iLounge.com recently blogged a press release from Logitech, an about face on their previous plan to sell their Harmony Remote division. the takeaway from their press release is this line: “The company has determined that retaining ownership is in the best interest of its shareholders. The Harmony product line has gained momentum following the April introduction of the Harmony Ultimate product…”
this statement may seem completely innocuous to you and most of corporate and consumer America but here’s the rub: it’s backwards. corporations are the result of a business having grown to enormous levels and normally funded by both profits and publicly traded share value determined by the health and potential of their company as a whole. the problem is that today’s companies have completely forgotten about the consumer, you know, the people that actually buy the products and services they sought to provide for a profit. in fact, most corporations regard their customers as a huge pain in the ass and prefer to answer only to their shareholders. it’s why customer service is of low priority to most businesses as they consider closing the sale to be the consummation of the business relationship.
to continue using Logitech as an example, if consumers were to completely stop buying Logitech products, profits would drop and the share price would fall precipitously due to shareholders selling their shares due to poor company health. despite common knowledge that shareholders are not customers, companies maintain their primary focus on them instead of the people who buy and use their products. it’s just plain wrong and is the cause of so many companies failing in today’s business environment.
if Logitech had their priorities straight, their statement would read that the move is in the best interests of their customers. why? instead of treating the customer like an obstacle between them and profits, companies like Logitech could use the sale to symbolize the beginning of a relationship rather than the current trend. by providing a superior product with unmatched levels of customer service, you nurture this relationship created by the sale and create a faithful, repeat customer.
one company seems to get this and they’ve paid the price for it over the past year by Wall Street douchebags: Apple. they fully understand that every sale is the beginning of a new relationship and not the end of one. it’s why Apple’s customers are so faithful, returning to buy again and again. because they focus on serving their customers as they should, they generate the kinds of profits the whole sector envies. however, because they don’t necessarily function in the best interests of their shareholders, their stock price was punished despite holding well over $100 billion in cash purely from sales profits.
so yeah, Logitech’s press release demonstrates how backwards their priorities are, and it’s not just them, as the vast majority of today’s businesses have their focus backwards. you can be sure that if you lose your customers, you will lose profits and your shareholders, like rats, will be the first to jump ship. you would think that with today’s technology giving the average consumer increased influence on the buying decisions of others, businesses would avoid selling to their shareholders, but you would be wrong.
are we so far removed from how to go about running a proper business that Apple’s simple premise to “delight and surprise our customers” seems not just gimmicky, but even a bit wrong?