Short-term Sales or Long-term Loyalty?

2009 August 11

Boston #56
Creative Commons License photo credit: Dennis Wright

If you had to choose between an idea that would generate money right now today and an idea that could generate considerably more money later, which would you choose?

It’s not a quiz, it’s an everyday decision. Some would say there’s no right answer for every business at every moment; that it depends on the circumstances; that a business hurting for cash flow probably shouldn’t pass up the short-term money. Some would say it’s a false dichotomy.

Every day we face the same choices in our personal lives when it comes to health and lifestyle decisions, and we understand the tradeoff: fun now vs. wellness later. Or when we make personal decisions about finance, and its our long-term financial well-being at stake. We know the value of compound interest, and we know that making healthy dietary decisions now can make all the difference in our health later in life.

But it seems that some businesses don’t even weigh their options; they automatically choose the short-term gains of immediate sales over creating something of lasting value. A company I used to work with struggled with this dilemma, even though they had solid earnings and money in the bank. It should have been easy to invest in their future by making decisions that would tend to make customers more loyal and return more often rather than drive customers to spend a little more in the short term.

Truly great businesses usually don’t make decisions that are based in short-term rewards; they seek outcomes that will prolong their health and enhance their longevity. We need more examples of that around us.

What’s an example you’ve seen recently of a company placing long-term health over short-term gains?

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