Kendall Cochran Shares Three Ways in Which Businesses Can Improve their Profits

Today, the business world is experiencing many setbacks. Thanks to heightened inflation rates in energy, consumer goods, and other categories, the economy has been suffering. For companies that buy and sell products, pricing has been unpredictable and has cut into profits.

Kendall Cochran, a business expert from Atlanta, GA, shares three ways companies can boost their bottom line even in difficult times.

1. Customer Retention

Recent studies have found that the return on investment in customer retention is highly valuable. Since it is far more expensive to find a new customer than it is to retain an existing one, it makes sense that the ROI on customer retention would be much higher. A 5 percent increase in customers retained can pay off in raising company revenue by 25 to 95 percent.

Retained customers are loyal to the companies they patronize. They buy more goods and spend significantly more money than new customers who are just trying out a product or service. They have already calculated that a product or service fits their needs, and they are going with what works.

Customer service is one of the most important aspects of retaining existing customers. If customer service becomes rude or perfunctory, even the most loyal customers will flee to a situation where they feel they will be treated with more care. Companies growing quickly may find it difficult to keep up the same customer service standards, but if they neglect to take care of their customers, another company will step in and do the job for them.

Existing customers who are happy with a business spread the word. They tend to refer their friends and family to a business they have been dealing with for several years. There is a huge difference in offerings between companies, and loyal customers know what they want and need.

2. Reduce Employee Turnover

Employee turnover is incredibly expensive. On average, a new employee takes about $4,000 to hire, train properly, and get up and running in their new position. Constantly hiring new employees can backfire, causing a major drain on company profits.

When a workforce is constantly shifting, quality and customer care standards cannot remain as high as they would with a stable, happy workforce. Companies need to take care to improve their organizational culture, support all types of employees, compensate them fairly and handle disputes equitably, and in general pay as much attention to employee satisfaction as they do to customer satisfaction.

Improving organizational culture means putting the company’s values into practice every day. It is one thing to promise a fair, equitable workplace and another to make sure that all supervisory staff members are ready to treat their employees well without favoritism or animosity.

Companies need to pay attention to diversity, equity, and inclusion. Employees of all backgrounds and positions need to feel important to the organization’s success. Diversity training is necessary to make sure that everyone is aware of being treated unfairly in the workplace.

Troublesome employees and managers who cannot treat people well should be retrained or let go. Most people who leave their jobs leave because they have a bad supervisor. When your company looks at a bad supervisor as a damaging factor where profits are concerned, you may look at the question of hiring someone else differently.

3. Reduce Costs

The third tip presented by Kendall Cochran is that companies can try to reduce their costs to raise profits. Since inflation is rampant in today’s economy, this provision could be even more difficult to follow than in the past.

Businesses that want to reduce costs should create a solid plan for managing their money. If a company wants to expand into a new market, they need to plan for those costs and estimate whether the cost of moving into the new market will result in greater profits. Some contingency planning is also needed if the change is not good for the company’s bottom line.

Comparing prices among suppliers is another good way to reduce costs. While loyalty to suppliers can sometimes pay off at lower prices, companies may offer their newer customers better deals. Shopping around doesn’t have to be a commitment, but it can cut costs.

One of the best ways to reduce cost without sacrificing the quality of materials used is by properly managing inventory. When inventory is not managed correctly, there could be waste caused by disorganization and letting older products become obsolete before they are used. When companies know exactly how much inventory they have on stock and where it is, they can allocate their resources much more efficiently and save money that can be applied to profits.

Enhancing Profits in Difficult Times

Kendall Cochran provides these three focus areas for businesses that need to improve profitability. Paying close attention to these three principles can help to reduce costs and leave more money in the profit column.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes