Is there really such a thing as bad profits? With business getting larger and more powerful and investors feeling and expecting ever greater ROI (returns on investment) wouldn’t all profits be good…
It is an important question to ask yourself. Those of you in leadership positions running companies and managing people, the culture you present to your team may lay the foundation for success not just in the short term but hopefully in the long term. The Leaders who have exceptional core values and focus on good profits and eliminate bad profits will not only create companies with long term success but will provide products and services that your customers will crave, want and need.
Bad profits are those profits that are earned at the expense of customer or patient relationships. Whenever a customer or patient feels misled, mistreated, ignored or coerced then the profits from that customer are bad…. Bad profits arise when a company saves money by delivering a lousy customer experience. What is really happening is leadership or companies extract value from their customers or patients instead of adding value.
When companies don’t understand the difference between good and bad profits the bad profits allow growth to suffer in the long term, reputations are hurt, customers or patients become alienated and employees become demoralized. You and your business become vulnerable to competition. Your business may achieve short term success but will always fail in the long term.
Bad profits create detractors – these are people or products that hurt your company and team members. They hurt your company’s reputation; they strangle growth and demoralize an organization. These detractors can be leaders, managers, employees, customers and or patients. The first step in avoiding bad profits is to recognize they exist and the second step is to recognized who are what the detractors are. The third step is to decide, can you convert the detractors that are people or products to promotors. That is done with not just good communication within your organization, but with outstanding communication and over the top service and customer and patient relations. The goal is to create in every transaction the BLT. You want people patients customers employees and or products that people Believe in, Like and Trust.
The goal is to focus on good profits from good products and/or services. Good profits are earned with customer’s enthusiastic cooperation. They occur when their customers or patients come back time and time again for your products and or services. They want to tell their friends family and acquaintances about their exceptional experience. When this occurs they become your companies and or products promotors.
Promotors are individuals or products that provide positive marketing for your company; they are loyal and provide the most cost effective growth for you and your company.
It has been estimated that most companies have about 42-82% of promotors receiving products and/or services. Your focus should be to improve that percentage as much as possible to promote the most good profits. This is done by training and more training that is backed up by outstanding leadership that has outstanding communication. This is not only smart business but good business, so let’s all get going.
Before you start re-evaluating your company, consider evaluating yourself or the leadership of your company. That may be the board, partnership or an individual. Look at those who are influencers and find out about their core values. This may be easier than you think. Spending time with people can tell you quit a bit about that person. If it is a dinner meeting, observe how they treat the wait staff, if it’s a golf match, see how they handle a bad shot, if it’s at a dinner party see if they include other people in their conversation or does the conversation always revolve around them. Are they good listeners? In the end, would you believe, like and trust this individual and if so, then you most likely have defined a good set of core values. You should be honest and straight forward. You shouldn’t put people before profits. You should do what’s right and not just easy. You should put your customer and employees first and if that seems impossible then make sure your team members know your always trying to do what is right.
Once you have the correct core values, the next step is simply putting the correct processes and procedures in place to make your products and or service succeed. A team that does not look up to leadership is a failure not only to your team but to your customers and products.
When making decisions and you feel bad in your gut, in most cases, you know you made the wrong decision. Everyone makes bad decisions but companies that want to excel long term, sense this immediately and move to make corrections.
Making good profits simply means you constantly re-evaluate your products and services and constantly try to make improvement. These improvements do not necessarily have to be major changes they can be minor tweaks that provide major improvements.
In order for business to succeed longer, a companies leadership must have a laser focus on good profits and create the correct processes and procedures that eliminate bad profits.
Dr. Kevin Coughlin practices full time and owns 14 dental practices in MA. Baystate Dental PC. He is also Clinical Adjunct Assistant Professor in the Department of Comprehensive Care at Tufts School of Dental Medicine.
Dr. Coughlin can be reached at Ascent-Dental-Solutions which has a focus on Development, Knowledge, Training and Education for the business community. firstname.lastname@example.org for information his website is www.ascent-dentalsolutions.com by phone 1-800-983-4126