Lisa and I were coming home after a week of business and R&R in San Diego . I was trying to recover from a dinner party my brother, John, arranged where I was the token conservative (Lisa is agonistic when it comes to talking politics). The recovery wasn't from California wine, but from conversations during dinner where, on several occasions, other guests where actually standing pointing their fingers and shouting at me. At one point, Lisa whispered to me, “Jim, just drop it.” I whispered back, “I am trying.”

It's hard for me to “drop” anything, even though it may be a losing battle. On the flight back home, we took our seats on the plane where I sat next to a gentleman with whom I, of course, struck up a conversation. He was very interesting and asked many questions. By the time the airplane taxied out to the runway, he knew that Lisa and I have three young daughters and that I seem to be involved in a lot of ventures and activities. At this point, I introduced myself and was surprised when he responded that he was Arthur Laffer. I replied, “Arthur B. Laffer of the ‘Laffer Curve'? I studied you in grad school.” Arthur responded, “Oh, I hate to hear that.”

Mr. Laffer looks closer to 50 than his 65 years of age. I couldn't believe it; I was talking with a person who actually had influenced my understanding of economics.

I went to graduate school at Northwestern's Kellogg School of Management where I received my masters of management in Marketing and Economics. During those years, I really became a believer in a couple economic theories: The first is Adam Smith's “Invisible Hand,” in his book, The Wealth of Nations . It expresses that free enterprise and individuals will “push” the market to an equilibrium that the “free market” wants and, on its own, creates the “greatest value” for society, without government assistance. The second is the “Laffer Curve.”

So here I am, ready to talk about economics, politics, and government with the founder of “supply side economics” and he asks, “So why are you working on so much?” I answered, “Well, I guess I have a hard time saying no.” He replied, “No you don't; you say ‘no' all the time: ‘no' to your daughters, ‘no' I can't take you I have a meeting or, ‘no' I have to go to work. You just say ‘no' to the wrong people.” As I see Lisa nodding in agreement, I realized he was right. As we continued our conversation (yes, we did eventually get to economics and politics) we also discussed how many companies don't say “no” to the right people or customers, as well.

It took an economist to make me realize that I needed to stay focused on my personal and business “mission and objectives” and stop chasing rabbits. Just as the “Laffer Curve” has shown that at a certain point in tax rates, you actually decrease your overall revenue, the same happens with time commitments and the allocation of other resources.

I view the “Laffer Curve” as showing that the excess of anything, without looking at the return, will create decreased results.

Sometimes, we need to say “no” to a customer. We must realize that not all customers are created equal and, at some point, we need to evaluate each customer to see which ones we are allocating too high of an investment (acquisition costs, customer support/maintenance, high discounts, overall time), which results in an actual decrease in the “greatest value.” Marketing needs to be viewed as an investment and should have a return, and we need to learn how to say “no” to the right people. ¦

Jim Goodman is the president of Customer Ease, a marketing consulting and research company in Des Moines . Jim founded the CEO Center (Creative Entrepreneur Organization) for assisting in the growth of Iowa businesses. Jim is also an adjunct professor for Drake University teaching Entrepreneurship and Marketing Research. To reach Jim: jimg@customer-ease.com or 515-471-1301.