- Portfolio managers seek companies that have sustainable and unique value propositions
- Financial advisors suggest we diversify our holdings and practice a hands-off buy and hold strategy
In short, find a good product and a good management team and sit tight. Why are so many companies willing to sacrifice customer service and abandon customers?
Somewhere we’ve gotten off track. Mickey Edwards wrote an interesting article not long ago in The Atlantic titled “The Business of Business”. He writes that companies seeking to do good while seeking profit can create sustainable models that benefit themselves and their communities. Too many businesses treat the business of business purely as maximizing profits.
Similarly, too many businesses treat the business of customer service as an exercise in constant cost cuts.
- This behavior is rational because of our short-term fixation on quarterly earnings
- Reductions on top of reductions eventually impact customers
- We all lose over the long-term
When shareholders and businesses would rather pursue a quick buck rather than developing a sustainable business model we inevitably lose employee trust, erode shareholder confidence and weaken our business.
If we agree that we want sustainable and profitable businesses, it stands to reason we want sustainable (i.e. satisfied) and profitable customers. The pivot point is that cutting resources, eventually cuts profits. We invest tremendous resources to “buy” our customers now let’s hold them as if they’re worth gold… after all, they are.