Do you know what goodwill is? According to Google’s online dictionary, goodwill can be defined as:
Well… the above definition, to us, fails to really explain what goodwill means in everyday life or how it is quantified without a looming takeover bid.
As such, we called in an expert to help make this clear.
Meet Matthew Smith, publisher at Early To Rise and experienced advisor on the topic of building financial freedom and success in online businesses.
In the video above, Matthew humanizes the definition of goodwill in terms of its application to online businesses.
Goodwill, he explains, is not a tangible asset per se although it is generally listed in a company’s balance sheet – major companies such as those listed in the Fortune 500 have tens of millions of dollars worth of “goodwill” reflected under their company assets.
Matthew further explains that goodwill is key when it comes to the success of online companies, as it reflects the “brand value” of the online company (which is important when it has no physical presence in the market). Without that “multi-sensory” feel of a physical transaction – think store, sales rep, purchase and physical goods in return – a customer can feel anxious and disappointed after completing an online transaction.
As such, it is crucial that online businesses make their transactions as “human” as possible and create goodwill every time a customer interacts with the company and its products. Goodwill can be seen as the residue feelings towards the company and the product after the transaction is over – it is your company DNA that stays with your customers forever.
Why should you increase goodwill?
Put simply, the more goodwill you create, the more support you will receive from your customers (whether they purchase or not) and this will be reflected in your company balance sheet. A win – win situation.
Further, if you get Google slapped, have a slip up in your revenue or if a scandal erupts, goodwill has the ability to save your company and your reputation.
Watch Matt’s presentation now to find out tips on how to increase your goodwill.
Do you feel that it is difficult to increase the goodwill of online businesses? If so, has this video given you some ideas on how to boost your goodwill? We look forward to reading your comments below.