How to cut costs without losing customer focus

The issue for a number of businesses it that they have already cut the obvious areas of waste but because revenues are weak they need to cut further.  The problem is where and how to cut without damaging the business and it’s customer focus.

A simple way of evaluating the various options to reduce costs is required. My approach is to look across the business and ask one question. How does this action or task add value to customers? A high level first pass will identify things to cut, things not to cut, things to review and perhaps even some areas to invest more in.  The key point is that it provides a consistent way to make decisions and to explain those decisions to staff and customers. It’s also repeatable as circumstance change either positively or negatively. 

Ideally the results should also be assessed against the plans of the business before final decisions are taken. Unfortunately a surprisingly large number of businesses do not have good plans beyond revenue and profit objectives. Definitely another reason why knee jerk reactions take place.  


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