In these difficult days of economic recession and subsequent financial hardship, keeping the costs down has become something of an obsession for many. Whether it’s an SME or a multinational corporation looking to trim the spending on travel expenses for employees, the need for cost savings is equally as important.
For commercial organisations, irrespective of their chosen industry sectors, the difference between spending sensibly and outlaying too much money can mean financial ruin. Therefore, every opportunity to cut expenditure without compromising on customer service is vital. Here are five cost-saving tips that need to be taken into consideration.
Keep looking for new customers or look after your existing ones?
There will always be times when spending money on marketing campaigns will be justifiable, and this is especially true for companies that need to drive a steady flow of new customers to their business to keep the turnover growing. However, there are times when a business can save money by simply keeping their existing customers happy.
In fact it costs on average seven times more money to get a new customer on board than it does to make sure your existing customers are happy, and thus businesses can save a healthy sum of money by making sure their existing customers come back to buy again and again.
You always need to factor in the benefits of effective marketing campaigns before deciding on whether to cut these costs. Make sure you target your campaigns to your audience and that you are keeping a close eye on the return on investment for every campaign. Remember: even if you keep your existing customer happy, without a regular flow of new customers, your business could be slowly strangling itself over time.
Save money on postage
Any company that despatches goods directly to customers will undoubtedly need a large budget to cover its annual postage and delivery costs. Many owners and directors make the mistake of going directly to the big global carriers for such deliveries, and businesses often end up paying more – even if they don’t get the customer service level they actually need.
However, by using a courier re-seller instead, business can still make use of high quality courier services, whilst saving a small fortune over the course of a year, and without reducing the levels of customer service they receive. This is certainly one of those occasions when shopping around for a better deal can bring exceptionally rewarding results.
Cut back on travel expenses
While mobility is vital for certain employees within most companies, many of them are travelling in bigger and better cars than is strictly necessary. Similarly, international business travellers are often sitting in hugely expensive first-class seats when a more affordable business class will do the job just as easily. For some individuals and organisations, appearances will matter greatly, they won’t be important at all for the vast majority. And the subsequent savings over a financial year can be extremely welcome.
Conduct regular spending reviews
A number of SMEs pay nothing more than lip service to spending reviews, but these mini-audits can prove to be highly effective. Sometimes, the opinion of an independent expert who is able to see the wood for the trees will spot areas of expenditure which are totally unnecessary. For managers and employees who are closely involved with the day to day running of the business, it’s often difficult to notice such anomalies, so a regular review of the company’s spending could end up saving a substantial sum of money.
Talk to your employees
This is one area in which many owners and directors seem reluctant to get involved, yet it often brings the most significant results. Every employee has an interest in the success of the company, and most of the time it’s those who are at the virtual coalface who will be in the best position to notice areas of potential savings. Even if you’re a boss who thinks there are no more savings to be made, it wouldn’t hurt to ask the question.
You may be impressed by the resultant answers, and even if they turn out to be impractical your workers will at least feel that their opinions are valued.
Featured images:
License: Creative Commons
License: Creative Commons image source
Iain Aitchison is an enthusiastic business and finance writer. He enjoys writing on the topic of efficiency savings within contemporary SME structures.