The ability for customers to rate their experiences with a company should be referred to as the review economy.
Milton Friedman once wrote that the only social responsibility a business has is to make a profit. His argument was based on the view that shareholders are the economic engine of an organisation, and therefore the only group the firm should be focused on. But as we enter the age of the customer, how much does this argument hold up?
In a previous article, I suggested that disruption depends on the perspective are you looking at it from and is driven by our desire for speed to value – when taking the customers perspective I would also include value for money. If a customer perceives they are not getting either there are plenty of avenues for them to take it out. Companies who receive poor ratings will inevitably lose customers.
The ability for customers to rate their experiences with a company should be referred to as the review economy. Good reviews strengthen the ability to attract and retain a customer base. Bad reviews will not only cause customers to abandon ship, but will also make it harder to attract new customers. This will have a negative effect on the bottom line and, ultimately, the shareholders.
We have entered a period where the customer has a choice in the company they want to do business with, not the other way around. To survive, companies need to focus on what their customer is asking for.
Friedman argued that a company’s only responsibility is to the shareholder. I would argue that the company which ignores its customer will fail their shareholders.
The review economy is here, pay attention and you will survive.
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