The UK rail industry, while a cornerstone of national infrastructure and economic activity, is currently operating within a complex and challenging economic landscape – it is a conversation we are all having far too often at the moment. For Small and Medium-sized Enterprises (SMEs) that form the vital backbone of the rail industry, securing new work has become increasingly difficult. When we’ve spoken to people at networking events over the last few months – that conversation has dominated every time.
A combination of lower anticipated spend on infrastructure projects, combined with sticky inflation, an increase in National Insurance, fluctuating interest rates, and broader economic uncertainty has led to a more cautious approach to investment and procurement across various segments. In such an environment, the temptation for businesses, particularly smaller ones, to cut back on “non-essential” activities like business development and marketing is understandable. However, this could prove to be a short-sighted and ultimately detrimental strategy. Instead, looking at effective and affordable approaches is a sensible solution to maintain consistency.
The reasons why are straight forward:
- A study by Forbes demonstrated that consistent promotion and brand presence can increase revenue by up to 23%.
- A study by MadeByShape said that 68% of businesses reported that brand consistency was a major contributor to revenue growth.
The Current Climate: A Test for Resilience
The prevailing economic conditions are undeniably tough. While some recent reports from Arcadis suggest a “turning tide” in the broader construction sector, with public sector workload expanding, the sentiment among many SMEs remains one of caution. Projects may be delayed, pipelines can appear uncertain, and competition for available work intensifies. In response, businesses often look inward, focusing on cost-cutting and preserving existing resources. Yet, it is precisely in these challenging times that a sustained and strategic business development effort becomes not a luxury, but a fundamental necessity for survival and future growth.
Why Maintain the Business Development Momentum?
To cease or significantly reduce business development and marketing activities now would be akin to a ship in a storm cutting its engines – it might save fuel in the short term, but it loses its ability to navigate, adapt, and ultimately reach its destination. For rail SMEs, maintaining a visible and proactive presence is crucial for several reasons:
- Visibility and Relevance: In a competitive market, those who remain visible are those who are remembered. Consistent marketing and targeted business development ensure that when opportunities do arise, your company is top of mind for potential clients. This isn’t just about winning new bids; it’s about reinforcing your brand, expertise, and reliability.
- Relationship Building: Rail is fundamentally a relationship-driven industry. Economic downturns can actually present unique opportunities to deepen existing client relationships and forge new ones. With fewer active projects, clients may have more time for strategic conversations, allowing SMEs to better understand their evolving needs and position themselves for future work.
- Anticipating Future Spend (CP7 and Beyond): Despite the current challenges, significant investment is still flowing into the rail sector. Control Period 7 (CP7), covering 2024-2029, represents a substantial commitment to maintaining and enhancing the network once the spending increases (if we are to take previous spending habits into account!). While the specifics of some programmes may be in flux, the overall spend is there. SMEs that continue their business development efforts are better positioned to understand where this funding will be directed, anticipate upcoming tenders, and prepare their capabilities accordingly. Those who disengage risk missing out on these critical opportunities.
- Tier One Reliance: The major Tier One contractors, responsible for delivering the largest rail projects, are heavily reliant on a robust and capable supply chain. They cannot deliver complex infrastructure projects without the specialist expertise, innovation, and agility that SMEs provide. These prime contractors are actively seeking reliable partners who can demonstrate resilience and a forward-looking approach. SMEs that maintain their business development efforts are signalling their readiness and capability to support these larger players, even in a difficult market.
- Market Intelligence: Active engagement in business development provides invaluable market intelligence. Understanding client priorities, emerging technologies, and shifts in procurement strategies allows SMEs to adapt their offerings, innovate, and remain competitive. This continuous learning is vital for long-term strategic planning.
Survival and Growth: The Differentiator
Ultimately, the businesses that navigate this challenging period successfully will be those that are proactive, adaptable, and committed to their long-term growth. Those who maintain their business development and marketing efforts will not only stand a better chance of securing the available work but will also be better positioned to capitalise when the market fully rebounds. They will be the ones that survive and, crucially, those that do not shrink, but instead build a stronger foundation for future expansion.
In an industry where resilience and foresight are paramount, the message to rail SMEs is clear: now is not the time to retreat. It is the time to engage, to connect, and to strategically position your business for the “turning tide” that is, however slowly, beginning to emerge.
Alongside business development and bid support, we can also provide affordable marketing support as well. Send an email to Dan at dan.clark@railindustryconnect.co.uk for a free no-obligation discussion to maintain marketing and business development consistency.
