There’s a stereotype in the business world that ethical companies are typically less profitable than their peers. But in today’s world, this stereotype doesn’t really ring true. Good ethics are good for business, plain and simple.
Here are five ways you can maximize profits, the ethical way:
Consider Insourcing and Reshoring
It’s fine if you don’t get it right at first. Amway, an American company that sells products ranging from beauty items to vitamins, didn’t get it right. Six years ago, the company looked at outsourcing as a means to deliver more products and boost the bottom line, however, many of their products didn’t fit the mold for outsourcing due to both supply chain design as well as consumer preferences. Today, certain products are made in certain regions across the globe, including right here in the U.S., because it’s good for business.
It’s wise to consider reshoring your business, as oftentimes it is cheaper to do business right here in America than overseas. Once supply chain managers take a hard look at spending and costs, reshoring will look even more attractive. Consider the fact that the majority of consumers like to know where their products are made and where they come from. For example, in 2016, companies felt the heat from consumers because of a lack of ethical practices in their supply chains. Today’s consumer is more sustainability and ethically-conscious than ever before, which means companies need to ensure that products are ethical, safe and even environmentally-friendly — it all comes down to customer preferences.
Be Socially Responsible in Your Day-to-Day
Social responsibility can boost your profits. It is important that the public has a positive perception of your business, and this is one way to do just that. But it’s about more than the consumer, too. According to studies carried out by the online publication Business Standard, investors prefer to work with socially responsible organizations. This can result in an increase in share prices, maximizing the profits of the company’s shareholders. Data taken from the book “Reputation, Stock Prices and You” shows that business owners can expect a 4.3 percent return, also maximizing profitability.
In order to become a socially responsible business, Jay Deutsch, an entrepreneur himself, suggests giving back in meaningful ways, such as adopting initiatives that have a significant meaning to your organization and encourage your staff to participate in putting together philanthropic activities. Most importantly, be genuine in your approach to social responsibility.
Provide Quality Customer Service
Whichever industry you may be in, it pays to provide exemplary customer service. Quality customer service results in customer retention, which increases profits and boosts new business through referrals and recommendations. Plus, the the longer customers remain loyal to your company, the more valuable they become to your business.
It is important to have a business-wide code that all employees, from business leaders to staff, must adhere to. Don Knauss, writing for Forbes, urges that all customers must be treated the same, whether making a deal with your biggest client or giving a sales pitch to the little guy. Everybody should get a fair chance, making it an equal, ethical playing field. This type of transparent process models ethical behavior, inside and out.
Thanks for Carol Trehearn