Business Rule No. 1


Folks snicker when I say this because it seems obvious.

But, for those unlucky enough to hang out with me for awhile, they come to appreciate that it’s not as obvious as it sounds.

One reason is that it’s not often clear what customers really want. Customers, themselves, do not know.

What’s worse is that they do not know that they do not know.

If you ask them what they want, they won’t say, “I don’t know.” They will tell you something. They often can’t articulate the many dimensions they’ve come to value or not value certain products.

Giving customers what they want can cost too much

Food Network personality and Chef Alex Guarnaschelli was a recent guest on the EconTalk podcast. In it, she explained a rule for her restaurant’s kitchen:

It closes when the last person who would like to eat here finishes ordering. You know? That’s when my kitchen closes.

That’s a great example of giving customers what they want.

Most restaurants have a set closing time and for good reason. It would cost too much to keep the kitchen open as long as Alex. A set closing time might cost some late night sales, but over time saves more in keeping the restaurant staffed longer and may be easier to keep workers who know when they will be able to go home.

As economist Thomas Sowell says, “There are no solutions. Only trade-offs.”

Giving customers what they want can cost too much, so business managers make decisions that might disappoint some customers and try to balance the right trade-offs to satisfy enough customers to stay in business.

Companies often give you what they want to give you, instead of what you want

This is my personal favorite, because I’ve seen so many managers over the years who thought they were ‘customer-focused’ fall into this trap.

Sometimes this works. Steve Jobs might be a good example of coming up with things that he wanted and it just so happened the folks who cherish Apple products agreed. He was a good representative of the tastes of Apple faithful.

But, I’ve also seen this backfire miserably, when executives of companies that served us common folk tried reshaping the company’s products into something they (affluent business executives) wanted. The problem was, unlike Jobs, they did not well represent the company’s customers.

Their initiatives would attract some people like them. Success would be claimed!

But, it normally cost them more than enough existing customers to make the net impact dreadful to the company’s top-line.

Many more reasons 

These a just a few main reasons companies don’t give customers what they want. There are many more — many are very subtle.

Business Rule No. 1 isn’t as obvious as it seems. Keep that in mind the next time you are not satisfied as a customer or your company is struggling to determine why it’s losing ground to competition.


1 thought on “Business Rule No. 1

  1. Pingback: Three Rules for Business Success | Our Dinner Table


Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s