Practical cost-reduction tactics
Start by identifying variable costs and low-impact fixed expenses. Small efficiency gains across areas compound into meaningful savings.
Tactics to consider:
- Negotiate vendor contracts and consolidate suppliers for volume discounts.
- Move to cloud-based, pay-as-you-go services and eliminate unused subscriptions.
- Outsource non-core functions or use freelancers for episodic work.
- Improve inventory management to reduce carrying costs.
- Automate repetitive tasks to cut labor hours.
Process improvements
- Conduct a quick expense audit to find obvious savings (software overlaps, unused licenses).
- Measure cost per customer and target the highest cost drivers.
- Implement approval thresholds for purchases to control discretionary spend.
Protect customer value
Avoid cuts that reduce customer satisfaction or product quality. Prioritize operational changes that maintain or improve outcomes while lowering cost.