Why it pays to give generouslyby
Can generosity lead to prosperity? Philip Fisher says penny-pinching is all well and good, but generosity can pay big dividends in the long run.
Over the years, accountants have tried pretty much everything in their unfailing efforts to boost the top line, increase profits and run a successful practice.
However, one of our innate, most highly trained facets is a leaning towards prudence. Expressed differently, most accountants have a tendency to be mean.
For the most part, cutting costs to the bone and squeezing the maximum amount out of clients will achieve your goals, if not always winning you friends. Who needs friends when you have a mansion and an S-Class Mercedes or even Rolls-Royce sharing the garage with your Tesla?
We all know the popular mantra: “If it looks too good to be true, it probably is.” Occasionally, something really is just true.
Last week, your doughty columnist ordered a couple of items from Amazon’s French outlet. The anticipated delivery time was just three days and all was going to plan until a mysterious message appeared explaining that the delivery had been delayed for an indeterminate period.
The explanation was incomplete but there has to be a chance that this was the result of an overworked Amazon slave succumbing to heat exhaustion.
Pleasingly, the blockage cleared and the package turned up one day late, which wasn’t an issue at all. Even so, the following day Amazon France sent out an unsolicited notification that they would be refunding a little over 10% of the original purchase price.
Given that global conglomerates have a reputation for getting every last penny out of their customers (and their workers), this small gesture came as a very pleasant surprise. It guarantees that this shopper will be using their services again in the very near future, not to mention telling friends, family and AccountingWEB subscribers.
This precedent might also make those running accountancy practices or other client/customer-facing businesses stop and think.
A few examples might show how we could benefit from an Amazonian strategy.
It doesn’t happen often, but sometimes accountants screw up. The natural reaction is to put up the barriers, deny responsibility and wait for the client to calm down and forget all about it. In reality, this is normally akin to waving goodbye or even facing a lawsuit.
Just imagine if, before they even realised that something had gone wrong, you called the client apologetically and offered them a discount on fees. If you’re really canny, it would be on next year’s fee to increase the chances that they retain the services.
It also sounds counterintuitive but very few accountants ever consider reducing fees in the general course of business. For the most part, that would be a recipe for disaster but, in some cases, it could be justified.
For example, if a relatively small client introduced a friend who gave you 10 times as much business, it might be a nice gesture to knock down the referring client’s fees for a year or two. They might even tell more friends about your wonderful and friendly services.
Spread a little happiness
Similarly, it is always a good idea to keep staff happy and often very small and inexpensive gestures are greatly appreciated. Sending someone out to buy ice creams for your team as they swelter in 30° (or 90°, if you prefer) heat might put smiles on faces. Going out yourself to buy them could be an even more powerful statement.
Along similar lines and a little more impressive might be closing the office at lunchtime on an overheated Friday and telling everyone to go out and enjoy themselves. In the middle of summer, you will lose a little productive time but there has to be a chance that enthusiasm the following week will more than make up for the reduction.
For those willing to push the boat out in the interests of future profitability, accelerating promotions of talented staff members often pays rich dividends. How many times have you seen promotions held over without good justification and then watched the individuals involved resign with the inevitable costly consequences?
Readers may well have their own thoughts or anecdotes about the ways in which generosity has paid big dividends. If so, you might like to share them below.