Missing out: where co-ops are getting it wrong

Co-operatives are failing to capitalise on their potentially strongest advantage, according to Rob Markey of consultants Bain and Co, speaking at the Quebec summit. The distinctive aspect of...

Co-operatives are failing to capitalise on their potentially strongest advantage, according to Rob Markey of consultants Bain and Co, speaking at the Quebec summit.

The distinctive aspect of co-operatives, he said, is that they are customer-owned and exist for the sole purpose of serving their customers. And yet, he said, many co-ops were playing this down in the way they marketed themselves. “It’s a huge missed opportunity,” he said.

He also claimed that customer loyalty towards co-operatives was lower than that in conventionally owned competitors, the reverse of what might be anticipated. He put this down to three reasons.

Firstly, he said, as co-operatives grew larger they had become increasingly removed from direct contact with their members. Secondly, co-operatives were using management tools and management training methods designed for investor-owned businesses. And finally, co-operatives and mutuals were becoming associated with general ideas of social good, rather than with promoting good value towards their members.

He argued for co-operatives to reconnect with their members, not only in relation to governance arrangements and democracy, but also in day-to-day business transactions, including areas such as customer service and product development.

Bain and Co’s study Member Driven Strategies: Leveraging Co-operatives’ Competitive Advantage is available on the Quebec summit website.

  • For more updates from the 2014 International Summit of Cooperatives, click here

 

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