Thursday, January 11, 2007

It’s the customer, ya’ hear, the CUSTOMER!

[OK. And the children. If politicians can use it, so can I.]

There are two fundamental models on which to build a business. The first stresses decisions based on income and profit, with the assumption that the natural extension will be doing what’s right for the customer. By far the most common.

The second stresses making decisions based on what’s right for the customer, with the assumption that the natural extension will be income and profit.

I got my formative business education at Nordstrom in the late sixties and seventies, when they were just beginning to explode on the national scene (in a recession). The employee handbook read “Use your own best judgment at all times.” in its entirety, and fledgling buyers were given million dollar budgets with the instruction “Buy what the customer wants.” Markups were capped at a maximum 52% to ensure value, and in the culture “Customer” was a noun only in the sense that “God” is a noun to the world’s faithful.

Can you guess in which model this blog believes?

In the rapidly changing business of real estate the industry spends a little too much time protecting the status quo, as opposed to embracing new technologies and adapting those that serve our customer. Rather than reacting negatively per se against anything that looks like it might jeopardize our business – whether it’s Redfin or Zillow or whatever – the pertinent questions are: Will it successfully serve our customers? If not, why not? And, if so, can we find some way to serve our customers even better?

So that will be this blog’s constant theme: The Customer.

And, of course, the children.

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