The following article is part 1 in a 5-part series on how to boost business cash flow.
Every business sometimes needs a quick influx of cash. But when a crisis hits, cash is key to your survival. If you’re facing cash flow issues right now, here are a five simple strategies you can employ immediately to fill in the gaps and make sure you’re covered.
#1. Ask Your Happy Customers for Referrals
If a customer is satisfied with your products or services, they’ll be happy to spread the word amongst their friends. This is a powerful form of marketing because it comes from a real person, not you, the company.
Some people will naturally sing your praises if you ask them to, but you can sweeten the deal by offering an incentive. If you feel uneasy asking people for a favor like this, keep in mind that your purpose is to offer your unique value to the people who need it.
Remember, people still have problems that need solutions. And there are plenty of people looking to ease their pain points by purchasing the right products or services. A referral from one of your satisfied customers can often push the sale in your direction.
#2. Offer a Loss Leader at a Low Price
Another way to attract new business is to offer a ‘loss leader.’ This is a popular product or service that you sell below cost for the purpose of bringing in new business. During a crisis, people are looking for good deals and still have money to spend.
Making a purchase activates the pleasure sensors in the brain, much like a drug. People are still buying not only because they have need, but also because it makes them feel good. However, many are looking for better bargains.
Your goal with a loss leader is not to make a profit. It’s to make new customers who you can then introduce to other products through up sells and cross-sells. You make your profit on the back end.
Loss leaders also create an opportunity to entice people to sign up for your email list or join your social media groups, making it possible for you to sell to them later on.
#3. Have a Flash Sale
A flash sale is a great way to inject a quick boost of cash into your business. Offer a deep discount on a high value item for a limited time only. Flash sales typically last only 24 hours.
Choose a good product your audience will love and announce the sale well ahead of time. Make sure the terms are clear and stick strictly to them. If you have people wanting to buy after the sale is over, start planning your next one.
#4 Get Reacquainted with Past Customers
It’s much easier and cheaper to sell to past customers than to bring in new ones. You probably have some customers who haven’t bought anything in a while. Now is a good time to rekindle the relationship and offer them a good deal.
Be careful not to restart the relationship with a sales pitch, though. Begin by providing value. Once you provide value, you can then present your buyer-level offers.
Create an occasion for your offer, such as a special “thank you” or an exclusive deal to reward loyalty.
#5. Offer a Taster
A great way to attract new customers or get your existing customers to buy more is to offer them a taste of the value you have to offer. Give people a free demo, free trial, seminar, or other offer where they get to see your products or services in action.
If you want to offer something limited, choose a select group of your most engaged buyers since these are the ones most likely to purchase.
Establish a repertoire of these techniques and you can employ them whenever you need a quick burst of cash. If you understand the times in the sales cycle when your sales lag, you can prepare well ahead of time to mitigate the costs.
If you haven’t prepared ahead, don’t beat yourself up about it. Businesses that adapt and pivot during a crisis are the ones most likely to come out the other side stronger.