“No customer, no job”

Such a statement seems to me like a truth of La Palice, an almost laughable obviousness!
According to ChatGPT, “the expression [vérité de La Palice] comes from the French marshal Jacques de La Palice (1470–1525).

After his death at the Battle of Pavia, a quatrain was written in his honor:

‘Alas, if he were not dead, he would still be envied.’

But, due to a copy error, the word envie (envy) was replaced with en vie (alive). Thus it became:

‘Alas, if he were not dead, he would still be alive.’”

Mr. Raymond Royer, a person I greatly admire who led Bombardier and Domtar, used to repeat this slogan: “No customer, no job.” His message echoes that of Mr. Shoen and underlines the importance of properly serving a company’s customers, since ultimately it is the customer who pays the employees’ salaries.

In my opinion, it is an obvious fact that many leaders and employees tend to forget all too easily, especially when their company is enjoying strong financial success. It then becomes easy to grow complacent and to look down on customers. I would add that some employees have understood the crucial importance of customers so well that they regularly take them hostage through strikes that affect the service provided to them.

Forgetting the customer is a mistake that carries great risk for companies. Drifting away from the needs and demands of customers is symptomatic of over-bureaucratization, a huge risk for any business. In your opinion, how many companies (and government agencies) offer an unsatisfactory level of service? How many times have you been left waiting many minutes by a company or a government agency where you are the customer?

In our investments, we favor companies with a strong competitive position and whose customers are, to some extent, “captive”: alternatives for the customer are few and/or switching costs are high. However, this is not a valid reason for such companies to take their customers for granted by offering them mediocre service.

For my part, I believe that personalized service to a company’s customers will become even more important in a world where artificial intelligence and robots are expected to be increasingly present. In such a context, human contacts and relationships will carry even greater weight.

All in all, the customer must always be king for companies. Those that forget this could pay a heavy price.

Philippe Le Blanc, CFA, MBA
Chief Investment Officer at COTE 100