Bauer Business Focus

Does Business Goodwill Pay Off?

Short-term hit vs. long-term gain.


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When businesses make a purchasing mistake during rapid change or disruption, the need to correct the error often falls to the salesperson. Doctoral Candidate Phillip Wiseman with the Bauer College of Business at the University of Houston, says if the return is accepted, that goodwill generally pays off.

"When businesses need to make a return, even though policy states they can't, salespeople usually take a short-term hit to their revenue. However, the long-term gains can be substantial.”

“By accepting returns, businesses are more likely to reciprocate in the future to a degree that more than compensates for the goodwill given.”

“Firms and their sales forces should not shy away from providing goodwill to businesses, particularly during more uncertain and challenging times. The gesture of goodwill helps form stronger relational bonds that can lead to an expansion of the relationship.”

For more stories from the Bauer Business Focus, click here.