Comments on: Is Your Growth Focused on Revenues or on Margins?

By: Amy Madsen

Amy Madsen — Tue, 03 Apr 2007 17:26:42 +0000

Thanks for an interesting article, Lewis. If any of your readers are interested in more info on Net Promoter or Fred Reichheld, Fred maintains a Net Promoter blog. Here is the link: http://netpromoter.typepad.com/fred_reichheld/

By: Lewis Green

Lewis Green — Tue, 03 Apr 2007 17:13:52 +0000

Claire,
Thank you for your smart take on this. You are right about corporations feeling pressure to meet Wall Street’s demands for dividend and top line growth. However, I believe that planning for both the short term and the long term will deliver both top line results and profit growth. Relying on short-term growth only hurts profits.
As for small businesses, I hear concern about taking risks. In other words, since big business focuses on top line (short-term growth), we should, too. My view of this based on actual case studies of small businesses focused on top line growth only–they represent businesses most likely to fail in the first five years.
And, finally, Go Gators!

By: Claire Ratushny

Claire Ratushny — Tue, 03 Apr 2007 16:12:46 +0000

Hi Lewis,
Excellent post. In fact: excellent article. Hope you’ll put it up on your own web site since it is so articulate and explains an important POV for your potential clients.
Why is it that so many businesses focus on short term goals and fail to realize their sustainability is weighted to building customer relationships and loyalty, which takes time? Why do they discount products and services and their businesses into oblivion? Can’t understand any of this. Corporations, of course, bow to shareholder demands and fall into these traps. . .but small companies and entrepreneurs?
You’re right: businesses aren’t investing in the right things. How to fix the problem? It takes time and work when consulting with clients to imbue them with the courage needed to change their tactics. Keep on fighting the good fight, Lewis.
P.S. Congratulations on your Florida Gators’ great victory last night! We all know you bleed orange and blue!

By: Lewis Green

Lewis Green — Tue, 03 Apr 2007 15:33:25 +0000

Ted,
I agree that “value does not equal price,” unless the price is low.
I just finished reading your comment regarding brands, and I agree–store brands vs., for example, Johnson & Johnson will appear to some consumers as offering less value. Lots of consumers feel the same way about low-priced services and products. When I used to out-source millions of dollars of work, I always threw out the two highest and the two lowest bids, without giving them a second thought. (This out of 10 – 15 bids.) The former because I needed to come in under budget; the latter because I imagined (perceived) that low prices meant crappy value.

By: Ted Mininni

Ted Mininni — Tue, 03 Apr 2007 13:29:05 +0000

Lewis,
Thank you for a thoughtful, well-written post on a very important subject. Your very first sentence: “Good and great companies don’t sell price, they sell value” resonates with me very much. So let me comment on that one point, even though your post makes other very salient points.
Firms like mine sell specific expertise and services, and we as well as product companies, need to remember that line. We have all experienced would-be clients expressing their need to shop around and select a consultant based solely on price to find out they’ve made a more costly mistake. We all have to do a good job of proving our value to the customer; all that we offer and bring to the table for them. Then we can build mutually respectful and long-term relationships.
Value does not equal price.