How to Reduce Costs for Your Business in Today’s Nigerian Economy

If you struck up a conversation with anyone right now in Nigeria, you would probably end up discussing the topic of how the economy is hard right now. Everyone on the streets is saying the same thing, and it seems like the poor are actually not breathing.

To make matters worse, the hikes in fuel prices and the high exchange rate has affected not just the cost of buying or shipping items and delivering them, but the purchasing power of customers. There is less money to go around, which means that people are likely going to only buy the things they absolutely need.

All these begs the question, what next?

For business owners, the answer is simple. Your business has to find a way to survive. For your business to do that, you have to keep making sales while also finding ways to reduce the cost of operations.

Let’s delve into some ways we’ve discovered that you can do that.

5 Ways to Reduce Costs for Your Business in Today’s Nigerian Economy

Before we go into the ways to reduce cost, it is important to state the one thing you must NOT do, which is to drop the quality of your products. Now more than before, the quality of what you sell has to be 100% good, as that will give your business the reputation of maintaining quality, and make your customers feel like whatever amount they’re spending is worth it.

Now, how can your business reduce costs during this period? We’ve got some answers for you.

1. Retarget old customers

One of the hardest things to do in running a business is getting customers through the door. Once a customer has successfully made a purchase from you, there’s a great chance that they will again. But most business owners forget to take care of these customers because they’re busy trying to get more customers in.

You shouldn’t leave trying to get your old customers to make another purchase to just posting content on Instagram; what if they’re not there all the time? You can reach them through other methods, and fun fact, it’s not as expensive as you might think!

One of the ways to reduce costs by retargeting old customers is to use your Bumpa app to send emails and SMS to your customers. Email & SMS marketing are very effective but can be quite expensive. But with your Bumpa app, you get messaging credits you can use to run email and sms campaigns. You can even segment your customers, and target them depending on an activity like when they last shopped, what they last bought and so much more.

You’ll Like This: 9 Simple Ways to Remarket to your Customers (& Get More Sales)

2. Consider cheaper but effective packaging

While you must not drop the quality of your product, one place you can take a look at your spending is in packaging. Packaging has to be effective, but in this economy, it can be a part of your business where you can reduce cost. If it’s possible, find a cheaper production company for your packaging. The most important thing is that it is effective (does the job well) and your customers get their items in great condition!

Related: The Expert Guide to Packaging Your Items for Trouble-free Shipping!

3. Consider a reduced price for 2

Another trick to help you reduce cost, especially for shipping, is to offer your customers a reduced price for 2 items, or offer them stockpiling options. The first option is a kind of discount that will bring in customers and make them buy more because they’re also going to be saving on delivery fees and price of items. You should not go overboard with the discount though, so that you’re not ending up losing money in a bid to reduce your business costs.

The second option also works almost the same way, but in this case, the customer buys at the exact selling price, and does not ship immediately. You can make some rules to make sure you’re not running at a loss. e.g customers have to stockpile a minimum of 5 dresses before they’re allowed to go for that option, and have to pay for every dress they’re stockpiling otherwise it could be sold to someone else. When they have accumulated a lot of dresses, it can be sent out to them for delivery and they only pay a one time delivery fee.

4. Implement a referral program

A referral program is a great way to increase your reach as a brand, without having to spend too much on advertising. Ask your loyal customers to refer you, and you can choose to give them an incentive or not. E.g a customer who refers another customer who spends up to 30,000 on a purchase, will get 5% off their next order.

The great thing about referrals is that the customer who refers someone has done at least half of the job for you, and if you can do the remaining half by providing quality products and a great service, you’ve easily bagged yet another loyal customer who will refer other people to you. And the wheel just keeps spinning; you’re getting more customers and increasing sales, through a cost-effective form of marketing.

5. Improve customer service

Closely tied to the method listed above, and a huge part of the success of any business, great customer service is a game changer. Now, you may think that making sure your customer service game is at a 100% isn’t a way to reduce cost, but let me tell you how.

Every customer you acquire is a cost to your business. Even if you don’t run ads or any form of paid marketing and you’re acquiring customers only strictly by word of mouth, the time spent in creating content to share, responding to enquiries, e.t.c is still a cost to your business. When a customer walks through the door, one of the things that almost guarantees that they will come back is a great product. The other is great service. If a customer ends up not making a purchase, the cost of getting them through the door is simply gone. And even worse, they’ve probably gone to your competitor and won’t be coming back.

Customer service helps you reduce this churn, and in turn, optimise customer acquisition spend. Make sure your customer service game is on point, and your customers will love you. Once they do, they’ll always come back and bring more customers your way.

You’ll like this: 10 Easy Tips on Improving Customer Service for your Small Business

Conclusion

We can all agree that the current situation of the Nigerian economy is a cause for concern. The hike in petrol prices and exchange rate has especially affected business owners, and this is why it is the best time to find effective ways of cutting costs for your business. With the few tips listed above, you can optimise some of your marketing strategies and reduce cost on marketing, packaging and delivery, while at the same time making sure that you’re getting quality customers that will bring in revenue.

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