Saul Klein
A business exists to satisfy its customers. But South Africa’s poor service attitude is an important factor in the country regularly being ranked near the bottom in terms of competitiveness.
One component of competitiveness that captures our poor performance has to do with the market orientation of local business. Market orientation means designing and managing organisations to satisfy customers better than one’s competitors do.
South African business demonstrates a serious lack of understanding of what service quality means and how to ensure that it is delivered. Local businesses must fix this if they are to survive, let alone penetrate foreign markets with any success.
I recently took an international flight on South African Airways (SAA). On arrival, I discovered that three pieces of checked luggage had been opened and items stolen.
SAA said their liability in such cases is limited by international airline conventions, and offers reimbursement for only 15% of the loss incurred. While this may be legally acceptable, from a business perspective such an argument reflects a total lack of understanding of customer service.
SAA asserted that customers should know about this liability as it is printed on the ticket. Customers should, accordingly, declare excess valuation, and pay a premium for such, when they check in at the airport.
In fairness, SAA is not alone among international airlines in treating customers in this way, and sensible travellers will seek airlines that protect their rights better. But a service organisation that makes the customer feel it does not care stands in danger of fuelling customer opposition.
Poor service is generally not an accident but a direct consequence of poor management. The increasing competition facing SAA should be cause for management concern.
The cost of fully compensating a customer is generally very small relative to the potential lost business, yet this does not appear to figure in the airline’s calculations. Neither does the loss to the reputation of the airline. Negative word of mouth inevitably follows from customer defection.
British Airways (BA) is a prime example of an airline that, since its privatisation in the 1980s, has become one of the world leaders in service quality.
BA realised that few customers complain; most simply go elsewhere. The airline revamped their customer-complaints operations, ensuring that every dissatisfied customer was heard from, and every complaint was acted upon.
Speed of response was also identified by BA as a key element in satisfying customers. They found that the quicker the response, the smaller the level of compensation that is required to keep a customer satisfied.
Customer satisfaction is not an option; it is an imperative. Trying to reduce costs in the short term can have major consequences in the long term. The sooner this is recognised, the better for all of us.