“Companies that grow for the sake of growth or that expand into areas outside their core business strategy often stumble. On the other hand, companies that build scale for the benefit of their customers and shareholders more often succeed over time.” – Jamie Dimon
The essence of title is lucidly conveyed through the quote. The truth for any business is that whatever it does must be for the customer. The company’s growth too, must be from the point of view to build scale for customer benefit. Simply put this means that when growing its business, a company should do so with minimal or no increase in the operational costs, thereby ensuring that there is no significant rise in the cost for the customers. To build scale for customer benefit also means that a company would grow but would also use its resources to the optimum to reach its goals. Scaling also means that a company would be able to increase its revenue without an increase or even a decrease in its operating costs, such that it can pass on the cost benefits to its customers. By effectively managing its resources versus growth, a company would not only build scale for customer benefit but would reap the rewards for doing so.
As a customer, would you not want to stay with a company that grows consistently and passes on a large part of their rewards and benefits to you? Such companies experience enhanced customer satisfaction levels, decreased customer churn, higher profits and gains, and a happier and energized workforce. The better a company gets at being able to build scale for customer benefit, the more effective it becomes internally. Everyone in the company would understand the value of collaboration and would find the most effective methods to fulfil their duties, using the least amount of resources – thereby spreading gain and enhanced revenue across the company.
With digitization and the advancement in technology, companies are becoming more efficient and finding better ways to build scale for customer benefit. They understand the importance of digitizing the most crucial customer experiences and interactions. They do so with speed and at scale consistently – this in turn produces positive results for them in a consistent manner. When a company gets into the digital mode, it is able to make every product and process, swifter and more efficient, thereby doing more with the same amount of resources and time. The savings can then be passed onto customers by way of discounts, better products and other modes of saving – for a company this is the ability to build scale for customer benefit.
In order for a company to be perceived as making efforts to build scale for customer benefit, it must be able to form a great impression on its customers in both worlds – digital and real. From experience, we know that customers would typically try out a digital offering a couple of times at the maximum, post, which they would abandon it if their experience were less than satisfactory. It is for the company to rethink its strategy and revamp the offering, without too much time lapse and at no extra cost to the customer. Customers expect top class products without the additional hassle and or bureaucracy that usually come into play. Being able to build scale for customer benefit translates to serving them without weaving through a maze of steps and processes, searching for the information they need or any other activities that would add to customer effort. To build scale for customer benefit is about providing customers with peace of mind, easy transactions, pleasant interactions and top class offerings and service.
In order to build scale for customer benefit, a company must internally understand and put in place what it believes to be a top class customer experience. It must know the kind of treatment a customer receives at every touch-point and at every stage of their association with the company. The company should become known and associated with such top class experiences – it would be something unique and distinct it offers. This in turn would attract more attention from existing customers and would attract a larger number of potential ones.
To build scale for customer benefit means that a company uses its size and reach to advantage. In order to get more benefits for its customers, a company must consistently negotiate better deals, gain favourable terms of association, and maximize discounts and offers for bulk orders and other such methods. By collaborating with large businesses and companies with wide domestic and global presence, a company would gain an improved market to sell. By keeping its expenses down and collaborating wisely, a company could increase its sales volumes without increasing costs for the customers and could even possibly bring costs down for them. When focusing on trying to build scale for customer benefit, a company benefits as much – it increases its chances of gaining more customers, is able to grab bigger market share and would increase its profit margins without increasing the amount of resources it would currently be operating with.
To build scale for customer benefit entails understanding the actual value your business and the offerings bring for the customers. The offerings must inspire trust and credibility and must be extremely viable for a large customer base and only then should your company consider scaling the business for it to remain beneficial for the customer.
Many companies believe that scaling up requires expanding the headcount of the company. This in turn would mean a huge amount of added costs and overheads, normally associated with hiring new staff. To do this a company would need to increase the cost of its products and services, which would have a negative impact on its customers. Some customers could pay grudgingly while looking out for better options, while other customers would simply associate with a competitor that would be offering better prices. A company could instead, use the existing talent within the company and look to outsource some tasks to independent workers / freelancers. This not only keeps costs in check, it allows a company to provide for the needs of its customers without added cost to them. While a company is in the process of scaling up, it is also adding benefits for its customers, which over time would reap rich benefits for the company too.
Companies that have recognized the advantages of automating and digitization would be able to build scale for customer benefit. Instead of using manual labour for processes, a company could look at automating them, thereby increasing productivity and output of its employees, and reducing the opportunities for error and mismanagement. With higher productivity comes ingenuity and creativity, enabling a company to customize its offerings as per the customer’s needs. Automated processes also allow the company to focus more on building and cementing relationships with its existing customers and growing the customer base. It is all about saving time and effort for the company and the customers – the better this can be managed, the more opportunities a company can create to cut down costs and save money. As existing customers receive more benefits and better pricing, they would be happy to encourage others to provide business to the company. Hence, in an effort to build scale for customer benefit, a company would receive, as many if not more, benefits.
The premise of the effort to build scale is to ensure that customers become happier, gain more, stay relevant for them, and overall contribute positively to their lives. If a company can do this consistently, it would soon reach the pinnacle of success and profits.