The Power of Goodwill
Imagine going into an Apple store, investing $900 in an iPhone (purchased without a contract), and still coming away feeling like you owe the company something.
Sounds bizarre, doesn’t it?
Well, it’s not. At least not according to ETR Publisher, Matt Smith. “I bought my iPhone out of my service contract, so it cost me almost $900. Even though I overpaid for the product I feel like I still owe them. I feel like they did something for me. As I hold it in my hand I can appreciate it because it is unique. I can see that the designers of this phone really poured their heart and soul into this product.”
“There is an enormous amount of attention to detail and energy, effort, and even love that went into this product. I can see it and feel it every time I use it. Even when that transaction was finished there was something leftover and that something is still there, and that’s goodwill.”
If you’re an accountant, you’ll recognize Goodwill as a business term. If you’re not an accountant, here’s the definition according to Wikipedia: “Goodwill is an accounting concept meaning the value of an entity over and above the value of its assets. The term was originally used in accounting to express the intangible but quantifiable ‘prudent value’ of an ongoing business beyond its assets, resulting perhaps because the reputation the firm enjoyed with its clients.”
Goodwill actually sits on a company’s balance sheet and reflects a company’s brand. As the brand grows, goodwill actually accrues in value.
Matt used to think that the idea of goodwill was kind of silly, that it didn’t make sense that so much value could be associated with an intangible such as the concept of goodwill.
Something in the last couple of years has inspired Matt to change his mind. “I think that if you’re transitioning from a transactional business to building a real business you start to see how goodwill is really what it’s all about. Goodwill is the transmission of the heart, soul and love that’s put into the products that you create.”
How can you create goodwill in your business (or even in your career, if you are employed by someone else)?
First, you can put extra effort into creating and selling beautiful merchandise, like Apple, BMW, or Montblanc pens.
Second, you can overdeliver.
Third, you provide extraordinary customer service.
Zappos is a company that has mastered both, through their shipping policies and their contrarian approach to extreme customer service.
But what if you run an Internet-based business that delivers digital products?
Well, that was Matt’s job to explain the concept of ‘digital’ goodwill to the team at MindValley, the organization we were visiting in Kuala Lumpur. MindValley creates beautiful websites that sell meditation and personal development products.
Matt was straightforward about the difficulty in building goodwill when all you’re selling is, “digital ones and zeros that no one can see and hold in their hand”. Building goodwill when selling information products can be hard.
In fact, as Matt explained, “Most of the time when someone buys a digital product when they leave they feel just a tiny bit screwed after the purchase. It’s probably on a subconscious level. It’s not that the product wasn’t good and it’s not that they’re going to ask for a refund. They’re not even disappointed. But at the end of the transaction I believe that there is this sense that you kind of owe the customer instead of the customer owing you.”
That’s a problem. With a digital product it’s almost impossible for the consumer to feel and touch and really experience the deep love, effort, energy, and heart and soul that went into the product creation. That’s why information marketers need to work extra hard to build goodwill. Fortunately, there is a simple solution.
“Creating great products is a start. Standing behind your promises and your guarantees is a key. All those basics are there. But, I think you have to go above that,” Matt said to the young group of MindValley employees spread out on their bean bag chairs is the aptly named, “Hall of Awesomeness” where we were gathered. “I think you have to raise the bar well above that and content is a way to do it – free content, great content that’s intriguing and valuable, that makes a difference in the lives of your readers.”
“The way we do it at Early to Rise, and frankly the way the largest online publishers in the world do it,” Matt explained, “is through daily editorial content that is excellent and is given away for free. The idea is that both our customers and non-customers have the opportunity to see what we’re about and to receive value from us every day without us ever demanding anything in return for that. That can create goodwill in an Internet business.”
It is our goal at ETR to make significant deposits of goodwill every day through our editorial and our customer service. In the future, we plan to incorporate improved product and website design, video content, and a supportive community into our ecosystem to foster even more goodwill among our readers and customers.
Content is one of the best ways, but not the only way to create goodwill with an Internet business. As Matt pointed out in his presentation, MindValley does an excellent job of creating goodwill through their customer service, fostering their customer community, and most importantly, their website design aesthetics that leave readers with a sense of bliss just from visiting the site.
Matt concluded his presentation to the MindValley team by saying, “The key if you want to build a long term business is that you must start making deposits of goodwill. And the easiest way to accomplish that is to help your customers see that this isn’t just about a transaction for you, that your heart and soul is going into these things that you’re creating, that literally your life force is being spent in order to add value to their lives. If they can see that then it will affect goodwill in a very significant way.”
If you are in this for the long haul, and you want to do it right, we encourage you to think about the concept of goodwill in everything you do.
As Matt finished his presentation to the MindValley team, “Work your butt off to let your customers know you love them. That’s how you truly create goodwill.”[Ed. Note. Craig Ballantyne is the editor of EarlytoRise.com, and Matt Smith is the Publisher. Together, they are dedicated to helping you achieve a Life Well Lived, as well as to helping you achieve your version of the American Dream through their publication, Financial Independence Monthly (FIM). Craig recently interviewed Matt about Goodwill, Position of Strength, and three other forgotten business factors as a bonus for all FIM members. You can become a member and access the interview on your own terms here.]