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Better Feelings Lead to Bigger Profits

September 13, 2016

Typically, we don’t talk about feelings in the business world. We like to talk about the hard things like the bottom line, profits, and procedures.  

However, I believe that there is a specific correlation between positive feelings and actual profit. The way that a person feels about what they are buying or the company they work for matters to the bottom line. In fact, most millennials choose to do business with companies the way previous generations chose charities. Think about the implications of this fact. Young people want their workplace and the products they buy to say something about who they are and what they believe.

This is why TOMS shoes are so popular. In my opinion, TOMS shoes are ugly, but they succeed because they explain their values through their product. Every time you buy a pair of TOMS shoes, another pair of shoes is sent to someone in need. The mission is simple but impactful. Buying a pair of TOMS isn’t just shoe shopping. It’s placing shoes on the bare feet of someone in need.

This one for one model is clear and compelling to customers, but not all companies can and should pursue this practice. In other words, not everyone can have a “sexy” cause. If you don’t have a product or service that’s naturally compelling, how can you explain your values to your customers?

Let’s take a look at the popular retailer Nordstrom. In November of 2014, Nordstrom announced that they would be closed on Thanksgiving Day, standing out amongst other retail stores that planned to get a head-start on Black Friday. Their reasoning was simple: one holiday at a time.  They wanted their employees to enjoy Thanksgiving with their families before jumping into the Black Friday rush. Here’s the interesting part–not only did they choose to stay closed on Thanksgiving Day, but they actively advertised that fact as a way to communicate their values to their customers. Think about it. Nordstrom actually put up signs specifically to remind you that they would not be open.

Whether they are selling tablets or toilet paper, the companies that communicate their values well are the ones that win. 

Before communicating your values, take some time this week to discuss what they are. Ask yourself and your colleagues this question: If tomorrow this company failed to exist, what gap would we leave in the world? If you can answer that question, you’re well on your way to identifying and understanding why your organization exists.

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