder Steve Jobs never left an opportunity to bring out the fact that he did not bother about shareholders, and what mattered was delighting the customer beyond expectations. His energy was focused on developing a new product and his consumers loved him for that. Apple fans world over adore the company, and do not care about the technology that it uses. So while the tech geeks might not rate the iPhone 4S very highly, the fact is that Apple sold four million iPhone 4 handsets in three days; the maxi mum a phone has ever sold in corporate history. The iPhone 5, which was launched a few days back, has been judged by many as lacking the ‘knockout gasping features’ that people have started to expect from Apple. But it will still sell 22 million units in the September quarter. In fact, after the launch, experts have revised their figures and are thinking that it will touch 27 million. According to some, the new device should sell as many as all the previous models combined. JP Morgan has even calculated that iPhone 5 could add half a percentage point to the country’s GDP growth!! Once again, you’ll see lines in front of Apple stores and share prices will start moving up.
A company that specializes in delighting its customers looks different, feels different and behaves differently. As Roger Martin, in his book “Fixing the Game”, says “To delight customers, a radically different kind of management needs to be in place, with a different role for the managers, a different way of coordinating work, a different set of values and a different way of communicating. This is not rocket science.” These organizations are not dominated by the sales force or the accountants, who only talk numbers; but by people who know how to create value. After all, it is commonsense that delighting the customer is what gets a business profits.
Business is finally for the customers and shareholder satisfaction is the consequence of correct strategies and not the strategy, silly!! Read more....
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