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Report #8: A New Marketing Strategy For The PRESENT: Ethics
A cartoon shows a group of suit-and-tie attired businessmen clustered around a conference table, the proverbial sales chart with the downward aimed red arrows at one end, and the meeting leader saying: “Ethics? Smythe, we’ll talk about ethics as soon as we can afford to talk about ethics!” |
Sadly, this is all too often the actual attitude of business leaders and entrepreneurs, as a result of a very simple misunderstanding.
In my business seminars, I’ll often ask participants to quickly make a list, on their yellow pads, of the most important assets of business. “Think about getting ready to go to the bank,” I tell them, “to discuss loan extensions or other credit matters, then prepare your asset recap.” When they share their lists, just about everybody lists such things as buildings, real estate or long-term leases as desirable locations; equipment and technology, inventory, copyrights and trademarks... and most completely forget to include what I insist is the single most important asset of all - the customers!
Incidentally, insurance will replace most other assets, but the only insurance against loss of customers is exceptional service, which is a practical application of a high ethical standard.
Most of the business owners and managers I interact with are most eager for advice to stimulate and increase sales, and most see the ‘solution’ to that ‘question’ as: new customers. They want to know how to get more new customers.
New customer acquisition is very expensive. For most businesses, it requires capital investment and risk. After all, advertising and marketing is only partly scientific; there is always risk of loss.
Most businesses can, instead, at least double their sales without adding a single new customer. The increases are readily available within their own present and past customer base.
I recently attended a marketing conference where it was revealed that the majority of American corporations place their “customer service functions” under “operations” not under “marketing,” thus viewing it as a cost of operations, pure expense item, rather than an investment in marketing - and this is dumb! Customer retention via customer service has to be seen as a profit center in a business. The savvy marketer, who will survive whatever impact the current recessions has on his industry and/or locale and who will prosper in the future, places great importance on the asset ‘the customer’ and seeks to maximize their “Total Customer Value.”
Consider that there can be three basic ‘categories’ of ethical standards in relationships between a business and its customers.
1) Minimum Ethics: We will do just enough to comply with all laws, stay out of jail, and deter lawsuits or returns for refunds.
Several years ago, at a seminar, on a dare, I made a list of ten known companies, in diverse industries, all viewed as “healthy” at the time that I predicted would be bankrupt within two years. My list was made up of businesses I believed were operating via this minimum standard. Two years later, seven of the ten were bankrupt and an eighth had been acquired while on the verge of bankruptcy. Just recently, one of the two remaining companies who beat my prediction announced first-quarter losses of 130-million dollars, massive employee layoffs, and obviously is in danger.
2) Average Ethics: We will give the customer “fair exchange” - reasonable value for their dollars, no less, but no more. Truthfully, most businesses are here. And, as a result, in good times, they’ll get average results, and will generally turn a profit and stay in business.
3) Maximum Ethics: To paraphrase another Kennedy, we ask not how we can get more sales, but how we can give more and better service! This is the right question. The business owner who is constantly striving to better reward his customers for their patronage is taking the ethical high ground, and will be amply rewarded.
This means many things. Truth in advertising and selling is one of those things. To many marketer’s surprise, it’s easier to sell and satisfy when you present an honest picture of the benefits and the drawbacks of a product or service than when you paint an overwhelmingly rosy picture! Why? Well, people are more skeptical than ever before and are rightfully suspicious of anything that seems too good to be true. Most customers appreciate honesty. Sellers do a better job when they know they are behaving ethically. In fact, a major cause of retail sales clerk apathy and ineffectiveness as well as of field sales representatives’ failure is their unhappiness at being involved in what they feel is an unethical selling situation. Staff performance is always improved by a business’ leadership’s passionate commitment to maximum ethics.
There’s no mystery here. You and your staff need to brainstorm on how you would like to be treated, if you were a customer. Compile the longest, most detailed list of ideas about how you would most appreciate being treated and keep to the list.
And if you run out of ideas, start looking around at the ‘opposite’ delivered by most other clerks who know nothing about the store’s merchandise. I’d suggest to you that staffing a store with uninformed, poorly trained people is an unethical act.
It’s worth nothing, too, that the ethics employed in relationships between a business’ leaders and its employees finds its way to the customer, too. Grossly underpaid or otherwise abused employees, who cannot strike back at management, vent their resentments on the customers. It’s instructive that the quality of American made automobiles only stopped declining and started improving when the manufacturers began emphasizing improving employee relations and employee involvement in decision-making.
There are many good reasons for ethical standards and behavior in business. Peace of mind is one of them. Depending on spiritual beliefs, your seating assignment in the afterlife might be another. If no other reason motivates you, you might consider its value as plain, simple, good business.
Source: 15 Secret, Money Making Reports!
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