Strategic Marketing Ways To Retain Gross Profits During Sluggish Economical Cycles-splitit

Business The main objective of a typical company up against difficult strategic choices is to outlive an economic downturn. The company should really remain committed to its business plan, and discover harmony in generating profitable revenue and reducing expenses. The goal is always to find strategies to reduce costs without eliminating essential income generating expenses. I hope to be able to offer you examples of these possibilities, as possible ways of holding onto gross profits throughout temporary cycles of an economic slowdown. Creating Client Referrals As a marketing expert, I am often amazed by the empty looks I get when I ask a client: "How many referrals did this company create last month?" If they know, it is rarely something substantial, for the reason that minimal effort is usually invested in the growth of this income source. Bringing in customer referrals, particularly targeted at repeat purchasers, is a talent of salesmanship, which seemed to vanish with the invention of computers and the Internet. Just about every business has a cost per sale metric they are comfortable with. Your sales staff, your customer service department, your email efforts, and the home page of your online business, are all touch points to advertise a customer referral program. Just take your cost per sale figure, divide it by 3, and use that amount as a word of mouth promotion. It is an low-cost source of customers and new income. A properly managed referral plan may contribute 2% to 5% towards your gross profit. Customer Retention Programs I tend to receive the exact same blank looks when I ask clients: "How many past customers did you reactivate last month?" Just like making referrals, this is a sales skill which has nearly been forgotten. For every single customer you lose, you need to find two new customers, in order to grow your business. Typically, customer retention is simple if you are taking the time to find out the reason why these people no longer use your services. You are going to hear remote incidences associated with shipping and delivery difficulties, a rude customer care encounter, and merchandise, which did not satisfy consumer expectations. All you have to do is address the issue and resolve the problem. Your client will be happy their account seemed valuable enough for you to make contact with them. A properly managed customer retention program may add an additional 2% to 5% to your gross profits. Strategic Retail Pricing Most companies use a flat rate formula for calculating their retail prices. In good times and in bad, I am a great advocate of strategic retail pricing. I do not believe in decreasing prices, and margins, during sluggish cycles to generate revenue. Strategic pricing is about marketing the value of your products and services. A best selling product is well worth more whenever it offers greater customer value. Before reducing selling prices on slower moving items, critique how the product is being presented. Does the product or service have a great sales story that underscores its worth? Is the art of professional quality and compelling? Your sales presentation might possibly need a tune-up. Packaging numerous top selling items into special offers is yet another easy way to increase average order value. Like you, consumers like to get value for their dollar too. Strategic retail pricing can help you increase your gross earnings between 5% and 10%. Bargain with Vendors Suppliers feel the same economic stress as merchants, but on a larger level. If you, and your industry is selling less, so is your supplier. This enables you to work out a better rate since it indicates to the supplier you are willing to look around, but you want to offer them the opportunity of first choice. Could you save 5% with a prepay discount? Could you find some cost relief on parts of the product line for promotion? Ask your vendor how they could help you to keep them as a business partner, and allow them make offers to you. Target at least a 1% increase in gross profits whenever you negotiate with your suppliers. Personnel Downsizing In many instances, this may be the only option you have to minimize company expenses. I do wish to emphasize the word expense. Your workers can be broken up within two groups: Overhead, and revenue generating. Salespeople and marketers generate income. Many of the steps mentioned above would be tough to implement without sales and marketing expertise. Some states offer a partial unemployment program in which you keep staff three days a week, and unemployment compensates your personnel for the other two days of the week. Be sure to think through all of your possibilities, and their consequences, before you take action. Retraining new people is much less desirable than maintaining knowledgeable and skilled existing personnel. You might save a buck right now, and lose two down the road with the growing pains, and learning curves, typically related with employing new personnel. If you do downsize, be sure to produce, or update, a company organization chart so everybody understands their new accountabilities. Effectively downsizing your personnel must have a positive impact on gross profits, and you should be able to prove that to the CEO on a regular schedule. Improve Employee Efficiency and Production An employee may devote up to 25% of a day making use of business computers and the Internet for personal use. They can go shopping, chat, email, search for jobs, go to Facebook, and monitor their fantasy sports leagues, only to name a few examples. I have personally seen email analytics proving 75% of purchasers responding to the email, are buying from their workplace. Some of my recommendations are old-school, but this one capitalizes on the latest technology. OfficeShield is an affordable employee monitoring software program which you may install on your network. It will notify you precisely how many hours a day your employees are not doing work. It can also stop and protect against accessibility to personal use websites. If you add up your payroll and discover a decrease of just 12.5% (an hour a day) in employee performance, that converts to some substantial weekly dollars, that should go directly in the direction of increasing your gross profits. Clearly, there are no chocolate or vanilla solutions to the hard challenges that a company faces as it attempts to maintain profitability in the course of an economic downturn. Even so, if you discover and analyze areas of opportunity, generate solutions, plan and apply actions, and evaluate the efforts of your work, your business is more likely to preserve and increase gross profits. About the Author: 相关的主题文章: