The Comeback of “Client Benefit First”

February 20, 2023
by Noriyuki Morimoto

When asking a customer of something, you should first tell the customer how they can benefit from complying with the request, as you cannot simply demand the customer to do anything. A typical case is an airline’s requirement that passengers fasten their seatbelts, which must always be preceded by the phrase “for the safety of our passengers.”

Similarly, when a bank wants a borrower to repay an overdue loan, it should not be able to simply demand for payment, given that the borrower is a customer. It should state the benefit of doing so, such as to protect social credit, or to maintain a stable transactional relationship, together with a strong recommendation for repayment.

In Japan, transportation companies loudly ask passengers to follow certain manners. Although this should be considered presumptuous for a service provider, it is accepted only because it is based on the common interest of maintaining the comfort and convenience of all users.

While governments can force citizens to do certain things based on laws and other grounds, companies can only influence the actions of their transactional counterparts by offering them benefits. Of course, the existence of government itself is for the benefit of the people, and it is in the people’s interest to obey laws and regulations, but it is not easy to find a direct linkage between the two, as in corporate transactions.

This client-benefit-first principle runs through all activities in commerce, or all relationships, but it is rarely followed faithfully in practice. For example, Japanese banks ask their customers to write their names in and press stamps on many documents, without any explanation of the reasons or how the customers will benefit from doing so. The leader of an organization tends to demand diligence and creativity from its members, but without mentioning the benefit of meeting such a demand.

In the airline industry these days, the enforcement of regulations seems to be emphasized more than the interest of users in ensuring their safety, as evident during safety checks before boarding a plane. This seems to run against the principle of commerce. In the first place, it should be remembered that the regulation itself is for the safety of passengers.


[Category /Financial Regulations]

Noriyuki Morimoto
Noriyuki Morimoto

Chief Executive Officer, HC Asset Management Co.,Ltd. Noriyuki Morimoto founded HC Asset Management in November 2002. As a pioneer investment consultant in Japan, he established the investment consulting business of Watson Wyatt K.K. (now Willis Towers Watson) in 1990.