Food retail sector delivers
The telecommunication sector has fallen from grace
THE ASK AFRIKA Orange Index did not only rate companies overall in terms of their service delivery but also looked at the various sectors, and here food and retail was rated the top sector when it came to offering customer delight.
The petrochemical sector was rated second followed by fast food, clothing retail and banks in fifth position.
According to Ask Afrika’s senior business analyst, Maria Petousis, the common denominator in these sectors is the focus on the customer rather than on the product or service.
Within the food retail sector, Woolworths Food was rated the best in terms of service followed by the grocery store/corner cafe, Pick ’n Pay, Shoprite Checkers and Spar.
Within the petrochemical sector, the top three service providers, Caltex, Engen and Total, were also rated in the top five overall rankings.
The only sector to be rated in the top five sectors in this year’s Orange Index and the previous index two years ago is the banking sector. Having said that, only Old Mutual Bank was rated in the top five overall this year, coming in at second place. The next bank to be rated was Standard Bank in 15th position overall followed by FNB in 45th position.
The automotive sector has also become complacent due to the enormous demand for its products.
The one sector to have fallen from grace is telecommunications. Rated not only as the top sector two years ago, one of its players, Cell C, was rated the best service company overall with MTN in third position and Vodacom in fourth. This year’s survey ranks the sector in 8th position with Cell C ranked 51st overall, Vodacom 19th and MTN 42nd. Like the banking sector, these companies have become too product-centric and are slowly losing the service game, Petousis believes.
However, when looking at the Telecommunications sector itself, MultiChoice has made great strides in terms of its service delivery and was rated second best in the sector after Vodacom, beating both MTN and Cell C.
Petousis believes the automotive sector has also become complacent due to the enormous demand for its products. Interestingly though, Mercedes Benz came first in the sector’s ranking despite the quality of the product having taken a drop worldwide. “Merc has definitely made up for this in terms of service,” she says. “Its sales may be down but its service rating is going up.” Twelve sectors were rated in total and the winners in each in order of sector
winners are: 1. Food retail – Woolworths 2. Petrochemical – Caltex 3. Fast food – Nando’s, KFC and
Steers 4. Clothing retail – Pep 5. Banking – Old Mutual Bank 6. Automotive – Mercedes Benz 7. Long-term insurance – San-
lam 8. Telecommunications – Voda-
com 9. Short-term insurance – Out-
surance 10. Airlines – British Airways 11. Medical aid – Medihelp 12. Government – Schools
Another interesting result, says Petousis, is that roughly 40% of all customers have different service expectations from different companies and industries, and this makes these companies sensitive to churn due to poor service. Industries more exposed to churn due to service are the airlines, short-term insurance, automotive and petrochemicals. Conversely, these industries are also more likely to attract customers with good service.
In terms of the preferred service delivery channels, respondents rated personal service as the preferred channel for most industries. Call centres usually fail as the processes serve to alienate the agent from the consumer, says Petousis.
Overall, however, South African consumer predictions were fairly close to the mark with predicted sector winners, at least within the top four ballpark, placing renewed emphasis on the importance of positive word of mouth, she says.
In the fast food, telecommunications and short-term insurance industries, the public’s perceived winner was the actual Index winner as well, ie KFC, Vodacom and Outsurance respectively. Engen, the perceived winner in the petrochemical sector, was in fact rated second with Caltex the winner, while in the long-term insurance sector, the perceived winner Old Mutual was rated second after Sanlam (see graph).
“It doesn’t take a huge budget to offer service,” says Petousis. “All it takes is the mobilisation of your workforce as is the case with Pep, Merc and the petrochemical companies. These companies have spent a great deal of time on staff motivation and it’s started paying off.”
In the words of Steve Ballmer, CEO of Microsoft: “We can believe that we know where the world should go. But unless we’re in touch with our customers, our model of the world can diverge from reality. There’s no substitution for innovation, of course, but innovation is no substitute for being in touch either.”