According to Simon (2010), choosing one’s primary customer is “a make-or-break decision,” since this decision ultimately determines how a business will allocate its resources as effectively as possible. In any publically traded business, one has a choice of three different primary customers: the customers, the employees, or the shareholders.
While many businesses elect to make their customers the primary customers, particularly in retail, wherein the mantra “The customer comes first” reigns, other businesses have chosen to make their employees the primary customers, notably Southwest Airlines. According to Freiberg and Freiberg (1996), Southwest Airlines’ motto is: “Treat your employees with care and concern if that is the way you want them to treat each other and your customers” (p. 271). In other words, Southwest Airlines clearly places the employees first, ahead of both customers and shareholders, which significantly enhances strategic performance and employee retention.
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Numerous organizations place the customers or shareholders first, often to the detriment of their employees. For instance, various businesses routinely engage in mass layoffs to satisfy shareholders, or they might side with unreasonable customers simply to maintain business, even if the customers were abusive towards the employees. In other words, many businesses have a myopic, or short-term, focus, which revolves around temporarily satisfying chronically unsatisfied customers or temporarily boosting revenues for shareholders.
In contrast, Southwest Airlines grounds its focus in the long-term, as the company recognizes that satisfied, happy employees are more likely to achieve the “legendary customer service” (Freiberg & Freiberg, 1996, p. 2) that Southwest Airlines is famed for. In addition, placing the employees first will also contribute to shareholders’ satisfaction, as a positive working environment will strengthen employee and customer retention, which reduces the costs associated with constantly training new employees and remedying customers’ complaints. Thus, Southwest Airlines will also significantly enhance its strategic performance in the eyes of shareholders, who will recognize Southwest Airlines’ long-term focus, which results in long-term gains and assures company stability.
- Freiberg, K. & Freiberg, J. (1996). Nuts!: Southwest Airlines’ Crazy Recipe for Business and
Personal Success. New York: Bard Press. - Simons, R. (November 2010). Stress-Test Your Strategy: The 7 Questions to Ask. Harvard
Business Review. https://hbr.org/2010/11/stress-test-your-strategy-the-7-questions-to-ask
