3 - Jacobs University

A customer is the most important visitor on our premises. He is not dependent
on us. We are dependent on him. He is not an interruption on our
work. He is the purpose of it. He is not an outsider on our business. He is
a part of it. We are not doing him a favour by serving him. He is doing us
a favour by giving us an opportunity to do so.
Mahatma Gandhi
1 Introduction
The Cambridge Dictionaries Online (2012) define business as ”the activity of buying and selling
goods and services, or a particular company that does this, or work that you do to earn money”
1 . The target of each commercial organization is to maximize its long-term profits and to assure
sustainability and continuity of its operations by building a set of customers which are going to
repeat business with the organization in the future. Under free market conditions organizations can
only achieve this, if their products meet the expectations of their target customers.
The term ”quality” is defined by the international standard ISO 9000 (2005) as the ”degree to
which a set of inherent characteristics fulfils requirements” (p. 18). Quality plays a central role
in today’s business environment. If an organization manages to identify and fulfill its customers’
requirements through its products to a high degree (achieve good quality), its products will deliver
high value to its customers who will be willing to do business with the company in the future.
Thus, the good reputation of the organization and the perceived value of its products will grow.
In his work The One Number You Need to Grow, Reichheld (2003) argues that company growth
correlates very well with its customers’ readiness to recommend company’s products to other potential
customers, such as e.g. their friends or colleagues. When satisfied customers share their
good experiences with other potential customers, the customer base of the organization expands
generating business growth and larger long-term profits. If, on the other hand, an organization fails
to meet the expectations of its customers (i.e. provides poor quality), it is very likely that the latter
will not be willing to do business with the organization in the future. The pool of customers of the
1 In this paper the term product is used to denote both a physical object and/or a service.
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