Part of maintaining and growing your company is to continue to boost revenues and profitability. But what is the best way to accomplish this? Should you sell more, or charge more?
There are risks and possible benefits to each.
Consider these two factors when drafting your growth strategy.
Increase your prices. This can be risky. The staffing industry is already highly competitive. Any increase it rates must be backed up by the quality of your work. If you consider raising prices, do plenty of research to learn what your competitors charge and what the local market will bear.
Employers who are already happy with the results they have gotten from your services can be a great source of additional revenue; however, there are potential obstacles and risks.
If you typically place large-volume low-skilled temporary workers with them, it may take some convincing for them to trust you with their executive recruitment.
They only have so much to spend. You may have already exhausted their staffing budget with the services you currently provide. They may also expect a discount for additional services. You may not have enough margin to accommodate this request.
Sell more. There are two ways to approach this. You could either expand your depth of reach into your existing customers or add new customers to increase your overall market share.
If you can increase the number of customers you service, you’ll have a larger revenue stream and you’ll spread your financial risk across a wider base in the event of an economic downturn. This strategy comes with its own risks.
It’s much tougher to add new customers than it is to expand the share of an existing customer’s business. You’ll typically have to invest more resources into this effort than selling into and existing customer.
Just convincing them to either use a staffing service or switch from a current vendor is no small feat. Also, the newer a customer is, the less likely they are to be loyal to your firm, so you may lose them as quickly as you acquire them.
At Avionté, we provide solutions for staffing firms that free them to get more done while keeping costs down. Our comprehensive staffing software delivers integrated software systems that make it easier to drive growth, maximize profitability and streamline your administrative tasks, so that you can focus on your serving your customers. To learn more about making your staffing firm stand out to attract both clients and candidates, contact us today.