Has Brexit been good or bad for British enterprise? We don’t yet know for sure. We don’t yet know when the UK’s exit from the European Union will occur; we don’t yet know how it will occur; and, in truth, we don’t yet know if it will even happen at all.
If and when it does happen, it likely won’t be entirely good or entirely bad, because nothing ever is: businesses may simultaneously benefit from the absence of legislative red tape, and struggle to reconcile the absence of free movement with their escalating hiring needs. They may lose access to the single market, but find themselves better placed to take advantage of international trade. It may bring frustration, but it may also bring opportunity.
For now, however, the country remains a fully paid-up member of the European Union, but the perception that seismic changes are afoot is strong enough to have had an impact on business confidence: between Q2 and Q3 2016, it fell by 11 points. The Smith & Williamson Enterprise Index, which tracks the attitudes and opinions of entrepreneurs, found that the number of respondents planning for growth declined by 14 per cent post-referendum, and that positivity around exports receded by 14 per cent.
The cost of doing business
The important thing to remember is that this is all based on an idea of Brexit, rather than Brexit itself. For all the panic about a complete wipeout of the industry, manufacturing has rebounded to ten-month highs, and sectors such as tourism have benefited immensely from the diluted pound.
Nonetheless, if you’re a small business owner, you may well feel uncertain about winning new customers – or, indeed, holding on to those you already have. To offset economic confusion, you may feel like you have to raise your prices: a potentially risky move to make in an environment where consumer spending is experiencing something of a decline.
As Brexit begins to take a more solid shape, you’ll need to think about pricing and profitability. To do so effectively, you need to think about how your customers are behaving. It’s important to understand that Brexit is an all-encompassing phenomenon: while consumer confidence may grab the headlines, it’s entirely likely that B2B companies will be similarly affected.
Larger companies can afford to undercut the competition and stay afloat; smaller organisations will find it much harder. To succeed, it’s vital to adopt a sophisticated, methodical, data-driven approach that accounts for behaviour, habits, and trends in the present business landscape.
Technology, trends, and customer retention
Companies like yours need to convince customers that they can still do business with your company despite economic uncertainty. This is no small task, but having a technological edge will certainly help.
For example, simply using CRM software to examine the data of your key customer relationships can be quite illuminating: immediately, you’ll have a clear picture of who’s likely to stay with your company through thick and thin, who’s slightly more hesitant, and who has bolted at the first indications of referendum result. From there, you should have some idea of who to target.
Of course, it’s helpful if you can narrow it down even further: to find out why waverers are wavering, and what you can do from a pricing point of view to keep them on side. You may not be able to offer mass discounts on certain products or services – in fact, you may feel compelled to drive prices up – but if you can personalise transactions to individual customers, you can still turn a profit.
Using business intelligence software, for example, you’ll know what a customer buys, when they buy it, and how these transactions relate to each other. By way of example: if you’re working in office equipment sales, a key account might buy keyboards and computer mice from you in great volumes. But they may buy them at full-price, independently of each other, and at different times of the year.
On your own, you may not have this information. With the right technology, you’ll have some idea of what you need to do, and how you can do it: the business intelligence tool can recommend a profitable price discount offer that bundles keyboards and mice together; it can let you know when a certain product or service is experiencing a surge of interest; it can apprise you of the problems behind any sudden sales drop-offs, and can let you know how to solve them.
Managing your margins
The difference between a successful company and its trailing competitors is often a matter of pennies: in the B2B world, where people buy from suppliers in high volumes, it can make a significant difference. But it won’t make all the difference, and in the post-referendum business environment, there’s no single, uniform way to provide value to all customers: cutting costs only goes so far.
Stay informed, employ the right technology, and personalise as much of your service as you can: it’s entirely possible to survive and thrive in the post-EU UK, if you make the right preparations and adopt the right attitude to your customer relationships.
Shaving a penny or two off your product’s cost may endanger your margins, but this isn’t the only way to succeed. Remember: if you can’t compete on price, you can always compete on value.
Paul Black is CEO of sales-i.
Further reading on Brexit and business
