Blog Page 295

Growing your business with referrals

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Most businesses benefit from “word-of-mouth” referrals. They are one of best way to get your name on the tip of everyone’s tongue, along with running a terrific business for many years.

Here are a few tips that may speed up the referral process and increase the number of people who’ll remember your business the next time someone asks them for a referral:

Remind customers you exist
Keep your name and number in front of past customers so they won’t forget about you. Maintaining a mailing list database, and keep in touch regularly. Send postcards when you have special offers, write a newsletter, or just drop a note or send holiday greetings. With e-mail, it’s more cost effective to send messages. Contact past customers no less than twice a year and no more than every other month.

Ask customers for referrals
Tell customers that you really do appreciate them giving referrals, and then surprise them with a gift or a “Thank You” card when they do.

Testimonials
You can use testimonials from past customers in your marketing materials or on your website or advertising. The fact that other customers let you use their name adds credibility and trust and serves as another kind of “referral.”

Ask customers and clients for feedback regularly
By soliciting suggestions — and responding to them — you can let customers know you really care about them and want to meet their needs; you can establish a relationship with them.

Do exceptional work
When you do something that not only satisfies a customer but delights and surprises them, they’ll remember it, and they’ll become part of your “word-of-mouth” advertising campaign.

Offering credit to customers

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Offering credit to customers can speed up their invoice payments, increase the amount of their spending, and even help businesses gain a competitive advantage in their market or industry.

However, weighing up the probability of increased sales with the risk of reduced cash flow, as well as the nature of a business and the size of the transactions are important factors when managing risk in a business.

Owners who are considering offering a credit option to some or all of their customers should consider the following risks:

Reduced cash flow
You may end up waiting for customer payments which then reduces your ability to purchase replacement products from suppliers.

Reduced profit margin
Funding credit sales will reduce a business’s profit margin. The cost of this will show on a business’s profit and loss statement, so owners should keep this in mind when they put a price on their products and services.

Large debts
Unpaid debts can pose quite a risk to a business. This is particularly the case when owners are exposed to large single transactions.

Performing a credit check is one way owners can manage the risk of bad debt. This involves customers completing and signing a credit application form or agreement before being offered credit. Owners need to collect:

  • the customer’s signature and a written confirmation that they have read, understood and will abide by all terms and conditions
  • identification and contact details
  • approval to conduct a credit check where necessary

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