The term “client focused” is usually a style of doing sales, or serving financial planning clients. My dad is a financial planner, I have lots of salespeople in my family so to me, it was a term I was around a lot and when I started my own business, I really looked forward to doing work where every decision I made was about what was best for the audience of my business.

That’s because I came from television news, where I was disappointed to learn that the decision makers don’t care about the audience. Sorry to disappoint you if you like TV news. There are many, many journalists who do care. There are even some managers who do care.

No one who owns a media company or runs a media company cares about the audience. They care about the shareholders. When you care about the shareholders and ignore the audience you will eventually find your business in the “death spiral.”

This is true of all businesses. If you care about the bottom line more than your clients, your business will die. I was reminded of this today.

The Death Spiral

Do you ever have a customer experience so uniquely terrible that you want to look up the CEO, drive over to his or her house, rouse the person from their bed in their pyjamas, and have them try to use their own service or product, so they can see what a massive failure it is?

This is what I would like to do today to a woman called Talbott Roche. (Talbott? Talbott, are you listening? Is there a Talbott Roche in the audience today?)

Talbott is the CEO of Blackhawk Network Holdings. Blackhawk is a prepaid card company. I’ve been attempting to use a prepaid Visa Gift Card since I received it on my birthday back in April and despite following all the instructions on the card, I have yet to find a retailer who will accept it, online or in person, despite the card’s claim that “it’s accepted everywhere Visa is.”  

Not Client Focused

What is interesting to me is Blackhawk Network Holdings’ shares dropped last month on the forecast of a disappointing outlook for the rest of the year. Talbott, in hier wisdom, blamed retail pressures. I’m sure she’s right! It’s a tough time for retail. If I was trying to weather retail pressures right now, I’d be working on making sure each customer was happy. Because I’m sure not going to buy one of her stupid cards, nor am I going to recommend anyone else does.

However in the prepaid card biz, once the card is “prepaid,” Blackhawk has its money. Historically, that was enough, for them and their shareholders. Service didn’t need to be part of the equation.

Another example: I have a client right now who just purchased a new phone system from a major communications company and it doesn’t allow him to make international calls. Or send faxes.

“I don’t send a lot of faxes,” he said, “but I don’t really feel like that’s the point.”

Of course it’s not the point. The point is, he was sold a system that doesn’t work, and he can’t seem to find anyone at this massive company that cares that his phones don’t work. He is just a drop in the bucket, a new client on the balance sheet to show the shareholders.

‘Foot Off The Gas’

When I worked at a TV station in 2009 or so, our local news team expressed concern that our staff was cut to the bone by layoffs, and we could no longer produce the amount of news necessary to fill an hour-long newscast. We were told by a regional manager to (direct quote) “take our foot off the gas” and relax. Just take syndicated stories from American stations.

So why would anyone be surprised when local viewers stopped watching, ad revenues started dropping, and even fewer resources were put into local TV. Many rounds of layoffs have happened since then.

My husband (an executive at a different company) calls it “the death spiral.”  

  • Make cuts to raise earnings for the shareholders.
  • Cut too deep and stop providing the service your users require.
  • Lose unhappy users.
  • Revenues drop, more cuts required.
  • Service falls further.
  • Lose even more users.

The spiral continues.

But, But Why?

Content is the easiest thing in the world to cut. Marketing, same thing. These things don’t make money! But wait –they do bring in users. Isn’t that making money?

Now, in the television industry where content is your actual product –literally, the only thing you produce– it seems ridiculous to me to do anything other than make more, better, different, new, disruptive, awesome content. No matter what happens, make sure your content is different than everyone else’s.  When times get tough, try to deliver it in new and interesting ways than everyone else’s.

I think the problem in Canada’s biggest newsrooms is that the people making the decisions get a fat bonus cheque every year based on serving the shareholders, not serving the audience.

I’m sure that’s the same for you in your business. When profits go up, so does your paycheque. I’m sure it’s the same for Talbott Roche.

Serve Your Audience

See, here’s the problem.  If you don’t serve your audience, surprise and delight your audience, eventually they’ll walk away. Being client focused isn’t a glib buzzword. It’s a way to describe serving your audience and meeting its needs, day after day after day.

So while cutting and sacrificing to get at those profits may seem like a money making decision in the short run, if it has any impact on client focused service, then the clients will walk away, and the death spiral begins. If you’re a sole proprietorship, you need to internalize this and live it. If you have shareholders, someone needs to make them deeply, deeply understand this.

There are too many companies who have been able to serve only their shareholders with impunity. Talbott Roche and her retail friends, for one. Airlines and their monopoly for another. Big cable and television and communications, and of course the cell phone companies. Even our own governments haven’t been responsive to voters, instead answering in too many cases to the political action committees who helped get them elected.

We the Customers

As people’s values around how they shop change, as driverless cars threaten to change how we travel, as new forms of communication emerge, we the customers have increased power to demand service. We just have to actually do it.

And as small business owners, we must remember that being client focused is simply money and time spent cultivating real relationships, listening, and understanding the needs of the people who allow us the privilege of being in business. That’s always time and money well spent.

2 thoughts on “Client Focused Approach vs The Death Spiral”

  1. Good to know! I will edit. As a feminist, I feel terrible for making this assumption but I’m going to chalk it up to the fact that my extensive googling revealed little & I have an uncle with the name Talbot

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