Keep customers close

STAYING close to customers is an important strategy to many of Western Australia's big private businesses.

Maintaining revenue and even growing market share can only be achieved in these conditions by understanding the needs of the market.

MG Kailis managing director Alex Kailis said too many businesses become inwardly focused in troubled times, slashing costs and watching the expense side of the ledger to the point of distraction from the main aim.

"In this environment you have to be stay externally focused," Mr Kailis said.

"There is a risk in being too internally focused and cutting costs.

"We want to stay close to our customers and see what they want.

"Are there new products that they want?"

MG Kailis restructured during the past two years, shedding businesses like its WA lobster and pearl production but remaining in jewellery retailing. It also has a marine services division, which provides diversified lines such as engineering and boat storage.

The company also has a prawning business and fishing licences, which it plans to vertically extend to a retail presence.

Betts managing director Danny Breckler has been through several downturns as head of the shoe retailer, and agrees that knowing your customers is critical in such times.

Mr Breckler notes that, as in previous downturns, men's shoe sales are the first to drop off, followed by women's.

The children's lines prove to be most resilient, with parents loath to cut spending on their kids' feet.

Betts had cut prices to keep demand up, a fact that helped keep inventories under control.

Mr Breckler said the drop in retail sales was the result of psychological factors because the fall in interest rates and petrol prices had actually made most people richer, even if they didn't feel that way.

"Consumer confidence and the fear factor is absolutely the major driver at the moment," he said. "Yes, unemployment is rising and that is a concern and those consumers who have lost their jobs, and I feel for them, their capacity to shop has been diminished.

"For the vast majority of others they are actually better off at the moment.

"Many Australians have more disposable income at the moment than 12 months ago, however there is massive risk and fear they may lose their jobs."

For its part, Betts has cut out some of its non-essential marketing expenditure such as mystery shopping and research.

"Historically we spent a fair bit of time researching all our customers, we have cut that back," Mr Breckler said.

"In good times you are happy to spend that money. For 12 months can you do without it? Yes is makes sense to do without."

Transport group Sadleirs, which concentrates on the less-than-container-load interstate rail freight and also has an international transport division, said its customer focus was one of the reasons it has no desire to cut staff.

"We are service orientated," said Sadleirs managing director Ian Cook, who employs 350 people nationally.

"It is our intention to retain all our permanent staff, we don't intend to shed any staff.

"We have 30 current employees that have been with the company for 20 years (or more). That sort of knowledge and expertise in the transport industry is not easily replaced, we want to keep that intact."

Mr Cook was especially adamant that Sadleirs would not reduce its marketing spend, essentially a sales force.

"That is one area I would not cut back on," he said. "We have an important sales and marketing team.

"They meet face to face with the

customers."