Why Pure ROI Just Doesn’t Make Sense

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C-suite managers are educated, trained and stubbornly married to Return on Investment (ROI). Of course, we have to make sure the business is profitable, but the obsession with profits first has significant downsides. As a result of a focus on ROI, all eyes are immediately steered to the end result in the form of added sales and profits. However, with the wrong mindset, it can be a treacherous path to follow — all the more so in an era where there is greater transparency, people are increasingly attuned to company ethics and where a brand’s employees should be its number 1 fans.

Employee Happiness Before Customer Satisfaction

ROI return on investment

The leadership mindset is very often obscured by the pressure to deliver short-term profits. Not only are investments improperly parsed from (so considered) costs, but client satisfaction (aka happiness and, ultimately, loyalty) is generally not involved in the equation at the board level. Ideally, customer happiness should not only be measured, but should be integrated into business targets. Moreover, in this Internet-enabled (social, mobile & local) world, employee happiness will be a key driver of customer happiness. Click To Tweet Fortunately, there are some companies leading the way with success, such as Zappos and Semco Industries; but too many companies prefer to stick their head in the sand on this question. In the new era of “customer centric” strategies, marketers are increasingly bandying about the term of “life-time value” of customer. How ironic that life-time value should be a feature when organizations are inveterately driven by short-term profits. Privileging short-term shareholder return versus longer term employee engagement (and by extension customer happiness) is a perilous and short-sighted approach to running one’s business.

Don’t you think that companies that talk about life-time value of a customer and don't measure customer happiness will get in trouble? Click To Tweet

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