Tuesday, 23 March 2010

Business in SA

I've often commented on business in SA but it seems to me that it is probably worthwhile enumerating the problems I've noticed, especially in the light of my recent unpleasant experience in dealing with Musica, our local music monopoly.

South African businesspersons basically do not "get" the following points:

1. The customer is always right. This is not some kind of deep philosophical point. It's a very basic point, a cliché which exists to remind you that you depend on the customer for money. The customer approached you to offer you business, so don't start telling the customer that he or she is wrong.

Well, in what ways do SA businesses tell customers that they're wrong? I'll tell you! SA businesses literally tell customers that they're wrong. They actually will argue with a customer who is complaining about something and tell the customer that "it's meant to be like that". SA businesses basically do not want to make changes to suit the customer's needs; they have a one-size-fits-all, take-it-or-leave-it attitude. If you don't like the way they do things, you can just go somewhere else. The trouble is that SA is plagued by monopolies.

2. SA companies don't understand that service is more important than quality. They don't understand that if they are friendly, helpful, and answer your communiqués in appropriately short timescales, you will go back to them, even if their workmanship is a bit lousy. Because it's easier to deal with someone who is friendly and helpful and tell them to try again, than deal with someone who is arrogant and is busy telling you that he did it right the first time, and the fact that you're not satisfied is irrelevant.

3. SA companies are very old fashioned with communication. They generally only understand direct phone calls or faxes. They generally require phone calls or faxes. It's very rare to find an SA company that actually responds to email (much rarer is the company that responds the same day!), and it's also rare to find an SA company that doesn't give you the pillar-to-post treatment when you call. ("Oh, no that's not our division, you have to call 0800 xxx xxxx for that problem. Click!) In fact, I've only found one company - Hetzner - that answers email on the same day, and often with a helpful answer. Every other company either does not answer or takes a few months to answer. I'm not kidding. Fax is also a waste of time. Unless they ASK you for the fax and tell you to send it to them, they ignore faxes just as much as they ignore emails. I've discovered that the solution to this problem is to either accompany the fax with a lawyer's letter or send the fax 10 times a day for two weeks solid. That sometimes gets a response, but not always. The same with email. Unless you send a threatening email, or put them on HelloPeter.com, they basically ignore your emails. Musica is a prime example of this. I sent three emails to queries@musica.co.za, and got ZERO reply. It's been a month now. Nothing. But they did respond to the HelloPeter thing. It took them two weeks to react to it, though. And of course, they phoned me. Why? Because SA companies don't understand email. They think it's a time sink that secretaries use to email each other jokes. They don't understand that email is the future business tool that will make or break their companies. Telephone, the Yellow Pages, and fax are dead. Email and websites are their successors.

4. SA companies are presumptious and intrusive with their "quality" attempts. So for example, they will call you at 9am when you're stuck in traffic, or 7pm when you're having dinner with your family, to find out if you want to buy insurance, timeshare, or whether you're happy with their service. It's a bit like waiters who come and ask you if the meal is OK - but only when your mouth is full and you can't answer! Even worse are telesales people who call you up unsolicited, or the spam we're starting to get now on our cell phones. Outrageous! I didn't opt-in to any SMS marketing campaign, as far as I recall!

5. You have to beg SA companies to take your business. You literally have to call, phone, email, and fax about 5-10 times before they respond and deign to quote you. To get them to come out and take a look is an even bigger task! And then to get them to finish the job is almost impossible! The key thing to understand with SA companies is the concept of retaining a small amount of the money due. Do not hand it over till the job is finished, otherwise they will disappear and never come back to finish. I'm thinking mainly of builders here, but any other SA companies are just as bad. Don't give them the money till the job is finished!

6. They're unscrupulous about what they pay their staff. Senior management get R 50 000 plus per month. Yes, that is about £ 4000 per month. Floor cleaners get R 2000 per month if they're lucky. Yes, that is about £ 150. Per month. Yet you will find that it is invariably the poor labourers who do the work. Especially the "bakkie brigade", aka labour brokers. A common feature of the SA working environment. Basically, a guy, usually white, will go find a bunch of labourers, usually black, and pay them a measly R 100 a day or so, to labour away in the hot sun, usually building or wrecking or somesuch. He will charge R 100 000 for a job and pay the labourers 1/10th of that. I saw this with my own eyes. I had a builder who quoted me that for a second storey on my house. He paid his workers, if I recall correctly, R 15000 or so. The materials were about 20-30k. What happened to the other 20 or 30k? Well, if he actually supervised them and he was actually on-site all day, maybe I'd have thought he deserved it. But he was nowhere to be seen! He dropped them, drove away, and left ME to supervise a bunch of guys who barely understood English, much less architect's plans. The government here recently tried to outlaw labour broking. I don't think that's the solution; it provides the labourers with some credibility if they show up in a bakkie (small pickup truck). It does get the labourers work, and it puts food on their tables. What is needed is legislation to cover the minimum wage they ought to be paid per hour.

7. Arrogant monopolies. The big companies in SA generally monopolise the market and are generally believed to be colluding on prices. Why else would the cellphone companies, for example, charge the same for a call or an SMS? It's going to hit you for R 2.75 (Call) or R 0.75 (SMS) when you first connect, regardless of which company you're with. (Yes, they talk about R 1.50 per minute calls but there's always an interconnect fee or a connection fee or a "drop down rate" or some other lie to cover the actual charge). The reason is that there are only two cell networks (the others just piggyback), so the "competitors" all have to pay the big two for use of their networks anyway, at the price-fixed prices, anyway. So there's no point to deciding which company to use; they charge the same and they're in bed together anyway. Even the land-line operator now charges cellular rates to connect to their "competitor". Try it out. Try call someone who's taken up a "Neotel" line. Telkom will charge you the same as a cell call, even though it's landline to landline. To make matters worse, Telkom and Neotel both use the 011 and similar dialing codes, so you can't even TELL in advance if you're calling Neotel or not. So you may as well use your cellphone exclusively; at least you know you're going to be ripped off, you don't have to guess.

The same applies to any of the other major companies. SA has a big tendency to monopoly capitalism. As soon as a really good company comes out - like CD Warehouse/Wherehouse (sic), they get bought out by inferior companies that just happen to be bigger. CDW was awesome. They had really really obscure stuff on their shelves. Now that Musica, the monopolists, run all the music stores in the country, virtually, we have nowhere decent to go buy obscure music; you basically can get the top-10 stuff at Musica and that's it. You've got no chance if you want something obscure (like I do).

Ditto the insurance companies, ditto the medical aids (health insurance) etc etc. You pay and you pay. If you find a small company, they're amateurish or go out of business. If you go with the big guys, they don't care at all about you and just bounce you around inside their call centres when you phone to complain, until you give up, because you're calling from a cellphone and they put you on hold at R2.75 per minute, and then make you hold for 45 minutes before someone bothers to answer you. No, I am not exaggerating.

8. They're slow. Americans will probably be horrified to hear this but at the local branches of MacDonalds, they actually have special parking bays outside the drive thru, so that when you order at the drive-thru, you can go park and wait for them to make your food. No, I am not kidding. I've actually waited about 5 minutes at a McD's before. Not that McD's is the greatest stuff, but what is the point of a "Drive thru" if you have to park and wait anyway? You may as well just park, get out your car, and go to the counter like any other take-away joint. Ridiculous. SA businesses just don't get it. There's no hurry. A "fast food" joint is where you get food within 10-15 minutes. A restaurant is where you get food within an hour. That's how it is. When McD's first came here, and we saw a drive thru for the first time (I'm talking 1995-6, really!) - we were amazed at the concept of getting your food in under a minute. Since then, McD's have completely slacked off and you now get stale chips (because they've been sitting waiting, pre-prepared, because it's too slow to not pre-prepare them) and you wait 5 minutes, especially if there's a queue of cars that's more than 2 cars long.

Pity there's no oil here.

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