Why Money Can’t Be Your Only Bottom Line
Read Atul Gawande’s stunning article on the cost of healthcare in America and you’ll start to understand why.
Gawande set out to discover why such a large discrepancy in medical costs existed between two US communities with similar demographics.
What did he find out that got President Obama’s attention?
1. Doctors in higher-cost areas are motivated by the wrong thing: money.
2. Higher costs don’t result in better care (and could lead to worse).
Profit growth had become an acceptable (even laudable) goal in some medical communities. The more acceptable, the more likely heathcare costs were to be higher and the quality of care, lower.
How did this happen?
When money became the bottom line, quality declined. In the words of one cardiac surgeon, doctors started behaving like business people.
So, what’s the fix? Doctors need to go back to being doctors.
What does this have to do with marketing your business?
You might benefit from acting like a doctor too.
Take a lesson from the Mayo Clinic. Mayo nurtured a culture where the focus was on improving care, not the bottom line. By eliminating seductive financial incentives and focusing first on patient needs, it actually decreased costs and improved quality of care.
Mayo proved better quality care can cost less when patients are put first.
How can you make your business healthier and your clients happier?
Which do you trust more: the company whose focus is on the almighty dollar or the one whose priority is making you happy?
Just like you want to feel you matter more than money, so do your customers. So why not act like a doctor and treat your customers like patients? Care for their needs ahead of your bottom line, and you’ll win their trust. Trust engenders loyalty. The money should flow from there.
Make your business the Mayo Clinic of your industry. Here are a three simple guidelines.
1. Put customer needs first.
Understand your customers. Only recommend products or services relevant to their needs. If you oversell, you might boost short-term profits but you’ll break trust in the long run. After all, most people are savvy enough to realize they were duped into buying something they didn’t really need.
2. Reward employees for sustaining the lifetime “health” of customers.
Create incentives that reward your employees for customer satisfaction and repeat business.
Short-term revenue goals produce short-term successes. Don’t waste time and money chasing after product development trends that don’t have legs or churning through customers. After all, it costs a lot more to get new customers than to keep existing ones.
3. Make every cup of coffee a $31,000 experience.
Respect the lifetime value of your customers.
Do you like coffee? A small cup of coffee at Starbucks costs about $2.00. If you’re like me, you might also throw in a muffin or scone. So now you’re spending $4.00, three or four times a week and occasionally on weekends.
As a customer, are you worth $4.00? Not even close. You’re worth at least $31,000!*
But Starbucks or Dunkin Donuts can’t win your lifelong loyalty if the coffee tastes like brown water, the cashier ignores you or the barista takes 30 minutes to make your latte when you’re already late for work.
The customer experience has to be priority number one.
Make every customer who walks through your door, visits your site, or attends one of your events feel like they just got a $31,000 cup of coffee. Make every customer understand that you care about their well-being and success at least as much as you do your margins, and preferably more.
*over a period of 30 years, assuming a spend of $20/week