What is goodwill?
Goodwill is the warm, fuzzy name for things that we do for free. This is often for a client but can also be for a supplier. It is usually unrecorded. Companies that provide it are unaware of it and its impact on profitability. This is where goodwill management and the benefit of evidence come into the picture.
What’s the problem?
I recently visited a multinational bank that had outsourced their call centre to us. Client staff channelled all requests for technical help via a support desk. Next, on-site technicians worked through the list of requests. All was well, except for the traders who refused to join the queue for computer fixes. Instead, they demanded that an on-site technician provide help immediately. The natural generosity of the techs meant that they helped, even if they should not have. This caused problems and stress for the support team and higher costs for my company. This meant we had a goodwill management problem. Rather, we were not managing it at all and it was costing effort and money.
Benefit of Evidence
Evidence always helps to resolve problems related to goodwill management. The techs asked the traders to sign an ad-hoc request book for each task of this type as evidence of the problem. It soon became clear that the numbers and effort were significant.
I presented the completed request books to our client and explained the cost impact of this work. The client refused to pay for it as they had not authorised it. They also told us that we should not provide ad-hoc help to the traders.
I asked the trading director to let the traders know that we would not provide ad-hoc help to them. I hoped this would be the end of the matter.
However, the trading director recognised that delay to tech fixes could cost millions to the bank. The cost of one technician was minimal by comparison. So they offered to pay for a resident technician on the trading floor, problem solved.
Manage goodwill for good results
The traders were happy with their new dedicated support service. The trading director incurred only a small extra cost, probably barely noticeable. My client was happy to have resumed normal working practice. My team were able to work as planned and maintain our profitability.
This all happened thanks to effective use of evidence-recording and analysis of the data.
What are you doing for free? How many favours do you do for your clients?
Contract Toolkit allows you to record goodwill and understand its impact. With the benefit of evidence, you can talk to your client about it without harming the relationship. Knowledge is power, you can have a powerful impact on profit when you understand what’s going on.
Contact us today for more information about how it could help you.