Nitin Shingala, Managing Director of TMF Group India, delves into the first budget from India’s BJP government and finds that whilst it is certainly a step in the right direction in terms of delivering on India’s growth targets, we shouldn’t get carried away just yet.
The new government’s first Union Budget for 2014-15 was last month presented to the parliament by Mr. Arun Jaitley, the Finance Minister, within 45 days of a superlative win by the Bhartiya Janta Party (BJP) led by now-Prime Minister Mr. Narendra Modi.
The Indian economy over the past few years has gone through one of its worst periods in history. Growth plummeted from a 9% to 5%. Sticky inflation, populist subsidy measures, oil price shocks and a devaluing currency have left the economy in need of a much-needed boost.
It’s been a very long time since the people of India overwhelmingly chose a single party, giving the government enough stability to last for the next five years and ability to take decisive actions. Expectations for the new government have soared very high.
This first budget offers a few reassuring steps and ideas of reforms the Modi government will need to deliver if 7%-8% GDP growth is to be achieved in next three years. However, investors and businesses may need to check their expectations of how quickly the economy can be turned around.
With this budget, the government has pushed for 5.4% to 5.9% growth for 2014-15 as compared to 4.7% growth in 2013-14, and has declared its intentions to aim for a sustained growth of 7-8% or above in the next 3-4 years, along with macroeconomic stabilisation that includes lower levels of inflation, less fiscal deficit and a manageable current account deficit. Mr Jaitley made it clear that it would not be wise to expect everything that can be done or must be done could be included in this first Budget. He also proposed setting up an Expenditure Management Commission to look into expenditure reforms.
In the interim budget, the previous Government set a target fiscal deficit of 4.1% – which seems daunting considering India had two years of low GDP growth, an almost static industrial growth, a moderate increase in indirect taxes, a large subsidy burden and not so encouraging tax buoyancy. The new government has accepted this target as a challenge and has announced its intention to reduce this further to 3.6% in 2015-16 and 3% in 2016-17.
There was also an expectation that General Anti-Avoidance Rules (GAAR) would be further deferred for at least another year; GAAR provisions will become effective 1 April 2015 and will apply to all investments post-August 2010.
In order to spur investment and growth, the government has announced a partial tax pass-through regime for real estate investment trusts (REITs) and infrastructure investment trusts, collectively referred as Business Trusts (BTs). The regulator SEBI (Securities and Exchange Board of India) is expected to finalise the framework for the BTs. This is expected to provide a major boost to growth to real estate and infrastructure development in India. Long term capital gains on sale of units as well as dividends received by the BTs and distributed to the investor shall be tax exempt. Interest income received by the BTs is tax exempt and foreign investors shall be subject to a low withholding tax of 5% on interest payouts.
In another welcome move, income earned from the sale of securities by foreign institutional investors (FIIs) and foreign portfolio investors (FPIs) shall be deemed to be capital gains income. This would eliminate litigation on the issue of income characterisation.
A High Level Committee will interact with trade and industry on a regular basis and ascertain areas where clarity in tax laws is required. Based on the recommendations of the Committee, the Central Board of Direct Taxes and the Central Board of Excise and Customs shall issue appropriate clarifications, wherever considered necessary, on the tax issues within a period of two months.
On GST, the FM has expressed hope to find a solution to the backlog and approve the legislative scheme to enable the introduction of a GST with the intention to streamline the tax administration, to avoid harassment of the business and result in higher revenue collection both for the governments at the centre and the states.
Another welcome announcement made by the minister concerns clarity in the implementation of Indian Accounting Standards (Ind-AS) to converge the current standards with the International Financial Reporting Standards (IFRS); we’ve been waiting for this for a while. It will go a long way in helping Indian companies to globalise and increase reliability of financial statements.
It is, however, disappointing that in an attempt to please all, the budget appears to be long on details and short of the sort of bold reforms one expected. The Finance Minister’s statement that “the government is committed to provide a stable and predictable taxation regime that would be investor-friendly and spur growth” is welcome – and we hope it does get converted into action and not remain as just a gesture.
In the end, putting India back on a growth path will require the government to push reforms beyond the budget and pursue reforms to facilitate further industrialisation and increasing urbanisation, but they have made a good start in terms of aiming to improve the investment climate and achieve fiscal consolidation.
India does have the advantage of a hugely aspirational younger population and is still on the growth path when compared to most other countries. We remain hopeful that in an increasingly connected and transparent era, the government and the political class cannot ignore power of the people and shy away from accountability.
For a more in-depth look at key points of the budget, including a summary of key economic indicators and the state of Indian economy, major policy proposals and details of proposed key amendments to direct and indirect tax laws, please click here.
Success beyond voice: Contact centres supporting retail shift online
As the nation continues to overcome the challenges presented by COVID-19, customers have shifted their channel preferences, and contact centres have demonstrated typical resourcefulness in adapting rapidly and maintaining uptime. It has been a steep learning curve, as they not only learn to operate digitally, but also build an understanding of consumers’ new shopping behaviours.
The closure of stores meant demand for customer service escalated, resulting in long telephone wait times, and consumers quickly realised that they could switch to online channels to fulfil their customer service needs. As a response to this change in channel preference, some providers quickly ramped up chatbots, social channels and private messaging apps. For example, recent research conducted by the CCMA (Call Centre Management Association), in partnership with Puzzel, revealed that some brands opened up their direct messaging channels on social media for the very first time, in a bid to ensure support across popular channels such as Facebook and Twitter. For others, the pandemic underscored the value of migrating customer interactions to self-service channels to manage demand and ensure customer service advisors’ time is directed to problems that customers cannot solve themselves.
Faced with severe constraints in many aspects of their everyday lives, the fact that contact centres remained open for business has been gratefully received by consumers. Even despite longer wait times, many contact centres reported skyrocketing customer satisfaction ratings due to lowered customer expectations. As the new normal starts to take hold, and customer expectations revert back, now is the time for contact centres to implement the right strategies to ensure customer satisfaction
ratings are maintained.
Jonathan Allan, Chief Marketing Officer, Puzzel, comments, “The short term reduction in customer expectations, which is driving increased customer satisfaction scores, will return to previous levels once we’ve all adapted to a new way of living. The accelerated move to online services and digital channels is, however, here to stay. Now, there is an increased expectation from consumers to receive support on social media, or to initiate a web to chat to receive immediate consultation or to book an appointment.
Allan continues, “Adapting to this multi-channel environment has become a necessity, not a nice to have, and relying on voice or email alone is no longer tenable. Customers expect to be able to initiate contact through their channel of choice, and to be able to start a conversation in one channel and seamlessly move between others. As customer’s expectations continue to rise, orchestrating these interactions is essential to ensure the most positive customer experiences, and enable the optimal selection of channels to drive efficiency and satisfaction. As customer behaviour changes for the long term, it is no longer viable to rely on only one channel for customer service as seamless customer experience becomes key to ensuring customer retention.”
7 Ways to Grow a Profitable Hospitality Business
The hospitality industry is a multibillion-dollar industry with lots of career opportunities in hotels, theme parks, restaurants, country clubs, etc. It is one of the fastest-growing sectors as a lot of industries are involved in it.
Though it can be very profitable for aspiring and established entrepreneurs, it can get challenging as it requires charisma, drive, and innovation to ensure you can meet your customers’ demands. Growing a hospitality business for profit requires a lot of thought and innovation. In this article, we’ll look at some practical ways to grow a profitable hospitality business.
1. Yield Management
Yield management refers to anticipating, understanding, and influencing your customers’ behavior to increase your business revenue to the max. This principle was first used in the hospitality industry in the late 80s. The main objective of yield management is not just to increase your rates or occupancy; instead, it involves forecasting your business’ supply and demand through different key factors to maximize your revenue. Let us consider some yield management examples. If you have a hotel, yield management will allow you to maximize the profit you can make from a specific number of rooms that must be sold on a deadline.
Another example is if you have a hotel located next to an event center or stadium, you will charge more for rooms than you do on a typical weekday or weekend during a conference or sporting event. Yield management involves targeting the right customer at the right time and selling for the right price.
It involves using gathered data to understand your customers and their sensitivity to pricing and combining that with seasonal demand. High demand, seasonality, and special events can allow you to alter your rates to increase revenue. Though the idea isn’t to increase rates only, it also involves attracting the right customer at the right time.
Yield management allows you to make more profit from your existing inventory.
2. Create a Website
Your hospitality business should have a well-maintained website as it adds to the first impression prospective customers have when they check out your business. For example, if you have a vacation rental, you can hire a competent web designer or a web design company to help you build a vacation rental website. Also, customers can make bookings through your website if you have one, and this will help you save more money as you will not have to rely on listing channels to gain customers.
Though listing channels can help you get bookings, you’d have to pay a commission and follow the transaction terms, which you will not det. When you have your website, you’ll have more control over how you present your business to customers. You can display a photo slideshow with high-resolution images of the property or add other enticing features that will help you gain more customers. A professional website helps to give your business a professional image while making it more visible online.
3. Maintain and Improve the Quality of Your Service
The hospitality industry is a highly competitive one, so it is important to stay on top of your game to gain more revenue. If your business is reputable for providing quality service, then you should maintain that standard. You can check out your competitors to get ideas on how to improve your service and set your business apart. This is very important as the reputation of your hospitality business is primarily determined and affected by your quality of service.
If your customers are satisfied with your quality of service, they are more likely to recommend you to prospective clients. To get more ideas on how to improve your service, you can check the online reviews about your business. Check what your past clients have said about their experience, what they like, what they dislike, and any improvement they might suggest. Once you improve your service quality, new and old customers will be willing to pay more even if you increase your rates as they will get enough value for their money. To grow a profitable hospitality business, you should be ready to offer more value than your competitors.
4. Have an Active Social Media Presence
This is a great way of making your hospitality business more visible online. It is also a means of reaching prospective clients. Apart from creating and maintaining a website, you should have an active presence on Facebook, Twitter, and Instagram.
These are where a bulk of your prospective clients are, and most brands take advantage of this. Nowadays, brands and businesses employ social media handlers that stay in charge of their social media pages. They are responsible for creating content and interacting with customers and prospective clients on social media.
You can post images and videos of your property on social media to attract new customers. Another way you can grow your business on social media is through sponsored ads. Most social media platforms offer various forms of advertisements at a reasonable price.
With sponsored ads, you have a higher chance of getting new customers or driving traffic to your website as you’d be able to reach a wider audience.
5. Create a Rental Agreement
If you are fully managing your business, then oral agreements with customers may not be enough. Your clients may have some assumptions about the terms and conditions or interpret the rules and regulations differently.
Sites like Airbnb can take care of this for you if you are not fully managing your rentals. For example, you can easily create an Airbnb house manual visible to prospective clients once they click on your property.
To avoid misconceptions and misunderstandings, you should create an agreement that will be visible on your website or any booking medium you prefer. Your guests will sign this agreement and protect both you and the guest if there is a dispute.
Though the terms and conditions may vary depending on the type of hospitality business, you can consult a business attorney for verification before using the agreement for your business.
A rental agreement should include information about the property, rental party details, occupancy limitations, the minimum stay requirements, house rules, rates and additional fees, cancellation policy, payment details, and the customer’s signature.
You can add other details and terms depending on your type of business. Creating a rental agreement is an excellent way to ensure your hospitality business runs smoothly as it makes it easier to prevent and resolve disputes between you and your customers.
6. Make the Booking Process Easy
A complicated or strenuous booking process is likely to discourage new clients from patronizing your business. Firstly, your hospitality business should have an online booking and buying platform.
A large percentage of people prefer to make bookings online. If your business does not have an online booking platform, you are bound to lose a lot of customers. If you choose to use listing sites or booking platforms, make sure the platform is reputable and offer good customer service.
If you use your website for reservations, then customers should be able to make a booking with simple steps. The required information boxes should not be excessive.
The less time your guests spend booking, the better. You should include additional informational text to help your guests through the booking process. Before your booking system goes live, ensure you pre-test it to make sure it’s hitch-free. Also, you can create a mobile app that allows your guests to make bookings and other transactions.
7. Keep in Touch with Your Customers
Apart from gaining new customers, a good way to grow a profitable hospitality business is retaining valuable customers. Guests will value a company that can offer a personalized experience.
If your guests can get a personalized experience, they are more likely to make more bookings or refer your business to others. Always interact with your guests on a personal basis. You can send emails or appreciation messages after a successful booking.
You can also refer your customers to your social media pages or ask them to sign up for your newsletter if they prefer to. Though you shouldn’t spam your customers with ads or emails, ensure you send information periodically about new offers, promotions, or other relevant details.
This will help keep your business on your customers’ minds, thereby increasing the chances of having repeat bookings. Once you identify your most valuable customers, you should try to keep the communication lines open. Also, you can ask for referrals or recommendations from your long-term customers.
As we have previously stated, the hospitality industry is very competitive. You need to come up with creative ways to market your business. To ensure you get a steady flow of revenue from your hospitality business, ensure you follow these tips we have given above. Apart from these, always be on the lookout for new trends and innovations in the hospitality industry to help you stay on top of your game.
This is a Sponsored Feature.
Finding and following your website’s ‘North Star Metric’
By Andy Woods, Design Director of Rouge Media
The ‘North Star Metric’ (NSM) is one of many seemingly confusing terms to come out of Silicon Valley but its message is simple and universal.
It refers to the single metric businesses use to guide activity, drive key decisions and measure success. And while it may seem naïve on the surface, to boil business success down to a single metric, there is a method to the apparent madness.
It doesn’t mean businesses simply ignore all other performance data but instead measure it against the overarching goal they’re working towards.
Here’s how businesses can create their own North Star Metric and follow it to website success.
What is a North Star Metric?
The idea of a North Star Metric is to focus on the goal which delivers the most value for the business and its customers.
It’s a popular strategy adopted by successful business around the world. For example, Spotify set its North Star Metric as ‘time spent listening’, while Amazon focused on ‘purchases per month’. Every business decision was then geared towards increasing these metrics.
For the business, this increase means greater advertising revenue and sales, while for users, spending more time using the service or making more purchases shows the platform is meeting their needs.
Chasing this North Star Metric sees businesses align their efforts towards a single goal. For ecommerce businesses, this means sales and marketing activity is aimed at taking users to the website, where service experts provide relevant content and information and website designers add natural calls to action.
Finding the North Star Metric for your website project, whether it be sign-ups, purchases or more time spent on site, allows the whole team – plus your agency, if you work with one – to move in the same direction.
What does a successful NSM look like?
Nominating your NSM before undertaking a website project allows you to focus all your efforts in design, functionality and content on delivering your goal.
However, some businesses may have been operating for years with a North Star Metric that isn’t quite right. If you’ve been focusing your efforts towards a goal which isn’t driving value for the business or customers, and for which you struggle to measure impact, you may need to switch focus.
Key considerations for making sure your NSM delivers a positive impact for your business include:
Generating engagement: the internet is full of businesses fighting for custom and users don’t owe them anything. If a website doesn’t give them what they need, they can find one that does within minutes.
Solving consumer challenges: Customers want a product or service that solves their problems and they want it now. Does your website contain information that answers their questions? Does it call out the key features of your product or service that makes their life easier?
Building trust: The chances are, many businesses offer a similar product or service to you. Customers need to know your business is trustworthy if they’re to part with their cash. Case studies, awards and user reviews are examples of content which can improve your brand authority.
Finding your website’s NSM
Identifying your NSM doesn’t mean picking a goal that sounds good in the boardroom. It needs to be a targeted, realistic and measurable goal.
Dial-in on your NSM by answering these three questions:
What is the single most important thing your website should deliver? The answer to this should be simple and obvious – more sales, sign-ups, downloads or leads.
What do users want from the site? You’re likely to have many users, so try to identify your main three here. What are they looking for when they enter your site? Advice, a product, a follow-up from an employee?
Which metrics tie together the above? You need to be able to measure your performance in answering these questions. If you’re after more leads, monitoring on-site user data – like time spent on site and number of pages visited – gives you an indication of what users want and how well you’re meeting their needs.
There are many questions to answer when finding your NSM. A useful way to arrange the information is in a visual hierarchy. Place your NSM at the top, with the answers to these key questions as branches.
Breaking it down into a visual flow chart like this also helps with gaining crucial buy-in from the whole business, with teams visualising how their role fits into the wider goal.
As your business grows and industry and user demands change, you may need to adapt your NSM.
If you’ve been working towards an appropriate NSM, it may only need tweaking slightly. For example, as a start-up, your NSM may have been building awareness by generating more leads. After a few successful years, the business may decide to switch the focus from leads to online sales.
While the metric changes slightly, the original strategy has already laid the foundations for the new goal, with your website designed to drive traffic and provide helpful content to inform users’ buying decisions.
Using analytics data, businesses can make changes to their website to align with their changing goals. Look at how users are behaving on your site. Are there ways you can encourage them to convert or sign-up?
This data helps you understand where to add calls to action or how to improve website design and functionality, so completing a form becomes a natural part of navigating the site and accessing content.
Mastercard Delivers Greater Transparency in Digital Banking Applications
Mastercard collaborates with merchants and financial institutions to include logos in digital banking applications Research shows that ~25% of disputes...
Success beyond voice: Contact centres supporting retail shift online
As the nation continues to overcome the challenges presented by COVID-19, customers have shifted their channel preferences, and contact centres have demonstrated...
7 Ways to Grow a Profitable Hospitality Business
Hospitality requires charisma and innovation The hospitality industry is a multibillion-dollar industry with lots of career opportunities in hotels, theme...
AML and the FINCEN files: Do banks have the tools to do enough?
By Gudmundur Kristjansson, CEO of Lucinity and former compliance technology officer Says AML systems are outdated and compliance teams need better...
Finding and following your website’s ‘North Star Metric’
By Andy Woods, Design Director of Rouge Media The ‘North Star Metric’ (NSM) is one of many seemingly confusing terms...
Taking control of compliance: how FS institutions can keep up with the ever-changing regulatory landscape
By Charles Southwood, Regional VP – Northern Europe and MEA at Denodo The wide-spread digital transformation that has swept the financial...
Risk assessment: How to plan and execute a security audit as a small business
By Izzy Schulman, Director at Keys 4 U Despite the current global coronavirus pandemic and the uncertainty it has placed...
Buying enterprise professional services: Five considerations for business leaders in turbulent times
By James Sandoval, Founder and CEO, MeasureMatch The platformization of professional services provides businesses with direct, seamless access to the skills...
Wireless Connectivity Lights the Path to Bank Branch Innovation
By Graham Brooks, Strategic Account Director, Cradlepoint EMEA As consumers cautiously return to the UK high street in the past...
Financial Regulations: How do they impact your cloud strategy?
By Michael Chalmers, MD EMEA at Contino How exactly do financial regulations affect your cloud strategy? It’s a question many of...