There is one fundamental business truth every entrepreneur knows intimately: customers are everything. Without customers, there is no business. There are no sales to make, revenues to collect, or profits to reinvest in the business. This is why it is so important to foster strong relationships with customers.
Interestingly enough, strong customer relationships actually play into a company’s ability to take advantage of invoice factoring. Invoice factoring for small businesses depends heavily on reliable customers who pay their bills. More on that later. For now, though, let us discuss some of the key benefits of fostering strong relationships.
Repeat Business Is Better Business
Perhaps you’ve heard the argument that it’s cheaper to retain customers than bring new ones into the fold. It is likely true. Companies spend a lot of time in money on marketing efforts designed to attract new customers. The same amount of marketing doesn’t have to go into loyal customers already happy to purchase from a company.
This tells us that repeat business is better business. It comes from customers who actually want to do business with a company. That says a lot. A company with a large percentage of its customer base being made up of repeat customers is doing very well. To get to that point though, a company needs to foster its relationships with customers.
Repeat Business Keeps Things Going
Repeat business can ultimately end up being a lifesaver. When economic times get tough, companies may have a challenging time recruiting new customers simply because people are not spending as much money. This could mean that their loyal customers are going to have to keep things afloat until the economy improves.
Once again, fostering strong relationships with customers goes a long way here. When things are tough, it is that core group of loyal customers a company leans on. Loyal customers are happy to continue supporting the companies they trust.
Loyal Customers Pay Their Bills
There is something else about loyal customers that makes an enormous difference: they tend to pay their bills on time. Some may even pay as soon as they receive their invoices. On the other hand, customers that do not tend to pay on time also don’t tend to be loyal. You can surmise the reasons for yourself. At any rate, this principle leads to the topic of invoice factoring.
As a factoring company ourselves, we know how important it is that a client’s customers pay its bills on time. We buy unpaid in voices. Obviously, we look at the creditworthiness of the customers whose invoices we are acquiring. It would make little sense for us to take on invoices from customers who struggle to pay.
By fostering strong relationships with your customers, you are also strengthening cash flow by creating customers more likely to pay on time. That’s good for your company across the board. But it is also good if you ever need to take advantage of invoice factoring. Presenting invoices from loyal customers to a factoring company generally leads to good things.
Do Whatever It Takes
The logical conclusion to this post is an encouragement to do whatever it takes to foster strong relationships with your customers. Even if you never have need of invoice factoring to meet short term financial obligations, strong customer relationships make for good long term business growth.
Remember that your business relies on customers. Without them, you have nothing. The stronger your relationships are with customers, the stronger your business will be. If your business can only master one thing above and beyond core products or services, let it be customer relationships.