Subscribe to Inc. magazine
LEAD

I've got to cut costs. Any unusual ideas?

Advertisement

It's not unheard of to ask customers to pitch in when high costs are choking your business. Here's how two CEOs did it:

Ask for help with expenses associated with customers' accounts. When a number of airlines imposed commission caps on travel agencies, Jim Roberts of Uniglobe Regency Travel called 50 of his core corporate clients and asked them to pay the cost of overnight mail and other deliveries. The owner of the Ontario, Calif., company, which expected 1996 gross volume of $6.5 million, explained the situation and said his alternative was to charge fees for each travel transaction. Surprisingly, only two clients refused to help out. Many even offered their own Airborne, Federal Express, and United Parcel Service account numbers because they got larger discounts than the travel agency did. The result: Uniglobe's delivery costs dropped from more than $300 a month to $50.

Charge for selling expenses. Benjamin Goldfield, founder of TS Partners, in Conshohocken, Pa., funds sales presentations the audacious way: his banking-software company asks prospective clients to pay for them. "I tell them we keep our costs low," explains Goldfield, "and I don't want to pass the cost of sales calls on to existing clients." Since many of his customers are large banks with deep pockets, Goldfield doesn't mind asking. Although many prospective customers balk, others don't and agree to pay travel and hotel expenses for TS Partners, which projected 1996 sales of $600,000. "Some people think it's outrageous," Goldfield admits, "but I would rather lose a few sales than incur thousands of dollars in marketing expenses."





Register on Inc.com today to get full access to:
All articles  |  Magazine archives | Livestream events | Comments
EMAIL
PASSWORD
EMAIL
FIRST NAME
LAST NAME
EMAIL
PASSWORD

Or sign up using: