The success of your business relies on lots of factors, but chief of all, it relies on your customers and suppliers. Both are separate from your business but have a large influence over your chance at success. So, strategies need to be put in place to ensure you build the best relationships possible with them.
Increasing your cash in - managing the customer
Customers are essential to your cash flow. Without them, there’s very little point in doing anything, so they should always be at the forefront of your thinking. To service them properly, you’ll need to understand them, their business and their motivations. There are nine things you need to know about your customers before you can build successful processes and strategies around managing them.
What do you need to know about your customers?
1. Who are they?
If you sell straight to consumers, you’ll want to find out details about who your customers are. Think age, gender, occupation. If you sell to other businesses, you’ll want to think about their business. Think size, industry, number of employees, etc.
2. What do they do?
It helps to have an understanding of what motivates your customers. Look into their interests, occupations, and aims. If you know what success looks like for your customers, you can decide how to be part of that.
3. How do they buy?
It’s handy to understand what your customer needs at every stage during their buying process. For some customers, testimonials and case studies are key to their decision-making, for others, they’re of no use at all. So, to ensure you’re creating effective content, it’s important to understand what your customers value.
4. When will they buy?
Approaching your customers at the right time is imperative. If you know at what stage your customer is likely to be making that call, you’ll increase your chances of success.
5. Why would they buy?
Evaluate your customers’ position. Picture their image of success and define how you fit into that. This will help you consider what your customers’ motivations to buy would be and what boxes they’d need to tick before making their final decision.
6. How much money do they have?
Pricing your products can be tricky, especially if you lack direct competitors. So, market and audience research are extremely important. And don’t be afraid to change your pricing.
7. What do they think of your competitors?
Knowing what your customers think of your competitors will give you opportunities to fill gaps in the market. Especially if your competitors are more established in the industry, it’s good to discover potential gaps you can fill.
8. What stage are they at?
It’s important to know where your customers are in their journey, in order to appeal to their thinking at the time.
The stages of a customer buying process:
Your prospects are hearing about your brand and becoming aware of what you do. In the acquisition stage, it’s your job to educate them on your product or service, make them aware of their need for it and encourage them towards purchasing.
They’ve bought it! They’re now official customers and are trying your product on for size. This is your chance to educate and encourage them to adopt your product as a regular part of their routine and begin to build a relationship with your brand. Here, continue to provide value as a product and as a part of the industry, giving your customer additional content
Provide a service worth coming back to. By encouraging repeat behavior, this is your chance to grab hold of your customers and hold onto them, encouraging repeat purchases in the future. Invest in your service, and keep the conversation going, providing value beyond the realms of your product with industry-related, valuable content.
Once you have customers who regularly return to you, it’s time to help them help you. Having advocates for your brand is a great way to encourage new sales prospects. Everyone wants to know something’s tried, tested and approved before they buy. So encourage your advocates to get the word out and provide you with testimonials. They’re also a great place to collect feedback from.
9. How do they like to pay?
Late payments are a huge issue facing businesses across the world. A report completed by Market Finance revealed that payments in 2019 were being made twice as late as they were the year prior. With the potential to really damage your cash flow, it’s important to find the easiest method of payment for your customers. Futrli Flow keeps you up to date with overdue payments, setting reminders, predicting realistic payment days and assessing your customers based on their risk, to help your cash flow go unharmed.
Where can you find information on your customers?
We’ve talked about how having information on your customers can be helpful but, where can you get this information from?
- Your own customer records. Futrli Flow provides records of the invoices attached to each customer, their history with payment. Investing in a CRM platform could be beneficial if you have a large amount of contacts. Logging email conversations and important details about the customer can help you provide a more bespoke service.
- Feedback and conversations with customers. Your customers are great sources of feedback. They’ve experienced your processes, products, and service and can therefore give you real feedback, as well as insight into their thinking throughout the process.
Increasing your cash flow with customer relationships
Remember, customers value one thing: quality.
Whether it’s your product, your support or the content you put out on social media, customers demand quality. The more effort you put into the experience your customer has, the longer you’re likely to retain them and therefore the higher their potential lifetime value is.
Marketing and sales
How do you want to present yourself? Marketing and sales provide your chance to hook prospects into becoming customers. This needs to be a positive experience, providing real value for the customer and growing a relationship with them, based on their needs.
Support and education
This is your chance to set yourself apart from your competitors and convert your customer from a one-time buyer into a life-long advocate. Of course, the level of support and education you need to provide will vary depending on your industry. By supporting your customer through their adoption of your product or service, you’ll encourage
Having a good product is crucial to success. Remember to drive your product with customer feedback (they are the ones paying for it, after all!). Acting on customer feedback and answering demand is key to keeping your customers on board and coming back for more.
Manage your customer dependencies
Going back to our dream clients, it can be hard to restrain from giving all your business to a few select clients. But, there’s an added risk here. Imagine one customer made up thirty percent of your revenue. And now imagine losing that customer. How would you deal with losing almost a third of your revenue? Have an action plan in place for if the worst happens. And better yet, keep your dependencies low. Keep your number of customers high to mitigate the risk across your portfolio.
Optimizing your cash out - the supplier
Maintaining good supplier relationships will provide opportunities to improve your deals on the purchase of materials and goods. It’s also important to know about your suppliers, in order to ensure their business aligns with the same legal and moral values that yours does.
Managing your supplier relationships
Pay on time
This is the number one rule for establishing good relationships with your suppliers. And it can be harder than it seems, especially if you yourself are being paid late by your customers. Paying your suppliers before receiving payment from your customers can put you in debt and leave you with no cash flow to hand.
Futrli Flow helps you track your bills, ensuring they’re paid on time and that you have enough cash flow to pay them in the first place. See your average days to pay or be paid, by your suppliers and customers on the right-hand side of your Actionfeed, so they’re always in view. And receive regular updates and reminders to make those payments.
Establish valuable deals
When you’ve built some history with your suppliers and proved your worthiness as an on-time customer, it could be time to renegotiate your deals, especially with those suppliers you buy from in large quantities often.
Oil the wheels
Take time to ensure you’re getting a good deal on your supplies. How do you evaluate your suppliers? Well…
1. Learn about your supply chain
Once you have a clear idea of how much everyone in your supply chain is trading for, you can evaluate whether your supplier is putting an overly-large margin on their supplies or not. Consider the cost and sourcing of raw materials, the overheads of the particular business you’re dealing with and the processes involved in those supplies reaching you.
2. Remember that relationships go both ways
We’ve spoken about securing a better deal with your supplier, but it’s important to remember that you may be able to provide your supplier with added value too. Would your product or service benefit them? If so, discuss deals that include your service, too.
3. Be a good customer
We all love them. Those customers that give sufficient lead times, pay on time, don’t make hundreds of changes to their orders. Of course, problems come up, but try to reserve making huge, last-minute changes to your order for emergencies only.
4. Plan ahead
Like we’ve said, whether they be disasters or massive opportunities, things do happen. So have a game plan and talk your supplier through it. Agreement on these processes by both parties will ensure that any big surprises are dealt with as efficiently and positively as possible.
Keep an eye on your dependencies
As with any business relationship, ensuring you’re not too dependent on your suppliers. If one of your main suppliers shut their doors, would your business cope? Would you have a plan B? Spreading the risk across multiple suppliers, reducing your reliance on one business, is a good way to ensure your survival if the worst should happen. Futrli Flow calculates your supplier dependencies and lets you know if you’re in a risky spot, so you can take action and protect your business.