'South African industry in general has a poor understanding of the concept of customer service.'
- Rodney Rudman, passenger strategy manager, Delta Motor Corporation

 

CUSTOMER service in South Africa is awful. In my book I Was Your Customer,  I reported that South Africa was rated 23rd in a worldwide survey of customer service in 24 countries.

I also quoted international management guru Peter Drucker who noted in Management  (Harper's): 'There is only one valid definition of business purpose: to create a customer. It is a customer who determines what a business is. It is the customer alone whose willingness to pay for goods or services converts economic resources into wealth, things into goods.

'What business thinks it produces is not of first importance - especially not to the future of the business or its success.

'Customers are the foundations of business and keep it in existence. They alone give employment.'

So, faced by a wave of foreign competition in the wake of crumbling trade barriers, how do South African captains of commerce and industry go about providing excellent customer service?

They don't.

Instead ...


THEY PAY LIP SERVICE TO THE CONCEPT

Some even introduce customer-care programmes. But quickly lose enthusiasm. Brian Streak, distribution marketing manager at Siltek, sums up the situation.

'South Africa is two or three generations away from developing a customer service culture.'

I intended making this the longest chapter in the book. After all, South African commerce and industry will depend for survival in a free market on the quality of its customer service. But in most cases, when I broached the subject, I was met by a bland wall of complacency.

For example, in a sector of industry notorious for its atrocious service, all manufacturers - without exception - claim an overriding commitment to service excellence.


A CRITICAL FACTOR

I refer, of course, to the motor industry. In 1992, Samcor launched an internal programme. Its aim: to develop world-class products, people and operations. It stressed leadership in customer care as a critical factor.

However, sales and marketing controller, Derrick Smith, admits that customer care has fallen below the desired level. Neglect of dealerships over the last 10 years led to a noticeable decline in the quality of customer service.

Now - some would say belatedly - management is tightening controls. How, Smith doesn't specify.


Total commitment

Nissan is also totally committed to customer service. Or so John Jessup proclaims. He says it's the key to the company's defence of market share in the face of both domestic and offshore attacks.

But how good or bad is quality of that service now?

National sales director Lester Miller adopts a stand typical of the smug-bound industry as a whole.

'Nissan is a leader in customer service, so this isn't a new business ethic for us. We undertake a customer satisfaction index (CSI) survey on a quarterly basis to ensure that dealers are meeting customer expectations.'


Imported cars

But customers may get a better service deal by buying imported cars.

They offer superior warranties. Hyundai, for example, offers a warranty of three years unlimited mileage compared to Delta's passenger vehicle warranty of 12 months unlimited mileage.'

And is Delta doing anything to close the gap?

The management team, according to Rudman, aware that a superior customer service approach is critical to the company's long-term success, has taken several fundamental steps towards becoming more customer-orientated.

Could any other sector of industry be more vague?

 Yes.


THE BUILDING CONSTRUCTION AND PROPERTY DEVELOPMENT INDUSTRIES.

Most of those interviewed - particularly in the property development sector - viewed customer service as an alien concept. Those who admitted to hearing of it, had relegated it to the backburner.

They just couldn't foresee any competition from faraway places with strange sounding names.

But there's an exception.

Blue Circle.

Derrick Theck believes that foreign entrants will buy market share by cutting prices. His company's only defence: to segment the market in accordance with customer requirements.

'Blue Circle has come to realise that it can serve both the large contractor and the small developer. In order to serve the small developer we must become more customer- friendly.'


THE OFFICE EQUIPMENT SECTOR

Only one company in this sector really acknowledged the importance of customers.

Nashua, probably best known for its photocopiers and, more recently, computers and cellular phones, has always been strongly customer-orientated - at least from its management's perspective.

Whether its service always lives up to its 'Saving you time, saving you money, putting you first' ad slogan is open for debate.

But I have to give the company credit for trying.


Commitment to customer service

Chief executive officer Jac Moolman, spends most of his time visiting the 57 Nashua franchised operations around the country. His mission: to instil the commitment of Nashua to customer service.

He believes that it is just as important for the person on the switchboard as it is for the technician who fixes the machines to be repeatedly exposed to the service message.

There are no substantial physical or performance differences between Nashua products and those of its competitors. All Nashua really sells is service.


BANKING

You can say the same about banks. Apart from the packaging, the products are much of a muchness.

The only differentiator is customer service.

And as things stand at the moment, service quality varies from mediocre to bad to worse.

All the banking groups, including First National, Standard, Nedbank and ABS (Allied, United, Volkskas, Trustbank), insist that they provide good customer service and are striving for excellence.

Not that you'd notice it by queuing in any of their banking halls.


Internal focus

ABSA chief executive Dr D C Cronj zoomed to the crux of the problem in the banking group's 1994 annual report when he admitted: 'Over the past two years much of the focus was internal.'

And M Sydney trots out an industry-standard public relations response to a query about customer service.

'Substantial resources have been allocated to staff training and development with the particular aim of upgrading service quality in terms of the Customer Focus Programme'.

Spokespersons for Standard and Nedbank use different but equally empty phrases to say very much the same thing.

David Kuming, of Investec, is more voluble. Investec is a group of companies that includes a merchant bank, securities trading, asset management and property development institutions.

Foreign companies, particularly those based in the United States, will use superior quality customer service as one of their get-in strategies, according to Kuming.

'In the USA everything is geared towards customer service. It's one of the most important aspects of business in the United States.'

But he isn't unduly concerned about facing the challenge of US-style customer service.

'Investec, has a very well-developed culture of customer service. Customer service is one of our major policies.'

Which is something we've all heard before.


FAST FOODS

Then comes a refreshing breath of candour from Grant Wilson, of Pizza Hut.

'In the past, Pizza Hut's service was not very good and we knew it. Customers always considered our service to be average.'

Which he concedes isn't good enough to ward off possible attacks from the likes of American-based and service-focused Dominoes, Pizza Haven, MacDonald's and Burger King.


FASHION RETAILING

Penny Lloyd reveals that stores in the Sales House chain could be in trouble when competing with American companies that are more customer-orientated.

'Sales staff throughout South Africa are notoriously slack when it comes to customer service. And if they don't "jack up" fast, we could lose out to foreign marauders.'

And from Edgars, a recent in-house survey found that customers weren't impressed with levels of service, which were perceived as 'minimal'.


FURNISHINGS

Nettex is also concerned with falling standards of service to customers.

'Foreign competitors from countries such as those in the Far East,' says M C van Wyk, 'are likely to have corporate philosophies that concentrate on providing high levels of customer service. This may have a negative effect on the Nettex's current share of the South African market for curtaining.'

Foreign competitors have already captured about one-third of the this market. And they're likely to increase their share if they continue to penetrate the market with lower priced, higher quality products that come with better warranties and higher levels of customer support.

So ...


HOW WILL YOU IMPROVE CUSTOMER SERVICE?

The are 10 key elements in good customer service. If you implement them all enthusiastically and as a matter of policy, you will achieve World Class Customer Service. These elements are:

  1. Better value.

  2. Better quality

  3. Better service.

  4. Better response.

  5. Customer comfort.

  6. Uniqueness.

  7. Consistent behaviour.

  8. The ability to listen.

  9. A caring attitude.

  10. A focus on revenue enhancement, not cost containment.

Nick Louw, of Commercial Airways (Comair), sums up the customer service situation.

'Overseas competitors have developed excellent customer service policies. They could use this as a differentiation tool since South African businesses have poor customer service policies that are badly implemented.'


THE ROLE OF PRICE AND PRODUCT QUALITY

Whether the provision of excellent customer service in all its forms will be the deciding factor in the coming war for control of market share remains to be seen. What is certain is that it will play a major role, along with price and product quality, in determining the victors. 

Prev   Next

  Authors Note
    Introduction
     
1. Protection Gets the Bullet
     
2. Perceive the Threat
     
3. Define the 'Get In' Strategy
     
4. A Quick Backward Glance-1
     
5. The Importance of Pricing
     
6. Vital Ingredients: Products and Productivity
     
7. Customer Service: On the Backburner
     
8. A Quick Backward Glance-2
     
9. Preventative Strategies: Price and Service Quality
     
10. Preventative Strategies: The Ramparts of Distribution
     
11. Preventative Strategies: Management - to restructure?
     
12. Preventative Strategies: Market Aggressively to Win
     
13. A Quick Backward Glance-3
     
14. In Conclusion
     
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