Let’s put “soul” and “care” in customer attitudes

Family-owned companies try harder

In May, I took a group of Slovak entrepreneurs on an “Armagnac”, “Wine” and “Cognac” tour in Southwestern France. We enjoyed great wine, great small hotels and great restaurants.

I took my friends only to small places, well rated, but not at the top “Michelin” level. And often, we asked the locals where we could go for lunch or dinner.

There is something about these small family owned restaurants. They want you to feel at home, they talk with passion about the special of the day, they offer you a last drink “on the house”. And they were genuinely honored to host Slovaks (many places for the first time) and they made it felt.

It showed the benefits of small operations when it comes to customer attitude. Like others, small entrepreneurs also make mistakes, but it always seems to matter less somehow because they are not just doing a job, they are living their lives.

Customer attitude needs “soul”

I like procedures when it comes to customer service because it helps, especially the newcomers in an organization, to understand how to materialize customer service.

That being said, “soul” is what is the most missing in customer/supplier relationships. The customer is just behind someone doing a job, and following some procedures.

You cannot train “soul”. This comes more or less naturally. You can tell an employee that the customer is important, that the customer brings money in the company, that it’s the customer’s money that is used to pay salaries. All of that is fine, but there is no “soul”, there is none of that committment that is going to result in a real customer/seller relationship.

And worse of all, it stops working as soon as there is the slightest problem.

“Soul” does not equal communication

I have seen many “communicating with customers” trainings. Companies that seeked to improve customer satisfaction worked on communication. Countless programs were invented, countless employees were subjected to speeches, role plays and what not in a very theoretical customer relationship policy.

In the end, and even in large firms for which we expected better, communication with customers just became a training on automated and pre-chewed responses to customer inquiries and remarks. No organization can really improve its customer service if it only thinks that it’s just a technical issue with communication.

Do not get me wrong, communication will work, but if there is something to communicate.

Do the employees feel that the customer is a respected person in the organization? Can the organization renew itself and admit when it is wrong? On what does the organization focus when talking internally to its employees, how does top management set the example, and how are concrete cases debriefed internally and learned from?

Does of any of this exist? Let me blunt, in some companies that thrived from their dominant position, noone even thinks about the above because as long as revenue comes in, it must mean that customers are happy. And if revenue does not come in, it’s the fault of the employees who do not communicate well. Let’s train them with the most expensive firms on the market.

And in the end it does not work. Surprised?

It’s all about care

In those small restaurants I was talking about in the beginning, “soul” is there because people own the place. It’s their creation, they want it to work, they want it to be successful, and they make no charts about it, they go with a feeling.

And the employees follow suit, because they feel part of the family.

That family is bond by the commitment of the owners to make the small operation a success. The owner is also very present, cooking, serving, talking to customers, making those small decisions such as offering a second round of coffee or a drink. Employees see that, they relate to that, and for the most part they start to understand how much the owner cares, and how much it is important to provide to customers the experience that they need.

In such firms, there is no hiding behind some customer satisfaction charts or an empty speech.

What firms need is an exemplary message from top down showing great care about the customer experience.

Given the challenges shown in the latest “Global Competitiveness Report, it is more than time to rethink how we are going to give to every customer a great experience and modernize our customer approach with fresher and more critical thinking.

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Comrades and Business owners!!! Unite for competition!!!

I am quite interested with Orange and T-Mobile not wanting to pay the fee to the Slovak telecommunications regulator for the extension of their license because they see it as too expensive. To be honest, I have no idea how it should be priced, but I found one of the arguments given by Orange Slovakia very interesting.

Orange claims in today’s (August 25^th) edition of Hospodarske Noviny that  it is unfair that o2 (the newest competitor in Slovakia who started operations in 2007) paid 8 times less a couple of years ago when it acquired the license. It considers the measure discriminatory.

From where I stand it looks fair: you use more bandwidth, you pay more. It will be interesting to see o2’s reaction when their license comes up for renewal, but until then, it would have been outrageous to ask for a comparable cost for the license. It would have also been a blow to a free market system.

Competition is the cornerstone of our economies. It is competition that leads to innovation, to better customer experience, and to lower prices that benefit the entire economy in return. Competition is only a problem for companies seeking revenue by doing none of the above.  I am not discarding the need for firms to have strong financial results and reward shareholders (I am one myself), but a free market system must be associated with a strong competitive environment.

As there are now the first heated discussions in our four party coalition about next year’s budget, there are some talks on lowering payroll taxes in regards to keeping Slovakia labor costs competitive.

There should be in fact discussions about maintaining or strengthening Slovakia’s competitivity, but not without taking a broader look at all factors leading to increased costs for firms in this country.

Labor costs have been influenced by a rise in salaries (especially in western Slovakia) that was out of control until the first financial crisis of 2008. And these salaries are being pushed up by high real estate and mortgage costs, food costs, and gasoline costs. The best potential employees are on the lookout for better salaries because they need them for their families, and this drives costs for companies up just as much as the payroll taxes.

Let’s take the example of gasoline costs in Slovakia. I tank in all of Europe for my job and Slovakia’s prices never cease to amaze me. Data confirms (according to the webportal natankuj.sk) that even without counting taxes, Slovakia has 0,9 Eurocent more expensive gasoline than the EU average, and 2,6 Eurocents more expensive diesel fuel. Each time I fill up now, employees of the gas stations started giving me window tissue wipers. At current gasoline prices, I feel I would be eligible for stock options to be honest.

In conclusion, I don’t want government controlling prices. We should ask however that our governments (and the EU) make it as easy as possible for new players and innovative ideas to take hold in our markets. And in the case of Orange in Slovakia which finds its license expensive compared to that of a newcomer, well so be it. A market is not some organization’s property.

Miškov’s road show

I was reading in “Profit” that Juraj Miškov, Slovakia’s Minister of the Economy, was sending Slovak representatives on a roadshow in Germany to seek out potential investors capable of bringing more Hi-Tech to Slovakia.

In all the turbulence that engulfs Slovakia in the daily works of a four party coalition, I was quite impressed by the minister’s clear view on the steps that Slovakia should take to promote investment. Finished the time in which printing a brochure would be enough, finished the time when Slovakia’s officials thought that the country was so attractive that people would come alone here and just try out their luck.

I worked last year on SARIO’s matchmaking fair with French firms. I believe that when this project was launched, SARIO was given by some French officials outrageous promises it could not in any way guarantee. As I struggled on my side to get French investors to seek out potential partners in Slovakia, it was clear that despite the personal efforts of SARIO’s team, it was unrealistic to believe that French companies would put up with travel expenses and a complex trip (the project was taking place in Nitra!) , especially just before a three weekend holiday, and with very vague promises of interesting partnerships from the Slovak side.

So seeing the situation reversed in which it is Slovakia that is going to promote itself pleases me very much as I find that Slovakia is being more pro-active in attracting added value investments.

Scapegoating the PIIGS?

A caricature in today’s (August 10^th) “Hospodarské Noviny”, Slovakia’s largest economic daily newspaper caught my attention.

A raft carrying 4 well off men drinking champagne floats on some sea called the Eurozone, while a hand and a ragged sleeve sticks out of the sea. “Slovakia” is written on that sleeve while the on the raft are listed the names of four countries that have made news recently: Greece, Italy, Spain and Portugal.

The debate if Slovakia should participate in the European safety net for debt stricken countries has been raging ever since the first aid plan. Slovakia’s people have made tremendous personal efforts during the post communist reforms: skyrocketing prices, unemployment, a struggling health and education infrastructure with a breakdown of what was in the past a very conservative society.

It is understandable that being asked to pitch in a State guarantee of almost 4,5 billion EUR makes people pretty angry. As was said at the time of the first bailout, Slovakia is a poor country, and has no resources to spare for countries that have not been able to finance themselves in a reasonable way.

That would be forgetting two important things: Slovakia is issued generous funding from the European Union for its development, infrastructure and education. 11,5 billion EUR are pre-allocated to Slovakia for 2007-2013 (for which 2,2 billion have been paid), and it would be unfair not to count it in the global European package, even if EU does not mean Eurozone.

The drawing does make me uncomfortable. Showing privileged fat guys drinking champagne on their boat while you drown does point towards the idea that the people on the raft are to blame for your demise. Firstly, I don’t think that nations that need the EFSF are “drinking champagne”: they are facing severe recession and high unemployment. They are probably going to live through the same hardships Slovaks went through: no-one remembers it as drinking champagne (a part for a bunch of well-connected moguls).

Now don’t get me wrong: I am as angry at politicians having mismanaged their economies for political gain than at the financial institutions that went bankrupt because of poor judgment. People who have elected politicians without thinking of what their promises were costing the country do need to tighten their belt as they are responsible for letting this happen. But let’s remember that the only reason Greeks managed to drown themselves in debt is that some people lent the money to them. Sounds familiar?

If the recession that has hit us since 2008 leads to a resurgence of nationalist finger pointing, the EU is in much more danger than I previously thought. This crisis is not so simple, and we need to overcome as Europeans, united and in peace.

Car prices in Europe: evolution and differences between member states: Slovakia prices in free fall, for best deals shop in Hungary

The European Commission has released its car price survey for last year.

The report focuses on pricing differences between EU member countries by comparing price lists of cars in member states, and adapting major equipment differences.

This study has been issued on a regular basis since 1993 and has strongly influenced manufacturers to narrow the price differences of cars between EU member states or face (unwritten) a totally liberalized market.

Major differences occur often in pre-tax prices, since in countries where cars are heavily taxed, competition between manufacturers often drag fully taxed prices down. With the Euro, gaps have been considerably reduced as currency variation could not explain differences any more, and that price variations between countries became more visible to consumers.

Slovenia shines as one of the cheapest markets of the Eurozone after Greece. In the small car, it is the least expensive Eurozone country for 7 models out of 30. When it is more expensive, difference rarely reaches 5% difference with the nearest country.

As for another Euro country, Slovakia, the most important information is that according to the report, prices of new vehicles have dropped more than 17% when average prices in Europe dropped only 2.5%. It is no surprise that the used car market suffered as it did. I recalled on my website some used car professionals talking about sales prices going down one third.

We know that the Czech and Polish markets are highly competitive. The report shows it as the Czech Republic is cheaper than any Euro country for 7 models out of 20 from the small car segment and for 6 models out of 20 for the lower compact segment (Škoda Octavia…). It is to be said that this result is achieved even though the Czech Crown has appreciated against the Euro 3% between January 2010 and January 2011.

But the palm of attractive car prices is Hungary: in the small car segments, it shines as the cheapest country in almost half of the most selling models. In the lower intermediate segment, Hungary is the cheapest market for 5 out of 20 models.

Read more at> http://europa.eu/rapid/pressReleasesAction.do?reference=IP/11/921&format=HTML&aged=0&language=EN&guiLanguage=en

Used cars with no kilometers shown?

I visited on the road a large used car retailer to take a look at its operations in a surviving sales site (one sales site in Slovakia was closed last year).

Some cars are shown without the number of kilometers. It simply says “unknown”

It looks bad, but this is a major improvement.

Let’s face it; our countries in general were a fantastic oasis for remarketing high mileage cars from Western Europe. What Germans and French did not want, the Poles and Slovaks took. Well, let’s say that some importers took at low prices cars that were magically improved and sold at higher prices…much higher prices. After all, these cars had less than 100000 kilometers…

So I applaud transparency in this business.

Transparency will clean up the offer of used cars, and correct prices. It will help the establishment of an intermediate used car market and help develop inter dealer B to B trading by creating stronger market price differentiations between products.

Perhaps, the money invested by manufacturers in used car programs (Peugeot, Citroen, Kia and Škoda among them) will pay out.

Best operators, and best advised operators might take the train of this opening of business. If they do not, AAA Auto will take the food right out of their mouths regardless of the quality of their certified used car programs.

For leasing companies and manufacturers, the oasis of markets that buy everything  is drying up. I foresee strong corrections in price depreciations in the near future.