Banking is in crisis. No, I don’t mean bonus scandals, gambling with other people’s money, rate fixing, product mis-selling and evidence shredding. I mean scandalous disregard of customers, over-charging and take-it-or-leave-it service that only an entrenched cartel could possibly get away with.

 

For everyday banking scandals like this you don’t need to go to New York or London. Any branch of the big banks here in South Africa will do.

Consumers who have never had it so bad are presenting service-led businesses with an unprecedented opportunity to stand out. Smart business simply has to offer respite from a perfect storm of rising prices, strikes, violence and failures of leadership.

 

The world is going to hell in a handcart. That’s the impression of anyone reading the news – which means even small personal touches and little gestures wow customers.

 

Even modest investment in better service has disproportionately large impact because the contrast with the norm is huge.

 

Developments in 2012 raise concerns rather than spirits. A list of depressing realities include …

 

Political shambles, with greedy politicians engaged in a cynical pursuit of power and constant waste of taxpayer’s money …

 

Sporting malaise, with former heroes exposed as cheats … cheating on wives, cheating with drugs and cheating on the field …

 

Environmental catastrophes in a world where 12 children die of starvation every minute while pollution piles up …

 

Social turmoil, highlighted by strikes, protests, violence and death

 

Rebellion by disillusioned taxpayers who occupy Wall Street, revolt against austerity and rail against morally bankrupt political and business leaders …

 

Cynicism as consumers feel exploited by institutions, brands and businesses they once trusted, but now don’t …

 

Fear of want as household costs outstrip income, with medical aid savings depleted by mid-year and desperate recourse to personal loans …

 

Anger in the face of market power, reflected in rows over short-term insurance claims that go unsettled …

 

Loss of faith as long-term investments don’t even pay out accumulated monthly contributions because fees deplete build-up …

 

Frustration with banks as rock-bottom savings and current accounts show just how expensive our banking charges are …

 

Refusal by consumers to be suckered any longer, indicated by low customer loyalty and rising complaints …

 

Escape from reality, reflected in celebrity fixation (Lady Gaga, Justin Bieber and Britney Spears have more Twitter followers than the combined population of Sweden, Israel, Chile, North Korea, Australia and Greece).

 

In a world gone wrong, smart businesses simply need to get a few things right to win big. I suggest…

 

• Get the basics incredibly right. Make it easy for people to do business with the company by cutting delays, improving efficiency and removing clutter
• Make it tough for competitors to lure customers away by creating high anti-switching barriers
• Put relationships above processes and rules while giving customers proof every day that you care more about them than short-term profits
• Continuously find creative ways to add value by presenting customers with personal, unforgettable experiences competitors will find hard to imitate.

 

When the average daily experience is mildly depressive at best, it’s easy for true service leaders to stand out. The bar has been set low … let’s see how many businesses still clear it.

All South African business faces a strategic ‘wobble’ on the recent Woolworths pattern. The good news is balance can be restored through proper crisis management.

Often it is difficult in a highly diverse society to be perfectly in tune with all of the people all of the time, but rapid recovery is possible.

The Woolworths controversy arose after the retailer published job ads seen by some as racist as whites appeared to be excluded, leading to calls for a boycott.

A balancing act is necessary in view of our history and racial sensitivities. An occasional wobble is inevitable. We’ve just seen ‘the Woolies wobble’, but something similar can happen to any business.

A key issue is whether staff should be representative of the population at large or of a company’s customer-base.

It’s not the first time local companies have faced this dilemma and it won’t be the last. Similar challenges have confronted SAA, MultiChoice, Nando’s, Five Star hotels, various magazine and newspaper publishers and most luxury brands.

In the Woolworths controversy, an in-store poster campaign had rolled out to inform customers of the ‘facts’.

Unfortunately, reliance on facts and rational argument misses the point as emotions come to the fore.

Any crisis management strategy should focus on emotions and perceptions.

However, a timely response should include at least four key elements:

• Acknowledge how upset people feel. This doesn’t imply agreement, but shows the company is not indifferent. An apology also helps to defuse situations. Without apologising for a specific action, management can at least ‘say sorry’ that some customers may have felt upset.
• Communicate regularly in as many media as possible – never ignore controversy in the hope it will go away.
• Remember perceptions are often more important than facts and wordy explanations can be dismissed by customers as empty excuses. Instead of focusing on the past, outline what will happen in future in a positive and hopeful manner.
• Heartfelt gestures make a big difference. For example, an outcry was caused when an employee of a major retailer killed a stray cat by hitting its head against a wall. The retailer repudiated such conduct, disciplined the staff member, sent notices on the issue to all stores and made a big donation to the SPCA. The story died within a week.

A crisis or controversy, if handled sympathetically and promptly, is an opportunity to reinforce a company’s connection with its customers. Typically, you pick up speed after getting over the wobble.