With a few exceptions, most brands and businesses have been taking a big hit since the COVID-19 pandemic was declared and they are seeking ways to cut costs. Here are some ways to reduce expenses without compromising quality during these challenging times.
The most obvious area is discretionary expenses, which most brands have already likely investigated. But, what about others like certain travel costs, luxury items, snacks, and extras? Make one last review of credit card statements and bills to see if anything may have been missed.
One major potential area is credit card processing. Now is a good time to negotiate with the brand’s credit card processor, particularly if they have a tiered pricing structure that breaks out transactions by qualified, mid-qualified and non-qualified rates. If they do, and unless they’re willing to reduce their fees and be more transparent, consider switching to a provider who offers flat, membership and/or interchange plus pricing.
Similarly, it would also be a good time for brands which have subscriptions to different trade publications and memberships in industry groups to revisit what they’re paying. Unless fees or dues have been reduced or suspended, this may be a topic worth pursuing since the brand is probably not receiving full value.
If the brand uses an insurance broker who represents several insurers, check to see if there are other options available for less. Is the current coverage still adequate or might adjusting it better suit the brand and perhaps result in lower premiums?
If the policy is directly through an insurance company, now is potentially a good time to shop around. Can the same coverage be purchased for less or with better payment terms?
The current pandemic has led to the launch of several incentives and relief programs. Huddle with the brand’s CFO or tax accountant to see if any of these might be beneficial. At the same time, revisit other deductions or credits that may have been previously overlooked. Some might include things like insurance for employees before, during and after the pandemic, research and development incentives, eco-friendly and green practices, or employing people like veterans, work-release programs or food stamp recipients.
If it hasn’t yet been looked into, rent, lease or mortgage relief is another area worth investigating. Some real estate companies and large landlords are assisting their tenants.
Vendors are another obvious possibility. When the pandemic is over, they’ll be looking forward to resuming delivery of their products to their customers. Now may be a good time to renegotiate more favorable prices.
If it hasn’t yet been done, look at ways to streamline those areas that consume time and money. Could some be automated or contracted out?
Last, but definitely not least, remember the brand’s target audience. If there are thoughts about cutting expenses to continue nurturing them, think twice about it. Remember that the cost to capture new customers is often four or five times that of retaining existing ones. Brands rely on these loyal customers now and going forward.
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Ronn Torossian, 5WPR Founder News