As businesses, we can feel bombarded by external threats and retreat into a defensive mindset. Already battered by the COVID-19 experience, and laden with CBILS debt to pay off, we focus on measuring change, seeking market feedback, managing supply chain risks, and frankly surviving the next year.

At times of instability, new market opportunities present themselves rapidly, and we need to adopt a more predatory mindset to exploit them. Rather than feeling threatened, we should embrace instability.

• How are my customers’ needs changing? How can we retain them and increase business?
• What new customers might we be able to attract?
• What goods and services are going to be more in demand?
• What are we going to stop doing as it is now unprofitable or a waste of our resources?
• What problems is this causing to our competitors?
• How can we exploit this new world?

In the world of supermarkets, you could imagine Waitrose trying to roll out more “value” lines, Asda / Tesco promising more price matching to Aldi / Lidl, and Aldi / Lidl trying to entice new customers into their shops. What are the equivalent behaviours for your businesses?

If businesses are worrying about volatility, they will probably be seeking fixed interest rates on debt and take out forward contracts on currencies and/or commodities. Can you appeal to that mindset by offering fixed-price services or contracts ahead?

Products which are energy-efficient are even more appealing now. Can you engineer improvements in that area, or simply revise your marketing communications to make people aware of your strengths?

Can you make it easier for people to buy products, offering longer demonstration periods or rent-to-buy schemes to reduce the barriers to decision making?

In a competitive market, you don’t want to be fighting in the commodity space unless you have cost leadership. You need to understand the customer needs and applications and sell a solution that takes away customer issues. Selling an application-specific solution is worth more than selling a generic piece of kit where the customer has to work out what to do with it to solve their problem. Look at the small packets of two number plate screws (and two plastic covers) at £1.99, when you can instead buy a bag of 100 screws and a bag of 100 screw caps, each at £2.99. That’s £1 per screw + cover instead of 6p, and only a small increase in packaging costs.

Customising your products and services to customer needs adds value. You ensure the match between customer needs and your offering, which simultaneously reduces the probability of competitive pressures.

The way we interact with markets has changed radically. Amazon showed what good web-based selling and logistics can do. Supporting remote customers with technical issues became difficult during Covid lockdowns, so people found ways around this. Video calling can be used to demonstrate equipment or help with installation and configuration remotely. Web-based video “how-to” or fault-finding guides enable customers to access those resources 24/7 without tying up your staff on calls.

Contract warehousing and logistics services can remove the need for traditional distributors (who used to take a large chunk out of your margin), but only if you ensure the customers are still served properly. You may no longer need three or four steps in the route to market, you might get it down to two overseas and sell directly to customers in your home market.

One thing that the COVID-19 era and working from home has definitely produced is the “death of customer service”, or its near equivalent. A successful business realises just how important it is to build a relationship with the customer. You need to make interactions with your business to be easy and enjoyable. Quotes should be sent as quickly as feasible, before the customer finds another solution or changes their mind. Your staff need to be available to discuss customer queries – people are much more open about their uncertainties in a phone call (or possibly web chat) than in a one-way communication like an email. If your competitors are failing at this, you can take business from them.

With Bank of England base rates now rising, higher government bond rates and higher corporate bond rates are now following. If you have an old defined benefit pension scheme you should see the deficit starting to come down. In time, that should mean that the pension fund contributions may also reduce. This does not apply to current defined contribution schemes (e.g. auto-enrolment or stakeholder schemes).

So go out there and embrace instability: I suggest you brainstorm at least 10 ideas for improvement and pick the best few to pursue.

^{*The views expressed are the author’s and not ICAEW’s.}