Why Profits Should Be Your Secondary GoalWhy Profits Should Be Your Secondary Goal
The great management guru Peter Drucker said it the best: "profit is not the explanation, cause, or rationale of business behavior and business decisions, but rather the test of their validity." In other words, profit is a reward. Here's what you should focus on first.
January 26, 2009
The great management guru Peter Drucker said it the best: “profit is not the explanation, cause, or rationale of business behavior and business decisions, but rather the test of their validity.” In other words, profit is a reward. Here’s what you should focus on first.
The most important part of your business — the very reason you are in business — is to serve your customers’ needs. When you neglect to give your customers what they truly need, then profit is irrelevant.
Did you know that it costs a retail financial firm an average of $280 to find a new customer and only $57 to keep that customer? Many businesses spend considerable time pursuing new customers to boost profits coming in the front door. But they forget there are disgruntled customers leaving through the back door.
I’m not suggesting that profit is not important. It’s necessary for survival. Profits will occur if you are getting and keeping the right customers. In a forthcoming post, I’ll talk about profit maximization and how it can help you in your marketing/sales/innovation endeavors.
Contributing blogger Shane Ketterman is a network engineer by day and an MBA grad by night. Shane has developed a passion for the new age of technology delivery. He combines real-world experience with unique marketing/business views.
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