Skip links

Chartered Professional Accountant

Main navigation

Business

Getting a Handle on Customer Relations = Customer Satisfaction

by

business-handshake

New customers. Occasional customers. Customers you’ve had since you opened. No one has to tell you that customers are the lifeblood of your business. You also don’t have to be told that letting good customers know they’re appreciated will help you keep their business.

Your “A” List

Can you identify your best customers? Categorizing your customers on the basis of sales volume or the number of orders they place should be as easy as running a few reports. If you don’t have a software system that can provide this kind of information, you might want to consider upgrading to a system that can.

Tokens of Appreciation

With your preferred customer list in hand, think of ways to show your appreciation. Certainly, giving your best customers discounts and free merchandise or services on occasion is always appropriate and appreciated. Sending handwritten notes or small, individualized gifts lets them know they’re important on a more personal basis.

You might also consider having a special sale for your preferred customers only. Be sure to mail out invitations so they know it’s a private sale. Or, think about hosting a topical seminar featuring key staff people and industry professionals. Using press releases to publicize the event, either before or after, can add to the prestige of being an invited guest.

Biggest May Not Be Best

Are there some “high maintenance” customers at the top of your list? Ones that place large orders but also demand an inordinate amount of time and resources? You might feel that customers like these don’t really deserve preferred treatment. But, at the same time, you don’t want to lose their business.

Before you decide how to handle customers like this, take a look at the bottom line. Run some numbers to see how profitable their business really is. You may find that not only are you not making enough money on their business, you may actually be losing money. In that case, you need to find a way to incorporate the cost of your efforts when billing these customers so that your profits don’t suffer.

Take charge of your financial future. Give us a call, today, to find out how we can assist you and your business.

Please follow and like us:
Share

Do You Truly Know Your Business Costs – You Better

by

Your company’s profitability depends not only on sales, but also on effective cost management. Are you adequately addressing the cost side of the business equation?

Analyze Your Cost Structure

You probably can readily identify the products and/or services that are generating your greatest sales volume. But can you identify all the costs associated with providing each product or service? Only when you know your true costs can you effectively allocate resources to the work that is most profitable for your company.

Actively Monitor Operations

As the busy owner of a small business, you can’t be everywhere all the time. But you do need to stay in circulation, regularly observing the day-to-day operations of your business and talking to your managers and employees. By staying visible and encouraging an open dialogue, you’ll be in a better position to uncover costly problems before they seriously erode your company’s bottom line.

Solicit Bids

Even if you are satisfied with a current vendor, you may want to talk to the competition from time to time. You won’t necessarily want to switch vendors simply because you are quoted a better price. But you may be able to use that price in negotiating more favorable terms from your existing supplier.

Watch for Discounts

In the interests of cash flow, your company may routinely pay its bills only when they come due. While this generally is a sensible strategy, it may not be wise if you are passing up generous cash discounts for earlier payment. In the current low interest rate environment, borrowing the funds you need to take advantage of discounts may be a better move. For example, suppose a vendor offers your company a 2% discount for paying a $10,000 invoice 20 days early. Passing up the discount will cost you $200. Instead, you might borrow $9,800 from your bank, pay the discounted invoice, and repay the loan in 20 days. If the rate on your bank line of credit is 8%, you’ll owe about $45 of interest — for a net savings of $155 on just one invoice.

Effective cost management requires good information and careful planning. For more tips on how to keep business best practices front and center for your company, give us a call today. We can’t wait to hear from you.

Please follow and like us:
Share