Increasing your profit – Hint: It’s not just about finding more customers.
Author - Catheryn Pangallo
October 20, 2021
Increasing your profit – Hint: It’s not just about finding more customers.
Author - Catheryn Pangallo
October 20, 2021

Did you know that, as a general rule of thumb, acquiring new customers for your business is five times more expensive than retaining existing customers? While the exact cost is subject to different factors, the sentiment holds true when it comes to deciding where to first invest your resources to grow your business.

 

It’s easy to get caught in the trap of thinking “more customers equals more profit”. Although there’s some truth to that concept, focussing only on new customers to grow your business is a common mistake, and an expensive one at that.

 

In today’s market, the barriers to securing a new client are higher than ever before. Competition is fierce, with potential customers able to access pages of near identical products and services with little more than a Google search.

 

As a result, many businesses are investing more resources than ever before just to create and maintain an ‘online presence’. With marketing having become so much more than taking out an ad in the local paper, the pressure to be across SEO, Facebook, Instagram and even TikTok can be immense.

 

With so many ways to advertise, whether you outsource or undertake the task yourself, finding new customers often ends up using up your precious resources (whether that’s time, money or both) with a return on investment that leaves you feeling disappointed.

 

Not only can this investment in potential customers be resource draining, it can also be at the expense of your existing customers.

 

Your existing customers should be your first priority when it comes to A) running a successful business and B) increasing your profit margins. By increasing engagement with your existing customer base, you’re not only more likely to retain these customers, but to increase their value to your business.

 

Improving customer satisfaction is the first step to retaining existing customers, and can also encourage them to increase both their order sizes and frequency. By building a better relationship with your customers by better understanding and adapting to their needs, you can provide solutions that benefit both them and your business.

 

Common ways to improve customer satisfaction:

Longer payment terms

Having the ability to offer your customers longer or more flexible payment terms is useful for improving their overall happiness with your business, and can also often lead to larger orders.

 

Many customers have their hands tied due to spending limits, or small repayment timeframes. By having the option to be flexible and tailor repayment timeframes to individual customers, you will not only build trust, but you’ll also allow them to place larger or more frequent orders, as they’re no longer constrained by short or strict repayment terms.

 

Rewards program

It’s easier than ever before for customers to switch between businesses, as finding alternatives has become so easy thanks to the internet. To combat this, introducing a rewards program is a popular way of increasing customer retention. Regardless of whether your loyalty program offers savings or additional rewards, the end result is always a better relationship between the business and customer.

 

An additional benefit to introducing a rewards program, is the ability to influence customer purchase habits. Whether your rewards program offers your customers additional rewards or savings, the opportunity to achieve a higher ‘loyalty tier’ through higher purchase amounts or increased order frequency, is an incentive that many customers find too good to miss. Not only does your bottom line benefit, but it leaves both you and your loyal customers feeling even more satisfied with the relationship.

 

Interest free options

When it comes to high order value, charging interest to your customers can add up quickly, and sometimes leave a less than ideal feeling when they get stung for the extra cost. Having the option to offer your valued customers an interest free repayment option is a tried and tested way to improve your relationship with your customers, resulting in better retention overall.

 

You began your journey to run a business, and help your clients, but it’s easy to lose sight of this in the chase to grow your customer base. By having access to finance options that allow you to improve customer satisfaction, and retention, you can grow your business and boost profit margins, all beginning with your existing client base!

 

Finstro offer a wide variety of payment solutions built specifically to enhance the B2B supplier/customer relationship? From extended repayment terms, interest free campaigns and BNPL solutions and alternate trade accounts. Contact Finstro today for more insights into growing your business by offering your customers flexible finance solutions.

 

Follow Finstro today, for more insights into growing your business with flexible finance solutions.

 

Website: https://finstro.com/

LinkedIn: https://www.linkedin.com/company/finstro

Facebook: https://www.facebook.com/FinstroAU

Instagram: https://www.instagram.com/finstroaustralia/


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