The easiest way to cut expenses is to save on customer acquisition
In a highly competitive e-commerce market, a healthy bottom line means everything to online business owners when it comes to shaping the future of their venture.
Innovative technology infrastructure needs constant investment in R&D, security and skilled talent, so every little bit of profit earned helps.
But in addition to keeping tunnel-focus on sales and increasing earning potential, merchants can also look for ways to save or cut costs to grow profitability. Finding ways to reducing expenses has become especially critical in the current Covid-19 economy as small businesses continue to bear the brunt of the upheaval brought about by the virus.
Visa’s Covid-19 CEMEA Impact Tracker, a report initiated as part of Visa’s regional Where You Shop Matters campaign to support merchants with insights that will help them weather the crisis, noted increased anxiety amongst UAE merchants with 89% of small businesses noticing a decrease in average consumer spending during the pandemic. The financial hit on revenues has been high with more than eight out of every 10 (83%) of businesses polled stating their earnings have been negatively impacted.
The good news, however, is that current conditions have served as a catalyst for eCommerce with many consumers in the UAE shopping online for the first time during the outbreak, presenting enormous opportunities for web-based businesses.
The easiest but most often overlooked way to reduce costs for your online business is to save on customer acquisition. It is far more expensive trying to acquire new customers than retaining existing ones. With your existing customers, the hard work of getting them on board is already done and by going the extra mile to keep them happy, you are not only securing repeat business but creating your own brand ambassadors to call on for support during these challenging times.
Make sure you let them know how important they are to your survival and make them feel special, as well as thank them by rewarding their repeat business and encouraging their word of mouth. Another way to incentivize repeat business is by keeping track of spend or purchase history of existing customers and offering tailored loyalty incentives or gifts. This doesn’t have to be expensive – a cupcake, care package or even just a handwritten note will go a long way.
Of course, aftercare and customer support is just as important as making the sale and now is the time to up your service game to make sure it’s as good online as it would be face-to-face. Investing in a good Customer Relationship Management System (CRM) will go a long way toward keeping your customer relationships on track.
There are many ways you can promote your business that require no more than a little dedicated time and creativity. If you haven’t had the time so far, now is the perfect time to properly build your database by adding an email opt-in on your website or blog. You can offer a free download, discount or gift for customers who are willing to add their email address to your list and even ask them for referrals.
With people spending much more time online now, it’s also the perfect time to branch out and make new connections through your online network to learn about the different challenges, opportunities and trends your potential customers are impacted by in the current situation.
Meanwhile, an online billing service might also work out more cost-effective than extensive accounting package. Small businesses often spend more time, or more money, than they really need to in order to keep their accounts accurate and up to date, so a streamlined online invoicing service, for example, could help manage billing processes more efficiently and enable your business to get paid faster.
Digital invoices are much more likely to be preferred by your customers too as payment preferences shift to contactless commerce. Visa’s global Back to Business study, which assessed the financial impact of Covid-19 on small and micro businesses (SMBs) worldwide, found that nine out of every 10 consumers in the UAE have changed how they pay for purchases, including preferring to shop online when possible (59%). The study also found that four out of 10 customers are now avoiding the use of cash (40%) and more than half are using contactless payments (52%).
No matter what happens in the coming months, now is an opportune moment to step back to assess our business costs and practices for the next six months to look at what we can improve.
For more insights, tools and resources, small business owners and sellers can also access Visa’s Small Business Hub, a merchant platform launched as part of Visa’s regional Where You Shop Matters initiative.
