Food re­tail sec­tor de­liv­ers

The telecom­mu­ni­ca­tion sec­tor has fallen from grace

Finweek English Edition - - The orange index -

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.”

CON­SUMER PRE­DIC­TIONS

* Cor­rectly pre­dicted win­ners Source: Ask Afrika

IN­DUS­TRY LEAD­ERS THAT OUT­PER­FORM THEIR IN­DUS­TRY WITH CUS­TOMER LOY­ALTY

Source: Ask Afrika

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