Feeling the pinch? How to steer your business through difficult times

As deflation in the UAE reaches a new low, many businesses are facing tough times, perhaps especially here in Dubai.

For those that can hold on, there are better times on the horizon. But how can you ensure that your company is geared up to get through the slowdown and will be fit to leverage new opportunities when the markets pick up? 

Here we’ll look at a few key strategies to consider.

1. Rely on your network

In lean times, loyal customers are even more valuable. So make an extra effort to ensure that your regular clients feel valued. 

Your current network can also be a good source of new business, making it even more worthwhile to nourish your existing connections. 

How to leverage your network

A 2013 study found that companies that succeed during financial slowdowns tend to invest in their relationships with current customers. 

This may involve taking on new staff to manage key accounts to ensure that important contacts feel valued. You might also consider developing a scheme to help customers that are struggling financially to continue working with you.

Here in the Middle East, nourishing current connections has always been important, as there is a strong preference for doing business with people we know. In times of recession, that’s even more relevant, as it’s far less resource-intensive to win business from existing contacts than new ones.  

For the same reason, it’s also a good idea to leverage your existing connections to develop new opportunities through referrals and recommendations. 

2. Diversify your customer base

If some of your usual sources of revenue are drying up, it makes sense to explore alternative ones. Consider whether there are other potential groups of customers that you could be targeting.  

How you can engage current and future customers

Depending on your line of business, it may be possible to extend your geographical reach, stepping up efforts to promote your offering outside the UAE. This could help you keep your revenue up while you ride out the storm.

You might also consider new categories of customers. For example, if you currently specialise in providing services for companies in a particular industry, could you branch out and begin promoting the same services, or variations of them, to other sectors?

3. Don’t scrimp on marketing

When times are tight it can be tempting to slash your marketing budget. However this may well be a false economy. 

If your competitors are scaling back on their promotional activities, an economic slowdown can present an interesting opportunity for your business to stand out as a confident player in the market.

How you can employ original marketing strategies

To start, it’s worth keeping up your existing marketing activities to send out a clear message that it’s business as usual at your company. Also, consider new, affordable ways to reach out to your existing target markets and new potential ones. 

Clever use of social media marketing can be a great way to increase the visibility of your offering on a limited budget. And why not make a point of asking satisfied customers to write reviews for you, to give your reputation a boost free of charge? Writing a prompt and polite response to reviews will not only create a positive impression on the individuals who post them, but will help to build trust in your brand.

Be aware of the general impression your business is conveying and try to ensure that any cutbacks don’t have a negative impact on the integrity of your brand and the way people perceive it. 

For example: If you hold an event, providing good quality refreshments can create a lasting positive impression. It doesn’t have to be lavish, just well chosen.

4. Keep innovating 

When revenue streams are slowing to a trickle, business leaders can easily panic. However a slowdown can present interesting opportunities to try out new ideas while things are less busy.  

One long-term study found that businesses that invested in innovation during downturns and then experienced a turnaround saw an average return on investment of 23.8%. This compared to 0.6% for companies that cut their product development budget. 

How you can boost cutting-edge thinking in your business

Rather than cutting back on innovation while times are right, why not dedicate more time to focusing on new approaches? That might involve coming up with new services or product lines, or new ways of working. 

If possible, it’s best to aim to be proactive, rather than simply reacting to market changes. However, do consider the current market, as well as projected changes on the horizon, and task your teams with thinking about how your business could adapt in response.

As well as keeping an eye on global trends, you might conduct a market research exercise – a survey or focus group. This will help you develop a clearer understanding of what potential clients are looking for today, and what they may want tomorrow. 

5. Use your downtime wisely

If business has slowed down for you, it’s likely that your staff have more time on their hands than usual. 

Rather than letting them take it easy, or even letting people go, make sure you capitalise on the extra working time available.

How you can use downtime to maximise your business

There are all sorts of ways you might use the extra staff time.

For example you might take the opportunity to carry out training, to equip employees with additional knowledge and skills. You could take the chance to bring groups together to develop new strategies, or perhaps to carry out an internal audit then work on making improvements. 

Going back to innovation, you could block out time for staff to generate and work on ideas that could enable you to break into new markets or serve your existing ones better. 

From struggle to success

The recent downturn has inevitably led to some tough times for companies of all kinds in the Emirates. While analysts are predicting that the economy will pick up in 2020, it’s not too late to consider ways you could capitalise the current conditions to give your business a boost.

Al Futtaim Willis is a commercial insurance broker and consultant operating within the UAE since 1976. Across geographies, industries and specialisms, Al Futtaim Willis provides its local and multinational clients with resilience for a risky world. For more information please call +971 4 376 0200.