Your margins are crucial to your success, and too often staffing owners and managers overlook key elements for building them into a sale, whether because of being caught up in a business cycle or trying to go the extra mile to please customers. These are all understandable goals; the question is how to achieve them the right way. Let’s look at how you can improve your margins…and your sales.
Here are four tips below.
Tip #1: Analyze Your Customers.
Yes, we all know that “firing” customers can be anathema to staffing firms striving for growth. But you need to recognize that hand-holding, battling on price, and constant complaints sap your time and energy. This translates to a loss of money.
There’s an easy way to determine which clients fall into this category, besides metrics, which are obviously useful. Simply ask your order desk or sales team for a list of their most problematic clients. Then match them up to the amount of profitable orders they bring to the table. If the match doesn’t fit, you don’t need to fire the client. Just explain to the client that the management of the account orders they require don’t allow you profitability and you’ll have to ask for a price increase. Under this scenario, hopefully the problem will take care of itself and you can go forward with a new understanding; if not, you can part ways and ease headaches.
Tip #2: Limit Your Discounting.
This is where a good plan can help you. Certainly, a customer who gives you lots of repeat business should get a better billing rate, or a discount may bring in new clients to start with. But just remember, when you start with a low price it’s difficult to go higher.
Depending on the cyclical nature of your business, you may want to offer discounts in the low end of the cycle. Make sure, however, to have a plan in place that gauges when you offer discounts, and whom you offer them to. You might even consider a quarterly promotion based on your workflow.
Tip #3: Focus.
You can’t be all things to all people. This causes confusion among your sales staff and can stall growth. Think about narrowing your focus to what you do best and operate in that wheel-house. If you’re in a niche market, this is easily done. However, even more, general firms can specialize by choosing what clients they want and providing the services that they do best.
Tip# 4: Cut operational costs.
These costs directly affect your operating costs. You can do this effectively and efficiently by outsourcing technology, billing, collections, and much more. At Madison we offer ATS/CRM, back office services, business intelligence and expert veteran advice to make sure you’re on top of the ball. This adds up to a real special sauce that makes your clients happy: reliability. You go from being a vendor to a valued partner and save money in the bargain.
Are you looking to cut costs?
Contact us today to find out how we can help you drive down costs, increase margins, and keep your business healthy.