Customer Retention key to Recession Survival
Customer retention is essential for SMEs to survive the recession, according to support group for female–led businesses Everywoman.
Speaking at the launch of Small Business Week, where BT’s State of the Small Business Nation 2008 report was also published, Everywoman co–ordinator Maxine Benson, advised SMEs to concentrate on maintaining a good relationship with their existing customers and suppliers.
“Firms must take care of their existing customers, by over–delivering for them and setting themselves apart from their competitors,” said Benson. “Customers are going to be making cost cuts, and firms don’t want the cost cut to be them. It’s important to keep speaking to customers to see what they really need.”
The BT report revealed that 51% of small firms have lost customers this year. It also highlighted that 57% of small businesses have experienced increased business costs, and 21% have reduced their spending.
“Business owners should look at their existing relationships with both customers and suppliers, and if necessary talk to their suppliers about how they can work together more effectively through these troubled times,” said Benson. “It’s also vital to keep a close eye on cashflow and control costs.”
The Association of Chartered Certified Accountants (ACCA) said that SMEs need to look at their payment terms and plan ahead in order to survive the predicted recession. ACCA UK director Wyn Mears said
“They should make sure they have a contingency plan in place, as we still have a number of problems ahead of us,”
“Getting paid is absolutely essential and everybody needs to set up more robust payment terms and chase customers more actively than they might have in the past,” he added. “It’s a matter of taking a step away from the day–to–day running of the business and looking at opportunities and how the business is going to develop.”
For advice on how to survive in the current economic environment, watch the Tuesday web seminar from Small Business Week, which includes advice from the ACCA and BT Business.