Why Customer Engagement is Important? Part 2 – Revenue Impact

The rapid homogenising of product and services has made marketers shift focus to customer experience (UX). In our previous article, we explained the importance of reviews and rants leading to customer engagement for online and offline enterprises. In this post, we will be analysing the impact of a positive UX on your revenues. Most businesses struggle with this very important aspect of sales, as UX helps in faster customer acquisition and increased brand awareness.

User experience is the forte of your marketing and sales departments. They curate and deliver the information needed for successful pitches. Therefore, the information should be replete with industry insights and virtual product demonstrations. A McKinsey report about use of transformational sales and marketing methods sheds some light on the importance of UX. The report states that companies using such methods have 90% higher sustained growth than those who do not. And, sustained growth naturally leads to sustained revenue generation and vice-versa.

Use of Digital Interactions and Interactive Storytelling

Adoption of disruptive technologies is fast transforming the product as well as the customer. A customer’s approach is no longer ‘feature based’ but is rather ‘value based’. Customers these days like to use self-guides and engaging content for solving their problems. Thus, creating a solution that puts customer in the driving seat can give enterprises a means of self-directed sales.

Cross Platform Support for a Seamless UX

IoT has enabled so many platforms and services that having a UX for singular platforms is no longer feasible. A customer should be able to take the experience with him when switching between platforms. For example, your desktop site cannot be worse off than your mobile website or app. You can however, include perks to guide customers to your preferred platform, as is done by Amazon for its mobile app.

Targeting B2B Customers

According to studies, most B2B customers have come 57% of the way through a buying cycle before having a one-on-one with your sales representatives. Thus, the number of lost deals for B2B marketers should be unsurprising. If you are a B2B seller, then your UX should be able to communicate with your customers at every turn in terms of features and value. This way, when your sales representative presents his case, it will already be a done deal (the importance of self-directed sales, remember?).

Online and Offline Parity

Being able to provide a seamless experience when a customer interacts with you offline – either without internet access or physical visits – is also an important aspect of UX. Consider Apple’s website, call centre and store services as an example. Users get the same ‘cared for’ feeling when interacting with any of the company’s sale and service points of contact. Which in turn allows Apple to charge exorbitant margins on its products.

Dependable User Analytics

All processes which rely on user experience require constant tweaking and refinement. Therefore, getting actionable analytics data on user preferences and behaviour is imperative for driving revenues with UX. Analytics also help you understand the nature of ROI on your UX experiments. Using cloud computing and machine learning tools can put you ahead of the competition in understanding trends and market outlook.

Constant Improvement is Necessary

For continued revenue growth, a continued effort in the user experience is a must. Customers should not feel neglected after you have made the sale. Constant engagement through emailers, app updates, notifications, etc. not only makes users loyal, but also drives brand image and boosts sales.

Concluding thoughts: User experience is a key indicator of a company’s commitment. A positive UX strategy can boost your company’s revenues, just like it does for Apple, and a negative one can do the opposite, just like it did for Nokia.

Keeping your Company’s Cash Flow Happy – Debugging Budgeting!

Keeping your Company’s Cash Flow Happy

Does cash flow translate to revenue? Certainly not. Deteriorating revenue with a robust cash flow is not going to be a saving grace for a failing company, but a good cash flow plan in a relatively stable business can work wonders. The important thing to note here is that cash flow deals with actual cash, as in payments received from the customers. 

So, what is Cash Flow Actually?

Money enters the company through sales, investments, etc. and exits the system through operations, investments, taxes, processes and the like. The record of this incoming and outgoing money comprises the detailed cash flow statement. Cash flow is indeed a crucial factor in any company’s finances, but not the totality of it. What methods need to be implemented depend upon the capabilities, strength and weaknesses of each method, in the light of the proposition that is offered by cash flow.

Understanding the Cash Flow Statement

The complete financial statement of any company, is made up of the balance sheet, the income statement and the cash flow statement. The income statement of a company depicts the profitability over the course of a financial year. The balance sheet details assets and liabilities of the company. The cash flow statement can clearly depict the working capital requirement of your company. In other words, the operating funds needed by your business to run efficiently. Keeping a close watch on the cash flow statement can help you regulate the funds required to keep your business running steadily. Here are some helpful tips that might aid you in better cash flow management in your business.

Understanding and Analyzing the Monthly Bank Statement

The bank statement is not just a ready reckoner for the funds that you have left at the end of the month. You will need to compare the balance you have in the beginning of the month with the balance at the end of the month. There might be instances wherein you haven’t made any purchases in a month towards restocking your inventory or spending on expanding your business, and that might make the month end balance more than the month’s beginning figure. That will not be an accurate measure of how your business is doing. On any average month, where you have regular spends and income, the ratio between the opening and closing monthly balance will be a good yardstick to measure your cash flow amount. In short, cash flow adds together the monthly accumulation of profit, accounts receivable & payable and change in the inventory.

Cash Flow Budgeting

If the cash outflows of your company are more than the inflows, it should be addressed on an immediate basis.

Ascertain Cash Inflow (Receipts)

As soon as goods and services are sold, they should be recorded immediately. Expenses occurring at the same time should be considered as well. Always keep in mind the profit and loss budget while deciding on the cash receipts of the month.

Ascertain Cash Outflows (Expenses)

Salaries, rent of the office/warehouse location, telephone bills, electricity bills, including management costs of the inventory, operational costs, spends on different departments and expenses incurred in execution make up your cash outflows.

Forecasting Cash Flow

Forecasting in any sense always includes careful observation. If you have kept track of the previous two points for quite some time and have a good grip on what your fixed expenses are, this might not be as difficult. At the same time, you will also come to realize the problem areas which affect your cash flow. There might be a few business units or customer segments that turn in the cash receivables at odd intervals or have irregularities in payments. You can then focus primarily on these points and act accordingly to normalize your cash flow.

Collecting Account Receivables Faster

Online, e-wallet, credit card payments if introduced into the business can make cash inflows from your customers a lot faster and boost cash flow for your company. Getting authorized for any of these services is much easier day by day. With a valid company registration certificate or even a current account statement from your bank, you can be set up with a decent e-payment option.

Planning the Flow of Inventory

Timing your inventory restocking with cash inflows is an effective way to protect your operating funds from being depleted. It also reduces the complications of calculating and tallies the incoming and outgoing cash at the same time instead of putting it off for later. Being mindful of the sales cycle helps. All being said and done, we would advise you to move to a digital cum physical bookkeeping if you haven’t already. Google Spreadsheets are a great way to start. If you already have a hang of operating spreadsheets, try out some free accounting software that is available for small business. You don’t necessarily have to invest a lot in a professional software. Cash flow deals with your company’s working capital and there are times when you might need some additional funds. Did you know that Lendingkart Finance offers working capital loans exclusively for small businesses? Want to know what you should keep in mind before applying for a working capital loan? Small Business Loans – Why and Why Not explains that in detail.

11 Important Things Your Competition Can Teach You About Finance

Competition is the bane and blessing for every business owner. As a business owner you need to keep an eye out for what your competition is doing. This is the ground rule and needs to be followed. In principal, keeping a track of others who are in the same business as you whether it’s for their marketing tactics, their communication, their growth rate and numbers or their new product or service announcements is all part of the game.

The question you might ask is- why do you need to do this?

Here’s why. To learn from the successes and even failings of your competition is smart. Others might be in different development stages than you are and already employing tactics that you intend to explore. Knowing how things are working for them helps you to plan and execute better. Plus, they might be doing some things right. It’s good to adapt and use those solutions for your own business wherever applicable.

For example, let’s take finance. Here are some important things your competition can teach you:

Scale:
As a business already in existence, the next obvious step is to scale up since every business wants to grow. How to use your funds to expand your business is a key question. Given that expanding is a big move you need to put some research in it otherwise things can backfire. This is where you can take a leaf or two from the books of those who have already done it and how it worked.

Managing cash flow:
How you manage your finance is very crucial to the success of your business. Plus, this is a basic requirement for future loan applications. Try to find out from your competition on how to best manage cash flow and learn from them to do this more effectively.

Allocation of money:
How to allocate your existing funds and where to put how much is a big part of business decisions. Those in the same business as you might have understood this well and being able to lay your hands on that strategy can benefit you immensely.

Brand building:
Brand building is very important. How your competition is using their money for communication and advertising is something that you need to learn from all the time. Especially from the ones who are getting it right.

Raising money:
A business needs capital all the time, whether it’s yours or theirs. Some people are more skilled at raising it than others. Keep an eye out for others in the same business as you and incorporate methods that they are employing to get funds and see if you can adapt those methods for your own business. When it comes to small business working capital loans, we at Lendingkart, are always ready to help.

Strong base:
As a small business while growth is important, being able to have a strong base is extremely critical too. If a business grows continually but does not spend some time is deepening its roots, then this can lead to cracks that can pose big issues if left unattended. How your competitors are using their financial resources to consolidate and deepen their roots can help you understand how to do the same with yours.

New Ideas:
No business can grow without new ideas and innovation. How your competitors are using their money to encourage and build on new ideas is something that you can learn a lot from. It is also a very effective use of your money.

Accounting:
Learn from your competitors on how to measure results and profits. A robust and dynamic accounting system can help you reach a good benchmark. Getting this right is very important. Clear financial records are a must and no financial decision can be fruitful without paying attention to numbers.

Prepare for lows:
Every business goes through lows and a part of managing your funds properly is directly linked to being able to survive the challenging times. Understanding how your competition is preparing for such scenarios is very helpful for you to be able to do the same. A competitor who may have successfully managed their financial situation can offer ready solutions but what is important to consider is that another one who might not have done that well will also have some lessons to impart. Don’t ignore those lessons.

Tax:
Another key area directly related to finance is tax liability and how to manage your funds effectively to make sure you do not accumulate a lot of it. Find out which of your competitors is getting this right and see if you can use some of their processes and practices in your own dealings.

Return on Investment:
How your competition measures return on investment can inform your own financial decision making into a more productive space. Learn from their strategies and assess their gains to see how you can maximize our own.

Learning from your competition can be a mix of do’s and dont’s. The idea is to keep your eyes open and recognize the opportunity to learn. Then feed that learning back into your own business for better results.