Getting your customers to pay sooner
Naturally, the sooner customers pay, the most cash you’ll have on hand to pay your expenses so it makes sense to spend some time developing systems to get customers to pay sooner.
Shorten the Purchasing Decision and Ordering Processes
Spend some time monitoring what the average lead time between first contact by a prospect and point of sale is, and why it is that long. What usually holds up the process?
- Is it because they need to consult multiple decision makers?
- Is it because they’re not really sure how the product/service works?
- Is it because they’re not 100% convinced of the benefits that you offer?
- Or is it because the product purchase isn’t a high priority and other things always seem to take precedence?
Whatever it is, try and identify some common trends and put in place measures to shorten the time frame.
- Making it easy for customers to place an order by offering online, telephone and catalogue ordering facilities (where appropriate)
- Lowering the barriers to doing business with you by offering a money-back guarantee. This “risk reversal” technique eliminates the risk and therefore significantly increases sales conversion rates.
- Providing buyers with all the information they need to select the right kind of product/service for their needs
- Ensuring that all decision makers are present when your salespeople are conducting a sales presentation
- Including a Frequently Asked Questions document that handles any buying objections
- Following-up persistently and vigilantly
- Making a value-added early ordering offer EG: Order in the next 7 days and pay via credit card and you’ll also receive X valued at $X FREE.
Shorten the Fulfilment Timeframe
In most businesses a number of functions take place as part of product “fulfilment”. Manufacturing firms, order materials, prepare a job, manufacturer it, finish it and dispatch it. Service professionals order materials, and perform the service and so forth. The faster these steps “efficiently” happen, the soon you will get your money which means the healthier your cash flow will be.
Here are some things you can do to speed up the process:
- Develop systems which increase speed and efficiency;
- Train your people to perform their roles faster and more effectively;
- Undertake time management training for your people so they get more achieved in their day;
- Analyse job roles of all staff and identify unnecessary double-ups;
- Identify why backlogs occur and fix the problems;
- Use the fastest shipment methods economically possible; and
- Ensure you have “back-up” suppliers of stock and/or raw materials so if one supplier runs out; you can access another one quickly.
For more business advice, contact one of our consultants by calling 1300 85 64 77 or email us HERE.