Many business owners work on getting more customers to improve profitability in their business without looking at whether there are better and easier ways to get more out of their existing customer base. In. the current challenging economic environmenthere is more competition for your customers than ever so here’s 3 ways of improving your profitability without the expense of getting new customers.
1. Improve Your Profits With More Sales Volume
Are all your customers buying all your services or products? Why not? Often your existing customers have no idea of all the services you offer and letting them know is a quick way of offering more service AND finding out what else they want – all dressed up in a relationship maintenance call.
One of the benefits of this is it’s virtually free (takes some time and resources but little else) and is a great way of increasing engagement with your clients. The downside is you will have to pick up the phone. DO NOT email this, as it will get lost in the daily deluge of emails your clients get, AND it screams sales and “I don’t care enough to talk to you”. Your competitors are not picking up the phone, so do something they aren’t doing.
An additional benefit of this approach is you get feedback on your services/products, you make more of the relationship with the clients, and you get the opportunity to innovate if your clients are looking for something you don’t offer but could do.
2. Improve Your Profits By Managing Your Costs Better
There are many ways of managing costs, rather than simple cost-cutting, which can have the unintended consequence of lowering quality of service or products. Places to look are in your bank account, in your processes with automation and improvements, and in the relationships you have with your suppliers.
BANK ACCOUNT – Every client that I’ve worked with has found some way of reducing costs and / or improving productivity when they take a long, hard look at their processes and bank account. If someone in your business looked at every payment going out of your business account, I am sure they will find a subscription or two that is just on auto-renew and no one knows what it’s for or who uses it.
PROCESSES – Whilst putting together and documenting processes is not seen as glamourous work, it does add value and take ££’s off your overheads and direct costs. And it’s not as hard to start as you might think. When everyone in the business participates, it becomes a team effort and is more likely to give you bigger savings than you doing the work yourself in isolation.
Additionally, are there any of your often repeated processes that could be automated? Good starting points are credit control, for example, where the impact of cash flow can be immediate.
3. Relationships With Suppliers And Retaining Existing Customers Will Improve Your Profits
If you have bulk purchasing power you are ideally positioned to negotiate better terms and rates from your suppliers. Building those relationships will pay significant rewards in the future if you ever have any difficulties with cash flow or urgent needs for additional supplies. Growing a business can quickly suck up a lot of cash. Good relationships with suppliers makes long term success easier.
New customers are costly and time-consuming to acquire. You’ve already got customers who are happily (for the most part I assume) paying you for your services. Keeping a customer is by far cheaper than getting a new one to replace a lost customer. Yet so few businesses have active customer retention strategies and they simply accept that occasionally customers leave. And some customers should be let go; it’s a matter of knowing which ones to keep and which ones to let go.
Communication with your customers on a regular basis is a great start to customer retention. Encouraging them to let you know when things are good and bad means you are engaging with their needs. How you respond when a customer complains will dictate how sticky you become with your client base. Talk to your customers when you have nothing to sell them and I guarantee they will buy more and stay with you for longer. Most of your customers are silently and secretly screaming, “Please make me feel special” – and a quick phone call asking them how it’s going is all it takes in most cases.
Regular updates on new products or services will generally make clients feel more engaged with your business. Consistent communication and contact even when there’s nothing to say makes them feel more a part of your community. When a client feels listened to, they are more loyal and more likely to ask you for new products, potentially leading to innovations.
Creating loyalty schemes doesn’t need to be complicated and can be as simple as remembering their “birthday” for doing business with you. Loyalty schemes need to be costed to make sure they are affordable. In my experience, it’s not the flashy, expensive schemes that work. It’s the ones that make the client feel cared about that give the greatest returns.
The last word
These 3 strategies can add to your business bottom line without a lot of effort and a bit of careful thinking. Greater profitability means your business is worth more, usually has more positive cash flow and pulls your customers closer. That’s a triple win for you, your business and your staff.
Are you stuck in the day-to-day of your business with no time to plan for the future? A Professional Business Mentor is just the leverage you need to get out of the rut and flying. Discover how you can make your business worth more AND avoid leaving money on the table when you finally leave your business. Click here to contact Christine by email. Alternatively you can book a call with the Business Mentor of the Year 2020, author and speaker. Who helps business founders get their businesses exit ready so they can enjoy a happier, richer future. She saves them THOUSANDS and increases the value of their businesses by MILLIONS.