Managing Internal Risks

What do you do when events lead your customers to stop buying your products or services? Managing customer risks means identifying what can go wrong in your relationship with customers and taking actions to minimise the impact on your business. Events that can lead your customers to stop or reduce buying your products or services include economic downturns, emergence of competitors, a poor relationship with customers, technological disruption, changing customer preferences, natural disasters, geopolitical tensions, reputational issues, changing laws and many more. Below are some tips on how to manage internal risks:

1. Build rapport

Building rapport with your customers can encourage their loyalty through good times and bad. Such rapport can be built through regularly reaching out to them and getting to know their name, especially your key customers, and consistently treating every customer with the same level of service. These interactions should also improve your understanding of what is and what is not working in your business.

2. Hire the right employees

Having the right staff can do so much to build and sustain customer loyalty. You should, therefore, focus on hiring employees at every level with excellent people skills. Ensure everyone in your organisation understands the value of customer retention and the role each of them plays in ensuring customer satisfaction. Build those into key performance indicators (KPIs) for all staff. Furthermore, treat your employees the way you expect them to treat your customers.

3. Solicit customer feedback

Regular customer feedback can help ensure your products or services meet the changing needs of customers, reducing the risks of changing preferences leading to significant falls in demand. Pay close attention to feedback, including on social media and ensure open, clear and timely communication in response. Have a plan for every avenue of communication and make sure your team follows this plan.

4. Protecting/growing your brand

Customer risk can be reduced by strong customer and community trust in your brand. The key to developing and maintaining this trust is consistently delivering on your brand promise, whether that be quality, low prices, speed, etc. Trust is also linked to building solid relationships with customers and responding to their feedback with positive communications. Social media channels are critical to your brand image and should be monitored as part of your risk mitigation strategies.

Internal risks are those within your control including customer relationships, customer experience, brand reputation and debtor’s control. These are risks that you can monitor and respond to through regular review and customer feedback. Steps to mitigate those risks include improving quality control over your products and services, increasing your focus on customer services and customer experience - in your premises or online - and improving the effectiveness of your internal collections process.