There is a fundamental question every business owner must answer: are you building your company around your customers, or around your bottom line?
It sounds like a simple choice. But the way you answer it shapes everything: your culture, your decisions, your growth, and ultimately, your long-term survival.
In Winning on Purpose, Fred Reichheld makes the case that the most successful companies in the world are not the ones that chase profit hardest. They are the ones who love their customers most and let growth follow naturally from that.
The Data Does Not Lie
Reichheld’s research presents a striking finding in Figure 3-1 of his book. Tracking cumulative shareholder returns from 2011 to 2020 against the Vanguard Total Stock Market Index (VTI), only the top NPS leaders, the companies most loved by their customers, actually beat the market average. Discover Financial led with a return of 185, followed by JPMorgan Chase at 111. Companies with poor customer relationships lagged far behind, with some delivering returns as low as 12.
The message is clear: putting customers first is not just the right thing to do. It is the most profitable long-term strategy available to any business.
Costco: A Masterclass in Customer Love
Few companies illustrate this principle better than Costco. When Reichheld met with co-founder and longtime CEO Jim Sinegal, he asked how Sinegal felt about Wall Street’s criticism that Costco paid its employees too much and kept prices too low. Sinegal’s response was direct: if you try to run a business following Wall Street’s advice, you will not be in business very long.
Sinegal’s priority list was telling customers and employees came first, shareholders last. And yet, as he pointed out, since going public in 1985, Costco’s total shareholder returns had far exceeded those of the S&P 500.
Costco’s approach is built on trust. The company maintains a strict markup policy and passes every possible saving on to its members. When they secured a better deal on Calvin Klein jeans, they lowered the price even when Wall Street argued they should pocket the difference. As Sinegal put it, members trust Costco to always do right by them, and breaking that trust would fundamentally change the nature of the company.
That trust is Costco’s real competitive advantage loyal customers who believe in the brand.
They Are Not Alone
Costco is not an outlier. Companies like Apple, T-Mobile, and American Express have all built their growth on the same foundation: understanding their customers deeply, removing friction from their experience, and consistently delivering more value than expected.
What these companies share is not just good products. They have a genuine commitment to making their customers’ lives better, and their customers reward them with loyalty, referrals, and repeat business.
What This Means for Your Business
Organic growth the kind that comes from happy customers telling others about you is the most sustainable and cost-effective growth available. You do not buy it. You earn it.
For small business owners, this is an enormous opportunity. You are closer to your customers than any large corporation can ever be. You can listen faster, adapt quicker, and build the kind of genuine relationships that turn customers into advocates.
But to do that, you need to understand what your customers are actually experiencing not what you assume they are experiencing.
That is exactly where a Customer Experience assessment comes in. Let’s connect and explore how understanding your customers more deeply can become your biggest competitive advantage.