How to run a successful business in a crisis economy

There was a lot of economic uncertainty across the globe in 2018. With the backdrop of Brexit in the UK and trade disputes between the US and China, there is no question that some are sensing the rumblings of another global financial crisis.

Although CPP Group has continued to progress on its growth journey, there is no denying that like many organisations, we’ve had to contend with the effects of these uncertain times, especially in our Turkish market.

With pessimistic predictions for global markets continuing into 2019, here I share some approaches that could help businesses succeed based on challenges we’ve faced in our Turkish market. Included is what we’ve learnt and how we’ve overcome them during exceptional circumstances.

Turkey has been one of the fastest-growing economies in the world in recent years, however its impressive growth numbers have been negatively impacted by foreign currency debt in the second half of 2018. A large trade deficit, a construction boom and soaring debt are also key contributors of this negative environment.

We’re seeing companies in sectors such as construction, textile, real estate and energy struggling to contend with a weak Turkish lira which has lost more than 60% of its value since the beginning of 2018. Banks that finance them have also felt the pain, which has led to increasing interest rates across all loans (consumer, mortgage, SME, corporate). Due to rising currency, inflation and unemployment rates announced by the government, consumer confidence index figures are declining.

Unsurprisingly we’re also noticing a change in consumer behaviour due to concern about the weakening of purchasing power which is expected given that inflation is rising to 35%. This price increase has a huge effect on consumer behaviours due to less disposable income, which lends itself to saving instead of spending.

Due to all of these factors, the government is taking what it views as necessary action on almost a daily basis by revising economic expectations and indicators under a new economy plan.

This plan, to be implemented over the next three years, is based on ‘balancing, discipline and change’. Under a new economic program, the Turkish government wants to cut its growth sharply, promising to curb public spending as it seeks to avoid a full-blown economic crisis fuelled by massive inflation and a plunging currency.

How we’re overcoming the financial crisis in CPP Turkey

Due to the negative effects of consumer habits aligned to increased inflation rates, purchasing insurance products are beginning to be seen as overspending in the Turkish market. Apart from compulsory motor and house insurance, people are steering away from insurance products. As our business partners’ in Turkey are in the financial industry, the deflation in this sector could also affect our business and sales numbers.

Despite this downturn performance is good and we continue to grow. Below I have chosen three key areas that we have focused on which has helped us progress. I hope that highlighting these may help you add value to your clients and partners should you find yourselves in circumstances similar to ours:

Improve efficiency – Efficiency in a difficult economy doesn’t have to involve cost cutting, which many turn to. Through detailed analysis of your business and creatively thinking about ways you can adapt to a changing economy you might be surprised at the opportunities to steer initiatives in a different direction in order to stay on track. In our case, increasing tele-marketing efficiency in our call centre by changing our telephony infrastructure with a new technology solution along with hiring more agents has led to an increase in the number and quality of our sales.

Add value to your clients – During an economic crisis, it’s important to provide support to clients and partners that may be struggling. Most businesses will need to strategize how to retain and attract consumers. If you can proactively help them with this you may be able to add crucial value to their business at a critical time. Reaching out to our business partners, for us this has included:

• Offering support with new projects through our in-house call centre. Sharing this extra capacity has enabled us to increase sales and handle complex queries in a much better way;
• Increasing the number of agents in our partner call centre, whilst improving the data we share for greater efficiencies and conversions.

Stand by your clients – The economic crisis is being felt by most businesses in Turkey, including us. By working with your partners to create innovative solutions and being a reliable support when they need it, you’ll prove to be an invaluable asset to them… gaining their loyalty along the way.