It is an important question to ask.
Bad profits are those profits that are earned at the expense of customer relationships. Whenever customers feel misled, mistreated, ignored or coerced, then the result is a bad profit. Bad profits arise when a company saves money by delivering a lousy customer experience. Essentially it means that leadership or the company extracts value from their customers instead of adding overall value.
Those of you in leadership positions, those of you that run companies and manage people, understand that the culture you present to your team may lay the foundation for success not just in the short term but hopefully in the long term. The leaders who have exceptional core values and focus on good profits — and eliminate bad profits — will not only create companies with long-term success, but will provide products and services that your customers will crave, want and need.
When companies don’t understand the difference between good and bad profits, the result is that growth suffers in the long term, reputations are hurt, customers become alienated and employees become demoralized. You and your business become vulnerable to competition. Your business may achieve short term success — but will always fail in the long term.
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