Allen Bolaffi, Managing Director of accounting firm UHY Haines Norton Adelaide, has some very useful advice for small to medium businesses trying to stay afloat during the uncertain economic period.
"The GFC is a commonly acronym for the Global Financial Crisis. I prefer 'Go Find Customers'!!," Mr Bolaffi said. "You need to nurture existing customers and avoid the discount trap."
Here is Mr Bolaffi's advice:
With the economy slowing arising from the global financial crisis, what should small and medium business do? Should they batten down the hatches and wait for the storm to pass, or should they see this as an opportunity? Experience tells us that this is a great opportunity for all businesses. It just requires a change of attitude.
Your existing customers are gold. You should take care of them, nurture them and ensure that they look after you. Service them well and ensure that they are profitable, whilst at the same time, ensure that they pay you!!
Go find someone else’s customers and make them yours. Your suppliers won’t have your attitude and will have battened down the hatches. You haven’t, so you have an edge. You have changed your attitude and want to do profitable business with them. Offer them things that you cannot buy, like service, delivery, and advice.
Don’t compete only on price
Price competition is a certain path to business death. Everyone can compete on price. Go back to those business differences that cannot be valued in money, like range, delivery or service.
Ask your customers for direct referrals. Customers like to be acknowledged and their opinions are important. But do it in person. Ensure that you speak to your customers every week where possible. Develop customer loyalty by relationship reinforcement. Visit your customers without trying to sell anything. Relationships are not only about selling.
Use technology cleverly – avoid the delete key
Buy yourself a mailing list from someone like Listbank. Not for the purposes of mailing, but identifying who is in the industry, area or business interest where you are. Never email someone you don’t know or have met. The delete key is my best friend.
Buy yourself some decent contact management software. Keep track of who you or your staff see, speak to visit and sell to. Intelligent use of these systems means that you can better manage your sales force and know what you have told the customer last.
Spend money to make money
Your customers will buy from you in preference to your customers for a number of reasons. Price is just one of them. If you make it the only reason, you will be back on the spiral of business death. There will always be someone ready to undercut your prices. So spend your money on those things that dollars cannot measure, like engaging sales people that can intelligently argue with your customers (note how drug companies employ doctors to sell their products to other doctors).
The Global Financial Crisis is a great opportunity for small and medium businesses to increase their market share in their industries at little cost. It means better managing staff, customers and relationships.
So Go Find Customers!!
Allen Bolaffi is the managing Partner of the Adelaide Chartered Accountant firm, UHY Haines Norton. He is a Chartered Accountant and holds a Bachelor of Arts in Accountancy from the University of South Australia. He is also director of several public and large private companies.
This media release is of a general nature and is not investment advice or taxation advice. No reader should make any investment decisions on anything that has been quoted above. No responsibility is accepted for any decisions made by any person who relies upon this article for any decisions that they may make. Always consult an appropriately qualified person to assist in their financial decision making.
UHY Haines Norton Chartered Accountants
UHY Haines Norton is a member of UHY, an international association of independent accounting and consultancy firms, whose organising body is Urbach Hacker Young International Limited, a UK company. Each member of UHY is a separate and independent firm. UHY Haines Norton treats clients with respect and offers intelligent accounting solutions striving for financial happiness. We are locally focused with the strength of a national association of independent firms.
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