Get the 1to1 Blog delivered right to your desktop.

Subscribe to the RSS Feed through FeedBurner.

What is RSS?

Get the 1to1 Blog delivered right to your Inbox.

Enter your email address:

Delivered by FeedBurner

Cash On Hand; Customers Waiting

One of the facts that was not highlighted in this week's story about consumer goods and their advanced customer strategy was the amount of cash these companies have on hand. According to Columbia Universoty professor Larry Selden, consumer goods companies have an embarrasing amount of cash in the bank. Instead of using this cash to reinvest in customers, they are buying back stocks and buying other companies. The most recent example is Johnson & Johnson's plan to pay $18 billion for Pfizer's consumer goods business. This is not a sustainable strategy. At some point the M&A opportunties dry up. At some point, companies have to realize that their customers are not Wall Street analysts. Yes, Wall Street analysts are important people. But their judgments are fickle. Customer judgments are rarely fickle. Invest in customers and they will repay with a larger share of wallet and their long-term loyalty. Grow customer value. It's predictable.

Categories

1 Comments

Customer judgments may not be fickle, but their commitments can be swayed. That is another reason that investing in customers -- and in the customer experience -- is so important. Customer strategy is one of those areas in which you are only as good as your last at bat. And in the end, if you're investing in customers, you're investing in shareholders, because an increase in customer value hits squarely on the bottom line.

Leave a comment


Type the characters you see in the picture above.

0 TrackBacks

Listed below are links to blogs that reference this entry: Cash On Hand; Customers Waiting.

TrackBack URL for this entry: http://www.1to1media.com/mt/mt-tb.cgi/24