There’s a light at the end of the tunnel. The curve is flattening, it’s been proven that surges will not destroy the health system, and people want to get back to work. Whether it’s a planned reopening or a court case that has pushed businesses to reopen, the world wants to get back to normal.
That said, we’re getting ever closer to a reopening, and it couldn’t come at a better time—at least based on the retail numbers from the Census data. Announced today, U.S. retail sales fell 16.4% in April, even worse than the previous record fall set in March, as consumers pulled back on spending during the coronavirus economic lockdown.
But like we had said—light at the end of the tunnel. Texas, Wisconsin, Indiana, and Florida have taken reasonable steps to get back to work, meaning it’s just a few more weeks before we can look from survival to recovery.
Keep the Business Coming In: Pricing Strategies, Marketing, and Leverage
Following our blogs on the first steps to take in order to stabilize your company position, the spend management imperative, the ways to collect money and shore up AR, and tips to manage payroll, we would today like to turn our attention to offer a few tips on how to bring in or retain customers.
As discussed in their highly informative 25 tips to improve cash flow in a crisis, NetSuite discussed some important steps to keeping the money coming in. Whether it’s in the form of a subscription program, increased vigilance on customer credit, or new marketing and distribution initiatives, there are a variety of ways to bring in money.
The Subscription Model
It’s likely you embrace the subscription model in your personal life. From Netflix to monthly box subscriptions, this has become one of the easiest ways for companies to receive consistent revenue—even in the wake of a crisis.
But guess what? People like to buy business services like they buy personal ones—meaning that many would actually prefer this system. If customers are buying products or services on a regular cadence, consider setting up a subscription sales cycle where they prepay. This has the dual benefit of securing future sales and also securing payments upfront for future costs.
Price to Sell
While there is a line between selling and liquidating, it pays to stabilize your cash flow. Something we discussed earlier, there is good reason to free up inventory that has been slow to move, and it’s dangerous to tie up resources in goods that aren’t moving.
NetSuite recommends you try to strike a balance between competitive pricing and being realistic about how much it costs to offer your service or product.
Trust but Verify
When cash flow is tight, it pays to work with only the most valuable customers. Any customer can say they are good for your product, but if they don’t pay in cash, you’re going to want to ensure the payment comes through. The sales team might be eager to close the deal, but a customer or client with a poor credit history is not likely to make payments on time and hurt your cash flow — but set it up with a higher interest rate if needed.
Marketing matters—especially during a crisis. Marketing is all about convincing your customers that you are stable and ready to help—two things that matter more than ever when it feels like the world is falling down.
Whether it’s evaluating distribution channels, running a PR campaign, or upping your efforts to use online advertising or email marketing, customers have time to read, and they are looking for a good way to buy.
Keep the Ship Upright: Controller’s Council is Here to Help
In times of crisis, it’s the controller’s time to shine. Your company will lean heavily on you for the steady hand and leadership they need to get them through this complicated time. From advice on managing cash flow to best practices on running the finance department, we’re here to help. Get to know us and follow us for all the latest.