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'Customer service must become top priority for companies in MidEast'

DUBAI -- Companies in the UAE must improve their level of customer service if they are to survive in an increasingly competitive environment.

Speaking with Khaleej Times, Eqbal Al Yousuf, president of the family-owned business Al Yousuf LLC said: "I believe the only way to survive is for companies to become more service-oriented," and later added: "One thing that does not exist in the Middle East is customer service."

As a result of globalisation and the increasing integration of the UAE into the world economy, competition will intensify. He therefore predicts that we will see the failure of more companies in the region.

"Some companies are going to fall out and those that do will have huge overheads and don't have good customer service," he said.

The change in agency laws, which will mean that distributors no longer have a monopoly, also does not concern him. "It won't change a bit. The best service provider is the one who wins, he said.

"The customer and supplier relationship is based on trust and if this doesn't happen, you can't blame the supplier going to someone else. It's the same with customer and customer service. Forcing people to come to us is no use. "I don't follow this issue at all because I don't see it as a concern," he commented. Family businesses form the backbone of the UAE economy. According to figures from the Dubai International Financial Centre (DIFC), there are more than 5,000 family businesses worth $500 billion in the GCC, accounting for 75 per cent of the private sector economy and hiring 70 per cent of labour in the Gulf.

The Al Yousuf family business is one of these. The family has had businesses in the region for the past 40 years spanning the auto sector, marine, electronics, and computing through to manufacturing, chemicals and real estate.

Their story is indicative of how family businesses in the UAE are being forced to adapt to significant changes in the operating environment.

Between the 1960s and the 1980s, the company was focused on the export and re-export market and drumming up business was easy, explained Al Yousuf. "In the 1980s, people would come to us and we hardly needed to go outside Dubai. Sometimes we could just pick up the phone and people would ask for items to be shipped -- that's how business was done," he said.

In the 1990s, however, when Dubai became an international hub "we had to change our model of doing business," he explained. The company became more pro-active.

"Instead of waiting for people to come to us, we were approaching people," he said. "The main thing is that we had to become customer-focused."

"We started opening branches, but when you have a lot of divisions it isn't easy. We tried to minimise the divisions and focus on our core product," he said. Consequently, half the company's businesses were closed, including medical and commodity exchange, he explained.

"Fifty per cent of our businesses were closed because of the change in direction of Dubai. We had to decide on what we wanted to focus."

In 2000, the company had to change again and "become more service-orientated," said Al Yousuf. A greater number of high-income and educated people, and a younger generation "have all created challenges for us. People want more service and are less focused on price," he explained.

"Our philosophy is to focus on our core business. To compete is to make fewer mistakes than your competitor which means you have to focus on your inner operation rather than on what the competition is doing," said Al Yousuf. While the UAE government is encouraging family-owned businesses to go public, with the new companies law soon to be enacted to facilitate this, Al Yousuf will not be taking this route.

"We are not thinking of listing," he said. "We have no problem with financing or liquidity and we don't have a plan for expansion beyond our current businesses."

He also added: "It is easier for a family business to serve the customer than a non-family one. When it comes to serving the customer you must be able to make a quick decision and there is no quicker way to make a decision than a family-business," he said.

On the thorny but highly pertinent issues of corporate governance and transparency, Al Yousuf said: "Transparency is never bad; it is always good. The only people who are afraid of transparency are those who are hiding things. If you don't do anything wrong, why are you hiding the information?"

Even under current rules, if you are from government or from banks and other suppliers, then the requisite information will be made available, he insisted.

"We are very transparent with banks and suppliers. We provide all the information because they need to know. We provide information to people who benefit from it but to provide extra information for the sake of it is a waste of time, "he said.

BY LUCIA DORE (Senior Correspondent)

© Khaleej Times 2006