SMEs’ growth and adoption of new models

With the current high cost of power consumption in Nigeria, small and medium enterprises (SMEs) suffer extra working expenses, either from generator usage or solar panel installations, to power their businesses.

It is of note that Covid-19 completely altered the business models of many enterprises. Remember too, just as the world thought Covid-19 was steadily coming to an end, the prices of crude oil hit the roof, therefore adding to the pains businesses have to compulsorily go through—in the form of higher costs of raw materials.

It is therefore worrisome that some Nigerian businesses still stick to the old ways of doing things, which often produced poor customer convenience and low customer satisfaction. This is why experts today now advocate innovation around technology adoption to improve performance and retain customers.

“In this regard, SMEs that hope to survive need to adjust to the reality around customer expectations, preferences, and convenience without further delay.”

SMEs need to raise their game due to the increasing competitiveness in the African markets as the African Continental Free Trade Area (AfCFTA) gains more traction and because of the urgency to create more jobs for the increasing number of unemployed Nigerians who are getting more frustrated daily.

In this regard, SMEs that hope to survive need to adjust to the reality around customer expectations, preferences, and convenience without further delay. If SMEs fail to recognise these changes in customer expectations, they may face a business continuity threat rather than just poor performance—also applies to large enterprises.

Some firms are already working with this realisation. A case in point is the sudden deployment of point-of-sale (PoS) terminals to agents throughout the country, with the agents executing some banking transactions nearly everywhere outside the banking halls. All these concepts are intended to capitalise on customer convenience and the current realities.

Hence, entrepreneurs should understand this and know that when it comes to the most crucial aspects of customer needs, convenience is supreme. Each customer, though, may have different ideas of what constitutes convenience; it is important to note that most consumers are price sensitive, and they base their purchasing or service decisions on it.

Despite a lack of solid business concepts and knowledge, the numerous neighbourhood corner shops, traffic hawkers, and businesses without recognised classification operate on this convenience model. Though it may seem to be an insignificant way to operate a business, the turnover, revenue, and profit could be sufficient to sustain the operators.

The expectation is that customers will hurriedly need items or products, and such businesses exist on this premise. Whereas major enterprises with a brick-and-mortar retailing strategy still pay exorbitant rent to maintain a physical presence without operating online or adopting technology for convenience. They ignore the digital age that has changed the retail industry, and indeed most sectors of the economy, where businesses can relate to customers anywhere and at any time.

It is high time for structured enterprises, retail outlets, and large businesses to adopt the convenience model in order to improve business sustainability and profitability. Convenience is more important to consumers than ever before, particularly in terms of pricing and location that is easily accessible (physical or online). What matters to most consumers is the time and effort they have to expend because they are largely impatient—the less time, the better, and the less the amount, the better.

Market surveys and customer research may assist in determining which solutions will enhance business service and overall provide a high degree of ease.

SMEs that do not leverage feedback from customers are always at the receiving end. It is good to have customers submit comments or reviews highlighting instances in which a particular business (or rivals’ business) failed to meet their convenience expectations, and this may be a pointer to the needs to be addressed. It takes more than pricing to outperform competition, and therefore, businesses must consider how to integrate convenience into a designed business model.

To effectively engage with today’s hyper-connected, technology-savvy, and impatient consumers, SMEs must be preoccupied with offering quick, convenient, and simple solutions. There is nothing that pays more for businesses at this time than being more convenience-oriented because it could be the shortest path to increasing customer retention, loyalty, and business profitability.