Getting over the growth hurdle - Technology or Manpower?

Every small business will eventually reach a stage where they need to invest in order to grow.

They may become so busy that the existing staff are so stretched that errors are beginning to creep into their work. They no longer have the time they used to have to follow up every lead or enquiry, or ensure that their customers feel valued. Slowly but surely, clients are tempted away to the competition, complaints start to appear about poor customer service and a business starts to slip down the drain.

In order to generate more enquiries, the business knows that they need to either increase telesales activity, improve customer service, canvass more, get a better website or advertise, and these pose the difficult question: "what generates the best return without costing the earth"? In a poor economic climate, the small business will always reduce their advertising budget first as that is the easiest thing to cut and the most difficult to gauge in terms of Return on Investment.

The small business will also often fall into the trap of cutting spend on cost-effective solutions that will help them get over this next hurdle.

Technology or Manpower?

Employees represent a very large expense, and for a business that does not have enough hours in the day the first thought is often: "I must take someone on".

Some years ago, a travel business client had reached a hurdle. The bulk of the work was being handled by one member of staff. Their new website was suddenly producing a surge of new enquiries, and due to the increase in overall workload, the employee was beginning to make the occasional mistake. In order to get over this hurdle, the company had a decision to make - either employ another person, or look at ways of improving the efficiency of the systems used to help the existing employee. A member of staff with the skills and experience would have cost around £16,000 per annum in salaries - a sum that could not be sustained.

A Customer Relationship Management system, though, would cost a fraction of that extra salary, and allow the employee to handle the increased number of enquiries, schedule reminders, email in bulk, track bookings and much more.

By investing £5,000 in a GoldMine CRM system, the company improved office efficiency, reduced the actual workload of the employee and resulted in a significant increase in turnover. This, then, did enable the business to invest in another employee shortly thereafter, and the hurdle was crossed successfully, allowing the business to grow.

Another client wanted to increase sales within their retail trade counter. Staff levels were always kept to a minimum as the footfall did not warrant the overhead of superfluous sales staff.

On average, the customer dwell-time within the outlet was 10 - 15 minutes. This can seem an inordinately long time for the customer in a queue, so it made sense to try to encourage that customer to buy more or learn about the products and servcies that were available.

How much would it cost to employ a body to hand out leaflets to every waiting customer, and try to promote products as customers browse (think "perfume-sprayers" in department stores, or "flyer-pushers" on the high street)? Do you honestly think this is the best use of your resources, and would you really generate enough additional sales revenue to cover that person's salary, and more?

The above client installed a marketing screen - an LCD screen that played bespoke content: product demonstrations, special offers, company news, promotions, all aimed at the customer on a soft-sell basis. The £2,000 investment was a fraction of the cost of an additional member of staff. Customers found the in-branch experience to be much better, as they lost perspective of time. Sales increased, spend-per-customer-head increased, and the screens were particulalrly useful for shifting end of line stock items.

Technology as a way of increasing sales for your business does work.

It doesn't need to be at the expense of human resources, but small businesses, particularly, often need to bridge the gap between their existing set-up and the next stage of their growth. Getting over that hurdle in the most cost-effective way, with an eye on Return on Investment, can make all the difference between a company's success or failure.

Argent Ram Media - 01580 761000. ian@argentrammedia.com