In a long tradition of getting almost all my predictions wrong I will once again gaze into the oracle and see what gazes back.
But, before I do, I want to spend a few paragraphs reflecting on what I think is the least appealing trend in big business over the past 12 months. This trend has been going on for some years, but I feel like we hit peak corporate ambivalence in 2019.
The social commentator and demographer Bernard Salt has written a couple of articles recently which I would commend to you. Bernard reflects on the state of corporate Australia and, in particular, the attitude of large companies to their customers. He concludes that while every business has a slogan or mantra that reflects a client first culture the sad truth is that corporate actions no longer watch the marketing and rhetoric. Bernard is absolutely right, as I suspect anyone who has dealt with a telecommunications company, insurer, bank, government department or airline will quickly identify with.
The central strategy of most medium to large businesses seems to be to push as much work as possible back to the customer. The customers time no longer has any value and if that means sitting in a call centre queue for half an hour so be it. Listening to the “your call is valuable” recording just adds insult to injury. If I am so valuable, why do you not have someone answering your phones?
In fact, rather than engaging with customers many companies seem to be doing all they can to avoid their clients. Many no longer have a way of calling a human to resolve an issue or purchase a product. It’s all online via self-registration, online help and FAQs. If, by some miracle, there is a phone number, you can be sure of a wait so long that you end up taking the self-help option.
I guess it could be worse.
A certain budget airline goes one better. They sell you a ticket and then send you a text saying your flight has been cancelled. That’s it. A certain car manufacturer sells cars that have fraudulent emissions software and an airbag manufacture sells safety equipment that can kill you.
Of course, it’s now considered essential that all large businesses (and indeed many small ones) invite feedback from customers. This is the corporate way of showing that they care. It’s all just so much smoke and mirrors. Try using the process, always via digital channels, to tell a large faceless organisation that their product is useless or their service atrocious and I’ll bet you don’t get a response. If you do it will be a No Reply email thanking you for your feedback. Take the time to sit on the phone and I can almost guarantee you will end up talking to someone with no authority who will also thank you for your feedback and do absolutely nothing after the call ends.
The individuals who staff what would once have been referred to as complaints departments are trained in the art of pushing all problems back to the customer. No blame can ever be accepted, and no solution offered. The entire charade is simply designed to allow the customer to vent and move on.
I have a theory that the current state of affairs leaves many consumers feeling angry and helpless. I also can’t help thinking an opportunity exists. If the level of frustration within the community is as pronounced as I suspect, I wonder if a corporate that puts customers first might be a worthwhile experiment. I’m not talking about a corporate that says it puts clients first, they all say that. I’m talking about one that actually does.
Of course, great personal service costs and I’m not sure the average punter is prepared to pay. I wonder if anyone in corporate Australia has the courage to find out.
Ok, I feel better now so let’s have a look forward. Here’s a few things that I expect to see in 2020. Of course, with The Donald in the White House, Brexit on the cards and our very own RBA bereft of ideas other than the cash rate lever this could all change.
Interest rates are going nowhere, and cheap debt won’t kick start our economy. To do that we’ll need reliable and cheap energy, water infrastructure planning on a grand scale, real full-time employment and one hell of lift in consumer confidence. I suspect if the politicians stop listening to the radical minority views then the quiet Australians might yet have a win. If you see new clean coal fired power plants being built, water storage and piping projects being approved, government red tape for small business being removed and employers moving back to traditional full-time employment arrangements, then fix your interest rate. Sadly, I suspect no rush.
In the management rights space, I expect to see heightened interest in partnerships as returns on other investments continue to underperform. An interesting sub-trend will be the desire of vendors to stay in as investors within a new purchaser group. The participation of a vendor as a silent partner in their sale has been a slow burn trend for some years but really started to come to the fore in recent months. Makes sense and certainly gives the other buyers in the partnership a lot of confidence.
We expect regional motels and caravan parks to trade at consistent levels with the usual suspects in terms of location doing well. That is, medium to large regional centres with a mix of demand drivers and hopefully growing resource sector activity.
On the banking front we expect service levels and credit approval turn around times to be pretty much as is for some time. That is, pretty slow. The ripple effects of the banking royal commission have had a profound impact on how banks see the world and I expect it will be some time before the current internal focus swings back to the customer. We don’t expect to see much change in bank credit policies as lending is sluggish and no one wants to be off the shopping list.
In closing, rest assured, I have seen the future and it is very much like the present, only longer.
And finally…….. Caveat Emptor
Mike Phipps F Fin
Director | Phippsfin Pty Ltd
ACN 139 124 673