The hip pocket of many Australian businesses is feeling the pinch of the ever-increasing costs of doing business. In fact, the Australian Bureau of Statistics reports that more than half of all Australian businesses have reported experiencing increases in their cost of doing business over the last three months to April 2022.
However, according to the ABS, only half of those businesses have increased their prices. Which begs the question, how can any business survive these mounting cost pressures when they choose to absorb the increasing costs rather than pass them along to their customers? If no additional funds are coming in through invoicing, then any savings must surely be found internally.
If you do nothing else, any additional income must come from your customers, which means increasing your customer base. Whilst this sounds like an elegant solution, this option can only be successful if you maintain your service levels and don’t let customer satisfaction decline. You may get an initial boost in income but forgo long-term customer loyalty.
What is driving the increasing costs for business?
With unemployment rates at levels unseen since the 1970s in Australia, the Great Resignation is in full swing. As a result, employees can be more selective in what roles they choose and look for the best package on offer. So, employers need to have many tools in their toolkit to offer new talent and retain existing ‘stars’. Tools such as within or above market wages, flexible working arrangements, or extended paid maternity/paternity leave. All this costs money.
If you are using a hybrid working model with combined work from home and office days, you may not fully utilise your office and parking spaces. Providing flexibility to your team may be ticking the employee satisfaction box but is it the most cost-effective way to do business.
Now that our borders are open again and flights are getting back on track, we are seeing increases in business travel and customer events. After a couple of years away from customer drinks, lunches, dinners and events, there is plenty of catching up to do. It can get expensive when you factor in the drinks, meals, flights, accommodation, parking, and transfers. Whilst it is all for a good reason and does cement the customer relationship, there is no doubt that getting back into relationship building is costly.
It’s not just business feeling the pinch – your customers are in the same boat
As we start to recover from what seems like a litany of crises – droughts, bushfires, floods, and COVID-19 – we are feeling the fatigue of having to endure ongoing stressors.
The cost of living is a hot topic lately and it is simply because we are feeling the pinch of many things all at once.
With offices opening back up, employees are heading back into the office in increasing numbers.
But being back in the office means employees need to start budgeting for things they haven’t had to consider when working from home. Such as more stops at the petrol station, tolls, public transport tickets, take away coffees and even work clothes. Maintaining a wardrobe of shorts and t-shirts for a couple of years has undoubtedly been kinder to wallets than having to splash out on office wear every now and again. Not to mention the occasional coffee or lunch at the local food court.
Increases in everyday living expenses are felt almost across the board. Whilst the anxiety you feel when filling the car with petrol has been lessened recently after the federal government halved the fuel excise, it is still by no means an inexpensive endeavour. With supply chain impacts due to drought, fires, floods and most significantly, COVID, our groceries are without a doubt costing more with every shop.
Add in recent interest rate hikes – and the almost certain notion that they will rise further–and the average mortgage increases are set to rise. For many Australians, this will mean increases in mortgage repayments, loans, and credit cards, and with less disposable income to hand, many will need to tighten their belts.
This means that your customers have less cash to spare and will be less likely to part easily with their left-over funds.
What are your options?
Your choices are relatively simple, carry on as you are, continue to see the cracks of increasing cost pressures, or do something. Whilst something is better than nothing, some ‘things’ are certainly better than others.
Streamlining your internal business processes and eliminating inefficiencies is a good start. For example, removing manual processes such as clunky payments and implementing integrated solutions will help streamline your payments process and help you get paid faster.
It’s also worth considering the payment process from your customers’ perspective. If you can find a solution that streamlines your payments and is a simple, easy process for your customer, you will be off to a head start. Making your payment process as easy as possible removes the first hurdle for your customers. The next hurdle to consider is your customers’ financial situation. For any customers with financial limitations that need your services — you just have to find the right solution for your business.
With less disposable income available, customers will be selective in what services they take on. When finances are tight, and there is uncertainty around what costs will go up next, providing your customers with certainty and flexibility when it comes to payment will ease their concerns.
Providing flexible payment options that allow your customer to extend their payment period and pay using various payment methods provides them with clarity on what expenses to expect each month and budget accordingly.
Fortunately, not all payment plans are created equal, and QuickFee offers financing plans for professionals with an effortless and transparent customer experience. Your customers can take advantage of the flexibility of payment plan options that allows them to pay in full or in instalments using their Visa, Mastercard or Amex credit or debit cards.
Interested in offering QuickFee’s payment solution to your customers? Contact us today at 02 8090 7700 to learn how QuickFee can help