Attracting the Right Type of Customer
We've talked a little before about the various steps and strategies that Buffett puts into action to attract the right type of investor.
Translating that into managing our companies or divisions, it's crucial to understand that we serve and desire a certain type of customer and everything is built around that knowledge.
Here's how he specifically targeted the type of investor he wanted in Berkshire: “Our goal is to attract long-term owners who, at the time of purchase, have no timetable or price target for sale but plan instead to stay with us indefinitely.”
He had a very similar way of dealing with the types of companies he wanted, managers he desired and products or services he offered.
I'm not sure why, but huge companies still try to be everything to everybody and wonder why they're unable to develop a branding position within the minds of their customers, along with long-term loyalty. The reason is that they aren't able to go counter to the powerful thought that you can serve everybody; which is an illusion. Still, it remains a powerful illusion.
Read press releases from companies and look how they shape and mold them to reach out to everyone in the world. They many times start off with the real purpose of the company, and then go on to attempt to take in everybody. It's really harmful to them as people then don't know what it is they stand for and if it's for them.
To build any company, we must be willing to narrow down who we're reaching out to and then form all of our marketing campaigns, strategies and services based upon that knowledge. Those that increasingly do this will be the big winners. Buffett and others has shown us it's true.
Other Buffett Resources:
MSU students have special visit with billionaire Warren Buffett
Sticking to what you know Core businesses
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