Retail is about selling products, right? Well… sure but maintaining a healthy market is a bit more complicated and requires that exchange to remain balanced. Once that balance is disrupted, one party will eventually terminate the relationship.
Peter Drucker said, “the purpose of a business is to create customers, profit simply validates the business model.”
There’s no question that many organizations, whether for-profit or not, measure success in terms of dollars-in vs. dollars-out. However, the economics of capitalistic markets are systems of balanced exchanges that must continually be judged “fair” by all parties.
Sales should be viewed as “consumer votes.”
“Sales” is a gauge that measures the quality of the exchange. It is easy to get overly focused on sales and lose sight that it just mirrors one aspect of the business.
Several years ago, within six months Apple’s stock dropped by one-third without any decline in sales and profits.
The financial markets were asking, “where are iPhone consumers coming from in the future?”
Sales dollars may be the most visible part of the exchange, but sometimes it’s even more tempting to focus on competition. After all, we often see competition as “the enemy” and the reason we don’t have better sales. Maybe our price is too high, but we need the margin. It’s not easy to see what consumers experience. However, over time, “not scratching the itches of consumers” is the beginning of the end for any business.
When sales are good, sellers tend to become a bit arrogant. When sales are not so good, it’s competition’s fault. In either case, it is easy to develop “a vision problem.” It is normal to think “seeing is believing.”
This is our 5th and final myth… and certainly one that needs busting.
You can get more Double Bottom Line insights from Dr Caldwell’s book ‘Winning in a Hostile Environment’ available through amazon.com or you can have him personally come share these insights with your team. He can be reached at firstname.lastname@example.org or 864-907-2052