Ethical Business Practices and Customer Goodwill

Creating Goodwill
Ethical business behavior and practices for companies creates goodwill, and can positively impact the bottom line. Look at the brand awareness created by Target and its community activism, and how that makes their customer want to shop at their stores and “give them business.” For individual business-people, ethics are a badge of personal credibility. Like goodwill for a company, in networking circles it brings deals, sales, and customers. For both the company and the individual business-person, they must stand behind their products, and provide reasonable follow-up servicing. Consumer trends indicate that service is a huge differentiating factor, especially for “big ticket” items such as cars, televisions, furniture, appliances, etc. For business people, service takes on the form of following up after a deal or sale, or adjusting and customizing services to the specific needs and desires of your customer.

Impact of Goodwill with Customers
Goodwill is measurable and highly elastic, which allows a company or person to earn a premium ethically. The additional sales that are generated by customers feeling good about your product or service has an elastic factor in the sense that it will cause them to buy from you at a higher proportion than if they felt indifferent. This effect can be directly measured in increased “pocket share” for current individual customers, and the amount of new customers obtained through referrals. These numbers are real and important to your business.

Ethics Fade, Societies Fall
It is interesting to see throughout history how the fall of ethics in a society preceded the collapse of that society, empire, or nation. Look at the Roman Empire, Greece, the French Revolution, and other collapses and it’s likely they started or were emblematic in their non-ethical businesses activities and that spread to their core institutions. Positive activism – not only just by the elite but with everyday people – is right and dutiful. We must all remember that people doing right by each other in business and activities translates into morality in our society – and that’s the whole point, isn’t it?