What is the Price on Good Will?

I know of a place that refuses to buy kleenex tissues for their employees. At one point they even refused to buy paper clips. Employees are expected to buy and bring in their own, even though these employees are mostly office administrative and other white-collar positions.

The cost of some goodwill to purchase these items for the 30 employees is roughly $60 a month. How many sales do you think they lose when irate employees complain to customers? How many hours of productivity do they lose as the employees spend time arguing about the $60 cost rather than doing their work? If every employee just spent an hour a month complaining (I promise you it’s more than that) and we assumed they were being paid on average $8/hour that’s a loss of $240 – $60 in ‘savings’ = $180 you just lost. Every. Month. That’s not counting the lost customer base who see angry employees and decide not to be a part of that business.

Audible’s employees are given the freedom to offer free download credits when something has gone amiss. I have been given three or four of these during my four years as their customer and it has kept me coming back. A credit usually costs about $14-$11 depending on if you buy in bulk or not. I currently spend about $600/year with them, sometimes more. Do you think a $44 investment is worth my good will?

On the flip side, one of the companies I used to work for had several customers that, after all the pandering needed to keep them happy (face-to-face weekly visits, constant re and re-structuring the payment options, constant drama calls sending the entire office into a tizzy) we were ultimately losing money to keep them as a customer. The argument was that we couldn’t afford to lose the cash flow, but the math clearly stated we were ultimately losing money thanks to lost productivity and other better customers we couldn’t focus on gaining.

Where are you ‘pinching’ right now that is backfiring?

Have you gone over the numbers?

Alternatively are you savvy enough to know when the cost of good will is too high to be worth it?

Marketing demands regular reality checks on what is and isn’t working. It might be wise to have some foresight into what a customer regularly brings in and have some reasonable ‘good will’ options you are prepared to offer.  It would also be wise to have a line in the sand as to when you’ll stop helping an abusive customer.

Leave a Reply

Your email address will not be published. Required fields are marked *