Worldwide Associates - Marketing Strategy - profitability




				Marketing Strategy - Profitability Many smaller organisations remain reluctant to raise money issues with their clients - something that larger organisations never shy away from Reducing Costs It looks like the easiest way to boost profitability: you slash costs, margins improve and profitability increases. In practice it can be the most damaging thing a growing business can do. Increase sales It may look like an easy route to increasing profitability but actually it can be one of the most difficult ways of getting that extra percent on the bottom line. That's because increased sales nearly always mean increased costs. And unless you really benefit from economies of scale you just end up tying more money up in your business for little or no reward. Cross Selling/up-selling When you can offer additional products and services to an already established customer. Cross selling is something that big organisations aim to do well and that many smaller organisations often don’t have time to think of because they are usually too busy trying to keep up with customer demands. Raising Prices Strangely, there are not so many organisations that will freely admit to this tactic as a means of increasing profitability. It is just not the done thing to be seen doing it in public, so to speak. There are ways and means of raising prices without fuss. The key here is a retreat to quality, people are prepared to pay more for goods and services from organisations that they trust - that is why the big players invest so heavily in their brands. Small organisations may be at a disadvantage here but gaining business on personal recommendation can have just as strong an effect. The longer you work with customers and the more areas of the organisation that they touch, then the more likely you are to have them pay the right price." Reducing capital employed This is just another means of reducing costs, although it requires a little more thought than just slashing the tea and biscuit budget. Take a good look at the capital tied up in your business and then work out if there is any way of cutting your borrowing and interest costs accordingly. Can you negotiate a cut in the amount and length of credit that you extend to your customers? Is there a better way of managing stock levels? What about moving to cheaper offices or encouraging flexible and remote working for your workforce? 10 Steps to increased profitabilty Have a strategic business plan in place and review it regularly Think carefully about timescale Define, monitor and react to the key performance indicators in your business Research your customers and think of ways to improve their relationship with your business Research your suppliers with a view to improving their performance/cutting costs Develop a good relationship with your bank to ease future borrowing Manage your working capital Aim for higher quality products and services so that you do not eat up costs repairing goods or customer relationships Ensure you have a good sounding board such as a non-executive or group of multi-disciplinary advisors Stand back and get the bigger picture Contact your local Accredited Partner for more details.		Quick links Find the assistance you want. Free advancement review Planned, controlled and first rate assistance Advance magazine 'Advance' is the business magazine of the International Confederation for Business Advancement (ICFBA) Supply Partner

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