How to reduce costs with better communications management

While the opportunity to reduce costs can often be obvious – for example, renting a smaller office or better utilities management – a process that is often overlooked and mismanaged is communication. The proliferation of communication channels may be seen as daunting and complex to new businesses, however those that make the necessary investment will not only be in a better position to meet the demands of customers, they will also be able to cut total expenditure on customer communications. For example, using email instead of post for certain messages (or certain customers), or scanning incoming mail to reduce the amount of space taken up by filing cabinets. Managing the delivery of physical and digital mail as part of a unified workflow can overcome many of the practical difficulties associated with multi-channel customer communications, enabling new businesses to cut costs through digital substitution.

Expensive implications of storage

An important aspect of any customer communications strategy is a consideration of the storage and inventory costs of what the business sends – envelopes, letterhead, documents, forms, brochures, etc – and what you receive. Many SMEs tend to view inventory as an unavoidable cost of doing business, and subsequently stockpile such materials for future use, however this means they end up investing money in items that could become out-of-date before they’re even used. By using print management solutions, SMEs can create and use electronic templates that remove the need for pre-printed forms. Furthermore, on-demand digital printing technology reduces, and in some cases removes, the need to hold any pre-printed documents.

Reducing stocks of pre-printed stationery and marketing material also frees up storage space. Addressing how you receive customer communications, in particular in-bound mail, can subsequently have an impact on the size of the office required. Indeed, instead of opening the post and distributing the physical contents, businesses could scan mail at point-of-entry and route files electronically. This has many benefits, including a significant reduction in local file storage. According to AIIM's Paper Wars 2014 survey, the amount of office space taken up by filing currently averages 13.5 percent. When you consider how high annual UK office costs are, the financial case for implementing a digital mailroom strategy becomes clear.

Inaccuracy costs

Another hidden cost of communications is money wasted on unnecessary, mis-directed, duplicated or badly planned communications. With the cost of producing and sending a document in the region of 35p-65p for the largest mailers – and even more for small businesses – working out when and how each customer prefers to be contacted and switching them to digital billing where appropriate could lead to big savings.

Sending documents with incomplete, inaccurate, out-of-date or duplicated addresses can also result in wasting money unnecessarily. There’s the possibility of being excludedfrom Royal Mail postal discounts, damage to your business's reputation, and the creation of extra work for staff who have to deal with customer complaints or process returned mail. Worryingly, studies have suggested that up to 25 percent of address data held by small businesses is inaccurate or wrong. By implementing tools that validates addresses and ensures contact details are up-to-date, businesses can save money on a regular basis, which all adds up.

Another big communication challenge faced by small businesses is the risk of human error. Indeed, many organisations still rely on manual processing, which can add significantly to the total cost of communications. Any process that is done by hand – whether the collation of multiple documents or the opening, sorting and delivery of mail – can be improved through automation. As well as improving productivity, automation can help save money by reducing labour costs and minimising the risk of errors and lost items.

In an increasingly competitive environment, strong communication management can give SMEs a crucial advantage over their rivals. Not only will it enable them to reduce communication costs, but it will also improve their cashflow through reduction in labour and storage costs, and faster business processes. Ultimately, some SMEs may be reluctant to invest in tools that optimise their communication strategy due to perceived high costs and complexity; however by considering automatic processes, they will find a number of opportunities to reduce costs.


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