Client Satisfaction is Business Holy Grail
Business owners and mangers across the UK are reducing costs, becoming more transparent, and investing in customer service levels in a bid to keep clients happy and avoid losing valuable business, according to new research* from leading independent invoice financier Bibby Financial Services.
While it’s not surprising that more than half (56%) of business owners are actively pursuing new business as a priority to ride out the downturn, many (54%) appreciate the importance of protecting existing revenue by upping customer service levels. And, over a third (35%) of business owners are actually increasing hospitality spend as a means of retaining existing customers.
In fact, with 44% of small and medium-sized businesses under pressure from customers to reduce their costs, more than half (56%) of business owners surveyed were in the process of trying to balance the books by negotiating better terms with their own suppliers
The research also revealed two in five (39%) business owners are now more transparent with clients and customers, for example giving them an insight into future business plans.
Despite their best efforts to take control of their firm in these unsettling times, effectively managing late payment and improving cash flow is still a major concern for 58% of small and medium sized business owners.
Edward Rimmer, Bibby Financial Services’ chief executive, UK and Ireland, said:
“The drive for new business is all very well but not if you’re putting your all-important existing client base at risk at the same time. While it’s promising to see the measures UK businesses are putting in place to survive the recession – ones which will also set them in good stead for long term success -, it is clear cash flow is still a major priority for businesses.
Although the Government has now introduced several measures aimed at increasing cash flow to small businesses, few of them really seem to be taking hold, not least because the banks are themselves still struggling with liquidity issues. The important thing is for business owners to look at all aspects of their cash flow situation, whether they need to tackle increasing late payment, or whether they need to change their pricing structure to stimulate client interest."
In most cases, newer business owners, for example those operating since 2006, are more likely to be open and transparent with clients and customers about their situation and future business plans, and least likely to be making changes in relation to cash flow. Indeed, business owners without experience of previous recessions are least prepared to reduce costs for clients or customers.
In contrast, those who’ve been running their business for longer and have experienced several other recessions are more likely to view financial changes as a way to get their business through the recession.
When it comes to business sectors, those in transport are most likely to be following the cash is king mantra, with 86% looking at managing late payment and improving cash flow compared to just 46% in the hotel and catering sector.
Edward Rimmer concluded:
“Irrespective of your experience, whether you’re a new business owner or more practised, cash flow should always be your key priority. It is worth looking at all potential ways to improve this, whether it be taking measures to improve client retention, negotiating supply chain deals, or even simply reviewing your finances.
Taking steps such as talking to your bank to apply for an increased overdraft facility – though at the moment this could be easier said than done – or looking at other cash flow options, such as invoice finance, which frees up the value held in your outstanding invoices, will ensure you are able to focus efforts on getting your business through the recession.”
Unlike many other institutions and banks which are tightening their belts to cope with the current economic climate, as the largest independent invoice finance provider in the UK, Bibby Financial Services is very much open for business. It is on hand to provide flexible cash flow funding solutions and is currently helping more than 3,000 businesses, handling client turnover of more than £3.9billion and advancing over £300million to help small and medium-sized firms realise their potential.