Many marketers will build a marketing strategy to grow sales or build awareness and may only consider the initial consumer reaction, if any at all. This is important because sometimes even good marketing campaigns lead to a “bad profit.” You heard me right: there is such a thing as “bad profit.” It’s whenever the profit earned or how it is earned impacts the customer’s perception of the brand.

A good example is the airlines. Once they became addicted to baggage fees, it not only “PO’d” customers but also had the additional consequence of causing more travelers to want to carry-on baggage, making the experience worse―especially when you’re either waiting behind the little old lady struggling to get a giant bag into a cramped overhead compartment or sitting in your cramped seat just wanting to take off. Southwest, on the other hand, doesn’t charge for baggage (unless it’s something huge or overweight), and, while people may still be bringing on their luggage, you don’t feel penny-pinched if you check it. So it’s a break-even for them.

Avoiding “Bad Profits” with the Right Marketing Strategy

The solution is to really think through the business and marketing strategy, and gamify what is likely the customer response. Let’s take the airlines and try to turn their current “bad profit” marketing strategy into a good one. The goal is to increase income from baggage fees and create a positive reaction. What if the airlines continued to charge for baggage, but you were rewarded with early boarding (ahead of everyone else except first class)? Those that check baggage will be rewarded. Those that bring on their luggage may be persuaded to check knowing they will get on sooner. There will always be a portion that won’t check, but everyone’s experience would be improved because you have less people struggling to shove baggage into compartments.

Another marketing strategy might be that you only charge the people who bring on their luggage. One airline attempted this under the guise of getting everyone in their seats and the plane on the runway faster. Unfortunately, it was viewed as another penalty, especially to those that might just have very short travel itineraries. So while the behavior would have changed, it would have been considered a “bad profit” marketing strategy because now all customers are being penny-pinched.

In the first scenario both the customer and the company are rewarded, but you could have a counter reaction where airline credit card holders may not renew because their only reason for getting the card was to board ahead of others. You solve this with loyalty points. Add double loyalty points for their baggage check and more points if it is lost.

When you take the time to consider behavior throughout the business or marketing strategy life-cycle, you can begin to optimize for a win-win scenario and focus on “good profit” versus living with “bad profit.”