Keeping commercially competitive

17 Jan 2014

The 2014 prospects of the South African economy remain the subject of an ongoing debate, with the 4th quarter FNB/Bureau of Economic Research Consumer Confidence Index concluding that a number of factors such as lost wages during strikes, higher household tax burdens and a slowdown in unsecured lending, has potentially been eroding consumers' ability to spend.

CEO of FNB Commercial Banking, Michael Vacy-Lyle, says, "One of the unfortunate results of lacklustre consumer spending is the negative impact on commercial businesses. The current economic conditions demand that commercial businesses introduce convincing measures to position themselves for long-term profitability."

He recommends a number of interventions that commercial businesses could take to weather the uncertain economic conditions, and remain commercially competitive:

Maximise business efficiency - make the most of what you have. For businesses that 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 one's business to potentially severe forms of risk. This certainly does not mean one needs to be conservative but it is always essential to take calculated risks.
Organic growth remains crucial - simply put, grow one's 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 one's current customers or identifying customer trends to improve an offering at a relative cost increase.
Customer remains king - any commercial business that does not meet the needs of its customers will cease 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 one's commercial business has an opportunity to use technology to create convenience for customers, do not 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.

"These are only a few of the solutions that commercial businesses could adopt to ensure that they remain competitive and profitable in 2014. Consumers will continue to wield the power due to direct and indirect economic impact, but there is still an opportunity to succeed as a commercial business," concludes Vacy-Lyle.