Thursday, January 30, 2014

The Employee-centric vs. Client-centric Debate

The early days of any new business venture represent an enormous challenge and transitioning from business plan to profitability involves a number of important steps and a great deal of investment. Laying the proper foundation for your business is essential to securing the long-term future for your company so having an insight into where you are going to focus your early investment will help shape what eventually defines your business. There are two major schools of thought here: the employee-centric approach and the client-centric approach. Both have their merits and which works for your business will come down to an analysis of which approach is most likely to make your company stronger in the long run based on the resources and capital that you have available.

Employee-centric Approach

Greatest investment: Capital
Best Marketing Feature: Cutting Edge
Clientele: High End

The idea behind the employee-centric approach is to create an environment where the people you hire have the best tools at their disposal so that they enjoy coming to work. The concept is that if the employee is happy they will be better able to service clients who will be happy in turn. In order to provide your employees with such an environment usually requires investing a lot of capital up front. This is the one drawback to this approach as, by having a high startup cost, you have immediately positioned your company to operate at a certain price point depending on the market for your service or product. You have reduced your potential pool of clients down to those that can afford to pay for your service or product, and you are now trusting that you will be able to market your company in such a way that attracts a high end clientele.

You will benefit from being able to provide your clients with the very latest technology in whatever you are offering, and reminding them through advertising and marketing campaigns that your company is on the cutting edge of the industry is essential to making your company viable. Investing big in your company through an employee-centric approach means going big the whole way. The investment is bigger so operating costs will be higher and, in order to turn some kind of profit, you will likely be asking your clients to pay more for your product or service than some of your competitors. By making such a demand of your clients, it is imperative that you consistently deliver the goods because the moment a client realizes that they can get the same quality product or service for cheaper, it’s their right to jump ship.

Client-centric Approach

Greatest Investment: Time
Best Marketing Feature: Value
Clientele: Anyone

In contrast to the employee-centric approach there is the client-centric approach which places a greater emphasis on customer relations and attempting do a lot with very little. Ever heard of someone building their business from the ground up? Well, that’s the idea here. In the client-centric approach there is a minimal amount invested in capital and, instead, a great amount of time invested in an effort to provide the client with what they are looking for and keeping them happy. Every customer is precious as they represent the lifeblood of the company and one dissatisfied customer could be the ruin of your business. A poor night’s sleep is justifiable if it gets the project delivered on time and on budget.

Although expectations might have to be tempered with limited resources available, the advantage here is that because your costs are lower you are able to attract clients who might be looking for the best rate in the market. This, in turn, easily becomes the strategy behind how to market your company to prospective clients. By offering the most competitive rates you attract clients with smaller budgets, but you can in turn offer your service or product to a wealthier clientele by being able to offer them value, thereby effectively opening your business to a wider pool of prospective clients.