Why does South Africa put up with shocking service?

Recent independent research into branch service levels at South Africa's largest banks confirms what consumers have known for some time. Service levels are woefully inadequate, with consumers spending most of their 'face time' with banks simply standing i

Poorer consumers who have no access to electronic or Internet banking facilities bear the brunt of a banking infrastructure which has failed to expand despite servicing thousands more account holders in recent years. Apart from longer waiting periods, die hard consumers who insist on transacting inside branches pay higher fees for lower levels of service. The research also found that bank staff focussed on procedure rather than paying specific attention to client queries and requests.

Overall, service levels at South African banks remain dismal, despite charging some of the highest banking fees in the world. Unfortunately for the struggling local consumer, banks are not the only ones doing a hatchet job on consumer rights. South African consumers pay through the nose for telephones and internet access and that is before we consider the shocking billing and service practices of local municipalities.

Cellular service giants vie with banks for top honours in slack 'service' stakes

Poor service is made worse due to the non-competitive pricing culture that prevails even where competition exists. Large South African companies like banks and cellular service providers are cases in point. Their concern is with maximising return to shareholders at the cost of consumers.

The four major banks have such similar pricing strategies (some call this price fixing) that consumers cannot attach any value to a move from one bank to another. Instead of considering the cost benefit of such a move, consumers are influenced by the cost and inconvenience of switching from one bank to another. South African consumers are essentially prisoners of inflexibly priced banking products and victims of the anti-competitive practices now deeply rooted in South Africa's big business.

Major cellular service providers are even worse. Despite the claim that there are three major players for consumers to choose from, the reality is there are only two. For all their efforts, Cell C remains a minnow in the local cellular market place, and consumers are left to choose between Vodacom and MTN.

The result is that prices can hardly be discerned between these companies. Consumers are forced to sign restrictive two year contracts for their cellular phone accounts and cannot exit these contracts without paying heavy penalties. And once the service provider knows this, there is little incentive to provide service. The consumer is, after all, tied to a provider for the length of the contract.

Monopolies encourage the 'take it or leave it' service approach

Most service providers in South Africa continue to treat customers with a 'take it or leave it' attitude. The reason is these institutions know that customers have few alternatives. If you are not happy with your Telkom fixed line, there is no other company that can supply the service. So your choice is to use Telkom, or go without.

Similarly, if your company is moving coal from the mines to the Richards Bay coal export terminal you can use Spoornet or carry it there in wheelbarrows. The choice is hardly a difficult one, and the business in this case is forced to accept whatever terms and conditions Spoornet feels should prevail.

Other huge companies like Mittal (previously Iscor) and Sasol abuse their monopolistic positions by applying pricing policies which have long been viewed by business as anti-competitive. Despite many attempted interventions by pricing bodies and other regulators, the practices remain in force. South Africans are forced to pay import parity prices for petrol and steel instead of receive the benefits that should accrue to them for supporting local industry.

Consumers need to carry the fight for their rights

To change the status quo, consumers will have to learn to demand more respect from suppliers. The battle cannot be won by throwing tantrums at customer service desks and making loud demands for branch managers to immediately attend to problems.

Instead, consumers should begin writing letters of complaint to banks and other service providers and following up on these complaints. Small consumer victories will be achieved once the weight of this hard correspondence becomes too much for the service providers to bear.

Editor's thoughts:
South African consumers are generally complacent with regards the various services they receive. Whether at the bank, the cell phone company, a restaurant or the DSTV service centre, we meekly accept whatever level of service is dished out. And when we try to protest our actions usually degenerate to a pointless shouting match without result. What can we do to ensure better service in South Africa? Send your comments to gareth@fanews.co.za