Warren Buffett once famously said “you only find out who is swimming naked when the tide goes out.”
Well as far as I can see, the tide’s out and the water is rising pretty slowly.
Is your company like those financial institutions that lent money to the person who looked like the Millionaire Next Door, only to discover they were playing the balance transfer game and using their home’s equity like an ATM machine? Might have been a good idea to have understood those customers’ ability to pay you back.
Are you like some of those luxury brands that appeared to be winning big pre-recession, but were mostly growing through raising prices and now are scrambling to win back customers they let drift to the competition? Seems like a good idea now to realize that you need both the uber-wealthy and the solidly affluent to help pay the bills.
Or maybe you are that high-flying e-commerce company that touts its incredible rate of customer acquisition and average spend per customer, while failing to notice an alarmingly high rate of customer churn. Oh, you don’t track retention?
Perhaps you are that brand that crows about its double-digit growth rate, while not even knowing that the category is growing much faster. Hmm, I guess market share is not important in your business?
When business looks good, it’s so easy to pound our chests. But there is a big difference between looks good and is good.
Remarkable companies are keenly focused on deep customer insight–in good times and bad. They have customer segment specific strategies that inform all their tactics, and they identify and act upon weakness before it becomes a crisis.
No one can predict everything that might happen to significantly impact your business. But a well crafted customer-centric strategy gives you the best chance to not be caught swimming naked, risking being sucked in by the riptide that is your boss, the Board or the marketplace.
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Now go put some pants on.