What is the most effective way to generate higher profits? In 1844 Charles Dickens wrote about a scheme very much like a Ponzi Scheme, in 1987 the movie Wall Street warned of doing things the wrong way and in 2013 the movie Wolf of Wall Street demonstrated that these aren’t just stories, this is what happens in real life.
These stories are relevant because first they tell us that it has been generally accepted since at least the early 1900’s that long term profits are not generated by inappropriate business practice, either illegal or just antisocial in nature.
You prefer to buy from people who you know, like and trust. So do your customers. So why do some people still persist in acting against their customer’s best interests?
One reason may be that the salesperson is attempting to maximise their profits, and some jurisdictions require Company Directors to maximise the profit of the company. Surely that’s all good?
It may be until you take actually think about it. Which gives you the biggest overall profit – ripping a client off once or maybe twice at the highest possible profit margin, and in the process driving them away so that they find someone else to do business with or maybe settling for 75% of that profit and keeping that customer for four or five years? Even at half of the original profit you make more money by working with your customer base.
The real point is that we know the right way to treat customers and treating them that way delivers what both of you want: they get good value and you get solid long term profits. Treating your customers so they naturally want to buy from you gives you time to improve your business so that even more people want to buy from you and the existing customer base is even more certain you are the right person to do business with. What would an ever-increasing number of return customers do for your profit margin?
And isn’t making a profit the idea behind being in business?