Client engagement – getting it right - Part 1
Anyone who has been in business for long enough will understand that whilst revenue is good, cash is king. Stating that cash flow is a critical element of operating a successful business is hardly a ground breaking revelation. However, having a large number of clients or customers who pay their bills on time in full sounds like a business utopia that is out of reach for so many businesses.
In fact, in the face of statistics from the ABS which show more than 60% of new businesses fail within their first 3 years of operations the Australian Securities and Investments Commission commissioned an investigation into the reasons for business failures and released a report into corporate insolvencies which occurred in 2011-2012. The report found that 40% had inadequate cash flow or high cash use and 33% suffered from trading losses.
Many problems with cash flow and trading losses arise from slow or non -paying customers. Winning and keeping new clients/customers and driving growth in your sales and revenues is challenging enough so once you've landed the client it's critical to make sure you get paid. Here are some tips that we have found very effective in ensuring that once you land that client you get paid for your work:
Get the customer engagement process right:know who your customer is, get all relevant contact details and information up front (read more here)
Once you know who your customer is, have someone vouch for them: make sure that you know that they will be able to pay you, get trade references and do credit checks
In next week's blog we will share some further tips with you.Back