11/20/2017

September 7, 2000: Thankfully, Customers Still Call the Shots

Doesn’t it warm you all over to know both Ford and Firestone consider us their Number One priority?

About every 30 minutes, one of their CEO’s is assuring us of that fact while they try to find out why Firestone tires and Ford Explorers seem to mix like oil and water.

Sorry, but I’m not buying their line.  What is left out of their message is if we had been their Number One priority all along, the crisis might never have happened in the first place.  Evidence will show, I predict, that someone made a decision somewhere along the way more focused on the bottom line than on the customer.

Now the debate centers on which tires in which plants were defective and was there enough psi in the tires and who is to blame.  That’s not customer focus.  That is the bottom line talking again.  If I owned a Ford Explorer or Firestone tires (I own neither), I would demand new tires regardless.   My family deserves no less.

Unlike Ford/Firestone, I remember three crises where the customer’s concerns really were put first. The most famous is the Tylenol case.  Having found a bottle that had been tampered with, Johnson & Johnson pulled all the bottles off the shelf.  Not just the ones made in certain plants or distributed to a certain area.  They pulled all the bottles.  Their quick action averted a disaster and a lot of lawsuits.

Then there was Chrysler.  A number of years ago, it was reported that Chrysler executives were driving new cars a few hundred miles, turning back the odometers and selling the vehicles as new.  Against legal advice, Chrysler chairman Lee Iacocca ran full-page ads with the headline, “We Goofed,” and promising never to do that again.  End of crisis.

Finally, there was the day that Coca-Cola executives Roberto Goizueta and Don Keough discovered we didn’t want New Coke.  We liked Old Coke.  Much as Iacocca had done, Goizueta and Keough did a mea culpa and — marketing studies to the contrary — declared, “The customer is right.  Give them back their Old Coke.”

Despite these examples, companies don’t seem to learn.  They think words speak louder than actions and that we don’t know the difference.  We get these patronizing messages from corporations that seem to feel telling the whole truth is a crime against humanity.  Call your typical company –any company – and get the maddening routine about punching touchtone buttons.  How impersonal can you get?  Then go read that company’s annual report and particularly the CEO’s message (he’s the one with the halo over his head) about their all-day, everyday commitment to you, the customer.  Bull feathers!  The commitment is to the bottom line.  Touchtone buttons cost less than people.  You don’t have to pay them benefits, buy them a desk, supervise them or hire and fire them.

Companies in all sectors are merging at alarming rates today.  Yet, the mega-conglomerates assure us that there will be “more customer choice.”   Yeah right.  In truth, customer choice is way down the list of reasons that companies merge.  The bottom line is the first priority.  CEO’s get fired for poor financial performance, not poor customer service – unless poor customer service leads to poor financial performance.

Take airlines, for example.  They cram us in like sardines – more fannies in seats mean more dollars to the bottom line – and then talk about their commitment to customer service.  They know and we know there isn’t a lot of choice as to which airline we can fly so let’s drop the bromides, please.

I am all for profit.  I own stock in several companies and I cheer their financial progress on those rare days when they show any.  But with 40 years of corporate hindsight, I suggest a company can be profitable and still not treat their customers as having no more sense than a hockey puck.

Early in my career I learned a rule about the external environment that is as inviolate as a law of physics.  It should be the first thing taught in our business schools.  Arthur Page, the first public relations vice president of AT&T, said more than 50 years ago,  “All business in a democratic country begins with public permission and exists by public approval.”  That rule is as true today as when he said it.

Loosely translated, it means you and I still call the shots.  Companies that ignore Page’s rule, do so at their peril.  Ask Ford and Firestone.