Holding onto existing customers and while beating back new competitors is a top concern of Canadian small and medium sized firms, according Telus Corp.
This fact emerged from a series of focus groups hosted by the Vancouver, B.C.-based telecom firm. A total of 41 small and mid-sized firms, from across Canada participated in peer-to-peer discussions and workshops held from June to October this year.
Most indicated they are optimistic the economic situation will take a turn for the better over the next three to six months.
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Attendees, however, felt the need to re-focus on customer interaction and improve service practices to reverse the current erosion of business.
The recession sparked new competition to smaller firms from the ranks of the recently laid off who decided to go into business for themselves, according to Linda Craenen, director of small business marketing at Telus.
She said owners of small and mid-sized firms are waiting out the recession, but are worried about how to keep revenues flowing.
There’s a consensus that they need to refocus on building customer relationships.
That’s definitely a priority for Blair Smith, a Vancouver-based realtor for Royal LePage.
During the heydays of Vancouver real estate, business was akin to a mini auction, Smith recalled. “It was about how high the client was willing to spend.”
The realtor said since the stock market disaster and a quiet winter, “there’s been a return to a more traditional way of business — more relationship building, more negotiation and communications.”
Keeping connected
Developing new leads and keeping in touch with recently acquired clients was a major issue for Clare Kumar, when she decided to go full-time with her business at about the same time she left Montreal for Toronto.
“I had a good number of clients in Montreal when I worked part time on my business. Suddenly, I had to start all over again,” said Kumar, owner of Streamlife, a company that helps busy professionals organize their time, home, and workplace for maximum productivity with using a range of tech tools.
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Kumar also said economic conditions compelled her to target a different demographic.
When she started her business in 2004, companies wanted to save time and real estate so there was a compelling reason to roll out telework programs. “With the recession, the need is still there but there isn’t much willingness to have conversations about investing in new technology.”
Another key challenge is people weren’tt familiar with the idea of a professional organizer. “Potential clients had the need but didn’t know who to approach.”
Some customer contact strategies SMB operators identified in the Telus workshop include:
- Being personally accessible to customers — understanding their needs and communicating with them on an ongoing basis
- Sending out monthly e-newsletters
- Volunteering — being involved in corporate responsibility initiatives and grassroots promotions
- Implementing customer satisfaction surveys
- Increasing community presence via networking and participating in industry forums and tradeshows
- Targeting specific sectors with very focused messaging to emphasize competency and differentiate the business from larger organizations and the competition
Kumar uses her Web site to inform potential clients about what she can do for them.
Visitors to her site immediately know what her business is about. The site’s front page functions as workplace “best practices” tip sheet.
For instance placing your cursor over various items in the photo of a home workspace brings up blurbs on how to work more effectively. There are also switches that allow visitors to move to other areas of a home where Kumar’s expertise can be applied.
Streamlife’s services and its target customers as well as the price Kumar charges, are also plainly stated in this front page. A well-produced video running for less than two minutes features Kumar herself explaining how she can help clients.
Keep the cash flowing
How to maintain cash flow is another major concern of Canadian SMB operators, according to Andrew Peek, co-founder of Freshbooks an online invoicing and time-tracking firm based in Toronto.
“Entrepreneurs want to know how to get paid faster and how to free up their time so they can what they do best,” said Peek, who was also a workshop leader during the focus group sessions.
Typically, Peek said, many start-up operators do their invoicing manually. But business owners can save themselves a lot of headaches by taking advantage of the numerous free and not so expensive invoicing and bookkeeping software packages now available in stores, online, or as a hosted service.
“The problem with keeping track of your cash flow manually is it takes more time when you’re trying to collect and trace back a certain account,” Peek said.
Services, such as Freshbooks, can send out automated and timed reminders to clients when it’s time to collect. “Rather than fielding multiple calls to every client, an operator can concentrate on chasing new leads,” Peek said.
For quicker project turnarounds and faster payment, Peek also gave the following advice:
Concentrate on small wins – Avoid tackling the big stuff right away. Even if you have a long-term project, identify a part of it you can deliver on right away and then get it done. When you get at this low hanging fruit you have something to show your client and get paid for right away.
Scope a project properly – Don’t over promise and under deliver. Make sure you are bidding only for what you can actually deliver. This will avoid delays and foul-ups and save your reputation.
Build better customer relationships – In many situations the service or product you are offering is probably being offered by competitors as well. In these situations, you can only compete through strong relationship building, says Peek. He suggests that owners of small firms adopt a personalized approach to clients, understand their needs, offer them insights into best project development practices, and provide ample opportunities for feedback.
“Make sure your customers don’t need to chase you down to find out how the project is going,” Peek said.
Streamline accounts receivable process – Automate the collection process. Give your clients incentives if they pay early. For example give customers a discount if they pay within 10 days of delivery.
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