During last quarter of 2013, the FNB/Bureau of Economic Research Consumer Confidence Index concluded that a number of factors such as: lost wages during strikes, higher household tax burdens and a slowdown in unsecured lending, had potentially been eroding consumers’ ability to spend.
While the 2014 prospects of the South African economy remain the subject of an ongoing debate, the CEO of FNB Commercial Banking, Michael Vacy-Lyle, points out that, “One of the unfortunate results of lackluster consumer spending is the negative impact on commercial businesses.”
He says, “The current economic conditions demand that commercial businesses introduce convincing measures to position themselves for long-term profitability.”
Vacy-Lyle recommends a number of interventions that commercial businesses could take to weather the uncertain economic conditions, and remain commercially competitive:
Maximise business efficiency
This simply means making the most of what you have. For businesses which sell consumer goods, the goal should be to keep the customer coming back for more and for those providing a service, the objective should be retention. A number of elements play a role in achieving this, and some of those include; superior customer service, quality products and cost.
Take calculated risks
With economic conditions remaining tougher, it’s always important NOT to over-expose your business to potentially severe forms of risk. This certainly doesn’t mean one needs to be conservative but it’s always essential to take calculated risks.
Organic growth remains crucial
Simply put, grow your business through existing customers. Any form of business has the potential to reap great results through organic growth. Organic growth could simply be offering more products/services to your current customers or identifying customer trends to improve an offering at a relative cost increase.
Customer remains king
Any commercial business that doesn’t meet the needs of its customers will seize to exist. Customers are under pressure to do more with less, therefore, the way businesses structure their offering needs to respond to the customer’s core needs.
Convenience is crucial
If your commercial business has an opportunity to use technology to create convenience for customers, don’t pass up on the opportunity. A convenient solution is often the most appealing and in certain cases technology tends to play a huge role in enabling convenience.
Vacy-Lyle says “These are only a few of the solutions that commercial businesses could adopt to ensure that they remain competitive and profitable in 2014.
“It’s without a doubt that consumers will continue to wield the power due to direct and indirect economic impact, but there’s still an opportunity to succeed as a commercial business,” concludes Vacy-Lyle.