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News & Press: General

The Difference Between Profit and Growth

Tuesday, January 24, 2012   (0 Comments)
Posted by: Cassie Nelson
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2012 Spring General Session Speaker, Scott McKain

There is profitability…and then, there is growth. And, it is vital for all AHTD members – providers and manufacturers -- to understand the critical difference. If any business desires to become more profitable, there are only three basic strategies possible in order to achieve the goal. An organization can:

1) Cut costs and increase efficiency
2) Persuade our current customers to spend more with us
3) Obtain and retain new customers

However, as renowned management expert Gary Hamel has written, "You can only grow by bringing something unexpected and exciting to clients.” Let’s face it – decreasing costs in today’s economy is neither "unexpected” nor "exciting.”

That’s why it is important to for all engaged in high technology distribution to understand that you not only assist in reducing overhead and enhancing efficiency – obviously important and fundamental to profitability – in addition, you contribute to creating superior customer experiences, an essential element for organizational growth.

When an organization can deliver on its promises in a more timely, organized, effective manner, it attracts and retains more customers. When logistics, purchasing, sales and marketing, accounting, communications, education and training, and management processes are enhanced and transformed, the entire organization – and the customer base, as well – benefits; often in dramatic fashion.

In addition, creating new and innovative solutions to customer’s problems is at the core of the most successful organizations in the world today. Taking that approach means you’ll get your current customers to spend more – and you’ll attract new customers. It is the cornerstone of marketplace distinction.

In other words, true growth is created by distinction...and your efforts are a significant factor.

No organization can cut its way to growth. Only through the attraction, retention, and enhancement of customers can an organization position itself for sustainable advantages in the marketplace on a long-term basis.

Chopping the training budget, slashing R&D, and cutting back on investment in technology may cause an organization to be more profitable in the short term. However, it’s impossible to consider that approach as a long-term strategy for growth and distinction.

Think about it: If you grow in a distinctive manner…you’ll be profitable.

But, if you’re currently just profitable…it doesn’t guarantee you will stay that way…or that your organization will grow.

It’s important for leaders to ask if an organization is operating at maximum levels of efficiency. It is even more critical to inquire if everything possible is being done to leverage our assets in order to create the customer excitement that generates sustained growth.