As the Gold Coast struggles gamely on in tough times, here are three timely and low-cost business tips that might help you forge a way forward.
Cash is King
It always surprises me the number of businesses that struggle on trying to make ends meet, working long hours and cutting prices to generate work and cashflow, but neglect the basic discipline of rigorously managing their debtors book. In some cases I have seen businesses looking to secure finance but haven’t even invoiced for work completed – ‘we invoice at the end of the month’.
Review your invoicing and cash collection systems, there are no rules here, just find a way that improves your cashflow. Give me a call if you’re struggling, we can help.
Improve Customer Service
I’m a nice customer. You all know me. I’m the one who never complains, no matter what kind of service I get. I wouldn’t dream of making a scene, as I’ve seen some people do in public places, no matter how bad the service is. No, I’m the nice customer. And I’ll tell you who else I am – I’m the customer who never comes back!
Research done by the Strategic Planning Institute at Cambridge is illuminating. After testing thousands of variables in numerous businesses to determine what impact various strategies have on long-term profitability, they came to the conclusion that the single most important factor was the quality of customer service as it was perceived by the customer. Companies scoring low in customer service in the study lost market share at an average rate of 2% per year. On the other hand those scoring highly gained market share at an average of 6% per annum and realised profits 1200% higher and charged significantly higher prices.
A survey found that 68% of customers quit because of an attitude of indifference towards them by the owner, manager, or an employee. We all experience this in our daily lives, and it staggers me that business owners allow it to happen. Does it happen in your business? Because it doesn’t matter how great your product or service is, if your customer service sucks, your business is going to struggle. And struggle big time.
So give us a call if you would like some help in the area of customer service. At the very least I can recommend some terrific reading for you, and can offer implementation support and accountability to assist you with applying any new ideas.
Keep your finger on the pulse – your leading indicators
Every business has key indicators that represent their pulse, but many business owners use lagging indicators’ like sales figures or profit margins. There will be indicators in your business that will give you an insight into problem areas before they occur. Find out what they are, and start measuring and monitoring them. What you can measure, you can manage. We can assist with identifying your key leading indicators and assist you with keeping them on track.
®2011 Peter Morgan