The primary goal of a typical organization up against tough tactical choices is to outlive a financial slump. The organization should remain committed to its business plan, and find balance in generating profitable income and lowering costs. The goal should be to uncover strategies to reduce costs without cutting out vital revenue producing expenditures. I hope to be able to offer you a few of these opportunities, as possible ways of keeping gross profits up, during short-term cycles of an economic downturn.

Bringing in Client Referrals As a marketing and advertising consultant, I am frequently astonished by the empty stares I get when I ask a client: „How many referrals did this company produce last month?“ If they know, it is never something substantial, since little effort is dedicated to the cultivation of this revenue source. Generating customer referrals, especially targeted at repeat purchasers, is a skill of salesmanship, that appeared to fade away with the invention of computers as well as the Internet. Every business has a cost per sale metric they are comfortable with. Your sales staff, your customer support department, your email campaigns, as well as the home page of your website, are all touch points to advertise a customer referral program. Just take your cost per sale figure, divide it by 3, and use that amount as a referral promotion. It is a low-cost way to obtain customers and new income. A properly maintained referral plan may contribute 2% to 5% to your gross profit.

Customer Retention Programs I tend to receive the same blank looks once I ask clients: „How many former customers did you reactivate last month?“ Just like bringing in referrals, this is a sales proficiency that has almost been forgotten. For every single customer you lose, you need to find two new customers, in order to grow your company. In many instances, customer retention is easy if you are taking time to understand the reason why these people no longer use your service. You are going to hear isolated incidences associated with shipping and delivery difficulties, a rude customer care experience, and products, which failed to satisfy buyer expectations. All you have to do is address the problem and fix the problem. Your customer will be pleased their business seemed valuable enough for you to contact them. A properly supervised customer retention program may add another 2% to 5% to your gross profits.

Strategic Retail Pricing Many organizations use a flat rate formula for establishing their retail prices. In good times and in bad, I am a great supporter of strategic retail pricing. I do not have faith in reducing prices, and margins, during sluggish cycles to generate revenue. Strategic pricing is all about advertising and marketing the value of your goods and services. A best selling product is worth more when it has higher customer value. Before decreasing selling prices on slower moving items, critique how the merchandise is being presented. Does the product or service have a good sales story that underscores its benefit? Is the art of professional quality and engaging? Your sales presentation might possibly require a tune-up. Packaging numerous best selling products into special offers is another great way to raise average order value. Just like you, buyers want to get value for their dollar also. Strategic retail pricing may help improve your gross profits between 5% and 10%.

Negotiate with Vendors Vendors experience the identical financial stress as retailers, but on a greater level. If you, and your industry is selling much less, so is your vendor. This enables you to work out a better price since it suggests to the supplier you are prepared to shop around, but you would like to offer them the opportunity of first choice. Can you save 5% with a pre-pay discount? Might you find some cost reduction on components of the product line for promotion? Ask your vendor how they could help you to keep them as a business partner, and allow them make offers to you. Aim for at least a 1% increase in gross profits whenever you negotiate with your distributors.

Employee Downsizing In some cases, this may be the only choice you have to lessen company expenditures. I do wish to emphasize the word expense. Your staff can easily be broken up into two categories: Overhead, and revenue generating. Sales agents and marketers generate revenue. Many of the actions mentioned above would be difficult to put into action without sales and marketing expertise. Some states offer a partial unemployment program where you keep staff three days a week, and unemployment compensates your workers for the other two days of the week. Always be sure to think through all of your alternatives, and their implications, before you take action. Teaching new employees is less desirable compared to maintaining experienced and trained existing staff. You may save a buck right now, and lose two down the road with the growing pains, and learning curves, usually associated with hiring new personnel. If you do downsize, be certain to create, or revise, a company organization chart so everyone knows their new accountabilities. Effectively downsizing your staff must have a favorable effect on gross profits, and you should be able to prove that to the CEO on a monthly schedule.

Improve Employee Efficiency and Production An employee can devote up to 25% of a day making use of business computers and the Internet for personal use. They will go shopping, chat, email, search for jobs, go to Facebook, and monitor their fantasy sports leagues, just to identify a few examples. I have personally seen e-mail metrics proving 75% of buyers responding to the e-mail, are buying from their workplace.

Some of my recommendations happen to be old-school, but this one capitalizes on the newest technology. OfficeShield is an affordable employee monitoring software program that you can install on your network. It will inform you precisely how many hours per day your employees are not doing work. It can also block and prevent accessibility to personal use websites. If you add up your payroll and find a decrease of just 12.5% (an hour or so per working day) in employee performance, that converts to some substantial weekly dollars, which can go directly in the direction of improving your gross earnings.

Of course, there are no chocolate or vanilla answers to the difficult issues which a company faces as it tries to preserve profits during a financial downturn. Even so, if you recognize and analyze areas of opportunity, create options, plan and implement actions, and evaluate the initiatives of your work, your business is a lot more likely to preserve and improve gross profits.

Craig Corbel is an Online Marketing and Strategic NYC Web Design expert for business owners nationwide. Learn more about Employee Monitoring Software by going to OfficeShield and installing their complimentary trial.