During this time of economic uncertainty, I want to make sure that I provide everyone with REAL Talk and give some ACTIONABLE Examples of some of the strategies that we have been executing and implementing within our firm over the last few weeks in real-time.
It helps that I was a CPA and a business owner through the last recession of 2008 as well, and I’ve been leading Fusion CPA and our client’s advisory for the last decade.
This discussion is very aligned with our video series on the 3 Forces of Scale, but here we’re going to touch on the importance of being AGILE in our Execution in these 3 Forces during a Downturn.
I will touch on:
- Sales & Marketing
Then we’re going to wrap up with a glimpse at a sample Timeline for the rest of 2020 given our current economic environment.
Sales & Marketing:
When COVID slapped the United States in the face just a few weeks ago, most of us had a gut feeling that our sales teams were going to have a hard time closing new business, however, the important to note is that these gut feelings need to be balanced with Data.
On a recent client call Steven Sumners, one of our Senior Tax and Accounting Managers, noted the fine line of both Over-reacting and Under-reacting to Gut feelings. A potential overreacting gut feeling for many entrepreneurs may be Layoffs and Furloughs across the board. A potential underreaction could be avoiding the hard conversations and real talk with employees only to max out a line of credit to support un-productive teams, which could lead to a Financial & Operational downward spiral
So what’s an example of us balancing Data and gut feelings in real-time?
We have looked at some Sales KPIs with one of our client’s the other day. We found the inbound calls to the company’s mainline had dropped from averaging 15-20 new calls per day to only 3-5 per new calls per day. Meanwhile, support tickets & new client FAQs doubled.
So what action items could we take?
The First action item was that we froze the outsourced call center they had and forwarded incoming calls to one of their Customer Success Managers who now has the capacity to take them.
This adjustment will equate to an annualized savings of $10,000
Note, that once this inbound call KPI starts to go back up, they will be re-activating the call center. The call center knows this because the ROI for the call center is actually tremendous in a Growth Cycle. It’s Transparency and Real Talk with everyone both internally and externally.
The Second action item is that we froze new hires in the Sales & Marketing dept, and simultaneously changed part of the Sales Team’s Weekly & Monthly Recurring Revenue KPI to incorporate some of our internal customer support initiatives.
Again, these are fully intended to be Short Term moves to stay lean in weathering the storm for everyone involved.
Finance is a lot about REAL Talk as well. In both Growth Cycles & Downturns, we speak a lot about monitoring A/R & Labor Productivity. Right now it is a no brainer to be micromanaging your Accounts Receivable on a weekly basis at this point, if not Daily.
With one client we just found this as a perfect time to finally mandate that all of his customers go on auto-draft, which will help greatly minimize his Accounts Receivable. After all, there is no one physically at his office to even pick up checks and deposit them at the bank, if they wanted to. Fortunately, only one of his customers refused and wanted to keep paying by check and of course, they have parted ways
In regards to Labor Productivity, a lot of entrepreneurs employ a large bench of Contractors. Most of the time those contractors come at a premium in regards to their cost of labor. When that happens, we’re Sacrificing Profit Margins due to their specialization ability which can be great in Growth Cycles but may not be as needed in a Downturn
An action item is that it’s a great time to think about consolidating Contractors with Full-Time employees. Not only to increase profit margins but to also keep your core team at as much capacity as possible.
I think we are now seeing a complete shift in many things Operations. It goes without saying that, companies that have not been actively investing in remote technology are finding themselves severely struggling in delivering their core service & products
The ability to work remotely is more important than ever.
About a month ago we Implemented the EOS Traction framework with one of our Law Firm clients. They had never even heard of Zoom and thank God we introduced it to them. They were a very in office-oriented team and so now it is even more important to continue their Daily and Weekly team Huddles via a video chat to maintain this connection and productivity.