When it comes to the study of business and management, there are few names that can be put along side with Peter F. Drucker. Drucker is considered the “father of modern management” and the lessons he taught still hold true today.
One of the key concepts he discusses is the definition of business purpose, which he elaborates on in The Essential Drucker:
“With respect to the definition of business purpose and business management, there is only one such focus, one starting point. It is the customer. The customer defines the business. A business is not defined by the company’s name, statutes, or articles of incorporation. It is defined by the want the customer satisfies when he or she buys a product or a service. To satisfy the customer is the mission and purpose of every business. The question, What is our business? can therefore, be answered only by looking at the business from the outside, from the point of view of customer and market. All the customer is interested in are his or her own values, wants, and reality. For this reason alone, any serious attempt to state ‘what our business is’ must start with the customer’s realities, his situation, his behavior, his expectations, and his values.
“Who is the customer? is thus the first and most crucial question to be asked in defining business purpose and business mission. It is not an easy, let alone an obvious question. How it is being answered determines, in large measure, how the business defines itself” (Drucker 24).
Indeed, many of us would define ourselves as “real estate investors” or “flippers” or “wholesalers,” and while that’s all fine and good, those words focus on ourselves and not the customer. And as Drucker notes, the customer defines our business.
Related: Yes, Customer Service DOES Matter in Real Estate: Here’s How to Make Yours Top-Notch
In a market economy, the only legitimate way to make money is to give people what they want. Give (at a price, of course), and you shall receive. And while we all know this somewhere deep down, it rarely percolates to the surface when it comes to our day-to-day decision making.
The tendency is to ask, “What do I want?”
Well, I want to buy a property at a low price and to sell it at high price. I want to get a great tenant at a solid rent. I want the bank to loan to me. I want… I want… I want… I want.
This is, of course, the wrong way to look at things. You should be constantly asking yourself, “What does my customer want and how can I give it to them?” Of course, this also depends on who your customer is, and as Drucker noted, that’s not always easy to figure out.
But it’s important to start with the right questions. Every decision should be based on three things: 1) What’s legal, 2) What’s economical, and finally, 3) What the customer wants.
I hate to break this to you, but you are not a beautiful or unique snowflake. What you…