Keep competitors off guard by avoiding the obvious. For instance, the usual reaction in a downturn is to tighten customer payment terms and increase collection efforts in order to boost cash flow. Instead, consider giving your most profitable customers or target accounts more lenient payment terms in order to capture more of their business. Make terms stricter for less attractive accounts. You’ll likely find that the net impact on income will be neutral at worst – or perhaps even positive – and you’ll see a boost on the upturn. Given that customer accounts offer different levels of profitability and growth potential, one size really does not fit all.
Source: “Winning in a Downturn: Six Actions to Take Now”
Original Publication: Boston Consulting Group
Subjects: Customer-Related, Finance, Management