Customising Internal Systems to Improve Net Profit Margin

Customising Internal Systems to Improve Profit Margin

Tuesday March 28, 2023 | Posted at 10:32 am | By Harriet Pritchard
March 28, 2023 @ 10:32 am

This is the last post in our blog series exploring how customising systems to align with your business processes, automation and reporting can improve net margin and positively impact bottom-line profitability.

Net margin is one of the key indicators of overall business health. As business owners weather the storm of 2023 and prepare to capitalise in 2024, understanding and maintaining profit margins is fundamental in in sustaining profitability.

The Relationship Between Customisation and Net Margin

In this post we discuss how customising your systems to align with your specific business needs and processes can help protect and grow your net margin.

No business is one size fits all. You know the processes and systems that maximise your business’s productivity gains better than anyone. In the same way that customising your marketing efforts to suit your user persona procures the most from your customer, customising your operational systems to suit your business needs procures the most from your internal processes.

Customisation can improve overall net margin in three ways:

Increasing Business Efficiency

A race car streamlined for efficiency

By customising your systems – or the external software systems you invest in – your internal operations become streamlined to align with your specific business needs. For example, if we consider the needs of a charity, processing Gift Aid donor contributions may be crucial in understanding the overall business performance and profitability. However, as this is specific only to certain businesses within the charity sector, out-of-the-box business systems are unlikely to effectively account for this business need.

Without customised systems, businesses may have to rely on clunky and costly add-ons to try and bridge the gap between what a standard software can provide and fulfilling their fundamental business needs.

Implementing an end-to-end software that customises systems to align with your unique business processes eliminates the need for clunky, inefficient, and costly add-ons. Alleviating this cost has a direct positive impact on net margin.

Improving Reporting Relevance

Volo Vision reporting interface

Customising your systems allows for greater reporting relevance and therefore a more robust and data-driven approach to making significant business decisions.

Once your internal systems are customised to the specific needs of your business, an intuitive reporting system will be better able to track the most relevant product and supplier data across multiple platforms. In turn, this provides you with a greater opportunity to build and implement a purchasing strategy that {improves sales velocity whilst protecting profit margin}[link to reporting and margin blog piece].

Enhancing Customer Experience

a customer transaction

It’s no secret that acquiring repeat customers is no longer as simple as providing a good quality product. In the age of one-click purchasing, same-day delivery and a never-ending scroll of product options, customers no longer applaud the simplicity of purchase – they expect it. It’s vital that customer expectations are met, and unequivocally valuable if they’re exceeded.

Customising your internal processes to suit your specific business needs, increases your ability to fulfil customer demands. Enhancing customer experience results in:

  • Fewer returns
  • Less costly customer service needs
  • A greater likelihood of returning customers

All three of which have a hugely beneficial impact on margin.

In summary, customising internal business processes improves net margin by increasing business efficiency, improving reporting relevance and enhancing customer experience.

Interested in improving your ecommerce margins by customising your own or bought-in systems to align with your specific business needs? Talk to us via our contact page for more information.

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