Customers Should Be On Balance Sheets
I once had a long & involved discussion that lasted over a few weeks with a CFO I used to work for in a large service industry corporation. The debate was simple; should ‘customers’ appear on balance sheets. It’s pointless to dwell on the outcome, traditional finance has never considered the goodwill of customers records, only their purchases. This ‘conversion only’ attitude is short-sighted in today’s economy, recurring revenue (and other tangibles like product feedback, promos and identifying future needs) comes from creating and establishing a relationship with customers and that’s what durably impacts the bottom line. To achieve that I argue that the only way is by treating a customer record (relationship) as an intangible asset thus giving it a place on a balance sheet where it’s full value can be acknowledged and corroborated by the community supporting every company (management, board, banks, investors and vendors).
In any business outside of those whose size enables them to cultivate eye to eye contact and continued visits maintain a savvy memory, one needs help from technology to assist with the who’s who, trouble is, CRM records are most always outdated, incomplete and full of irrelevant fields that shun even the bravest from filling them in. Further, it’s no one’s job — it’s a task that’s spread out between a variety of people across the company which makes things look more like a family finger pointing feud about who’s turn it is to clear the table. The very nature of this ‘intangible’ work makes any CFO run when someone mentions turning it into a measurable asset, after all if you can’t measure it you can’t manage it.
I’d like to see a job role created, call it what you like but make the person (or department) in charge of ‘maintaining the record’ as steadfast as those at intelligence agencies around the world who look after human-source intelligence (HUMINT) — after all, in those circles, profiles are the organisations principal assets. While I’m not insinuating that there links between commercial and military operations, both of these entities rely on a similar level of understanding of who their primary subjects are and this entails the whole organization to consider ‘profiles’ as being a paramount constituent of their operations. Until someone in your organization answers up to actively maintaining and nurturing customer records like a living thing and they have the palpable support from absolutely everyone in your company then your customers will remain ‘off the sheet’ and everyone’s minds.