Soft Costs are Still… Costs!

How often do you hire a new client regardless of who they are, just because they’ve promised to spend with you? Finding new clients who are eager to spend with you doesn’t always come easy so it’s understandable that you’d get the school girl giggles.

As a professional, you should have a review process for all your prospective clients which not only highlights their financial capabilities but also their ability to help you.

We’ve all experienced it before, we became giddy at the thought of money and chose to ignore the possibility that they would turn into a nightmare… and not just for you; for your support team, or your finance department. That’s right, these guys have the potential to rocket their way to the the bottom of your Christmas card list at a speed faster than NASA could simulate.

Do your sales team understand that new clients don’t on-board at a zero cost to the business? Think about all the marketing you’ve done to get them to this point; even if you were one of the biggest hardware vendors in the world, on average, each new client hit the system at -£200.

How much does it cost your business to invoice your clients? The whole process that gets that invoice to your client comes to approximately £32, so when your sales team don’t invoice on time, or your client doesn’t pay, whatever is owed begins to haemorrhage all over the shop creating a bloody mess for you to mop up.

Whilst many businesses are striving to adapt to flexible and mobile working environments by becoming more outcomes driven, it is important not to mentally uncouple your departments from their mutual responsibilities. Every aspect of the business must operate in a joined-up format to avoid cash falling through the net. Regular reviews must be had to unite the company as a whole to drive efficiencies not only on the front-end but in the back office. Looking behind the line doesn’t mean you’re going backwards, far from it. It’s all about having a well-heeled business operation and someone needs to head up the responsibility.

Large organisations have procurement managers for a reason. They sit shoulder to shoulder with the sales and operation managers to ensure that they run a tight ship and smaller business, despite their financial constraints, must be able to identify business costs; hard or soft.

So when you next face a client who is waving a big juicy cheque in front of you, take a moment to evaluate who they are as a business and in fact, whether they deserve you.

Susanne Dansey is the Managing Director of Purple Cow Ideas Management – an organisation that facilitates a paradigm shift in the collaborative nature of the ICT Industry. You can follow her on Twitter and join the conversation on Facebook.


One thought on “Soft Costs are Still… Costs!

  1. Pingback: Reading for February « The Cowshed

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