Cisco Cisco Smart Business Portal Livre blanc

“To remain competitive, you must figure out how to keep your

customers longer, grow them into bigger customers, make

them more profitable, and serve them more efficiently. And

you want more of them,” state Don Peppers and Martha

Rogers, Ph.D., in their most recent book, Return on Customer:

1

The fact

is, customers, and not products, are the cornerstone of com-

petitive advantage and growth. In a marketplace where too

many products are chasing too little demand, customers are

the scarcest, most valuable resource.

To understand why, consider the current market conditions.

“Every household in the industrialized world already has one

or two or more cars, a washing machine, television sets in 

different rooms, and a cell phone (or several),” state Peppers &

Rogers. Product commoditization is tightening its grip as inno-

vation cycles are trimmed. Competitors are creating product

knockoffs seemingly overnight and are taking advantage of

cheap, global distribution networks to bring their offerings to

market fast. Price cuts only fuel the commoditization fire,

compressing margins and lowering profits further. Even last

year’s “temporary” cost reductions have become permanent in

an effort to compete.

These conditions create a strong opportunity for companies

able to center their business on customers. “Companies

focused on acquiring, retaining and growing customers are in

a much stronger position to boost sales, increase profitability

and grow,” explains Becky Carroll, senior consultant, Peppers &

Rogers Group.“They’re able to reduce their costs by diverting

resources away from low-value customers and generate more

revenue by concentrating on high-value and high-growth 

customers. It’s a win-win, but it all depends on enabling a

strong customer focus across the organization.”

©2006 Peppers & Rogers Group. All rights reserved. Peppers & Rogers Group is a division of Carlson Marketing.

The Customer-Centric SMB: Increasing Profitability by Focusing on Customers

WHITE PAPER   2006

3

The Customer Centric Opportunity