The Wall Street Journal talks about waiting in line today. Did you know that it costs money for airlines to staff check-in counters, but your waiting in line is absolutely free? Or that if you didn't wait in line at the car rental desk, the agents would loose the opportunity to upsell you on add-on services? Does the success of these practices argue against a strategy of focusing on customer value? Do these practices even demonstrate a lack of focus on customer value? I'm tentatively saying no and no, and provide the following counter arguments:

  • Value has many components, each with related costs. Successful businesses focus on the net value obtained by the customer. Most people give a higher value to low cost rather than service when it comes to flying. The lower cost of fewer ticket agents and longer lines allows the airline to provide greater overall value through more discount fares.

  • Customer should not be confused with consumer. Consumers are the universe of customers. But not all consumers are customers of a business, and it is impossible for a business to focus on all consumers ("focus on everything" doesn't really make sense, does it?). In the case of car rental agencies - their customers are the frequent renters, and the companies do focus on providing value to this consumer segment. If anything, the infrequent casual renter is a distraction in the mission of a car rental company to provide value to its real customer.

The key element to success through a focus on customer value can be found from answering two questions: "Who is/should be my customer?" and "How can I maximize the value to him/her of what my business offers?"

Not to turn this into GE News, but GE has this reverse mentoring program going on where younger workers experienced in the ways of the Web are mentoring older executives on making it through a virtual meeting. At the same time, the kids get to grill the grownups about survival and success in the corporate world. Great idea, even though it demonstrates that you don't really need us consultants. Actually, this 2-way mentoring sounds a lot like knowledge management - people learning by interacting with people, using a little technology here and there to facilitate the process.