Goodwill Sweet Spot

Have you ever bought a favorite product from the grocery store lately only to find that there is less of the product in a smaller package for the same price or higher? We’ve all seen this kind of squeeze play in the marketplace and sometimes have gotten so angry, we simply stopped buying the product at all.

Have you ever wondered why a popular brand and product is downsized this way when common sense should tell the company that their product had reached the sweet spot for product pricing and fulfillment? You can chalk it up to greed.

On the corporate ladder, management is constantly bombarded with the need to squeeze another dime out of a maximized margin of profit. Think about it. If you go into pretty much any type of business, that particular business has a limit to how much it can profit the owner. That is why some investors sink their money into several different businesses. The expectation of profit only goes so far. In fact, the margin for lost opportunity is much broader than for profits. Yet, for many very large corporations, they push the envelope and gamble with company goodwill in order to enhance quarterly earnings for stockholders.

My advice for CEO’s out there – watch your marketing team like a hawk! If a product is your bread and butter, don’t mess with the model. In other words, if it ain’t broke, don’t let marketing “fix” it! What you should be doing is riding their butt to come up with new products that will pad the portfolio. A really good product brand should not have to suffer simply because your team is too lazy to pick up some slack in sales.

Case in point: Recently, my favorite brand of yogurt (I won’t say which one) decided to take out a portion of the ingredients that helped the stuff taste better. Oh, they put on a good ad campaign (how much did that cost?) and told their customers that the product still tasted good. But, let me tell you, it doesn’t! I became so upset about the whole thing that I just stopped buying the product altogether. This company lost the goodwill created by probably its most profitable and popular product. Some corporate yahoo told management that the product wasn’t as profitable as the competitor brands and so they decided to squeeze the life out of a perfectly positioned sweet spot.

So, if your executives are being hounded to produce higher and higher profits from a sweet spot product, you had better pull back on the reins and redirect their efforts toward revamping those lagging products, or better yet, find something new to push onto the market. Believe me, once your goodwill is gone, it is nearly impossible to get it back to that point. In the case of the yogurt mentioned above, the only way to win me and others back as customers is a massive PR campaign, an apology, and several coupons. Consequently, I’ll always wonder if they really put the sweet spot back into their product.

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© Copyright, Goodwill Sweet Spot, 8/19/2017, April Graves-Minton, Love MoonEagle. All Rights Reserved. Republished: 2/10/2023