When do you fire your clients?

The Economist on clients:

It often makes perfect sense to refuse to give your customers what they want, or at least what they say they want. “You can’t just ask customers what they want and then try to give that to them,” Steve Jobs told Inc. magazine in 1989. “By the time you get it built, they’ll want something new.” The job of a great company, he added, is to make a product that its customers would never have thought of, but which immediately makes them salivate. In other words, firms should lead customers rather than just following them.

Many brands depend not just on leading customers but on turning them away at the door. The best nightclubs measure their success in terms of the number of people they turn away rather than the number they serve. Ditto the best universities or private schools. Celebrity chefs give the impression that you are lucky to be able to eat their food, and that the privilege will be removed if you fail to behave properly or grovel sufficiently. The famous “Seinfeld” episode about “the soup Nazi” was based on a real New York soup vendor, Al Yeganeh, whose soup was so delicious that his customers would put up with all manner of abuse (“Have your money ready before you order”).

Companies sometimes have to fire their customers rather than “delight” them. Told by a discontented reader that he was thinking of cancelling his subscription, Kelvin MacKenzie, a former editor of The Sun, Britain’s best-selling tabloid, responded by banning him from reading the paper ever again. Clay Christensen, of Harvard Business School, has outlined a more sophisticated version of the Mackenzie strategy in “The Innovator’s Dilemma”. Mr Christensen points out that companies can become prisoners of their existing customers. IBM, for instance, ignored the personal computer market for a long time because it was a prisoner of its huge existing mainframe business. The only way to break out of a declining business is to fire your existing customers—every so politely, of course, and never making any reference to “muppets”—and embrace the future.


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