All businesses could benefit from reducing operational costs. Even if you're closing lots of sales, having excess operations can drive down your profit. Take this opportunity to gauge which operations you can eliminate to further prevent things from getting out of control.
Here are 5 steps that can reduce your operational costs:
1. Outsource specific business functions
Outsourcing has become an absolute necessity for organizations looking to compete in modern marketplaces. Hiring full-time staff for extremely specific roles can be very expensive—especially for smaller businesses. There are many examples that could be relevant to your company; your IT team, for instance, or your cyber-security specialists. While it's essential to have this expertise at your fingertips, you can reduce costs enormously by outsourcing.
“It comes down to practicality,” says Mike Knivett, Managing Director of digital marketing specialists Artemis. "For many of the small businesses we work with, hiring even 1 full-time SEO and digital marketing professional wouldn’t make financial sense. We are able to offer them the skills and experience of a full team of talented individuals across multiple fields."
Outsourcing is often not only cheaper but also financially simpler—instead of having budgets to assign and expenses to deal with, this can all be assigned to the monthly fee of an outsourced service.
2. Maintain your levels of compliance
It's more important than ever for organizations to take compliance seriously. Organizations are now faced with key legal regulations surrounding not only financial matters but also issues such as data protection and cyber security.
For example, if you process card payments, you need to comply with the Payment Card Industry Data Security Standard ([PCI DSS](http://www.theukcardsassociation.org.uk/security/what_is_PCI DSS.asp)), and if you handle the personal data of individuals you must comply with the General Data Protection Regulation (GDPR). And while it might cost money in order to ensure that you maintain these levels of compliance, it will save you money in the long-term, as you can avoid fines and potential legal action.
You should never assume—make sure that you're taking these compliance issues seriously and assign personnel to manage them for you.
3. Utilize chatbots to better manage customer support
Modern businesses are used to the idea that ‘the customer is always right’ and great customer support is a vital part of the success of your organisation. In fact 67% of customers are willing to pay more for a product or service if it comes with a great and relaxed customer experience.
However, maintaining a great customer experience can be expensive—as it's often assumed that high quality customer support is achieved by having more members of staff and higher levels of training. Naturally an aspect of this is true, but it's also vital to note that a great deal of customer support comes down to good management of time.
For example, you can use chatbots to handle and filter out some of the simpler customer queries that might otherwise take up the time of your support staff.
4. Ensure your marketing solutions are cost effective
Nobody can deny the importance of great marketing for business. Without strong marketing campaigns you won’t bring in customers, meaning you won’t sell products and services, and everything spirals downward from there. This indicates just how crucial it is to get your marketing right.
But it must also be noted that if marketing solutions are not cost effective you can wipe out huge chunks of your profit because the customers that you are getting simply cost too much to attain. The key statistic you need to consider is cost per conversion. You might find, for example, that your pay per click (PPC) Google advertising is bringing in customers, but on closer inspection you might discover the cost per conversion (CPC) has grown substantially year-on-year.
In this case you could look into other marketing options such as email marketing or social media in order to achieve leads more cheaply.
5. Automate and save time
One of the major risks of reducing your costs is that it impacts your ability to provide great service or do your job correctly. This is why it has become so vital for modern companies to invest in automation wherever possible. Functions such as payroll, HR, marketing, invoicing, and more can all be supplemented by automation.
If you can automate monotonous tasks it can provide more time to your skilled workers so that they can address more critical work.
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