SME Advisor Middle East - Good advice for better business

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Issue 69 August 2011 www.smeadvisor.com

ADCB BUSINESSEDGE – Cutting edge financial solutions for Small and Medium Enterprises

Stars of Business

Awards & SUMMIT 2011

PUBLICATION LICENSED BY THE INTERNATIONAL MEDIA PRODUCTION ZONE, DUBAI TECHNOLOGY AND MEDIA FREE ZONE AUTHORITY

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Page 39

NETWORKING EVENING AT THE CAPITAL CLUB Page 60 - 63

MARKETING TO WOMEN

QUARTERLY PERFORMANCE SURVEY

NEUROMARKETING

VIRTUAL MENTORS

ISSUE: 69 AUGUST 2011

Contents 30

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Shoptalk TRENDS AND UPDATES: A quick look at news and events that will impact SMEs in this region.

14 SHELF LIFE: New toys for you and your business. Like you need an excuse!

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34 INTEGRATING SOCIAL MEDIA: Organisations must bring together the best of official Websites and social networks to create unique customer experiences and stay one step ahead of the game, says Abbas Alidina, Founder and Director, Logicks.com.

36 TWITTER: Alan Devereux, Communications Officer for the British Business Group, Dubai and Northern Emirates, discusses the dynamics of Twitter and how to influence your audience through it.

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Trade CRM STRATEGY: Today customers are looking for more than just a superior product explains Dr. Ashraf Mahate, Head of Export Market Intelligence, Dubai Exports and Vice Chair of the Economic Policy Committee, Dubai Economic Department.

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Management

20 VIRTUAL MENTORS: Professor Suzanne De Janasz, IMD Business School, Switzerland, discusses developmental relationships that defy time and space.

24 BUSINESS FEEDBACK: Receiving objective and outside feedback is never easy but is vital to business success, says Debbie Nicol, Principal Consultant and Owner of business en motion.

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Marketing WOMEN: In the first of a two-part series, John Lincoln, Vice-President, Enterprise Marketing, du, explains why it is important for SME owners

take you seriously, says Ibrahim Mardam-Bey, Co-founder and former CEO of Siraj Capital, and currently a member of the Board of Directors.

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BAD PR: It is a reality for all businesses at some point or the other. The genius is in how you face up to it and turn it around, says Sawsan Ghanem, MD, Active Public Relations & Marketing Communications Consultancy.

Sales CUSTOMER VISITS: If the priority is only on the number of sales calls then there may be a lack of focus on exactly who is being visited and why, says Peter Heredia, Managing Director, Max Sales Solutions.

Legal

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Technology for business ONLINE BACKUP: All the things that make social media so attractive to users can also pose significant risks to your business, says Nigel Hawthorn, VP EMEA Marketing, Blue Coat Systems.

Business pin up S*UCE: We talk to Zayan Ghandour, Co-owner of s*uce, a quirky lifestyle boutique based in Dubai.

Opportunities SUKAR.COM: Muhammad Chbib, CEO, Sukar.com, talks to Mike Byrne about company growth, regional trends and online shopping opportunities.

SME Success Series

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NETWORKING EVENING: SME Advisor and ADCB in conjunction with Exclusive Telecom Partner du hosted their most recent networking event at the Capital Club, Dubai. We bring you exclusive coverage.

Industry watch

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NEUROMARKETING: Tactile perception studies have identified different profiles based on people’s perception of touch.

This research will aid marketing firms in designing the right sensory mix for their target markets, says market research firm DervalResearch.

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INTELLECTUAL PROPERTY: Have you ever wondered what the asset value of your intellectual property is, asks Geethalakshmi R of Associated Business Attorneys.

Finance

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SAVINGS: Retiring in comfort is something you’ve got to think about seriously, whether you own your own business or work for someone, says independent financial advisor Greg Pogonowski.

EGYPT: Zawya have released new research that reveals the impact of the Black Swan event on the companies listed on the Egyptian stock exchange.

SME Speak Survey

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Human resources 26 RECRUITMENT: Whether you do it in house or through a recruitment firm, it’s not just about hiring; it’s about hiring at the right time, explains Philip Lefebvre, Managing Partner, Whitewater Executive Search.

and marketers or investors to include marketing to women as part of their core business strategy.

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Business growth

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QUALITY OF CLIENTS: If you have hit a wall where growth is concerned, it is time to take a fresh hard look at yourself and your business, says Vikram Venkataraman, Director, Salvus Strategic Advisors.

FAILURE: Although a taboo in our region, in Western developed economies, if you haven’t failed several times, no investor will

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QUARTERLY PERFORMANCE SURVEY: This month SME Advisor and Tickbox Surveys Middle East conducted a survey to discover how reader’s firms performed over the last three months and their expectations for the next quarter.

A day in the life…

NAHEL.COM: Saeid Hejazi, Founder and Managing Director of Nahel.com, takes us through a typical day in his life.

Editorial

Publisher Dominic De Sousa COO Nadeem Hood Managing Director Richard Judd richard@cpidubai.com +971 4 440 9126 EDITORIAL Dave Reeder dave@cpidubai.com +971 4 440 9106

It’s the eye of the tiger Exactly what is the eye of the tiger? As the song by the same name goes, it’s “just a man and his will to survive.” It’s the fire in the belly without which you cannot be an entrepreneur.

This song from the soundtrack of the Rocky movies echoes their theme – like when Apollo Creed urges the boxer Rocky to rediscover that fire inside, “Now when we fought, you had that eye of the tiger, man, the edge! And now you gotta get it back, and the way to get it back is to go back to the beginning.

You know what I mean?”

You know what he means? He means facing the F-Word – failure.

Being able to look failure in the eye is a vital trait for entrepreneurs.

And this is not “there’s more fish in the sea” pep talk, as our columnist Ibrahim Mardam-Bey, Co-founder and former CEO of Siraj Capital, explains. Failure allows us to understand risk and learn to manage it. If you haven’t failed several times, investors won’t take you seriously, says Ibrahim. He also mentions how failure is frowned upon in certain cultures, as well as the high actual cost of failure.

That is the reality on the ground and it might hinder some, but the question is – would it stop you? If you’re reading this and you’re the force behind a start up (or a few), you know what we are talking about.

And we’ve put our money where our mouth is; or, to be more apt, where our heart is.

When SME Advisor was a struggling little magazine called SMB Advisor three

years ago, when many felt that the market was not ready for a specialised SME title, and when the recession hit us big time, most would have thrown the towel in. Today, SMEs are the buzzword but, back then, it was the “will to survive” that kept us going and helped us learn and even start afresh.

This fire in the belly is what still drives us; it’s the reason we work insane hours, surviving on coffee and micro-waved popcorn, and we can’t wait to get back to work each morning, even though we whine and moan at times about how life is not fair. This fire in the belly is what will now fuel the next spurt in our growth as we add to our business titles.

So do watch this space for updates. We’re really excited!

Until next month...

Ketaki Banga, Group Editor, CPI Business Talk to us: E-mail: ketaki@cpidubai.com Twitter: @SMEadvisorME Facebook: www.facebook.com/ SMEAdvisor

LinkedIn group: SME Advisor

Group Editor, CPI Business Ketaki Banga ketaki@cpidubai.com +971 4 440 9115 Assistant Editor Mike Byrne mikeb@cpidubai.com +971 440 9105 ADVERTISING Sales Director Raz Islam raz@cpidubai.com +971 4 440 9129 Key Account Manager Faaju Abdul Fatah faaju@cpidubai.com +971 56 674 5757 CIRCULATION Database and Circulation Manager Rajeesh M rajeesh@cpidubai.com +971 4 440 9147 PRODUCTION AND DESIGN Production Manager James P Tharian james@cpidubai.com +971 4 440 9146 Art Director Kamil Roxas kamil@cpidubai.com +971 4 440 9112 Designer Froilan A. Cosgafa IV froilan@cpidubai.com +971 4 440 9107 DIGITAL SERVICES www.smeadvisor.com Digital Services Manager Tristan Troy Maagma Web Developers Jerus King Bation Erik Briones Jefferson de Joya Louie Alma online@cpidubai.com +971 4 440 9100 Published by

1013 Centre Road, New Castle County, Wilmington, Delaware, USA

Branch Office PO Box 13700 Dubai, UAE Tel: +971 4 440 9100 Fax: +971 4 447 2409 Printed by Printwell Printing Press LLC © Copyright 2011 CPI All rights reserved While the publishers have made every effort to ensure the accuracy of all information in this magazine, they will not be held responsible for any errors therein.

SHOPTALK trends & updates <<<

Manufacturing sector contributes 13% to Dubai’s GDP Owing to increased government support and funding, the UAE’s manufacturing sector was among the largest non-oil contributor to Dubai’s GDP since 2009, according to the Dubai Manufacturing Sector Snapshot report published by Dubai Exports, an agency of the Department of Economic Development (DED), Government of Dubai.

The manufacturing sector ranked as the fourth highest contributor to GDP at 13.2% or AED 38.72 billion, after wholesale trade, retail and repair; transport/storage/ communication; and real estate and business activities at 30% (AED 89 billion), 14% (AED 41.54 billion) and 14% (AED 40.29 billion) respectively.

The sector also employs 8% of Dubai’s total workforce, proportional to its total contribution to GDP – an indication that the sector functions at relatively reasonable levels of productivity .

In addition, based on constant levels of pricing, the manufacturing sector has experienced an average growth of 8% per annum between 2007 and 2010, despite a sharp decline in the curve between 2008 and 2009. In 2010, the manufacturing GDP growth posted 11% as compared to 6.20% in 2009 .

Currently, Dubai’s annual industrial production is estimated at approximately AED 200 billion, with total exports of AED 68 billion accounting for 34% of the total production. Export of gold products constituted 60% of the total export value. The growth in the value of direct exports correlated with growth in manufacturing GDP, indicating that exports sustained industrial growth during the financial crisis .

In 2010, Dubai’s external trade activity exhibited recovery with increase in direct and Free Zone exports. Direct exports in 2010 posted AED 68 billion, a 24% increase from

AED 52 billion in 2009, while Free Zone exports were valued at AED 143 billion as compared to AED 112 billion in 2009 , a hike of 28%.

“Dubai is the ideal location providing world class trading platform for a wide array of commodities. This manufacturing report findings show a growing export market with significant opportunities for Dubai manufacturers. The Dubai government realise the importance of diversifying sources of income and increasing the participation of the industrial and the export sectors in increasing the country’s GDP,” said Engineer Saed Al Awadi, Chief Executive Officer, Dubai Exports.

The make-up of the manufacturing sector in 2009 showed that at AED 18.1 billion per firm, basic metal production is the most capital and labour-intensive activity, followed by production of non-metallic minerals at AED 1.84 billion. The largest numbers of

Zawya joins forces with Arabia 500 Zawya, an online provider of business intelligence in the MENA region, announced a new partnership with AllWorld Network, aiming to establish an information system and network of growth entrepreneurs in Emerging Markets.

Zawya will serve as the Business Community Partner for AllWorld’s Arabia 500, the first

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SME ADVISOR MIDDLE EAST

ranking of its kind for fast-growing small-and-medium businesses in the region.

The Arabia 500 ranking will be announced on 16th-17th November 2011 during the AllWorld Arabia 500 Awards & Global Summit, under the patronage of Her Majesty Queen Rania Al Abdullah of Jordan, and Allworld will check applicant companies’ credentials based on surveys and a review of audited financials.

AUGUST 2011

Gunnar Skoog, CEO, Zawya said, “Being a regional SME that has succeeded, we are always keen to help entrepreneurs and fast-growth companies in MENA reach their full potential. The Arabia 500 is one of the most ambitious projects to date for the purpose of economic development in the Arab world and we are proud to be associated with it.”

Deirdre M. Coyle, Jr., Co-CEO and Co-Founder of AllWorld

manufacturing firms are involved in fabricated metal & equipment, and wood products including furniture, with 634 and 299 of employees, respectively .

Meanwhile, only 3% of the total industrial firms have investments exceeding AED 50 million and most of these industrial firms are in the non-metallic minerals products, and food, beverages. The investments are derived primarily from local sources, while foreign investments constitute roughly 8% of the total capital .

In terms of labour strength, the metal fabrication segment has the highest number of companies that hires more than 100 employees per firm, including the most firms to employ 10 people or less, while 84% of industrial firms in various segments have employment strength less than 100 persons.

Meanwhile, 56% of all industries are located in the Jebel Ali Free Zone (JAZFA), while 16% are in Al Quoz and 13% in Al Qusais .

added: “The MENA region does not lack any capability as there are amazing entrepreneurs throughout the region; the real issue is their visibility. Without visibility, economic potential is artificially suppressed and few companies will ever get to truly scale. With its research and reach, Zawya is ideally suited to provide these companies with the knowledge and exposure they need to achieve scalability, we call this concept Visibility Economics.”

All private non-listed companies from the MENA region can apply for Arabia 500 ranking at www.allworldlive. com or www.zawya.com/sme

SHOPTALK >>>trends & updates

DED business snapshot reveals growth and optimism across sectors An inaugural business survey of 500 on-shore and free zone companies across Dubai revealed that entrepreneurs and business professionals in the Emirate share an optimistic view of Dubai’s future business outlook.

The survey conducted by the Department of Economic Development (DED) during the second quarter of 2011 revealed that SMEs and export oriented firms have recorded stability in sales revenue in the current quarter with 43% of the companies saying they expected an increase in sales performance over the next quarter and another 26 % saying they anticipate constant sales.

His Excellency Sami Al Qamzi, Director General of DED, said: “The perceptions of the business community provide the most realistic assessment of the prevailing business outlook and climate, helping us to tailor our strategy roadmap for continued growth. For the Department of Economic Development, continuous engagement with the private sector is integral to our efforts to support economic planning in Dubai.”

The report stated that while service-oriented firms are

more upbeat about their future profits than the manufacturing and trade sector, both services and manufacturing firms expect to increase their manpower in the third quarter while trading companies intend to maintain the same level of employment.

In addition, findings suggest that businesses in Dubai are enthusiastic about their capital investment plans with 55% of firms saying they plan to upgrade their technology and an additional 61% planning to expand capacity in the

following 12 months.

The quarterly surveys are designed to be the leading indicators of business performance across all sectors of the economy, and will help DED to report and monitor the Business Confidence Index.

His Excellency Sami Al Qamzi, Director General of DED

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SME ADVISOR MIDDLE EAST

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SHOPTALK trends & updates <<<

DIFC continues to attract companies

Abdulla Mohammed Al Awar, CEO of DIFC Authority and Marwan Ahmad Lutfi, Deputy CEO and Head of Business Development, DIFC Authority

The Dubai International Financial Centre (DIFC), the financial and business hub connecting the region’s emerging markets with the developed markets of Europe, Asia and the Americas, recently updated the market on its positive performance in the first half of 2011.

DIFC reported that 64 companies joined DIFC in

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the first six months of 2011, bringing the net total of active registered companies operating in the Centre up to 81,3 with 312 regulated and 409 nonregulated companies, and 92 retailers. DIFC added that 44% of new regulated companies in H1 2011 came from the Middle East and Asia, 50% from Europe and North America, and 6% from the rest of the world,

AUGUST 2011

reinforcing DIFC’s position as one of the leading financial hubs connecting East and West.

Occupancy of DIFC’s owned commercial offices in the Gate District remained above 95% of the leasable space, and DIFC reported robust demand from new companies and existing clients increased the occupancy within third party developments, the Centre said. In addition,

DIFC’s total owned retail space available as increased by 41,000 square feet indicating continued expansion.

As part of its commitment to support the growth of financial services and commercial activities in the region, DIFC Authority said that it has signed new Memoranda of Understanding (MoUs) with the Chengdu Financial City Investment and Development Co, the Korea Capital Market Institute and the Dubai SME. At the same time, the other independent entity under the DIFC umbrella, the Dubai Financial Services Authority (DFSA), entered into three new MoUs with the Reserve Bank of India, the UAE Insurance Authority, and DFSA Cayman Islands Counterpart.

According to DIFC, its achievements were recognised by the Xinhua-Dow Jones International Financial Centres Development Index 2011, which provides a ranking of 45 international financial centres in terms of development capacity, where Dubai was ranked 8th globally in terms of growth and development and topped the financial centres in the Middle East in the latest edition of the Global Financial Centres Index.

Abdulla Mohammed Al Awar, CEO of DIFC Authority concluded, “In 2010, DIFC focused on developing and implementing its new business strategy which focused on growing our existing client partnerships. We have successfully carried this through into 2011 and have seen the evolution of DIFC continue, adapting to the rapidly-changing environment around us.

SHOPTALK trends & updates <<<

Building the digital advantage for MENA countries

Bahjat El Darwiche, Partner, Booz& Company According to Booz & Company, new information technologies have added intelligence to core infrastructures such as transportation and utilities, and spurred widespread innovation across national economies.

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SME ADVISOR MIDDLE EAST

As a result, governments now recognise that innovation in ICT products and services can have a multiplier effect, driving productivity growth and economic performance across the country as a whole.

“Countries of the MENA region have an opportunity to

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develop a strong innovation culture for their ICT sectors by fostering technology startups, creating business-friendly policies and regulations in such areas as patent filings, and devoting a larger percentage of their GDP to R&D,” said Bahjat El-Darwiche, Partner, Booz & Company.

To strengthen their ICT sectors and foster innovation, governments in the MENA region must act on five core elements: identifying key focus areas, establishing innovationfriendly policies and regulations, making funding more widely available, improving ICT infrastructure, and developing the local talent pool.

According to El-Darwiche, key focus areas for the MENA region include Arabic and Islamic services and applications, IT services and smart devices for high growth sectors, and urban and infrastructure management to complement the continued economic development in the region. This is followed by the development of efficient policies and regulations pertaining to intellectual property and copyright protection.

According to the company, MENA governments must then work on increasing their R&D spending and provide financing for entrepreneurs by setting up national funds for innovators

and entrepreneurs, which must be complemented by broader and more efficient funding on the part of the private sector.

“Beyond that, policymakers must ensure that infrastructure is in place for more specialised ICT needs, including a robust telecom and broadband network.Governments worldwide have invested billions of dollars in order to deploy the broadband networks that will act as the backbone of data-hungry economies,” explained ElDarwiche.

The company believes that building the right talent pool is the final and most crucial step for any national ICT innovation programme. Although in the short term MENA governments have little choice than to rely on imported talent, in the long run they can derive benefits from investing in training programmes involving a process of knowledge transfer from the imported workforce to a locally generated one.

A holistic approach combining all the above mentioned areas will help governments foster an innovative ICT environment and equip these countries to generate a steady stream of competitive ICT products and services which over time will lead to a sustainable long-term economic advantage over other countries.

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The next generation The Samsung Galaxy Tab 10.1, and Galaxy Tab 8.9 pack a powerful 1GHz Dual Core processor, 1 GB RAM, complete flash support and the latest Android 3.1 (Honeycomb) OS. The new generation tabs are faster, thinner, lighter and more powerful.

The new generation tablets sport large 10.1 and 8.9 screens, dual surround-sound speakers, full HD 1080P playback and 720P Recording, 3 megapixel rear-facing camera with auto

With its small and slim design, the new Kingston DataTraveler 108 fits anywhere while protecting your data. Available in 4GB, 8GB and 16GB, with each capacity offering a different colour, the DataTraveler 108 also features a handy key loop that lets users transform this tiny drive into a fashion accessory with the use of a lanyard.

The DataTraveler 108 comes with urDrive, and preloaded software that gives users a new and exciting way to look at their data. It comes with a five-year warranty, 24/7 tech support and our legendary Kingston reliability.

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SME ADVISOR MIDDLE EAST

focus and 2 megapixel front-facing camera.

The new tabs are slim and ultra-light with the Tab 8.9 weighing 469g and the Tab 10.1 at 569g respectively.

Keeping it social Nokia has launched the new Nokia E6 SmartPhone. The device features both touch and type alongside social networking functionality. The new Symbian Anna platform offers a host of usability enhancements, including fresh, new icons, improved text input, and easier Internet browsing.

A range of applications are available through the Ovi store to ensure that users can access all the tools they need to stay up-to-date and connected to their world while on the go, including the “What’s App” application, which is also available for download on the Nokia E6 through the Ovi store. For the first time in the UAE, consumers can now purchase any of the broad range applications from the Ovi Store and directly bill them to their mobile phone account.

The Nokia E6 offers Microsoft Exchange, Microsoft Communicator Mobile and Microsoft SharePoint. The device also features enterprise grade security with hardware accelerated encryption, and new e-mail features such as full meeting request support.

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Cubic ink

Keith McMillen Instruments (KMI) have announced the SoftStep KeyWorx, a multi-touch foot controlled digital interface, providing a new and faster way to operate a computer. Available for Mac and Windows, SoftStep KeyWorx can be utilised by everyone using a computer, from gamers, video editors, programmers, data entry professionals, disabled people, repetitive stress syndrome sufferers, and anyone who wants a faster way to use their computer.

Pressure and location sensitive, SoftStep is USB powered with ten fully customisable keys that remember up to 100 sets of commands for repetitive tasks. The cursor click control allows the user to keep his or her hands comfortably on the keyboard at all times and the blue backlight makes it visible everywhere, even under a darkened desk. Made with advanced elastomeric and graphite composites for a lightweight design, SoftStep is light-weight and portable, weighing just one pound, small enough to fit in a briefcase or backpack.

Printing with the swipe of a button Sharp Middle East has announced the launch of their Multi Function Printer (MFP) range with a finger-swipe touch control panel. The line up is the newest of Sharp’s next-generation printing solutions to be offered in the Middle East region.

The three models in the range are the full colour MX-2610N, MX3110N, and the MX-361ON, all of which feature the 10.1 inch control panel which users can tap, flick or slide a finger to control many features such as accessing documents, functions and settings.

A huge feature that will enhance the ability of the MFPs is the inclusion of full Internet access, and cloud connectivity. Using the fingerswipe control, users can print Web content without the need for a PC, as well as enabling businesses to reach beyond the firewall to run Software as a Service (SaaS) applications.

The new series also features Sharp’s Open System Architecture (OSA) applications, where applications that streamline and automate a range of everyday office tasks can be developed by third parties.

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Foot control

Xerox have announced the release of the ColorQube 8870, a new solid ink colour printer from – and the second desktop product under the ColorQube brand.

The Xerox solid ink colour printer’s cartridge-free ink produces highquality colour prints and generates 90% less printing waste than comparable colour laser printers.

With print speeds as fast as 40 pages per minute in both colour and black and white, the printer is ideal for offices that depend on colour for business proposals, reports and fliers, as well as everyday documents such as e-mail and spreadsheets. It also includes: • Earth smart print driver defaults for two-sided printing, proof print, recycled paper and draft mode.

• Intelligent ready feature that learns usage patterns and moves to low-power mode when the printer is least likely to be in use.

The ColorQube 8870 solid ink colour printer price starts at USD 2,499 and is available immediately through Xerox direct sales, agents, resellers, dealers, and concessionaires.

Picture perfect Sony Ericsson has announced the regional launch of their Xperia neo, the first GreenHeart SmartPhone from the Xperia range.

Xperia neo is equipped with an 8.1 mega-pixel camera that boasts Sony’s Exmor R for mobile sensor. The CMOS sensor allows the capture of high-quality, bright pictures, and, HD video recording even in poor light conditions, which can be shared on an HD TV via the built in HDMI-connector. It can also be viewed on the 3.7 inch screen featuring reality display with the Mobile Bravia engine that delivers clearer images.

Xperia neo runs on the latest Android 2.3 Gingerbread platform that gives users access to over 200,000 applications.

Available at leading electronic stores throughout the UAE at a price of AED 1,799, the Xperia neo comes in blue gradient, silver and red colour.

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SME ADVISOR MIDDLE EAST

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Trade CRM strategy <<<

ADDING THE PERSONAL TOUCH! In the modern business firms need to create competitive advantage in order to differentiate their customer experience from those of their competitors. No longer are customers satisfied with simply purchasing a superior product or one at substantially lower price but look for the whole experience, says Dr. Ashraf Mahate, Head of Export Market Intelligence, Dubai Exports, and Vice Chair of the Economic Policy Committee, Dubai Economic Department.

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AUGUST 2011

Today customers are looking for enhanced customer service at the point of sale, excellent product or service performance, as well as after sale care and support. This is true not only for congested markets where product differentiation is limited but is also for products and services with few, if any, substitutes. The ability to enhance the customer experience is a precondition for the establishment of competitive advantage of firms.

This is more so the case in foreign markets where the exporter is faced with a diverse range of competition, hence impacting on its export performance.

One manner by which exporters can enhance the customer experience and benefit from export growth is the establishment and development of customer relationships. It is not only about building customer relationships but effectively managing them so that they support the business and its long term goals; to therefore implement a customer relationship management strategy.

Different definitions exist for customer relationship management (CRM) depending on oneâ&#x20AC;&#x2122;s viewpoint of business management. However, the most common interpretation of CRM is a corporate strategy that seeks to manage a companyâ&#x20AC;&#x2122;s interactions with its existing or potential customers. In doing so CRM invariably uses technology such as CRM software and devices in order to synchronise business processes so as to enhance the customer experience through improved marketing, customer service and support.

The key objective of a CRM strategy is essentially to attract and convert new customers while ensuring that existing customer demands are met in the most

Trade

effective manner. Although CRM strategies are normally associated with large companies this need not be the case and there a whole host examples whereby small and even micro-sized firms have effectively implemented it to improve their customer retention and acquisition rates.

For instance, SMEs can integrate the level of cooperation and information sharing between their sales, services and marketing staff.

This will allow feedback from sales or technical support to inform the marketing staff of specific services and product features required by customers. This is perhaps the most basic example but nevertheless a good base for small and micro sized firms to start.

Developing and building effective CRM should be the part of every companyâ&#x20AC;&#x2122;s strategy as they allow the firm to grow through repeat business as well as referrals.

It is a well-known fact that it is far more cost effective and of course profitable to keep an existing customer satisfied than to acquire the next customer.

Loyal customers invariably help the firm maintain its sales level and the bottom line. Satisfied customers are the best advert for any company especially in the modern high tech environment whereby customers are bombarded with various messages throughout their working day through a variety of media. Researchers estimate that in this confusing marketing world it is very difficult for companies to get noticed and that on average a marketing message needs to be repeated between seven to ten times before it gets noticed by the customer.

After the marketing message has been noticed by the customer there is the conversion step whereby the message has to lead the customer to make the purchase. Researchers have shown that a referral breaks all these steps and ensures that the marketing message is not only noticed by also converted into a sale.

In the world of social networking and media, whereby sites such as Facebook, Twitter, dis-satisfied (as well as satisfied) customers can make a considerable difference to the reputation of a company. The ease and popularity of social networking sites has meant that past customers can have a new avenue by which to share their experience with other past or potential customers.

At the same time potential customers understand the importance of using recommendation sites to help them in making their purchasing decision. Although, accurate statistics do not exist of the impact of social networking sites on consumer buying decisions; anecdotal evidence does show from sites such as Tripadvisor that negative experiences of hotels leads to fewer bookings. Hotels which tend to have the highest customer ratings on the Website tend to have greater bookings and customer following.

As many companies have found to their peril, social media sites allow users to share opinions and experiences regarding companies, products and services, without any form of filtering or censorship.

In other words customers can write what they wish regarding a company or brand, wether it be positive or negative. In this way social media can be a double edged sword but if the customer experience is enhanced then a satisfied customer actually is an effective sales agent for the company and helps it to the value of the purchase.

Academic evidence shows that about 65% of customers are not brand loyal and move from product to product. The same studies find that the main reason for such a high switching rate is that firms tend to be indifferent to the customer. Of course this may not necessarily be the case but it is perceived to be such by customers.

This implies that customers switch

The key to building effective relationships with third party logistics suppliers is trust and commitment.

Certain studies have found that the sharing of rewards with logistics firms and working with them to resolve problems is far more effective than to adopt a blame approach or conflict

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not necessarily due to product failures, but due to the fact that they do not receive the level of service expected.

More importantly, the customers feel that their custom is not valued by the firm. In other words they receive the message, directly or indirectly, that the firm could not care less if they purchased from the company or not. Customers feel that nobody at the firm really cares about their needs. Perceived indifference by the customer is essentially psychological in nature.

Therefore, this negative perception can be made into a positive one through changing the customerâ&#x20AC;&#x2122;s mind and in doing so creating a long term emotional bond with the firm. Of course a customer will not change their mind because they are told to do so. The company needs to make a real and determined effort to find out how their customers demand their service to be delivered. This information should be used to train staff and make changes to their business process so that it is able to deliver a superior customer service.

More importantly, regular checks need to be made to ensure that the company is continually delivering the service in the manner and to the level required by its customers.

Consumer behaviour studies show that on average 4% of customers complain regarding a negative experience while 96% simply do not carry out repeat business with the company. From a purely financial viewpoint any customer dis-satisfaction is translated into wasted expenditure on marketing and advertising as well as the loss of lifelong earnings from the customer; the income that could have been generated from the customer if he were to remain with the company till death.

The natural question then arises why firms do not focus on enhancing customer experience as this is a key aspect to generating and maintaining sales. Most firms rely on price as their key selling SME ADVISOR MIDDLE EAST

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Trade

tool and hence leading to little if any differentiation with their competitors. It is true that most customers tend to ask the price at the start of the purchasing process but it need not be the deciding factor.

Studies have shown that on average only 15% of sales are based on price even in highly price sensitive markets. However, firms incorrectly assume that customers tend to purchase purely based on price. In fact, consumer behaviour studies show that non-price factors as they allow the customer to differentiate between firms and tend to impact on the buying decision.

For exporters the issue of perceived indifference becomes more important, if not complicated, because of the multi-layer nature of their business. In the first instance (or layer) the overseas agent or distributor is the initial customer.

The exporter needs to maintain an effective relationship strategy with the agent or distributor otherwise it can lead to various problems least of all is failure in the foreign market.

If the agent or distributor receives an enhanced experience from the exporter then they will be convinced with the exporter and this will drive superior overseas business performance.

Therefore, the exporter first needs to demonstrate its value approach to the overseas distributor. The exporter’s value approach impacts on the manner in which the overseas distributor operationalises this into its own business processes.

The final value approach that the customer receives has the distributor’s key values embedded in it. Of course, the greater the distributor’s perception about the value created and delivered by the exporter, the higher the positive impact in the achievement of a long term relationships between the two partners.

Second, the exporter needs to

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build effective relationships with third party logistics firms. It is extremely rare for an exporter to invest in all the components of the logistics cycle, from taking the product from the factory floor and to the customer.

More often than not exporters tend to use third party logistics providers.

Dr. Ashraf Mahate In most cases the role of the logistics supplier tends to be ignored, yet it is vital for ensuring an enhanced customer service.

For instance, any late delivery, even if it is compensated by the exporter or distributor, erodes the level of customer experience. If this is repeated then it can lead to customers moving their demand to competitor products. The key to building effective relationships with third party logistics suppliers is trust and commitment. This in turn implies sharing of information so that the logistics firm can effectively plan and co-ordinate its activities with that of the exporter. Certain studies have found that the sharing of rewards with logistics firms and working with them to resolve problems is far more effective than to adopt a blame approach or conflict.

The third layer in the export market is the end customer, with whom the exporter may not necessarily have a direct linkage.

This implies that the relationship building with the end customer may have to take place through the agent or distributor. Through a cross exchange of information between the exporter and distributor both can have information regarding past customers and what is known about them.

AUGUST 2011

Through a cross exchange of information between the exporter and distributor both can have information regarding past customers and what is known about them. For the distributor it allows them to acquire leads in a cost effective manner while ensuring that lost customers are re-acquired in a more targeted manner

For the distributor it allows them to acquire leads in a cost effective manner while ensuring that lost customers are re-acquired in a more targeted manner. For the exporter the exchange of information will allow it to repair any customer relationships that are broken so as not to damage the long term reputation or image of the exporter.

For an SME a CRM strategy allows it to acquire, retain and grow its customer base in the most cost effective manner. As the old saying goes, “it’s nice to have customers but it’s priceless to have customers who rave about you to others”.

ABOUT: Dr. Ashraf Mahate is the Head of Export Market Intelligence at Dubai Exports (formerly known as the Dubai Export Development Corporation), which is an agency of the Dubai Economic Department. Dr. Mahate is also the Vice Chair of the Economic Policy Committee with the Dubai Economic Department. He has written a number of journal articles, chapters in books and edited books in the areas of economics, finance and banking.

He has also presented papers at major international conferences. Dr. Mahate has provided extensive consultancy services to various organisations in the areas of banking, economics and finance. He has been a director of a number of companies including a venture capital company and a private equity fund.

Dr. Mahate received his doctorate from Cass City University Business School in London (UK) which was ranked by the Financial Times newspaper as the 12th best university in the world for finance. He read Economics at University College London, followed by a Masters in International Economics and Banking at the University of Wales in Cardiff. Dr. Mahate is a professional educator and received his training at the Institute of Education (University of London).

He is a member of the Chartered Institute of Managers (UK) and a Member of the Institute of Commercial Management (UK). He is also a member of the Association of Certified AntiMoney Laundering Specialists (ACAMS).

Introducing Server Room in a Box

APC rackbased cooling draws in hot air from the rear, at its source, and then sends conditioned air out of the front, ready to be used by adjoining racks.

APC integrated cooling future-proofs your IT room without breaking the bank Is your server room a barrier to adopting new technologies?

Consolidation, virtualization, network convergence, blade servers — these new technologies improve efficiency, cut costs, and allow you to 'do more with less.' But they also bring high-density power, cooling, and management challenges that server rooms were never designed to handle. You’re relying on guesswork, depending on building air conditioning, or improvising remedies.

So, how can you increase the level of reliability and control in your server room without spending a fortune?

Introducing the APC by Schneider Electric™ total server room solution Now you can get power, cooling, monitoring, and management components that easily deploy together as a complete, integrated solution. Everything has been pre-engineered to work together and integrate seamlessly with your existing equipment. Just slide this proven, plug-and-play solution into most existing spaces — there’s no need for confusing cooling configurations or expensive mechanical re-engineering.

The modular, 'pay as you grow' design lets you be 100% confident that your server room will keep pace with ever-changing demands.

Future-proof your server room easily, cost-effectively

If you have dedicated IT space…

Get pre-validated, high-density cooling as a single offering.

APC InRow SC System combines an InRow SC precision cooling unit (up to 7 kW capacity), NetShelter SX rack enclosure, and rack air containment system.

If you don’t…

Introducing the NetShelter CX: portable server cabinets, with extreme noise reduction, designed for office environments.

APC takes the hassle out of configuring server rooms. Self-contained InRow™ cooling units, high-density NetShelter™ enclosures, and the APC rack air containment system combine to create a proper IT ecosystem in almost any environment. Rack-level monitoring sensors, intelligent controls built into the cooling unit, and integrated management software provide complete remote control and unprecedented visibility into the entire system. Simply add power protection (such as undisputed best-in-class Smart-UPS™ or Symmetra™ units) and you have a total solution for today, tomorrow, and beyond.

These solutions integrate power, cooling, and management in a secure, quiet, cooled enclosure that’s indistinguishable from other office furniture.

Download the White Paper, ‘Cooling Solutions for Rack Equipment with Side-to-Side Airflow’, and get a chance to WIN a Lenovo® all-in-one touch screen PC! Visit www.apc.com/promo Key Code 89345t Call +9714 7099690 (Arabic) / +9714 7099691 (English) • Fax +9714 7099650 ©2011 Schneider Electric. All Rights Reserved. Schneider Electric, APC, InRow, NetShelter, Smart-UPS, and Symmetra are trademarks owned by Schneider Electric Industries SAS or its affiliated companies. All other trademarks are property of their respective owners. • APC Middle East, PO Box – 53852, Dubai, United Arab Emirates • 998-2029_GB

Management Virtual mentors

<<<

So far away...

Unlike the frustrations voiced in Dire Straits’ famous theme song for longdistance relationships, when it comes to virtual mentors, Professor Suzanne de Janasz, IMD Business School, Switzerland, discusses developmental relationships that defy time and place.

Imagine taking advice from a shipping mogul in Bangladesh. Or getting tips for your upcoming meeting in Japan over a Webcam crossing ten time zones?

Ever think of co-authoring a book with someone you’ve never seen? The Internet along with e-mail, social networks and chats, is providing a new perspective on an age-old practice – mentoring.

Anybody who is somebody has a mentor, or so we’ve been told by popular press. Protégés progress faster, receive higher compensation and are more satisfied than employees

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Career experts even suggest that one mentor is not enough. Savvy professionals create a network of developmental relationships that includes individuals within and outside their organisation or industry AUGUST 2011

without mentors. How else can you effectively navigate a business climate characterised by layoffs, worker mobility, boundary-less careers and increased work demands? Career experts even suggest that one mentor is not enough. Savvy professionals create a network of developmental relationships that includes individuals within and outside their organisation or industry.

Who needs a mentor?

Traditionally, those who needed mentors were young, inexperienced, new entrants in the work force. Because the employee of old might stay

with a company for decades before changing jobs, the need for mentoring was relatively simple and short lived. Yet, as most of the world’s economies have shifted from industrial to knowledge work, the answer to this question is quite simply, everyone. Today’s college student will find half or more of his or her knowledge outdated by the time the degree programme ends. And seasoned employees may witness their expertise being reset to zero as technology, demography, and globalisation evolve. With most developmental support from human resources departments at a minimum, individuals must

Management

rely on themselves, or more effectively, reach out to others, to learn and build necessary competencies.

to helping today’s professionals effectively navigate complex organisational changes, new field developments and career path issues. Even though the relationship between mentor and protégé is virtual, the benefits are real. In some cases, using virtual means to connect and carry out the relationship is more beneficial than using traditional means.

The new age of mentoring Mentoring works best when a mentor and protégé come together informally, through similar values and interests.

However, if you think that a potential mentor knocks on your door (or sends you an unsolicited e-mail), you’ll be waiting a long time. Recent research shows that people who are extroverted, have high self esteem and are achievement oriented are more likely to initiate mentoring relationships than those who are not. So what are the shy and reserved to do? Enter the virtual world of mentoring…

In today’s fast-paced, 24/7, networked world, connecting with mentors virtually is not only possible, it’s necessary. If you e-mail, Facebook, Tweet or participate in Google groups, you already realise the power and facility of connecting with others. So, if the thought of approaching a stranger to be your potential mentor scares you, there are other, equally effective, possibilities.

E-mentoring or using virtual means (e-mail, phone, Webcam) to initiate and carry out critical developmental relationships, whether via formal organisational practice or informally, is a new age developmental practice that is growing exponentially. In fact, e-mentoring is now a staple at a handful of global companies such as HP, Xerox and IBM. These companies are able to connect employees with varied developmental needs with other employees near and far.

Through virtual mentoring business leaders and organisations are able to offer insight and assistance critical

Real benefits

1 Even though the relationship between mentor and protégé is virtual, the benefits are real. In some cases, using virtual means to connect and carry out the relationship is more beneficial than using traditional means

Avoiding gossip: While many organisational mentoring programmes arose out of a need to support diversity initiatives, the pairing of a young female with a highranking male can be the subject of coffee break conversations.

Employees – especially those who feel they’ve been passed over for promotions and other opportunities – can’t help but gossip about their perceptions of what’s “really going on” between the mentor and protégé. Such gossip (“I know why she got the promotion…!”) is not only damaging to the reputation and credibility of the mentor and protégé, but also to the mentoring program.

When protégé and mentor meet electronically, other employees have nothing to see and nothing to say.

2

Just the facts: When people meet face-to-face, they pay attention to visual cues, such as ethnicity, height, weight and fashion. Based on these characteristics, it is easy to make assumptions (perhaps even subconsciously) about someone’s values and goals.

And, these characteristics may instantly create known differences in the relationship.

Yet, research confirms that successful mentoring relationships are characterised by value similarity; demographic similarity does AUGUST 2011

not enter into the equation.

Put another way, when we converse over chat or e-mail, we are not distracted by the other’s appearance, but instead are tuned in directly to what is being communicated.

3

The whole truth: Research on computer-mediated communication (including that between virtual mentor and protégé), shows unequivocally that because relationships are free to develop without the distractions of gender and other demographic differences, trust forms more quickly than it does in face-to-face relationships.

Protégés are more likely to share the whole truth, and not just “what they think their mentor wants to hear”.

This is critical. What kind of advice – if any – could a mentor provide if all you tell him/her is that everything is perfect.

In online communications, there is a well-documented “electronic courage”. Those who are normally shy in person are fearless when they have the time to compose the perfect (written) confrontation or complaint.

The same is true in virtual mentoring. Protégés are more willing to share openly and candidly their failures as well as their successes, and therefore stand to receive more and more useful advice from their e-mentors.

4

Managing impressions: Imagine meeting with your newly assigned mentor, the VP of Marketing, for the first time. You’ve heard she’s smart, no-nonsense, and highly regarded. You want to impress her but, in your efforts to do so, you get tongue tied and share things that put you in a less-than-positive light. Because several choices for engaging in conversations with an e-mentor are virtual (not face-to-face) and SME ADVISOR MIDDLE EAST

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Management

asynchronous, the e-protégé has a chance to think through and edit their communications, ensuring that all interactions – especially the early ones, crucial for building rapport and trust – are presented positively.

5

Balancing work and life: While not without its challenges, telecommuting – doing required work from home, on the road, or at a designated location – provides organisations who embrace it with greater access to employees.

It also allows employees more flexibility in where and how they fulfil their multiple roles. The same is true for virtual mentoring. With an e-mentor, one need not spend time trying to schedule and reschedule meetings, activities and meals in order to have a conversation with one’s mentor.

Virtual mentoring naturally gives freedom to the parties in deciding when, for how long, and how frequently they will connect – with little, if any, wasted time.

6

Getting access: There was a time when only the elite, high potential, or members of underrepresented groups were eligible for organisational mentoring programs. With one third of the world’s population now online, we are no longer so digitally divided. Children have access, retirees have access, even prisoners have access.

Moreover, the boundaries of time and geography are rendered irrelevant. If, as the opening paragraph suggests, a shipping mogul in Bangladesh is willing to share words of wisdom with you, you can learn from the interaction. And, over many conversations, the mogul will learn some things as well.

Mentoring via virtual methods means that anyone, at any age,

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What kind of advice, if any, could a mentor provide if all you tell him/her is that everything is perfect. In online communications, there is a welldocumented “electronic courage”. Those who are normally shy in person are fearless when they have the time to compose the perfect (written) confrontation or complaint

at any level, and in any part of the world, can connect with and share ideas with anyone else with access to a computer.

The benefits of virtual mentoring are real and the technology enabling it is readily available. There are even a handful of companies that help businesses set up mentoring systems.

By taking advantage of e-mentoring practices, today’s business leaders can tap into a developmental process that extends far beyond traditional networks to enhance personal enrichment and career success.

Yet for the savvy business practitioner, with or without an established corporate mentoring program, the virtual world is yours to explore.

ABOUT: Suzanne de Janasz is a professor of leadership and organisational development at IMD. She teaches in IMD’s Program for Executive Development (PED) and OWP along with many company-specific programs and publishes in a variety of outlets. Her latest book, Interpersonal Skills in Organizations (4th edition), 2011, provides leaders with the conceptual and practical tools needed for effectively leading oneself, one’s group, and one’s organisation.

AUGUST 2011

Management Business feedback

<<<

Two heads are better than one!

You have a great business idea and eagerly develop yourself as a first-time business owner.

You have heard it all before – the need for a business plan, a license, a name, a creative design, working capital and the list continues. Perhaps it is what you have not heard that could make all the difference, says Debbie Nicol, Principal Consultant and owner of business en motion.

What is it that is important whilst you are transitioning from business idea to business entity? Look at the latest idea you dreamt, you designed, you implemented and now you wonder why it may not have reaped the benefits you expected.

One word remains dominant in that thought – you!

There quite often is an emotional attachment to an idea, unlikely and unwilling to become detached easily. Your eyes have considered it from every conceivable angle; your ears have heard it over and over again. It makes such great sense to you and possibly you alone.

Business can rarely work in isolation. The inclusion of others’ feedback is essential for future business success and could save

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you years of heartache. So how can you gain this feedback and apply it in the best possible way?

1

Surround yourself with trusted confidantes Confidantes by definition will be trustworthy and interested parties, acting in a confidential manner, respecting the privacy of your idea, yet providing realistic feedback. The number is really up to you, generally being between one to three.

Select your confidantes from a broad cross-section of experience.

They may differ in length of time in business, size of business, products and services or even the amount of local market knowledge they have to offer.

Screen carefully and choose those who are able and willing to be transparent and factual with AUGUST 2011

Screen carefully and choose those who are able and willing to be transparent and factual with you – if your business plan does not make sense, or has missed out crucial information, will they be willing to share this with you?

you – if your business plan does not make sense, or has missed out crucial information, will they be willing to share this with you? If your business card’s design is not functional, will they open your mind to alternatives?

If your forecasts appear flawed, do they have the ability to pick up that detail? Have they made mistakes in business and been able to turn them into opportunities? Are they able to relate to your circumstances? Will they have time, or make time, for in-depth conversations, and will you feel comfortable with their scrutiny?

2

Describe the concept verbally This is the stage where you’ll discover if your plan is clear and tangible. Are you able to describe clearly, confidently and on-demand your elevator pitch?

Would someone walk away

Management

feeling informed and keen to re-connect after hearing it? Who is your target market? Why do they need you? Why would they buy from you rather than the competitor?

Describe the concept verbally, keeping your mind open to the feedback it attracts. It may not necessarily be what you want to hear, but may be what you need to hear.

3

Share your business’s representation Share the name you are planning to apply to your business entity and watch the reaction it receives. This may be harder than you think!

Ask for their honest opinion; how does that name feel to you; what do you envision when you hear those words; what might it remind you of; what could it be confused with; how does it fit with the concept; is there any hook in it that will excite the clientele; where have you seen anything like it before and what colours and experience does it make you think of?

If a logo design or plan exists then expose it too. What message do they receive from your intended representation? Is it the one you desired?

Considering your business’s identity from another person’s perspective will encourage you to open to alternatives. Look for trends in the feedback. Always keep in mind that your opinion really doesn’t count in the pursuit of a name; it’s really up to the customer!

4

Invite questions from your confidante Wouldn’t you rather know that something is forgotten before it is too late? Keep a log of the subject areas you could not answer. Use that log to revisit time and time again. Use it as a checklist to ensure that your

business collateral leaves nothing unanswered. Construct a list of these questions with answers you would use should that question be asked again by a potential customer.

Keep a log of the subject areas you could not answer. Use it as a checklist to ensure that your business collateral leaves nothing unanswered.

Construct a list of these questions with answers you would use should that question be asked again by a potential customer

Review A first-time SME can easily become over-excited and fall into the trap of “it’s all about me,” possibly displaying a blinkered expert mentality. How many times have we seen technologies built by budding engineers, only to find truth in the statement, “just because we build it, doesn’t mean they’ll come!” Seeking feedback is a proactive approach to ensuring your business will hit the target first time around!

Inception • Who are your confidantes?

How do they both complement and conflict with each other to provide you with an all-round perspective?

• What is it that you may not have yet gained feedback on that could potentially hinder your business?

• What else could be helpful to you whilst transitioning from business idea to business entity?

coffin! “So what is it specifically that you do?”

The business owner is dismayed and asks “Why do you ask”. From there, each word from the customer simply drives the nail deeper into the business’ coffin. “Well, there’s no description on the card, or indication of services. I’m not sure what the picture is and I can’t feel what the business offers.”

Let’s rewrite this case in point!

The draft of the business card is released from the design company. The business owner is so proud of its shapes, colours and unique design.

The trusted confidantes are given the card and feedback is sought. The same question prevailed; what is it that you specifically do? The first-time SME realises that they need to rethink their business before launch.

Case in point A business card is proudly shared with a potential customer by a first-time SME business owner at a networking event. The business owner is proud of its shape, its colours and its unique design.

The potential customer engages with the card for the first time, looks at it, turns it, considers it from all angles and then delivers a nail in the business’ AUGUST 2011

ABOUT: Debbie Nicol, aka “the enablist”, principal consultant and owner of business en motion assists organisations and leaders to move ahead through change. She works with organisational development, change management, corporate cultures and learning strategies. For more information visit www.businessenmotion.com

SME ADVISOR MIDDLE EAST

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HR RECRUITMENT

<<<

How to hire a recruitment firm Whether you do it in house or through a recruitment firm, it’s not just about hiring; it’s about hiring at the right time and with the right process in place to meet your company’s business objectives, explains Philip Lefebvre, Managing Partner, Whitewater Executive Search

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AUGUST 2011

When a project is given to several firms at once, it becomes a race against time and the quality of deliverables is the last priority. There is no formal research and recruitment process and, in fact, these firms will typically rely on a database of CVs which they will match with the requirements of the role

The decision to recruit is usually a positive one. It indicates growth, expansion, and the desire to hire talent to manage positive objectives. It can also represent a feeling of panic, as management agrees to accept the new personality of one that is not their own – and the higher the role in the corporate structure, the more essential it becomes for the right person to fit with the right crowd and make the right decisions in the best interest of the company.

Recruiting can be interpreted in many different ways; and typically, on the basis of what impact the specific role has on

HR

the organisation or where it sits in the organisational structure. The recruitment process encompasses several steps depending on the complexity of the role and the experience a potential candidate must have in order to be considered a match for the company’s needs. Add to that the multitude of different recruitment methods, and it becomes a complicated decision for any human resources team.

Role and repercussions The task of the recruitment officer responsible for hiring 300 sales reps is as complex a task as recruiting mid-management or senior executives. The role of the recruiter is to hire staff that can embrace the vision and mission of organisation; and that happens at all levels. However, as we move up to the management ranks, recruiters begin dealing with candidates’ engrained values and personality traits that must be carefully screened in order for the “fit” to happen.

When a company identifies a need to recruit an executive, it has one of two approaches at their disposal; it can use the internal human resource function to recruit candidates, or it seeks support from a recruitment firm.

With the latter, the decision to outsource the process can become a daunting task. There is a multitude of different firms that offer recruitment services and as in any industry, the quality of the service ranges dramatically.

Key elements that influence the decision of which firm to use are cost, quality of deliverables, and

Philip Lefebvre

time lines. Considering that no solution offers all three elements, a company must decide which of these are the most important.

The objective when recruiting an executive into a company is to hire the right person who will quickly and seamlessly integrate into the organisational structure and deliver results. The cost of a bad hire goes beyond just the fees and salary paid; and therefore, it’s critical for a company to ensure that the recruitment process is thorough. Furthermore, when a company seeks to recruit an executive, they are looking to obtain the best candidate available at that point in time in the market. With this in mind, the number of recruitment firms that offer suitable recruitment services greatly diminishes.

The role of recruiters – in house or within your company – is to act as ambassadors while interacting with the candidate market. They will essentially sell the opportunity to individuals and thus need to be equipped with the right information about the company and the position. It is, therefore, essential to have a consultative relationship between clients (internal or external) and recruiters or HR departments.

A company should not be content with a short list of active job seekers who are either out of a job or desperately trying to leave their current one. The true talent lies in the passive job seeker, and in order to get to those, the recruitment process must be thorough

The more passionate recruiters are about the business, the more impactful they will be when selling the opportunity to potential candidates; and the higher the success of attracting top talent.

Where companies fail during their recruitment process is typically when they have given an assignment to the wrong person. Executive recruitment or executive search is a complex process that must be done correctly in order to guarantee a successful placement.

Organisations that choose to use multiple recruiters at a time for executive positions will only cheat themselves. The service rendered by firms that agree to non-exclusive/success-based terms is only a fraction of what an organisation would require to get the best person for the role.

When a project is given to several firms at once, it becomes a race against time and the quality of deliverables is the last priority.

There is no formal research and recruitment process and, in fact, these firms will typically rely on a database of CVs which they will match with the requirements of the role. The firm will then send several CVs which they think could be suitable and that is the extent of the process. There is limited interaction with the client and usually a basic conversation with a potential candidate to obtain their current salary and notice period.

The search process When a company hires an executive, they seek to attract someone who will ultimately have a strategic impact on the business. It is in the best interest of the company to make sure that the search process is methodical, and that the potential candidate market is scrutinised. A company should not be content with a short list of active job seekers who are AUGUST 2011

SME ADVISOR MIDDLE EAST

27

HR

either out of a job or desperately trying to leave their current one.

The true talent lies in the passive job seeker, and in order to get to those, the recruitment process must be thorough.

As previously mentioned, the relationship between a client or business head and a recruiter is critical to the success of a project. Armed with a strong understanding of the company, the industry, and the current market dynamics, a recruiter will work with a client to develop a list of target organisations which will be researched to identify who in these will have the required experience for the role.

This target list of individuals is the basic research that any good recruiter will use, and it typically takes seven to ten days to acquire this information.

Once the research is complete, the recruiter will then actively recruit these individuals and propose the opportunity to them.

In tandem, a recruiter will also source with industry experts to assist in identifying who the “stars” are. It is at this point in the search process where constant communication between the client and the recruiter is essential. A client must be kept informed regularly, primarily to ensure that the recruiter is on the right track, and for any necessary course corrections.

Timelines will vary significantly during a recruitment project.

Several variables affect the time it takes to get to the short list stage.

These include the geographic scope of recruitment efforts, time of year when the project is being done, and availability of client for feedback. A standard search assignment should take approximately three to five weeks to get to the short list stage.

Companies that expect results within a week or two cannot expect the same level of quality

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in the candidates as the process will be rushed and the research incomplete.

At the short list stage, the recruiter will have interviewed several potential candidates and is now in a position to make recommendations. Some organisations believe in the maxim “the more, the merrier” but, in fact, it is the role of the recruiter to properly screen and minimise the amount of candidates to the perfect few – usually three or four.

The recruiter will typically meet with their client to discuss these candidates and share their views on each. It is also an opportune time to raise any concerns that could be delved into deeper during the client interviews.

While it is the role of the recruiter to present a strong short list, it is the clients’ responsibility to keep the process moving forward Seal the deal It is also at the short list stage internally. that the typical search assignment Many searches drags on. It is critical to the derail at this success of the search process stage because that clients remain responsive as interviews and engaged. While it is the role of the recruiter to present a get postponed or rescheduled, strong short list, it is the clients’ responsibility to keep the process candidates moving forward internally. This disengage from means scheduling interviews with the process and all the stakeholders and sharing their perception feedback regularly with the recruiter. Many searches derail at of the client this stage because as interviews company is get postponed or rescheduled, distorted candidates disengage from the

process and their perception of the client company is distorted.

As the process moves towards a successful close, it is the recruiter’s role to assist their client with compensation negotiations. It is typically advised that the recruiter act as middleman during these discussions as it guarantees a continued and healthy rapport between candidate and hiring manager. It is also recommended that the recruiter be aware of candidates’ compensation expectations. It helps to avoid AUGUST 2011

situations where a client and candidate get to the offer stage to only find out that the candidate’s expectations are well beyond what the company is looking to pay.

The recruitment process described is essentially what a client should expect from its search provider. Beyond this, a recruiter must be a credible and trustworthy consultant to clients. The two key measures of a successful recruiter are the success rate in placing candidates, and the percentage of work that is repeat business.

There will always be a need for inexpensive recruitment solutions, and there are many of those available. However, when an organisation makes the decision to hire someone that will have a multi-million dollar impact on its operations, it is more prudent and warranted to spend more to ensure the search for that individual is done well.

ABOUT: Philip Lefebvre combines more than 15 years of executive search experience between Korn/ Ferry International, and Heidrick & Struggles.

He subsequently moved to Dubai in 2008 to participate in the growth of a regionally-based executive search firm.

Philip began his career in Montreal, Canada, assisting companies across the telecommunications and natural resources sectors. He then moved to Toronto, where he broadened his experience and worked closely with clients in the pharmaceutical, FMCG and financial services sectors. Prior to moving to the UAE, Philip was the Canadian Practice Head for the life sciences industry sector for Korn/Ferry International. Since his arrival to the region, Philip has had the opportunity to work with a wide variety of clients. He has successfully closed searches in sectors such as industrial, oil & gas, real estate, hospitality and pharmaceuticals. He has also worked across several key geographies including UAE, Saudi Arabia, Qatar, Egypt, Iraq, Morocco, Algeria and Tunisia.

Philip is Canadian but spent the first eight years of his life in Saudi Arabia. He holds a Bachelor of Finance degree from Concordia University in Montreal, Canada, and is fluently bilingual in English and French.

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Marketing Women <<<

Thinking pink?

Why should SMEs master the art of marketing to women? This is a two-part series on targeting a very important market. In the first part John Lincoln, Vice-President, Enterprise Marketing, du, will explain why it is important for SME owners and marketers or investors to include marketing to women as part of their core business strategy. Next month, he will advise on the strategies and tactics to get it spot on.

Be forewarned: Pinky pinky donkey Woe betides any small business owner or marketer who does not have a purposeful business strategy targeting women. I have often noted that small business owners and SME marketers ignore this most important macro segment.

Most assume that glossing pink all over their business premises or marketing collateral is all they have to worry about when marketing to and targeting women. Going pink is not a business strategy! SME owners and marketers should ensure that their propositions and services are targeted to meet the unique needs of women. This is not about a pretty colour!

My observations I have observed that in many small businesses and even large companies, the folks responsible for marketing, sales and overall business leadership are almost always overwhelmingly more male.

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SME ADVISOR MIDDLE EAST

If you do not believe me, look around – the majority of owners, marketers, creative folks, advertising, design teams, product development, sales and service teams and others are all mainly men, especially in certain regions.

Does this make sense? Why is this so? Aren’t we all missing something here?

Men really don’t get it nor do they understand the unique needs and perspectives of women. They assume that they could get away with just plastering pink all over the place and putting girlie stuff around, and that is enough to woo women to their business.

This reminds me of a quote: “A woman can say more in a sigh than a man can say in a sermon.”

Imagine that sigh reverberating across the world of social networks and you get the picture.

Ignore your women customers at your peril.

Why is it relevant?

SME owners and marketers should know that there are major global demographic, social, economic and AUGUST 2011

Marketing

technology shifts and marketing trends that are altering the traditional landscapes of small businesses. Understanding these changes is essential to the survival of your business and therefore the sustainability of your business model.

Demographic trends Look around you! There is a one in two chance that you will see a member of the “fairer sex”.

Women make up about 48% of the population in the world. What this means is that one out of every two potential consumers for a small business is a woman.

Look at most businesses of any size. I am flabbergasted as to how we cannot represent in the workplace of any business, some level of proportionality to the female population around us!

I am sure that you would also agree that, ignoring or not, really understanding half of your potential customers is definitely not a good business strategy.

In some age groups, globally women make up much more than half of that population group. In the over 65 years in age group, women make up about 56% of the population. This could be explained due to women’s longer life expectancy. This means that older women are healthier and more active in later life than men. In many developed and developing economies, women over 50 have evolved from being a homemaker to being a purchaser of high ticket items.

This is not surprising and makes perfect sense as, once the college tuitions fees are paid and their kids move out, these older but healthier and empowered women have a much higher disposable income.

Who makes the purchasing decisions?

Who rules the roost?

Globally, women decide, influence or account for about at least 85% of

all purchases. This includes large ticket items like houses, cars, and the selection of healthcare and financial services providers as well as white goods and more.

Most men, (despite their personal experiences as a partner and or husband), assume that this is only for household and food items. This is certainly not true. In fact women make the decisions or highly influence the purchase decision in almost anything ranging from vacations to the purchase of technology items like PCs, to over-the-counter pharmaceuticals. This is not a truism for the developed economies alone; this is true for any part of the world. Women exert a high influence on any purchase.

Therefore, if you are a small business owner or marketer retailing or distributing almost any item, it makes sense for you to pay special attention to women.

Women in the workforce All over the world, from Dubai to Dhaka to Dallas, the number of women entering the work force is increasing. What this means for SMEs is that women have independent and more disposable incomes and that they can spend more than ever before.

This also means that women have less time with their family.

This has implications on how a small business meets the needs of household goods and grocery items versus “stuff” like clothes, handbags, perfumes and the like that women buy or use for their personal use.

This also means that SMEs must differentiate the experience when women shop during work days versus the weekends. Given their lack of time and hectic schedules; balancing home and work life, affordability, convenience and efficiency, should almost always rule the design of any proposition, when women shop for their

household or “personal” items.

It would also be wise to note that women do appreciate their “me time”. Shopping during their “me time” will require businesses to ensure designing a different experience.

Decreasing birth rates and increasing divorce rates

There are two other important Given their and often ignored demographic lack of time trends that businesses should note. They are the decreasing and hectic birth rates and increasing divorce schedules; rates in developed and developing balancing economies. What this means home and for the small business owner or marketer is that the women have work life, more time for or by themselves, affordability, higher disposable income and convenience lesser influence by a third party. and efficiency, should almost Women are more oriented always rule the detailed Women are more detailed oriented design of any than men. They look at the nuances of a sale, a deal or an offer. This is a proposition double-edged sword for businesses.

As an SME, you will have a better chance of success at promoting discounts, coupons and trade-ins. It is a known fact that women are more likely to use coupons than men. However, if your proposition design is incomplete, they would also see the flaws in it.

Women are digital Most women in the developed and developing economies are digitally savvy. They use the Internet for shopping, keeping in touch with their friends through e-mails and instant messaging, and are very active on social networks. This has a lot of implications for SMEs; the obvious one is that they have a huge potential online shopper base.

Given that women nurture relationships with friends better than men, they are more likely to pass on deals or savings that they AUGUST 2011

SME ADVISOR MIDDLE EAST

31

Marketing garner insights and develop propositions that women understand and need.

The last word

John Lincoln

have come across to their friends.

Women are more appreciative of a business’s intent to serve them better. Therefore women are more like to respond positively to requests to serve on a select online product or service panels.

This is important for a small business owner or marketer as women are not only your best chance for referrals but they can better help you improvise your proposition to serve them better.

Women are more loyal customers than men Women focus on relationships better than men. Women see themselves as interdependent and more connected then men.

They will put in extra efforts to connect with people, society or even a business. Women focus on maintaining a relationship more than men. Businesses have a better chance of promoting loyalty-based propositions to women than men.

Women are more likely

32

SME ADVISOR MIDDLE EAST

than men to give a business a second chance than men.

Women do not give loyalty to an organisation but rather to people in the organisation.

This has huge implications for SMEs, who have a better chance of having close relationships with their customers than large organisations. SME marketers should ensure that they treat women as individuals and encourage one-on-one interaction.

However, small business owners must be aware that retaining key service employees must be an integral part of their strategy.

Women feel misunderstood Research has shown that women feel misunderstood in most marketing campaigns ranging from food to healthcare, automobiles and financial services. This is a tremendous opportunity for SMEs to AUGUST 2011

Women are more detailed oriented than men. You will have a better chance of success at promoting discounts, coupons and trade-ins. It is a known fact that women are more likely to use coupons than men. However, if your proposition design is incomplete, they would also see the flaws in it

Any business that ignores purposeful, structured and targeted marketing to women is making a huge mistake.

Most SMEs have a tremendous opportunity and potential to market to women, irrespective of their product or service categories.

A good start would be to hire more women in your workforce.

Men don’t really understand women and women feel that most marketers miss the mark.

So whatever your business, do ensure that your business strategy and personal leadership takes women into account.

As someone said: “Women get the last word in any argument. Anything a man says after that is the beginning of a new argument.”

ABOUT: John Lincoln has over 20 years telecommunications experience in the USA, Japan, Europe, India, Dubai, Malaysia, Latin America and various other countries. He has extensive senior expertise in international telecommunications sales, marketing, business development and customer service delivery. John also has executive experience with general management, marketing, P&L, product development and revenue management responsibilities in both consumer and enterprise segments for both the fixed and mobile sectors. In addition John has an impressive operational and management portfolio of established proven expertise in incremental business value creation and management of large multi-cultural teams in Vodafone Global in the UK, Japan Telecom in Tokyo, AirTouch and Pacific Bell (now AT&T) in San Francisco and Tokyo, Airtel in Delhi and other telecom and technology companies.

Additionally he has extensive large scale business development, M&A and operational project experience across the USA, Europe, Asia and Latin America. John has an MBA and MS in Telecommunications from the Golden Gate University in San Francisco, California, USA. You can find John’s personal blog at johnlincoln.blog. com. He can be contacted via: john.lincoln@ gmail.com, Twitter: @lincolnjc.

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44

Marketing Integrating social media

<<<

THE RIGHT MIX OVER THE LAST FEW YEARS, THE WORLD HAS WITNESSED A TRANSITION FROM TRADITIONAL MARKETING TECHNIQUES TO HUGELY POPULAR DIGITAL MARKETING STRATEGIES. WITH THE SIMULTANEOUS GROWTH IN THE USE OF SOCIAL MEDIA PLATFORMS FOR BUSINESS, ORGANISATION’S MUST BRING TOGETHER THE BEST OF OFFICIAL WEBSITES AND SOCIAL NETWORKS TO CREATE UNIQUE CUSTOMER EXPERIENCES AND STAY ONE STEP AHEAD OF THE GAME, SAYS ABBAS ALIDINA, FOUNDER AND DIRECTOR OF LOGICKS.COM.

Like us on Facebook.

Follow us on Twitter.

How many times per day do we see or hear businesses telling us to find them on social media? It is great to see the large number of companies that are finally incorporating social media into their business strategies. Unfortunately, most companies are rushing into tapping this trend and not thinking through their social media strategy.

Customers no longer trust advertising In the 2010 Global Trust Study conducted by Nielsen it was discovered that customers trust family and friends much more than they trust advertising.

Businesses have finally woken up to the fact that customers are influenced more by social media conversations than they are by the content on business Websites.

The social media bandwagon Whether or not it is for the right

34

SME ADVISOR MIDDLE EAST

reasons, businesses have jumped on the social media bandwagon.

It is quite interesting to see the volume of businesses that prompt customers to either visit their Facebook page or find them on Twitter. It has become common practice to plaster social media icons across an organisation’s Website along with a call-to-action that prompts customers to visit these pages.

Is it possible that we have been blinded by the hype of social media and are not doing it correctly?

Stop losing your Web traffic Businesses have been quick to send their hard earned Website traffic away to social media sites such as Facebook. While this business strategy may have contributed towards helping Mark Zuckerberg to win the Time Magazine 2010 Person of the Year award, this may not be the best approach for your business.

If you have invested significant time and money to attract relevant traffic to your Website, blindly sending the traffic away to a third AUGUST 2011

party Website could mean that you are actually losing potential customers.

In one particular instance, a client was losing Website visitors to a third party site at a critical point of conversion. Users of the Website were successfully navigating through the Website until they were ready to make a payment. Unfortunately, just before confirming the order, customers were distracted by a large “Like us on Facebook” button. This resulted in a much lower conversion rate for the Website because when users clicked this familiar button, they disappeared into the world of Facebook.

If you have invested significant time You don’t own social and money to media attract relevant Your business Website is your own property. However, you do not own traffic to your Website, blindly anything on a social media site. Your personal profile, company page, sending the friends, fans and conversations all traffic away to belong to Facebook. a third party Sending all of your hard earned traffic to social media sites can Website could mean that you be a risky strategy. What if you’re Facebook Page or Twitter accounts are actually get deactivated? What happens to all losing potential the relationships you have earned? customers It is imperative that businesses begin looking at the long term implications of building and maintaining relationships with various stakeholders on social media sites to protect themselves and mitigate risk associated with the deactivation of these sites.

In the long term, you want to bring as much of the earned

Marketing

relationships, conversations and customers back onto your own property.

Social Website maturity levels The social Website is what results when you combine social media with your website. It represents an opportunity to provide customers with a superior online experience compared to what was previously possible. Social media can actually be integrated with your Website in a number of ways. The following diagram illustrates the various social Website maturity levels.

0. No Integration

At this stage, organisations have a Website as well as a social media presence, but there is no integration between them. Visitors to the Website may not be aware of the organisation’s social media presence or vice versa.

1. Social Linking

This is the first level of social media integration and represents the stage at which most companies start. Businesses start by linking away from their Websites to their social communities such as Facebook and Twitter, giving users a chance to find you on Social media.

At this level, companies aggregate conversations that

occur on social media back to the company’s Website. This could be

2. Social Aggregation

something as simple as a Facebook fan box or a stream of Tweets from the company Twitter account.

At a more advanced level, the company could also aggregate conversations from customers in addition to its own posts. For instance, if customers are able to see relevant Tweets from other customers, this can make the conversation feel much more authentic. In this scenario, it is recommended to allocate a curator or administrator to the aggregation process. This person will be responsible for filtering spam and irrelevant Tweets.

Product pages on Websites are not just about products anymore.

They are about the customers who bought the products. We now have the ability to pull in relevant conversations from social media directly onto your Website, which is quite remarkable when we stop to think about it.

Whereas social aggregation focuses on pulling in conversations to the Website, social publishing is the opposite and focuses on pushing conversations outwards to Social Media. Allowing your visitors to “like”, “re-tweet” or “share” something on your Website will effectively update their social media profiles with your content, enable their friends to see it and will most likely trigger a viral effect.

In this scenario, the Websites visitors have effectively become your marketing team as they promote and share information about the business to their

3. Social publishing

Product pages on Websites are not just about products anymore. They are about the customers who bought the products. We now have the ability to pull in relevant conversations from social media directly onto your Website

Abbas Alidina

ABOUT: Abbas Alidina is the Founder & Director of Logicks.com, a digital marketing agency that helps businesses across the Middle East to improve their online performance. With more than ten years of marketing experience, he has developed strategies and executed projects for numerous global and regional brands.

For more information please visit www.logicks.com or follow Abbas on Twitter @AbbasAlidina

AUGUST 2011

networks and it doesn’t cost the business anything.

Social context is an advanced level of maturity in the social Website. This is when a users’ experience of the Website varies dynamically depending on their context. To achieve this level, the Website must be integrated with social media to a higher degree than the previous levels.

Firstly, the Website must have a “social login” facility to enable users to log in with their Facebook, Twitter or other social networks.

Once a user has signed in, the website can provide them with a customised experience based on their social media profile.

For instance, if users have indicated that they have a specific hobby, the site can present them with content related to that hobby. Websites can also provide them with specific suggestions based on the interests of their friends. These are the types of experiences that are possible when we move up the maturity levels of the social Website.

The bottom line is that although the use of social media for business creates opportunities for organisations to create dynamic online user experiences, social media strategies require a keen dedicated effort towards creating and managing easily accessible and usable sites. The social Website maturity levels presented above can be used as a guide when upgrading or redesigning your website.

At the end of the day, an organisation’s goal is to get customers to visit its Website frequently and recommend the site to friends and acquaintances to create an efficient viral loop.

SME ADVISOR MIDDLE EAST

35

Marketing Twitter

<<<

The loudmouthed monster Alan Devereux, Communications Officer for the British Business Group, Dubai and Northern Emirates, discusses the dynamics of Twitter and how to influence your audience through it.

Social media didn’t exist until very recently. Just a few years ago it was called social networking (remember that?). Twitter turned social networking sites into social media sites; it changed the rules of the game.

Whether or not you are active on it, you would have heard of Twitter, the Website that allows people to update others in 140 characters or less (the medium on which NASA chose to tell the world it found ice on Mars and on which the US government announced the death of Osama Bin Laden).

I have found that a good way to describe Twitter is to compare it to a room full of people, all shouting and all wanting to be heard. The more followers an account has, the louder it can shout. The more someone “tweets” the stronger

36

SME ADVISOR MIDDLE EAST

Alan Devereux

that voice will grow. Not being heard above the crowd? Make friends with someone who has a really loud voice and get them to shout on your behalf. Twitter highlights the influence of people (or in some cases, the perceived influence). Whether your influence is real or perceived, what you say is important.

If you have a customer service type company you would do well to sign up to Twitter. Instant access to a company when my new purchase has failed me seems almost gift-like. Having to drive back to the shop or AUGUST 2011

wait for thirty minutes on the telephone is a chore. A customer service agent on Twitter can deal with multiple queries at once; the same agent on a phone line can only help one customer at a time. If you have a small business, perhaps ten employees, maximising time is essential. Twitter is useful.

The pitfalls Twitter is, however, a very dangerous place. Once you enter the “Twittersphere”, there is no turning back.

Customers and clients will expect instant access to you; they will expect instant and informed replies. Potential customers will be keen to hear what you have to say, you will need to deliver a steady stream of updates. Remember, the rest of the room is shouting. If you sit quietly, you will be ignored – and apathy is the greatest threat of all.

Twitter can also be very time consuming. To overcome this you can schedule messages using free applications. If you do chose to schedule tweets you must also remember to partake in an equal amount of real conversations. You would not watch an hour of television advertising but you tolerate some because it accompanies the show you want to watch. TV is a balance between adverts and content, your Twitter feed should be the same. I use five different scheduling applications to help manage our account, a

simple Internet search will help you find the one (or five) that suits you best – but please remember the balance, you must balance adverts and promotion with real conversations.

The payoff We now know that Twitter can be useful, is definitely dangerous, and it can take a lot of time. It appears to be two-thirds negative.

What is the payoff? How do we measure return on investment? Well, you are reading this article because of Twitter. The good people at SME Advisor ME have a Twitter account. I saw their messages and offered to write a column. Knowing they will promote my article online, I have immediately increased my company’s exposure.

Also knowing that this fine magazine is delivered to thousands of ADCB and du customers in print form, I know my article will be read by our target demographic, which is business people.

If it were not for Twitter I might not know the magazine existed, because of Twitter I write regularly for it. If you do not have a Twitter account and are reading this in the magazine, I have reached you. At the BBG we measure ROI from social media usage in different ways – brand exposure is one of them.

ABOUT: Alan Devereux is a husband, a father, and Communications Officer for the British Business Group, Dubai and Northern Emirates, and can be found here: http:// ae.linkedin.com/in/alandevereux. He can be contacted at info@britbiz-uae.com

Marketing PR <<<

How to deal with a PR disaster Bad PR is a reality for all businesses at some point or the other. The genius is in how you face up to it and turn it around, says Sawsan Ghanem, MD, Active Public Relations & Marketing Communications Consultancy.

No business, big or small, is immune to some form of bad PR at some point during their existence; it’s the way of life, it’s part of growing up – like your first crush or the clothes that your mum insisted on making you wear for all family photographs, much to your embarrassment.

But, just like with those experiences, it doesn’t necessarily mean that the business has done something wrong or made a bad choice of PR partner or some poor decisions; it may just have been the target of a disgruntled ex-employee with an axe to grind or, at the other end of the scale, be a victim of leaked confidential information through unforeseen circumstances.

Media, wherever you are in the world, will be keen to cover your company’s embarrassing moment as, more often than not, bad news gets more column inches!

So now that you have come to terms with the inevitability of varying degrees of bad

38

SME ADVISOR MIDDLE EAST

PR in the future, the best and most effective approach is to focus on how you will handle this and, even better, turn it around, use it to your advantage or neutralise it. (Just think about that awful outfit and the wonders of Photoshop, or tell everyone it was all the rage that year.)

What if Every company needs to have a crisis management plan in place to deal with any possible scenarios – all potential “what ifs” should to be covered.

You will need to deal with the situation or issue head on rather than go into denial.

No comment means getting nowhere, except into even more hot water. When you are seen to be facing up to your issues, remorseful, accepting of the facts and dealing with what went wrong, you will be looked upon with respect; in fact people who may have never wanted to buy your products, use your services or visit your premises may become your best customers!

To ignore what’s going on, to bury your organisation’s AUGUST 2011

Sawsan Ghanem

head in the sand or, even worse, refuse to deal with the media who, at first, criticised you is the worst possible path as it will inevitably send the wrong signal to people who will then come up with their own conclusions, whether you are innocent or not.

Remember, in this new and exciting digital age we are on show all the time and people can talk about us all the time and do this in very public domains.

Monitor closely what is being said about your company on the Internet as, after all, it’s a 24/7 medium that the whole world has access to. This is pretty straightforward and you

can use a wide range of tools that monitor and report every time you are mentioned.

Engage with your audience and the media and rebuild, refresh or renew your relationship with them through different platforms including social media. You need to be seen as approachable and not hiding anything. A company going through a crisis, big or small, should ensure that its key spokespeople are on standby, have a grasp of the entire picture and know how to convey the key messaging in a factual and informative manner – honestly, openly and, when necessary, with humility.

Whatever you do, make sure that anything you communicate or commit to, you deliver on as otherwise you will be the victim of even worse publicity. It’s like those photos of you in cringe-worthy outfits – they may not be flattering, but they are of you, so deal with it and make the best of it.

Good luck...

ABOUT: Sawsan Ghanem is the Joint Managing Director of Active PR. She has lived in the Middle East region for the greater part of her life. Sawsan lived and studied in the UK for a few years where she gained her BSc in Chemistry & Management from Kings College, London University and MA in International Business, from Webster Graduate School (London Campus).

Sawsan began her career in PR over 14 years ago, when she caught the PR & Communication bug. She founded Active PR in the summer of 2003 along with Louay Al Samarrai.

Sawsan has in-depth experience in strategic PR campaigns, media relations, creative thinking, crisis management and more. She is the SMB Advisor Middle East winner [before the magazine was rebranded SME Advisor] in the category of Admirable Woman Entrepreneur (2008).

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Sales Customer visits

<<<

Are you knocking on the right doors?

In todayâ&#x20AC;&#x2122;s world of selling, there is much emphasis placed on how many customer visits a sales person completes each day. However, if PRIORITIES ARE only on the number of sales calls then there is likely to be a lack of focus on exactly who is being visited and why, which can have a huge impact on your overall revenue, says Peter Heredia, Managing Director, Max Sales Solutions.

Research has shown that on average it takes more than five visits to close business more than 80% of the time. This appears to hold true whether this is closing business from acquisition visits or from development. It is therefore critical that these type of calls are maximised while ensuring existing customers are kept happy.

Step 1 Identify how many visits can you physically make This is a simple calculation. number of visits possible per day X number of days per month X number of salespeople

= Total Visits There is general consensus that sales people often boost their visit rate by operating within their comfort zone and visiting their friends and friendly customers. It is important to ensure that visits are planned based upon the impact on results, rather than on how enjoyable they are. So how do you get the mix of visits right in order to maximise revenue?

It is recommended that you look at the following: The type of visits your sales people should be making How they can work out which companies they should be visiting The impact it will have on your revenue.

The starting point is to look at the type of call that a salesperson makes. It may vary a little from business to business, but in general there are three types of visits a sales person should be making.

40

SME ADVISOR MIDDLE EAST

AUGUST 2011

Sales

Step 2 Calculate the number of visits that are needed to maintain existing customers To do this for each salesperson you need to:

A Remove a list of existing customers in revenue order for the last three months trade.

B Write down next to each one how frequently they need to be visited every three months in order to keep them satisfied.

C Calculate the total number of visits required for this period (this is the total number of maintenance calls that should be made).

Step 3 Calculate how many visits are available to work on opportunities

D Remove the number of required maintenance calls from the total visits calculated in Step 1.

E You are left with the number

Research has shown that on average it takes more than five visits to close business more than 80% of the time. This appears to hold true whether this is closing business from acquisition visits or from development

How much sales training investment would you need to make to increase your closing ratio? Itâ&#x20AC;&#x2122;s much simpler to focus on making sure that the balance between maintenance calls and those pursuing opportunities is improved.

This example provided delivers a 20% increase in revenue through just a little focus.

of visits that are available for opportunity meetings (development or acquisition) and there is a clear call ratio to follow.

Impact of redirection If a company is spending 50% of their available sales time on opportunities and the other 50% on maintenance, then this is how their monthly figures will look:

CURRENT PERFORMANCE ACTIVE OPPORTUNITIES

10

AVERAGE VALUE PER OPPORTUNITY

12,000

CLOSING RATIO

25%

SALES CYCLE PERIOD

30 DAYS

MONTHLY REVENUE REALISED

30,000

If you conduct the visit optimisation exercise you establish that in fact you only need to spend 40% of your time on keeping your existing customers on board and happy. This means that you are able to increase the number of active opportunities being worked by two. Letâ&#x20AC;&#x2122;s see what impact this will have in our example.

OPTIMISED PERFORMANCE ACTIVE OPPORTUNITIES

12

AVERAGE VALUE PER OPPORTUNITY

12,000

CLOSING RATIO

25%

SALES CYCLE PERIOD

30 DAYS

MONTHLY REVENUE REALISED

36,000

ABOUT:

Peter Heredia

Peter Heredia is the Managing Director of Max Sales Solutions. He has worked with sales teams around the globe for more than two decades and has worked in the Middle East for the last ten years.

If you would like to talk to Peter about your sales team then please contact him on peter@maxsalesolutions.com

AUGUST 2011

SME ADVISOR MIDDLE EAST

41

Legal IP

<<<

Let’s start with answering a few questions: • Do you sell ideas?

• Is your business profile service oriented?

• Is your business, product, or service exclusive?

• Have you identified it with a unique logo, style, design or simply a mark? Have you ever analysed how valuable an IP is?

• Have you ever considered evaluating the business module, process, idea or mark, in terms of an asset value?

The real asset

our y g n i Know worth of your the asset valueR, CEO and what wondered Geethalakshmi Have you ever . property is, asks Business Attorneys intellectual ssociated A , Managing Partner

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Business evolution is the consequence of the simple process where a product, service, module, or process will sell.

Income generated from such sale justifies the production, thereby crafting a value for what is created and thus spawning the birth of a business. Every businessperson initiates several measures to protect their business. Ever wondered what you need to do to protect the idea or intellect behind your profit?

This brings us to the crucial question – is intellectual property the actual asset?

In today’s competitive business world, there is just one single answer – yes. Intellectual properties are the most vulnerable, yet cashing asset, for every SME that always goes either underestimated or never estimated.

Intellectual property audit is the contemporary, yet critical, form of appraisal to evaluate and assess a SME’s net worth in terms of intangible asset value.

All companies insure their hard assets against loss and their company against liability, but most outdoor related businesses

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will not have insurance against loss of their intellectual property.

So what is needed is to identify what intellectual property a company owns that is valuable to its business in terms of setting it apart from competitors and whether the company has taken the appropriate steps to retain its value and safeguard it against loss.

This article will outline the some of the more obvious steps involved in this kind of audit.

Businesses should treat intangible assets like physical assets; they should make wise decisions in acquiring the assets, take steps to protect the assets, monitor the assets to ensure that they are not taken, and take action against others who attempt to steal the assets.

However, many businesses neglect their intangible assets until it is too late. Though the word “audit” brings fear to many hearts and puts people on the defensive, an intellectual property (“IP”) audit is one of the best tools available for companies to offensively develop, protect, and maximise the return on their intangible assets.

When to IP audit?

To determine whether an IP audit should be undertaken, a business should consider the following types of questions: Do we know what intangible assets the company owns, licenses, or controls?

Have we taken steps to protect our IP assets?

What is the status of the company’s known intellectual property?

Do we know how much we are spending on IP assets?

Do we know how much our IP assets contribute to our bottom line?

Is a product line going to infringe a competitor’s patent, trademark or copyright?

Is a product line protected? If

Geethalakshmi R.

The audit can help ensure the validity of conveyances of intellectual property rights and eliminate any gaps in the chain of title or any potential dispute over ownership rights and to determine whether the scope of the rights being acquired or sold are subject to the rights of third parties

not, what are the options?

Do we know what IP assets are controlled or owned by our competitors?

Do we know how our competitors will react to our products?

Can our IP assets be used to obtain financing or licensed to third parties?

Have we budgeted for potential IP litigation?

Do we need to copyright everything? What’s really worth protecting?

Do company policies properly secure trade secrets, confidential information and other intellectual property?

Have we developed uniform procedures for handling intellectual property issues, including standardised agreements for use within the company and with third parties?

Are we adequately protecting our assets and preventing unauthorised third parties from infringement our intellectual property rights?

Are we losing valuable royalties or market share to an infringer?

Have we identified methods to increase branding of the company’s name and to crosspromote brands?

Have we ensured that we are in compliance with all of our licenses?

IP audit process:

SME IP portfolio analysis: 1. Identify and assess 2. Technology and law 3. Market and value 4. License and asset net worth 5. Commercialisation and disposition AUGUST 2011

SME business analysis: 1. Set up 2. Legal compliance 3. Actual IP rights:

a. Trademarks, copy rights, designs, trade secrets and modules The audit process will categorise IP assets according to type and will determine what protection, if any, exists and the scope of this protection to ensure adequate protection is achieved.

Contracts are reviewed to determine whether such contracts adequately address the company’s intellectual property rights.

Inbound and outbound licensing agreements, employment agreements, employee manuals, work made for hire agreements, copyright assignment agreements, agreements with competitors, and any other agreements that may directly relate to ownership of IP assets are reviewed.

A list of names, logos, and trademarks are compiled to determine whether the marks have been registered and protected for the products where the marks are used. Also identified are quasi-trademark uses, such as domain names, trade names, and fictitious business names.

Promotional materials are reviewed to determine whether copyright registration has been obtained or are necessary.

Samplings of print and online publications are reviewed to identify potential risks.

Consideration must be given to whether Websites comply with laws, regulations, and sound business practices relating to privacy and data collection, terms of use, message boards, linking, banner advertising, and use of domain names and met tags.

In addition, products, publications, or Websites may contain protectable trade dress elements. Other information, such as databases, software, expansion plans, and marketing strategies SME ADVISOR MIDDLE EAST

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may qualify for protection as trade secrets. Further, the business’ policies regarding confidential information are reviewed to ensure that trade secret protection is encouraged and enforced.

Inventions and technologies are reviewed to determine whether patent protection is appropriate. Existing patents are assessed for validity and risk of infringement.

After completing the analysis, an audit report is prepared evaluating whether the business has sufficiently protected and enforced its IP rights and recommending a prioritised plan of action for correcting deficiencies and reducing risk, and recommendations on implementation and training for key personnel.

IP audits and the employee An IP audit helps a company educate employees on intellectual property rights, design uniform policies and procedures for protecting a company’s trade secrets and confidential information, set up a programme for the company to register and docket patents, trademarks and copyrights, and alert the company to any errors in pre-existing registrations to avoid a claim of invalidity, misuse or fraud.

Further the audit can help ensure the validity of conveyances of intellectual property rights and eliminate any gaps in the chain of title or any potential dispute over ownership rights, determine whether the scope of the rights being acquired or sold are subject to the rights of third parties, and ensure that the adoption and use of a new product, creative work, technology or trademark will not violate the rights of any third party.

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Agreements protecting intellectual property A key part of the intellectual property audit will be to identify and assess the adequacy of agreements, which should be in place to protect intellectual property. These agreements are of two types: internal agreements with employees and third party agreements.

Every company with intellectual property to protect should have employment agreements with employees having access to such property, not just key management. The employee agreements should include provisions whereby the employee recognises the ownership of the employer in the trademarks and copyrights of the company and agrees to protect its trade secrets from disclosure both during and following the term of employment and regardless of the circumstances under which employment terminates. The employee agreement should further acknowledge that the employer is the owner of the copyright of all work performed on the job (and in certain circumstances off the job).

For employees with broad access to trade secrets and customer relations, and perhaps for others, the employer should have in place agreements whereby employees covenant not to compete with the employer after they terminate their employment.

These types of agreements must be carefully drafted because they are often challenged as unfairly restricting the liberty of a former employee to pursue employment of his or her liking and courts will give any restriction on this interest careful scrutiny.

Although different states have formulated different policies on when covenants not to compete will be enforced, most require them to be limited in time (certainly five years or less, with AUGUST 2011

A business allowing independent contractors to have access to a company’s copyrights and the right to affiliate or represent itself as being associated with the business should be dealt with in licenses, specifying the terms and conditions under which the independent contractor is allowed to use the copyrighted materials and trademark association with the business

two years generally being safe), limited in geographic coverage to no more than the scope of the customer base and competitors, and limited in the scope of the restriction to protect only what the business is entitled to protect.

One method of limitation that has been approved in some states is to prevent an ex-employee from soliciting any existing customer of the business and any prior customer of the business within a defined period of time with which the employee had contact.

These covenants can be important and thus it is important that they be carefully crafted to meet the needs and circumstances of a particular business without overreaching.

Contracts with third parties should be audited as well. If the business uses independent contractors for the delivery of its services, work for hire agreements should be in place as well as several of the provisions usually put in employment agreements, such as nondisclosure provisions and covenants not to compete.

A business allowing independent contractors to have access to a company’s copyrights and the right to affiliate or represent itself as being associated with the business should be dealt with in licenses, specifying the terms and conditions under which the independent contractor is allowed to use the copyrighted materials and trademark association with the business.

ABOUT: Advocate Geethalakshmi is held in great esteem and high regard amongst her profession. She is the CEO and Managing Partner for Associated Business Attorneys FZC, UAE, ABA Management Consultants, Dubai UAE, ABA Investments LLC, Dubai UAE and Associated Business Attorneys, Bangalore India – a position which is not common for an expatriate woman in the profession. Geetha can be reached at geetha@abattorneys.com

SME ADVISOR EDITORIAL BOARD

We are hiring! and adding to our existing board

To ensure that our readers keep getting rich and varied advice, not just in print but also in our various other initiatives like social media and events, we will be regularly reviewing our editorial advisory board. The aim is for our readers to get access to a core group of advisors from our existing panel, and also a rotating group of advisors, who change every year.

Are you up for the challenge? Itâ&#x20AC;&#x2122;s not for the fainthearted, but it is a platform to connect with the biggest and most dynamic SME community in the region!

Get in touch with us if you are an industry guru who wants to give something back to the business community by sharing your expertise and advice. Mail ketaki@cpidubai.com.

For more information on our editorial board members, visit www.smeadvisor.com

Finance Savings

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How to retire at 55 The chances of most of us retiring in comfort appear to be pretty slim. But that’s something you’ve got to think about seriously, whether you own your own business or work for someone, says independent financial advisor Greg Pogonowski.

I know that this is alien for most employers in this region, unless they have their headquarters in another country where remuneration norms are different, but instead of getting a pay rise why not ask your employer to pay into your pension plan?

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Many of us simply aren’t putting enough money aside to be able to give up work before our mid 70s.

Indeed, an increasing number of people are reaching middle age without anything set aside at all, perhaps relying on state benefits in their home countries.

How much will you need?

It is possible to retire early. It’s just not easy, but things worth doing rarely are. As one of my mentors said to a colleague of his in the US: “You live in the richest country in the world – and you are broke. Who sold you that plan?” Can the same be said of the UAE too? It still puzzles

me why people end up with not enough when there are enough options to help you plan; but that does mean making a small sacrifice today and reining in the “Dubai lifestyle” a bit perhaps.

If you want to retire by the age of 55, it’s time to do some math. It will come to you before you know it, and one thing that gives senior citizens dignity in older age is money – with it you have choices, without it not many.

So, exactly how much cash is needed to cover retirement varies depending on the person and their lifestyle. Sadly, there’s no simple answer. However, pension experts tend to tell you to aim for between half and twothirds of your current income.

This still means a “pay cut” of

33-50% on the day you retire!

Most SME owners have two days in their current weekend, and most retirees have seven. Funny how just at the time when most people do the most of their spending (the weekend), they will have “longer” weekends and yet less money!

The current national average salary in the UK stands at £25,800. If we translate that into US dollars at the current approximate rate, we arrive at a figure of $41,280 which is only around AED12,600 per month – not that extravagant. So let’s see how much you need to save in order to enjoy a retirement income of around AED 12,600 per month.

You have to start early What the table above clearly shows is that it’s next to impossible to retire early if you leave your pension planning late – very few SME owners or their workers in any country are going to be in any position to devote 50% (or more) of their salary towards their pension, as would be required for workers aged 35 and over. The first thing that is abundantly clear is that if you want to retire early, it is absolutely crucial to start saving early, and with meaningful sums.

Take advantage of your employer It’s worth noting that in my calculations above, I relied entirely on the personal

Finance

contributions that you make towards your pension. However, your chances of retiring by the age of 55 are far higher if your employer offers to make a contribution as well, where they will also pay a set percentage into your pension pot. I know that this is alien for most employers in this region, unless they have their headquarters in another country where remuneration norms are different, but instead of getting a pay rise why not ask your employer to pay into your pension plan?

People tell me there is a gratuity scheme in place by law, and that is all very well, but the amounts that are paid out are insignificant when compared with your needs, whether you are an employee or a business owner. A good way to look at this if you are an SME owner, is to pretend you are an employee – what will you get personally? Why not use your money to safeguard your personal future by creating a fund outside your business so you are not dependant on it for your future income?

Assuming you as an SME pays the equivalent of 5% of your salary, let’s see how much lees you need to invest now, to enjoy a life free from work at an early age:

month in order to put enough cash aside to retire at such an early age, it’s a lot easier if you can take advantage of cash from your employer as well. For all SME owners, that means you.

If you want to ditch work by 55, it’s crucial that you take advantage of whatever pension help you can give yourself.

What’s more, even if your employer doesn’t currently offer a pension scheme, they may soon be forced to. Governments are looking into proper pension provision, not just a gratuity.

Do note that a number of assumptions are made with all the tables here: A compound growth rate of 7% has been used, while a management charge of 1% is deducted from the final figures. Inflation is assumed at 2.5% compound, while annual contributions are assumed to increase by 2.5% each year in line with inflation.

As you can see, while you still need to save a serious amount every

here and there, but if you have some reasonable fiscal discipline it should be possible to save the requisite amount.

It’s a sacrifice Even with employer help, it’s still a pretty big task to set so much cash aside each month towards your pension. In order to put aside such a sum every month, you’ll need to make some serious sacrifices.

A healthy aversion to getting into debt will help, while you’ll need to forget about keeping up with the Jumeira Janes – no Kindles or iPads for you perhaps? Your entire cost of living will need to be kept to a minimum. Personally, I’m too much of a sucker for a treat

Greg Pogonowski

Not all pensions are the same, so before you even consider signing on the bottom line, be sure you know exactly what sort of performance you should expect from your cash. You also need to be fully aware of the charges involved – even small differences in the charges can make a huge difference to your final pension

Take control of your cash Of course, in order to reach early retirement it’s not enough to put that money in your pension and hope that it performs well – in order to get the most out of your pension contributions, you really need to engage with your pension.

Not all pensions are the same, so before you even consider signing on the bottom line, be sure you know exactly what sort of performance you should expect from your cash. You also need to be fully aware of the charges involved – even small differences in the charges can make a huge difference to your final pension.

You should regularly look at how your fund is performing and, if it’s not up to scratch, don’t be afraid to move elsewhere.

Is it worth it?

So after all that, is it worth trying to retire so early? Personally, I’m not so sure.

Don’t get me wrong, I’d love to retire at an age where I can actually enjoy my newfound freedom years. But I’d quite like to enjoy my younger years too.

Of course, I know that I need to keep up my pension contributions at a decent level so that I have a healthy fund by the time I do retire, but that doesn’t mean I want to sacrifice my holidays (however modest) or whatever other treats I get to enjoy every now and again.

And anyway, lots of us actually enjoy work (no matter how much we may deny it). My grandfather didn’t completely retire until he was well into his 80s, and I’ve no doubt I’ll be the same. Building up a decent pension pot is really important, so be serious about the amount you put in. After all, you want a serious amount back, but it doesn’t have to be entirely at the cost of enjoying your younger years. A bit of balance is more like it.

ABOUT: Greg Pogonowski is an independent financial adviser with over 27 years experience in the financial services profession, he works with Pinnacle Asset & Wealth Management. He can be contacted at greg@yourmoney-matters.com, or by calling +971 (0) 50 8769035.

AUGUST 2011

SME ADVISOR MIDDLE EAST

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Business growth Clients <<<

It’s quality, not quantity If you have hit a wall where growth is concerned, it is time to take a fresh hard look at yourself and your business. Get a new mirror. From a different perspective you will find there are several hidden costs and opportunities which you can fix, to accelerate sales, cut costs and increase profits, says Vikram Venkataraman, Director, Salvus Strategic Advisors.

Those of you who have read the fable, Snow White and the seven dwarfs, the evil Queen has a magical mirror which she looks at every day and asks, “Mirror, mirror, on the wall, who is the fairest one of them all?” to which it dutifully replies “You my Queen are the fairest one of all.”. Then one day it tells her that she isn’t.

My advice would have been for the Queen to throw the old one out and get a new one, but of course life is far more complicated than that.

This article is rooted in practical experience of having worked with several SMEs in the recent past. This is not a theoretical exposition or explanation of some management theory. What I would like to discuss are four

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Business growth

common weaknesses which we have seen in small to medium firms, which are so basic, surprising and yet so very present, that one wonders how firms actually manage to grow despite not addressing them.

These weaknesses can be quite easily fixed, although it cannot be done overnight. These may seem unconnected and bit random; they are not and you will see why.

A very long list of clients As they say, too much of anything is bad. In all the firms we worked with, we found their client list to be long, very long indeed.

When we dug deeper, we found the classic problem of the 80/20 rule - 80% of clients contributed only 20% of revenues and more shockingly, roughly 5% of clients accounted for almost 50% of revenues! We also found that this was a result of an obsessive focus on growing the client base and on acquisition of new clients over the years.

Why did this happen? Firstly, because most owners believe that more clients are a good thing.

Secondly, they rarely analyse the potential of a client, or come to any conclusions about how much that client will contribute to the firm over a period of time.

Incremental revenues are seen as a good thing; who wants to say no to more sales, especially when it doesn’t seem to do any harm? More sales means average operating costs come down, right? Not always!

What does this mean for the firm? It means that there are significant hidden costs here that you can cut and hidden opportunities you can exploit.

Firstly, these percentages mean that unless the bottom 30% or 40% of clients have the potential to give you more business, you really don’t need them and in fact, they are a

You can cut costs by getting rid of some clients, free up more time for your sales team for selling to good clients, learn more about the client base and getting more meaningful clients on board, rather than waste time on low potential ones

Vikram Venkataraman

huge source of costs to the firm. This unproductive “tail” of clients don’t produce much revenues but need servicing by the sales and operations teams.

Someone has to maintain the receivables ledger, follow up on collections, ensure that the items purchased by them are in stock, and so on and so forth.

This means running expenses as well as working capital stuck in stock and receivables, which can either be reduced and costs saved, or, reserved for better and more deserving clients.

Secondly, the hidden opportunities of which, the two most important ones are: a) Your sales team is not doing enough. They could very well be hiding behind a vast client list, being busy over small deals and not running after big new clients or chasing more revenues from the important clients they already have; b) They would like to, but don’t know enough about their clients, or don’t know how to find out more about them.

So what can you do about all this to squeeze more profits out of your client base and sales team? You can cut costs AUGUST 2011

by getting rid of some clients, free up more time for your sales team for selling to good clients, learn more about the client base and getting more meaningful clients on board, rather than waste time on low potential ones.

Here are some tips: Think about what will happen if you say no, to servicing marginal clients. What impact will exiting 25% of your bottom clients have on your revenues? What impact will it have on saving servicing costs and releasing valuable time of the sales team? What can they do with this free time? They can certainly focus on the better clients, visit them more often, sell them new products and explore new opportunities.

This is far cheaper and easier than acquiring new customers.

Remember, to do all this, you must be forward thinking; and be prepared to lose some bit of your revenues to gain significantly more in the future.

A long list of agencies In the Gulf, every firm likes to collect agencies or distributorships, assuming that each one will bring in more clients, more revenues, decrease dependencies, make the firm a one-stop-shop, and so on.

We found, in the same firms we worked with, that the same 80/20 rule applied.Here again, it was the same story as having too many small clients. Marginal agencies (a legacy of the past and with no future) bring you little or no benefit.

But they do impose a cost in ordering and stocking their SME ADVISOR MIDDLE EAST

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products and spares, servicing their products, handling product complaints, repairs, warranties, recalls and so on. If these agencies produce little revenues, but, are critical to your overall offering, then that’s fine, as long as you are clear about it after having thought it through.

But if you are acquiring them just because you feel good or you don’t want your competitor to have them, then that is not doing your firm any good. The moral of the story: too many products are not a good thing. You also need to have a clear plan for each offering, rather than just having many of them.

Who needs analysis and reports?

SME owners posses substantial market knowledge (about clients, products, competition and pricing) but often comparatively know less about what their own firm is currently doing! Let me give you a few examples of what we found: Glaring information gaps; several clients operated more than two business divisions and had branch offices. Although they knew how the company was doing, they did not have divisional or branch-wise financial information. This meant that they had no idea whether they were profitable or not! We also found that they already had accounting systems that were capable of producing this information, but were unaware of this!

There was no information whatsoever on their clients; other than a receivables list. They had no idea of the revenues or profits from each, costs of doing business, and so on. All clients were treated the same – the good and the bad. Worse still, they did not know the difference!

Both these gaps are easy

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to bridge. Basic accounting packages, available off-theshelf, can provide good quality reports. All you need is the mindset, the realisation that the information you don’t have is critical to success; the rest is easy.

Little knowledge of the competition. Most owners thought they had market intelligence on what their competition was up to.

However, their insights were superficial; they knew nothing of their size, cost base, target base margins and future plans.

This sort of information is difficult to get, but you have to spend time on the issue. Very often a lot of information can be obtained from your own employees (those who have worked for the competition!), disgruntled clients of the competition and so on. You get the picture. Spend time on gathering market intelligence and be less inward focussed.

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Sales team growth; so what’s the problem?

Yes the team has grown, but fast enough? Could it have grown faster? Could the quality of sales be better (any improvement on the 80/20?). So far, in every single successful and profitable SME we have worked with, the most glaring weakness has been the absence of a sales team. Shocking as that may seem, this is true.

A couple of them had one or two sales staff (whilst the overall number of employees ranged between 30 and 50). The only real sales person was the owner himself!

Some other firms did have a sales team; a ragtag bunch of salesmen, with no sales manager, no targets, no performance monitoring system and no incentives. The team had no client information, no reports, no product training or coaching. august 2011

But if you are acquiring them just because you feel good or you don’t want your competitor to have them, then that is not doing your firm any good. The moral of the story: too many products are not a good thing. You also need to have a clear plan for each offering, rather than just having many of them

As a result, the team was unproductive, hiding behind activity rather than productivity, performing administrative and other tasks to keep the owner happy and appear busy, and generally not being truly useful.

They were also not doing what they were hired to do. But whose fault was that?

In today’s world, every firm, irrespective of the business it is in, whether it is an advisory firm like ours, a dental practice, or, a building materials business, needs to go out and bring in the business.

Every firm needs some form of a sales team, properly structured, managed and remunerated.

Conclusion There are so many hidden costs and opportunities within your own firm, and taking a close and careful look at your internal set up can unlock the profits and cut back the costs fairly quickly. This is the first step one should take, rather than look for solutions outside.

ABOUT: Vikram Venkataraman is a career banker with 25 years of experience in banking in India and the Middle East with various banks. Some of the key senior positions he held are: • Executive Director, Regional Head of Credit Structuring ABN AMRO Bank, Middle East and Africa.

• Founding Member of Management Team and Head of Corporate & Institutional Banking, Dubai Bank.

• Head of SME Business, Transaction Banking and Factoring, Mashreq Bank, Dubai.

• Various assignments in Corporate Banking in HSBC India.

His most recent experience in banking has been as the Head of the SME Business at Mashreq, which he left in 2010 to co-found an SME focussed investment banking firm – Salvus Strategic Advisors, JLT in Dubai and Salvus Capital Advisors Pvt. Ltd. in Mumbai. Salvus advises SMEs with the objective of helping them grow. Raising equity and debt capital is an integral part of Salvus’s activities.

Vikram has also been an entrepreneur in the wellness business, giving him a unique perspective of SME issues, both from a banking and entrepreneur’s points of view. He holds a BA from Loyola College, India and MA from Oxford University, UK. He has served as the Secretary of the Oxford University Economics Society.

Business growth FailurE <<<

Failure in our region is taboo, whereas in Western developed economies, if you haven’t failed several times, no investor wILL take you seriously, says Ibrahim Mardam-Bey, Co-founder and former CEO of Siraj Capital, and currently a member of the Board of Directors.

Webster defines failure as “lack of success”. I define it as an “opportunity”.

When I look at the state of entrepreneurship in the Middle East, I am reminded of how difficult it is to start, run and succeed in startups in this region. A startup entrepreneur is naturally faced with traditional challenges including, but not limited to, raising capital, finding the right people to manage and lead, resources, and navigating red tape. But, in addition to all this, the MENA entrepreneur has to deal with the classic F-Word phobia!

You see, our culture is unforgiving when it comes to the F-Word. Governments programmes don’t fail, they simply become new programmes.

When SMEs fail, the cultural and reputational impacts are

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Ibrahim Mardam-Bey

considerable and can easily put off an entrepreneur from trying again. Failure in our region is Taboo, whereas in Western developed economies, if you haven’t failed several times, no investor will take you seriously.

This “hidden” cost of failure in our region is a disease that has stifled business startups and job creation. Our regional legal systems do not allow for elegant and transparent failures.

AUGUST 2011

There are not enough regulatory platforms that enable investors and entrepreneurs to efficiently wind down an SME and move on to the next one. Many family groups often “exile” weak investments or divisions that languish for decades on balance sheets hoarding resources, rather than “failing” them and redirecting valuable resources to new job creating enterprises.

Our inability to accept failure in business as a natural and healthy evolution is a big hindrance to growth in entrepreneurship and job creation.

Failure is necessary so mistakes become lessons and lessons become practices. Failure allows us to understand risk and learn to manage it. It is also an inherent mind exercise that forces us to broaden and expand our thinking beyond the status quo.

It is time for us to rethink the relationship of success and failure in our region. Arab entrepreneurs must be encouraged to take risks and accept that failure at one point or another is inevitable, but must be used as an incentive and a reminder to look straight into failure’s eyes and try and try again.

The cliché of how many US start-ups fail before they succeed is a known one, but what is rarely noted is that the majority of job creation in the US has always been as a result of this process. If “Arab Springers” want jobs they must have the courage to start businesses and they must not fear failure but rather embrace it.

As a CEO of an investment company I have experienced my share of failure. It is a gut wrenching process that can be hard on the mind and soul, but it is also an awakening and eyeopening process that makes one stronger and better prepared for the next challenge. Failure is as natural as success and

should be a valuable tool for the next generation of start-up entrepreneurs. It’s time to use the F-Word. So, in the spirit of recognising failure, here are my top three lessons learnt: Fail quickly: Recognise the signs early. Our fear of failure blinds us from the early signs that must be acted upon.

Beware of your own sales pitch: Don’t believe the hype and always question what your team is telling you.

Take the bullets: Man up and deal with the repercussions – and then move on.

As Winston Churchill said: “Success is the ability to go from failure to failure without losing your enthusiasm.”

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ABOUT: Ibrahim Mardam-Bey is a serial entrepreneur and business developer with extensive international experience.

He was the co-founder and CEO at Siraj Capital. He possesses a broad range of experiences unique in the international finance, merchant investment banking and Islamic Finance world. As an executive he has held numerous senior positions, and as an entrepreneur he has been a principal in several successful ventures. Ibrahim also maintains an active role in corporate governance, mentoring and public speaking.

Prior to co-founding Siraj Capital, he had served as Chief Financial Officer of a Telecom company, strategic advisor and Non-Executive director of an educational software company, and Chief Marketing Officer and member of the founding team of one of the MENA regions’ leading Structured Finance Banks. He has written and contributed on topics of international finance, Islamic Banking and Sukuk, and has been featured in the several leading publications.

He is a member of the Arab Bankers Association of North America, the Londonbased Arab Bankers Association, and Young Arab Leaders. Ibrahim has received numerous business and professional recognitions and awards for his pioneering work on several international Sukuk transactions.

Technology for business Online backup

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Stay socially safe Linking a twelfth of society and growing rapidly, companies, large and small, can no longer ignore or try to block social networking in their environment. However, all the things that make social media so attractive to users can also pose significant risks to your business, says Nigel Hawthorn, VP EMEA Marketing, Blue Coat Systems.

Social networking is fundamentally shifting the way we interact, communicate, organise, form opinions, and even shop; it’s blurring boundaries, increasing transparency and creating fluidity in everything we do. It’s a part of the fabric in which we now learn, play and work.

The reality is you need to go where your target audiences are – and people are more likely to participate in a social media forum than any other venue. Customers, partners, and employees, alike expect to engage with you via social media; it’s a way for you to stay connected, gather feedback, recruit, and collaborate. As a result, you need to support social media in your environment to enable the innovation, increase productivity, and accelerate growth that will drive your business.

Social networking risks The following are the top four risks you will most likely face when social networking:

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Malware: In 2010, social media became the preferred communications vehicle for users, who are spending more than 700 billion minutes per month on Facebook alone, making social networking sites and their users ideal malware targets. According to Sophos, 40% of users were infected by malware from social networking sites.

Typical attacks draw on the trust based relationships established between users and their connections. They try to trick users into giving up information and access that can be exploited for financial gain. Some examples of malware particularly successful in social media are: Phishing: With increasingly sophisticated techniques, attackers pose as one of your legitimate social networking connections and try to lure you into providing sensitive information, such as your login credentials. They prey on the tendency of most people to use the same passwords for all their accounts, hoping that by tricking AUGUST 2011

While you find yourself compelled to allow social media to compete and thrive in today’s global economy, you do not need to expose your business to undue risk.

There are ways to protect against and mitigate the risks posed by social networking

you into giving one username and password they can get access to more profitable banking, financial and other online accounts.

Most users have their radar on concerning financial accounts, but their daily login to a social networking site is just a speed bump, creating an opening for cybercriminals to steal online assets. This is why more and more phishing attacks are targeting seemingly “nonrelevant” online user accounts.

Click-jacking: Attackers lure you into clicking on a link, perhaps posting it on your wall and then spamming your friends to “check it out,” or “view my photos.” When someone clicks on the link, they unwittingly install malware (code or script) that can be used to steal information or take control over their computer.

Click-jacking uses the dynamic nature of social networking and a willingness to click on links from those you know, and even those you don’t, to quickly reach a large audience, cajole you into revealing private information (through surveys), collect hits for ad revenues, eventually gaining access to your entire social network.

Data loss: Social networking is about making connections and sharing experiences and information, however, sometimes that information is not meant to be made public.

It’s not uncommon for people to inadvertently post confidential information – “hey, I just met

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Technology for business

with xxx and I think I am about to make a huge commission,” or “I’m pulling my hair out, if we can’t fix this software bug soon, I don’t know that I will ever sleep again,” that provides “insider knowledge.” There have also been cases in which employees have unintentionally posted proprietary software code to social networking sites, exposing sensitive intellectual property. These actions, though unintentional, can potentially violate industry specific regulations, impact your reputation, or put you at a competitive disadvantage.

3

Bandwidth consumption: As much as 40% of employees report that they are on social networking sites at work, creating a potential strain on bandwidth to the detriment of other business applications. Last year, when the US government mandated open access to social networks, traffic on the network increased by 25%. Video alone (think of all the videos your friends share and you link to through Facebook or Twitter), can overwhelm many networks. A single video stream usually consumes between 500k to 1.2 Mbps (and that’s not even HD, which can be up to 4 to 7 Mbps), and when you have tens or hundreds of people accessing videos it’s easy to see how overall performance can degrade.

4

Productivity loss: Social networking sites are becoming online destinations, enabling you to post and read messages, date, shop, upload or check out videos, and play games. This makes them increasingly convenient and engaging for users, drawing them to spend more and more time there, as well as increasingly challenging for the business to appropriately control. When unchecked, the time spent on social networking sites can affect productivity, as your employees spend more and more time (think

back on the 700 billion minutes on Facebook) playing Farmville during business hours.

New requirements to keep your business safe While you find yourself compelled to allow social media to compete and thrive in today’s global economy, you do not need to expose your business to such potential hazards. There are ways to protect against and mitigate the risks posed by social networking.

Specifically, your solution needs to provide: A real-time Web defense – Social networking is constantly changing, as are the tactics used by attackers to exploit it. As a result, your solution needs to analyse your web traffic on the fly and uncover threats that may be hidden there. Real-time analysis of dynamically changing links provides risk analysis and timely protection to keep social media safe. So when you see “hey you should take a look at this,” you can either allow or deny based on the potential risk it poses.

Selective social networking controls – To protect against data loss and comply with industryspecific regulations, you need to be able to manage the actions your employees can take within social networking sites. For example, you may want to prevent employees from uploading attachments, photos or videos to social media sites, thereby preventing risks of inadvertent data loss or risks to your corporate reputation.

The key is to have granular control over what can be done within social networking. This requires a solution that not only looks at where the initial traffic is coming from (Facebook, YouTube), but also at what is being done within that application (email, posting messages, downloading attachments).

Caching – You can’t allow social media to overrun your network and adversely impact business

Nigel Hawthorn

To manage productivity you need to be able to set acceptable use policies within social media.

The ability to delineate between social networking sites and specific applications or content within those sites is crucial to setting an effective acceptable use policy

critical applications, however, because social networking is becoming so integral to business, you cannot simply block it. What you can do is offset any potential performance degradation with caching, which allows you to locally store data and video files after an initial download and make them readily available to users who want to subsequently access them. In this way, you can enable access to social networking without compromising the performance of other traffic on the network.

Policy flexibility – To manage productivity you need to be able to set acceptable use policies within social media. You may choose, for instance, to block access to Farmville during work hours; or if you allow it, you may want to give it a lower priority, so it doesn’t impact business critical applications. With a flexible policy framework, you can prioritise and manage access to activities and applications. The ability to delineate between social networking sites and specific applications or content within those sites is crucial to setting an effective acceptable use policy. So, if you elect to block games, you can block both standalone games, as well as games within social media sites The promise of social networking no longer needs to be a potential risk for the business, embracing social media only requires the right security.

ABOUT: From working with an Apple distributor in 1980 to VP EMEA Marketing now, Hawthorn has 25 years experience of computers and networking. His international knowledge started in 1987 and has presented at security, e-commerce and networking forums in over 50 countries. He has contributed to a number of computing books on protocols and security and lived in California for a number of years before relocating back to the UK as he was missing the rain. He has worked for Blue Coat Systems for over nine years.

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Business Pin-Up of the Month S*uce <<<

Funky fashion We look at dynamic companies and entrepreneurs in the region, what makes them tick, and the buzz on their business.

Buyer, gives us more insight into this unique boutique business.

s*uce is a fashion and lifestyle concept founded in 2004 by three young ladies living in Dubai. Zayan Ghandour, Fatima Ghobash and Dina Saleh realised there was a niche that needed to be filled in the UAE fashion market. The concept of s*uce grew out of a desire to fill that niche with everything that was fashion forward including clothes, accessories, lifestyle, and all aspects of glamour and design in general. s*uce now has five locations in the UAE offering a curated mix of unique pieces by up-andcoming designers, limited edition collections from contemporary international brands and diffusion lines, as well as quirky lifestyle items and home interior accessories.

Zayan Ghandour, Co-Owner, Creative Director and Head

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What is innovative about your approach and what sets you apart from your competitors?

First and foremost, we ensure that everything you find at s*uce is special and unique. We are not a cookie cutter retailer and donâ&#x20AC;&#x2122;t believe in cookie cutter fashion.

That is why we view our collections as curated. Every single item in store is handpicked and customised with our customer in mind. We travel to as many trade shows as possible, always on the lookout for the next big thing, or the coolest as-yet undiscovered designer. s*uce embarks on a series of annual initiatives that truly AUGUST 2011

In a nutshell Name: Zayan Ghandour Designation: Co-owner, Creative Director and Head Buyer Company: s*uce Industry: Retail Date it was founded: February 2004 Number of employees: 25 - 50 Location: Dubai, UAE Website: www.shopatsauce.com

Business Pin-Up of the Month

differentiate it from any other homegrown brands in the region. In September 2009, s*uce launched the Stars in Our Eyes shopathon: an annual platform for local and regional s*uce designers to launch their new collections.

The shopathon takes place normally at s*uce boutique in The Village Mall, Dubai.

We also launched the DesignaDress in order to give a greater number of people a chance to achieve designer stardom. Each year, s*uce sets guidelines in line with autumn/winter trends and everyone is encouraged to apply. The winning designer gets sponsorship from s*uce and a chance to create an exclusive first collection retailed at the boutique. s*uce collaborates with local and international artists every March to coincide with Art Dubai, selling original artwork by French graffiti artist, Fafi in 2008, and commissioning multimedia collagework by local artist Lema Alireza in 2009. We also curated an installation by Boston based assemblage artist Polly Becker for the Bastakiya Art Fair in March 2010.

In March 2011 s*uce’s SugarVintage designer, Leila Al Marashi, created her first artworks, exhibiting the 12 pieces at s*uce for two weeks, before moving the exhibition to The Pavilion, Downtown Dubai. The pieces garnered a lot of attention and Leila has acquired a bit of a cult following with her iconic tongue-in-cheek twists.

Not only does s*uce support brands that benefit local charities, such as Chamaille and Braveheart, but it also holds a dedicated breast cancer awareness campaign every October. Every year s*uce designs and produces a special item, which is adorned with Swarovski crystals and sold in store. All proceeds go to local charity Friends of Cancer Patients.

For 2011 we have tied up with Harper’s Bazaar International and Browns as the exclusive retailer of their designer charity t shirts.

Harpers International & Browns Fashion asked six designers (Donatella Versace, Angela Missoni, Veronica Etro, Frida Giannini for Gucci, Alberta Ferretti and Rossella Jardini for Moschino) to design t shirts to be sold in aid of Women for Women International.

s*uce also recently launched a community art campaign, the s*uce benches project www.sauceloves.com/ benches, where we asked designers and artists to customise standard benches which were on display at Art Dubai and around the city. The initiative was extremely well received, and we realised we aren’t the only people who love benches! Our aim is to increase the use, appreciation and number of benches in the city. We are currently launching a phase two with Etihad airways which will take the campaign international.

What is s*uce gifts at XVA? In March 2008, s*uce launched a new concept store, “s*uce AUGUST 2011

gifts at XVA”, in one of the most fascinating and charming districts of old Dubai: Bastakiya. The new gift store concept focuses on quirky gift items and local and regional designers with a s*ucy twist.

What is your trademark problem-solving style?

Over the past six years s*uce has consistently placed the greatest emphasis on experience driven retail.

As a small business, there was no budget allocated for traditional print advertising and so the marketing strategy had to rely on word of mouth, creative PR activities and creating the most rewarding multi-sensory shopping experience.

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Opportunities Sukar.com <<<

BAGGING THE BEST DEALS! In recent years the Middle East has had one of the highest Internet penetration rates per population and yet purchasing power online still remains weaker than most other developed regions. But the tides are turning and figures suggest shopping over the Internet is on THE rise. Muhammad Chbib, CEO, Sukar.com, talks to Mike Byrne about company growth, regional trends and online shopping opportunities.

Launched in April 2010, Sukar.com currently operates across nine countries, including the GCC, Jordan, Lebanon and Egypt.

Sukar.com provides invitationonly access to the fashion, lifestyle and luxury items through daily and timed offers at very privileged

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prices, which can be up to 90% off retail prices.

It runs over 200 campaigns each month and each brand has its own campaign running for two to three days only or based on availability (BOA), and all is sold on a firstcome-first-served basis.

The club was founded by an AUGUST 2011

“There is an exclusivity attached to this shopping club, in that a member is getting access to a wide range of products at extremely privileged prices. The different income areas, even the high income bracket, come to us for these exclusive offers and the prices we are selling products at.”

expert entrepreneurial team of a handful of people, all with track records in creating and leading successful Internet start ups, including several internationally recognised online private shopping clubs in Germany, Turkey and Russia.

What is noticeable from the outset is that Sukar.com has the backing of a very successful set of investors, both from a financial and from a business expertise perspective. Their business model is backed by people who know the region and by people who have worked this business terrain in other regions.

“Our investors are basically two parties – one is the Jabbar Internet Group and the other is a group of European investors, who are focused, among other things, on buying shopping clubs across the globe. So when establishing Sukar.com we had a great combination of specific Middle East online business knowledge coming from the Jabbar Group and then we had the international global investors that are focussed on shopping clubs,” said Muhammad Chbib.

Recent statistics provide an impressive growth projection by Sukar.com. In the 15 months since their establishment they have grown close to 100 employees, with almost 750,000 users and with an average month on month growth rate varying between 20% - 25%.

“What we are doing is positioning people across the globe and establishing a network of buyers, in order to source the best products. For this we have our shopping club partners to see what they have and what relationships they have that are proving successful and then we have the key hubs we buy from (US, Europe and Turkey) and of course the local buyers we have sourcing goods.”

Opportunities

“Our operations are based here in Dubai and we currently serve nine countries; all the GCC countries, plus Lebanon, Jordon and Egypt.

Considering the size of some of those countries, it makes sense to have people on the ground in some of those places. We are in the last stages of establishing an on-the-ground presence in KSA, but until this is complete we will remain serving from the UAE,” says Muhammad.

Sukar.com brands itself as an exclusive online shopping club but one should not mistake that to mean that membership is reserved only for the wealthy; indeed there is an abundance of opportunities across a broad price range, with products boasting prices from AED 30 to AED 100,000.

“There is an exclusivity attached to this shopping club, in that members get access to a wide range of products at extremely privileged prices. I mean if you are extremely rich then chances are you may not even bother to look at what we have on offer. The different income areas, even the high income bracket, come to us for these exclusive offers and the prices we are selling products at.

“But pinpointing an exact bracket or profile within our membership in terms of wealth is not easy. We have wealthy Arab locals, very well earning Western expats and also Eastern direct hires (as they are known); and they all buy,” notes Muhammad.

He believes that the potential for growth with online shopping in the region is huge. The repeat rate of purchasing once the initial step is taken by a customer to test the process is well beyond the 50% boundary.

“Once people see that the process works and the ease at which the transaction is complete, they come back time and time again; so the repeat buy rate is very healthy and rising steadily all the time. The first hurdle is the hardest; once you have convinced people that online purchasing

Muhammad Chbib

“Sukar.com has the system in place where they hunt globally for good deals on behalf of our customers; if there is a request from a member and it seems there is enough demand for the product across their membership then they will go out and find it.”

is safe and convenient and they are fulfilled by the process then it becomes much easier thereafter. It’s this simple – there is nowhere else you can get the discounts we offer on certain brands and products,” he says.

Considering the growing number of online shopping sites appearing across the region one wonders how Sukar.com maintains such healthy figures and continues to grow at such an impressive rate. Muhammad outlines that it’s a mixture of various strategies; “One is to maintain the ability to keep the promises you make to the customers and the other is to be utilise our very useful network of shopping clubs we have through the Jabbar Internet Group and our European investors,” he notes.

Not only does this network of shopping clubs prove efficient for sourcing products for the site but also in storing the merchandise.

“We have a network of shopping clubs globally and we can use their warehouses. In some of the hubs we are planning to open our own warehouses but for the time being we share a lot of warehouses. Our biggest warehouse is here at our main hub in Dubai and by the end of this year we will quadruple the capacity from what we started off with in April 2010.” he adds.

What makes this process accessible is perhaps the rate at which Sukar.com completes the entire online shopping experience for the customer.

“We haven’t yet really had a situation where we had a surplus of stock which we needed to get rid of.

In most cases we will never have a AUGUST 2011

lot of stock sitting in a warehouse; the speed of turnover from the point of ordering from the suppliers and delivering it to the customer means that goods are not left sitting around. We normally have a very accurate idea of the number of goods we need to order in advance and then it’s shipped to the customer as soon as it arrives,” says Muhammad.

Sukar.com has the system in place where they hunt globally for good deals on behalf of our customers; if there is a request from a member and it seems there is enough demand for the product across their membership then they will go out and find it.

Members are also rewarded for referrals – whenever you recommend the site and your friend makes their first purchase there is a USD 25 reward credited to your site account.

And it’s not just Sukar.com and its members that are benefiting from the success. At present, they are sourcing around a third of their goods locally; the high level of purchasing in the region for its business is good news for SMEs equipped to provide the products and services needed to feed the growing demand.

“There is a ripple effect touching a lot more SMEs than just us. Not only are those businesses which are providing the goods to us benefiting but we also have a lot of services which we offer; payment and logistics services for example.

Some of these businesses have hired people to deal exclusively with us because the rate of business is very healthy,” explains Muhammad.

Sukar.com is one of many examples of local SMEs set up and thriving in the region, regardless and in spite of the tough economic conditions. What is perhaps most noticeable is that their growing operations touch other SMEs as well as their own and with it contribute to the growth of this dynamic sector and the region’s overall growth.

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SME Success Series Presented by

Business networking evening <<<

That’s capital!

Nilanjan Ray, Sr. Vice President Head, SME Banking, ADCB, welcomes attendees

our most recent business networkING evening proved a bigger hit than the last. presented by adcb, in conjuction with our EXCLUSIVE telecom partner, du, the event brought together an exclusive list of business owners, AND top management. we bring you the highlights.

(L-R) Mike Byrne, Assistant Editor, SME Advisor Middle East, Ketaki Banga, Group Editor, CPI Business and Richard Judd, Managing Director, CPI Business and Technology

Following the success of our last networking evening in February of this year, we decided that it was time to plan another. The guest list top management and business owners were invited to the Capital Club, an exclusive, members only, venue based in DIFC, Dubai.

Special thanks must go to one of our Strategic Partners, Cynthia Trench, from Trench & Associates, who set the ball rolling with her excellent suggestion to hold the event at this venue – it proved every bit as popular with our guests as it does with its members!

For weeks leading up to the networking evening our

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call centre was inundated with inquiries with an overwhelming demand for places right up until the day of the event. There were even walk-ins from members of the Capital Club who popped into the venue after seeing droves of people heading for the room downstairs!

The evening was intended to provide a relaxing environment for some of the region’s top business decisionmakers to meet and greet and hopefully take away with them some business leads.

After the positive feedback we received regarding the oneto-one consultations at our previous networking evening, we thought it best to offer the same opportunity to attendees

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again. Subject matter experts ranging from legal and human resources, to banking and SME mobility and technical solutions, were present to offer customised private and confidential advice.

Perhaps the most surprising element to the night was the readiness of so many attendees to give a sixty second pitch about who they were and what their respective companies were all about. Unlike our previous networking evening by the beach, no encouragement for shy attendees was needed and an informal queue started to form at the front!

We have more events

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planned for the second half of 2011, with the SME Stars of Business Awards and Summit on the 28th November. For further information and to nominate your business visit www.smeadvisor.com/awards2011.

For coverage of all our previous events and information for our up-coming events visit www.smeadvisor.com/events.

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SME Success Series Presented by

One-on-one consultants ADCB

Mohammed Samiuddin Unit Manager, SME Abu Dhabi ADCB

There were four experts available for discussion from Abu Dhabi Commercial Bank (ADCB). Their areas of expertise range from international trade finance, derivatives and commodities working capital trade solutions, to foreign exchange and risk management solutions.

Rajesh S. Jangla Head, Treasury Sales Dubai, NE & Oman Treasury & Investments Group ADCB

A Treasury, derivatives and commodities specialist, Rajesh has over 17 years of treasury and financial markets expertise with various FIs in the Middle East. He has been with ADCBâ&#x20AC;&#x2122;s Treasury and Investments Group for over five years providing vanilla and exotic risk managements solutions in foreign exchange, interest rate and commodity derivatives to ADCBâ&#x20AC;&#x2122;s clients.

Mohammed Samiuddin has 12 years of diverse banking experience in different departments in retail banking, commercial banking and risk management, during which he has handled varied portfolios. Currently as Unit Manager, his focus is on growth of existing SME portfolio with reliance on assets build-up and to maintain the existing portfolio of varied SME clients. Mohammed has a Masters Degree in Business Administration with Finance as Major.

du There was an expert from du available to discuss SME mobility and technical solutions as well as general marketing techniques within the SME segment.

Neil Armitage Head of Trade Sales ADCB

Neil has over 30 years of banking experience, with the last 15 years in trade finance. Over the past two years Neil has been responsible for building a successful trade sales team at ADCB to take advantage of the many opportunities in the MENA region.

Ehtesham Riaz Team Leader, Medium Segment, Dubai Business Banking Group, SME ADCB

Ehtesham manages a team that provides custom made working capital and trade related solutions to cater to the business requirements of medium segment companies in any industry operating in the emirate of Dubai. His expertise includes over draft facilities, short or medium and long term loans, invoice discounting, post dated cheque discounting, LC, finance against trust receipts, letter of guarantees and more.

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Raghav has over eight years experience in the telecom domain having previously led teams in the functions of marketing, sales and technology. At present he is the leader of operational teams, project manager and product manager for new and existing products at du.

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Raghav Mimani Marketing Manager, Enterprise SME Segment, du

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Trench & Associates The legal consultants for the evening were on hand to give advice regarding estate planning and wills, offshore companies and general corporate queries.

Nicola Houlton HR Consultant Real HR

Nicola is a member of the Chartered Institute of Personnel and Development Licentiate Status (2011), and is at present working across various accounts at Real HR, assisting with processes and practices including recruitment, selection, reward, induction, performance managements, training, succession management and discipline.

Cynthia Trench Principal Lawyer Trench & Associates

Cynthia specialises in corporate and property law as well as private client. Her expertise is in respect of enabling clients to be established in the Middle East expeditiously in a cost effective way. Furthermore, she has handled many mergers and acquisitions.

In recent years, she has assisted clients in restructuring developersâ&#x20AC;&#x2122; contracts or sales and purchases but also in disputes resolutions in property, construction and rental matters as well as (L-R): Eilis Leng and Cynthia Trench estate planning and give tips to one attendee. drawing up Wills.

Virtuzone Virtuzone were present at the event and had a consultant advising on how to set up a virtual freezone office and the benefits of doing so. (left of picture) Ulrika Christoffersen Head of Sales Virtuzone

Eilis Leng Associate Lawyer, Trench & Associates

Ulrika been with Virtuzone for the past 18 months, heading the sales division but has extensive work in UAE for over 13 years, having also worked in free zones in RAK and DMCC.

Eilis completed an LLB Hons degree in 2007 and qualified as a Solicitor in England in 2009. Prior to joining Trench & Associates Eilis worked for a law firm in the DIFC where she gained corporate, commercial and arbitration experience. Eilis is now part of the Corporate Department at Trench & Associates.

Real HR Our HR experts for the event specialise in minimum HR requirements for SMEs, Labour law and new visa options, restrictive covenants and how to structure an effective HR function.

Zawya Zawya had an expert at the event to discuss ways to invest and to do business in the MENA region.

Ned S. Jaroudi, Business Innovation Executive / Head of Marketing and Channels Zawya

Nuria Gonzalez-Martin HR Director Real HR

Ned has over 20 years experience advising fast-growing small and medium (SME) Middle East ventures in the technology, media, telecom, construction, retail, healthcare, education, and sports/entertainment sectors, with key clients such as du and Mubadala.

Nuria holds a BA in European Business Studies and a Masters in Human Resource Management and has been working in HR for over ten years helping to plan, organise, manage and develop HR functions for a range of local and international companies.

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AUGUST 2011

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Industry watch NEUROMARKETING <<<

Some like it soft Tactile perception studies have identified different profiles based on people’s perception of touch. This is important not only for the fashion and luxury industries, but also for businesses involved in consumer packaging. This research will aid them in designing the right sensory mix for their target markets, says market research firm DervalResearch.

A woman’s hormonal makeup drives her taste in fabrics and textures, with “estrogen-driven” women preferring animal fabrics such as wool, fur, leather, or silk, while their “testosterone-driven” sisters go for vegetal materials such as cotton and linen. So reveals Diana Derval of the market research firm DervalResearch.

She just presented her findings on hormones and tactile perception at the 15th annual meeting of the Society for Behavioural Neuroendocrinology (SBN) in Mexico.

DervalResearch didn’t just make this estrogen-animal/ testosterone-vegetal theory up out of whole cloth, so to speak.

Between April 2007 and February 2011, the firm studied 3,500 individuals from 25 different countries. Both men and women of various ethnicities, vocations, and general preferences were measured for their individual

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sensitivity to touch, and were also interviewed about which fabrics they preferred and which ones they found irritating to the touch.

The findings from DervalResearch impacted behavioural neuroendocrinological circles.

Behavioural neuroendocrinology is the science that studies the interactions between the nervous and endocrine (hormonal) systems and our behaviour. Professor Derval is concerned with the effects of prenatal exposure to estrogen and testosterone, which not only has a direct impact on physical traits and behaviour, but, according to her research, on sensory perceptions as well.

Although hormonal fluctuations throughout the normal life cycle can have significant effects on mood and behaviour, and people’s individual experiences can help determine likes and dislikes, prenatal hormonal AUGUST 2011

The research presented at the SBN Conference in Mexico explored the link between hormones and sensitivity to touch.

Depending upon gender, ethnicity, and immune system, individuals have different perceptions of light touch, pressure, pain, cold, and vibrations

exposures appear to have a profound and lasting influence on many basic preferences and reactions to stimuli.

The research DervalResearch presented at the SBN Conference in Mexico explored the link between hormones and sensitivity to touch. Depending upon gender, ethnicity, and immune system, individuals have different perceptions of light touch, pressure, pain, cold, and vibrations. “Touch is a vibration. We identified different tactile profiles based on people’s perception of touch: nonvibrators, medium-vibrators, and super-vibrators,” says Professor Derval. “The super-vibrators,” she explains, “are six times more sensitive to touch than others and clearly prefer to wear cotton to silk or wool.”

And this doesn’t only apply to women. “This tactile segmentation is also valid for men,” says Professor Derval. Her research has found that men

Industry watch

on average are more sensitive than women to synthetic textiles such as nylon, but important variations can be observed among age-matched men of the same ethnicity.

As for those estrogendriven women who prefer “animal” fabrics, they’re more likely to be non-vibrators or medium-vibrators, whereas the “testosterone-driven” women who prefer vegetal fabrics are more likely to be super-vibrators or medium-vibrators. Acting as a predictor, the influence of prenatal hormones seems to override both gender and ethnicity in explaining the different sensory reactions to an identical tactile stimulus.

These findings, Professor Derval believes, are critical not only for the fashion and luxury industries, but also for businesses involved in consumer packaging. “This research will aid them in designing the right sensory mix for their target markets,” she explains.

Beyond neuroendocrinology, DervalResearch is part of an intriguing new trend in “neuromarketing,” which combines neuroscience with marketing research. Not surprisingly, there is much more to the research than simply determining a person’s

fabric preferences based on that person’s “vibrational” category.

Prof. Derval’s findings also target hormonal influences on the other senses: vision, taste, smell, hearing, and proprioception (the ability to sense our own movement and position).

“Consumers are unique individuals but they are also predictable,” says Diana Derval. “Their preferences and behaviour are directly linked to their biological and sensory perceptions. And again, these perceptions are greatly due to the influence of prenatal hormones. Similarly to what exists in many animal species, we have identified eight gender polymorphisms among humans based on the prenatal influence of hormones – four in male and four in female. We can identify the gender polymorphism or what we call the Hormonal Quotient (HQ) of an individual based on the gender, ethnicity, and different biomarkers, including the digit ratio – the relative length of the index and ring fingers of the right hand.”

Professor Derval explains that knowing consumers’ Hormonal Quotient (HQ) makes it possible to predict not only their favourite textures, but also their preferred flavours, smells, shapes, and sounds. These profiles are

Professor Derval explains that knowing consumers’ Hormonal Quotient (HQ) makes it possible to predict not only their favourite textures, but also their preferred flavours, smells, shapes, and sounds. These profiles are already used by leading brands and have enabled their teams to design and deliver the right consumer experience across their markets

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already used by leading brands and have enabled their teams to design and deliver the right consumer experience across their markets in a powerful yet costeffective way. One big advantage, notes Professor Derval, is that companies will no longer need to conduct traditional, recurrent, and costly surveys. They just have to identify the profile and HQ of their consumers once. A wide array of industries – food and beverage, electronics, luxury items, fashion, cosmetics, automotive, pharmaceuticals, advertising, leisure, and tourism, to name but a few – can benefit from this research.

“Consumers will benefit from a greatly improved sensory experience,” adds Professor Derval.

Professor Derval elaborates on her findings on sensory perceptions in the book, “The Right Sensory Mix,” published by Springer. That book has just been nominated for the Berry-AMA (American Marketing Association) prize for Best Book in Marketing of 2011.

Professor Derval’s findings on hormones and sensory perceptions are already influencing the way many products are designed and marketed to target customers.

“Thanks to her discovery concerning the relationship between hormones and sensory sensitivity, Diana Derval proposes an amazing scientific approach to accurately profile consumers, according to their Hormonal Quotient,” says Wai Wong, Marketing Manager Accessories at Sephora Paris.

This new approach will allow companies to fine-tune their positioning and product range for every local market, and systematically increase their innovation hit rate.

That’s good news not only for marketers, but also for consumers everywhere.

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Industry watch Egypt <<<

Revolution leaves scars on Egypt’s corporate sector Zawya releases new research that reveals the impact of the Black Swan event on the companies listed on the Egyptian stock exchange.

Zawya, an online provider of business intelligence in the Middle East, released its latest report on the impact of the Egyptian Revolution on the country’s publicly-listed companies.

During the first two months of 2011, Egypt experienced “a low probability, high impact event” – also referred to as a

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“Black Swan”. The event, known as “Egypt’s 2011 Revolution”, left deep imprints on the Egyptian economy.

Zawya Equity Capital Markets Research analysts measured the economic effects of the revolution on the country as a whole, and studied the effects on companies listed on the Egyptian Exchange.

Adapting the same sector classification as the exchange, the

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In terms of revenues, the sector that recorded the lowest median percentage change was travel and leisure, with a 54% decline, while the highest median was that of the chemicals sector at 20%

Zawya team compared the effects of the revolution among sectors.

In terms of revenues, the sector that recorded the lowest median percentage change was travel and leisure, with a 54% decline, while the highest median was that of the Chemicals sector at 20%.

For price, the real estate sector witnessed the sharpest median decline (29%), unlike the median in the technology sector which saw an appreciation of 2%.

67% of the companies in the telecommunications sector were directly damaged during the revolution, with the Egyptian Company for Mobile Services reporting the highest Direct Damage of around EGP90 million.

Companies operating within the banking, financial services, and real estate sectors had part of their assets under investigation

by Egyptian authorities. 40% of the companies belonging to the basic resources and chemicals sectors reported that at least one of their shareholders’ stakes was frozen, with telecom Egypt reporting the highest number of Shareholders’ Frozen Stake (11 shareholders).

The team, led by Senior Market Analyst Hasan Shahin and Market Analyst Nicolas Zreik used the companies’ disclosures released on the Egyptian Exchange Website, as per the Egyptian Financial Supervisory Authority’s (EFSA) request, and reflected on Zawya’s platform as the primary source of information. The criteria used were: revenues, price, direct damage, assets under investigation, and shareholders’ frozen stake. Access the full report at www.zawya.com.

sme speak

Quarterly performance survey <<<

Optimism in the air!

THIS MONTH SME Advisor Middle East and Tickbox Surveys Middle East conducted a survey of its readers to find out how their firms have performed over the last three months and their expectations for the next quarter. The aim of these monthly surveys is to provide a snapshot of the current practices in the market.

This survey was sent to SME Advisor Middle East readers between the 15th June and 15th July 2011. The sample is UAE wide and includes firms in the free zones as well as those in non-free zone areas.

It is hoped that the survey will also help SMEs in their business decisionmaking process and allow them to understand what is happening in the wider sector in which they operate.

Expectations for the next quarter The SME survey shows that over the next three months the sector expects a considerable improvement in their performance. Of the firms surveyed, 74% indicated an expected overall improvement in their performance of which 29% felt that that it would be a lot better than now. Nineteen percent of the firms felt that they would not expect any change in the forthcoming quarter while only 6% anticipated a decline in their overall performance. 52% expected new orders to increase while 45% foresaw no change.

Only 3% of the sample surveyed believed that new orders would

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decline in the next quarter. These results are a marked improvement on the experiences of the current quarter whereby 55% of the firms felt that it was better than the last. Thirty-two percent of the respondents experienced no real change in their overall business performance this quarter compared to the last while a further 13% actually experienced a significant decline the survey revealed.

It appears from the survey that the third quarter was by and large positive, but, nevertheless, difficult at least for a large proportion of the SME sector. The survey indicates that SMEs expect a marked improvement in the final quarter of 2011 with business services being the most optimistic followed by the trading sector (re-exporters). Interestingly, the greatest growth expectations are in the smaller sized firms (with fewer than 100 employees).

Consistent with an overall improvement in performance a similar proportion of firms (74%) indicated that their sales would increase in the next quarter. Again this is a marked improvement on the current quarter whereby 48% of firms experienced an improvement in their AUGUST 2011

SMEs expect a marked improvement in the final quarter of 2011 with business services being the most optimistic followed by the trading sector.

Interestingly, the greatest growth expectations are in the smaller sized firms, with fewer than 100 employees

sales volume compared to the last period.

In fact, the survey shows that 23% of firms actually experienced a small decline in their sales in the third quarter compared to the previous one. The most optimistic sectors that believe the next quarter will lead to a marked improvement in sales are business services and trading.

When it comes to operating costs the general indication is rather negative with only 36% of the firms anticipating any improvement. The vast bulk of the firms (55%) believe that there will be no change in operating costs, while a further 10% feel that it is going to deteriorate. Despite the low level of expected improvement in operating costs it is nevertheless higher than that experienced by firms in the current quarter.

The survey found that only 19% of the sample experienced any positive improvement in operating costs while 61% had no change. In fact, 19% of the sample actually experienced deterioration in operating costs in the current quarter. In the case of input costs 29% of the sample felt that there would be an improvement in the next quarter while 65% foresaw no change.

The most optimistic sector tended to be the retailing and the decline in property rentals may be an important contributory factor, however, this was not questioned in the survey. The most pessimistic was the manufacturing sector and to some extent the recent fluctuations in commodity prices as well as exchange rates may have contributed to this negative view.

The survey showed that the SME sector was concerned, to a small extent, with regard to the level of

sme speak

new competition with 27% of the firms surveyed indicating that it would increase. A little over half the sample felt that there would be no significant change in the level of competition in their industry.

A further 20% felt that the level of competition would actually fall in their industry.

Although the sector seems to be concerned with regard to competition, there appears to be no real change to the experiences in the current quarter. The survey found that in the current quarter 23% of firms saw an increase in competition with 48% experiencing no difference. The sectors witnessing the least impact from competition were business services, trading, training and education and restaurants respectively.

Selling price One of the most important business indicators is the selling price as any improvement indicates the willingness of consumers to pay a higher price, which in turn improves the overall financial performance of the firm. The ability to charge higher prices also indicates that the firm is able to pass on any increase in input costs to the consumer rather than absorb it internally.

The survey shows that in the current quarter 35% of the firms were able to increase prices. In the next quarter the proportion of firms looking to increase prices is expected to increase slightly to 39%.

However, only 6% saw deterioration

in their selling price this quarter. The expectations for the next period are considerably worse with 29% of the firms expecting price deterioration.

Again, the worst affected seem to be the manufacturing sector while those able to increase prices tend to be the business services and trading sectors.

Staff recruitment Staff recruitment is perhaps the most important indicator of confidence in the SME sector because it represents a fixed cost which few firms like to take on unless there are consistent or significant indicators of growth.

This is more so the case in the UAE whereby 90% or so of the working population come from outside the UAE. Therefore, any staff recruitment has additional expenses such as visa costs, resettlement expenses and so on, which tend to be writtenoff over the period of the contract.

Anecdotal evidence shows that staff recruitment tends to be one of the most difficult decisions for all SMEs and is carried out with considerable caution.

Almost two thirds of the sample surveyed indicated a willingness to recruit staff; a positive indicator of the confidence in the UAE economy. More importantly, it shows that the economy now seems on the road to recovery.

SMEs are looking to recruit new staff with 61% of firms indicating that they will hire in the fourth quarter of 2011. At the same time almost a third of the firms expect no change in staff numbers while 6% actually intend to dismiss a small number of staff. Again the sectors that are

Staff recruitment is perhaps the most important indicator of confidence in the SME sector because it represents a fixed cost.

Almost two thirds of the sample surveyed indicated a willingness to recruit staff

most likely to recruit tend to be in business services, education and training, retailing, hospitality and restaurants as well as trading.

The SME Performance survey for the third quarter of 2011 shows that in general SMEs are more confident than in the previous period. There appears to be a strong indication that the sector will be recruiting staff.

However, there are still some signs of caution largely in terms of input and operating costs.

The most optimistic sectors are business services, education and training, retailing, hospitality and restaurants as well as trading.

In terms of size the greatest improvement is likely for the small firms (less than 100 employees). The manufacturing firms seem to be the most pessimistic and this may be reflective of its dependence on global markets which are still weak especially in North America and Europe.

Note The figures may not add up to 100% due to rounding up.

ABOUT: Tickbox Surveys Middle East specialises in market research surveys for the consumer, B2B, investor, community and employee segments.

They also specialise in helping companies to identify appropriate interventions for improving customer and employee satisfaction as well as loyalty through using surveys and statistical analysis. For more information visit www.tickboxsurveys.com

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A day in the life of...

Nahel.com <<<

Hassle-free shopping

At a time when many are looking to switch industries or try something different, we bring you first person accounts of the lives of entrepreneurs or senior executives, outlining a typical day in their business. Who knows, maybe the perfect idea is waiting for you. Read on and get inspired.

Saeid M. Hejazi is the Founder and Managing Director of Nahel.com, one of the largest online shopping sites in the Middle East. Established in Dubai in late 2008, Nahel. com’s original business model won the University of Toronto’s National Business Plan Competition, having beaten 470 teams. At present, this online shopping forum offers over 20,000 products across more than six departments.

7

:00 am: I turn on the laptop; I’ve been having problems for months getting my emails on my BlackBerry.

I have acquired special skill where I can turn on my laptop, without being completely awake. Usually, the only email I get are from the US, because of the time difference. Of course, I check on how many orders we got over night. This can either make or break my day. Lately, it’s been getting me off to a good start.

7

:15 am: Swim time! This is something I just pickedup again, because it’s the only

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cardio I can do. After coming back from a month long trip in the US, I’ve definitely gained some weight. America has the best pizza, wings, and nachos, all of which I ate too much of while on vacation.

8

:30 am: I leave for Costa coffee across the road with a sandwich in hand.

9

:00 am: I arrive at work, usually as most of the team arrives.

10

:00 am: I review various departments’ daily tasks with marketing, operations, Web development and business development. I go over operational reports that cover average delivery time, supplier performance, incoming calls, emails and customer complaints.

I have another coffee and then sit with the marketing department; we go over CPC, CTR and conversion rates and then optimise for better results.

11

:00 am: Next my team and I work on business development and finding new business opportunities.

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12

:00 pm: It’s time for more coffee and then get back to some business development and opportunities

1

:00 pm: I sit with the Web development team. The focus recently has been on back-end development and modules in order to scale the business. With the increase of orders monthly, we need to make sure we are maintaining our level of customer satisfaction, and delivering faster than we promise. This means working with the warehouse, operations and our various suppliers.

2

:00 pm: We hit social media; the team monitor Facebook and Twitter and see what our followers have been up to, what they have to say and how we can help them. Then we analyse the campaigns and their results and plan for future campaigns.

3

:00 pm: I spend some time going back over some more emails.

3

:30 pm: We normally hold a conference call around this time with our business and Web development teams in Beirut and Amman; focus has been on the folding of a major Arabic books ecommerce store, into Nahel.com.

5

:00 pm: I have a meeting with the special projects catalyst on various initiatives Nahel.com is working on.

7

:00 pm: Again I go over emails and follow-ups, using the time difference to make international calls and follow-up with new partners and promising opportunities.

7

:30 pm: Wrap-up and go home.

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