Good customer service is a necessity in the business world, and it is easy understand why: happy customers are repeat customers. Repeat customers are important because 1) it is easier and less expensive to keep current clients than to find new ones. 2) Customers who are already satisfied with your company will bring you more business through referrals and 3) repeat and loyal customers can also make it possible to save money through reduced inventory costs.

Good Customer Service = Better Inventory Costs

You probably haven’t considered the impact that loyal customers have on your inventory costs. They do, however, because coping with the demand for your inventory and determining how much stock to keep on hand is one of the most difficult aspects of inventory control. Predicting future sales is far from an exact science. Predictions that are too low will leave you short of product and with unhappy customers. Predict too high, on the other hand, and have excess inventory, tied up cash, and the possibility of taking a loss if the market value of the items decreases.

If you’re nervous about your forecasting techniques, you’re more likely to keep high levels of inventory to prevent having out of stock items. Here’s where repeat customers can help with a reduction: repeat customers often have relatively predictable sales, especially when their purchases are cyclical. Cyclical purchases occur when customers buy new merchandise to replace old merchandise, such as when, for example, new phone models are released.

Current Customers, New Customers, and Forecasting

Knowing the cycle allows you keep lower inventory levels during the down times and higher inventory levels when you know that it’s time for customers to be making their merchandise upgrades.

When you don’t have repeat customers, you must rely on new customer sales to keep your business going, and sales from new customers are rarely predictable. Say, for example, you launch a new marketing campaign to appeal to new customers. If the marketing campaign is successful, you’ll likely see an increase in sales – but how much of an increase? Since you can’t know, you’ll have to increase the amount of inventory you keep on hand to meet the possibility of a new, larger demand.

Good customer service is one of the best ways to keep your current customers coming back, and good customer service is easier when you have good inventory control. If you’re having trouble keeping your inventory under control or have questions about getting software to help you with that task, please contact Southeast Computer Solutions today – we can help.

About Southeast Computer Solutions

Southeast Computer Solutions is based in Miami, Florida, and has additional operations in Mexico. For over 30 years, we have positively impacted the success of small and mid-sized businesses with effective business management implementations that improve our clients’ operations. We listen, we are accessible, and we care. Learn more by visiting our website or calling 305-556-4697.