Friday 30 January 2009

A test of character

As everyone knows the entire world, and Botswana is no exception, is heading towards a recession. Of course this is depressing and frightening, but I think that perhaps the worst mistake we could make would be to panic.

I think that a crisis such as the recession we're facing is a test. It's a test of the courage we can summon. It's a test of resolve and determination but perhaps just as importantly, it's a test of creativity and imagination. At the end of the day it's a test of companies who can put all those things together into action, not reaction.

So what should a company do? When profit margins are already tight, when the shareholders are bugging you and when consumers are showing signs of staying at home rather than buying your products, what should they do?

I believe that the companies that stand the best chance of survival are the ones that, instead of retreating and hiding, evolve. Instead of staying still and failing to adapt to changing circumstances, smart companies should be like our ape-like ancestors and adapt to the new environment and embrace the changes it requires.

The clever ones will be the ones that develop imaginative new products, introduce greater flexibility in their offerings and improve their service to a whole new level.

Of course launching new products becomes harder in a recession, the products have to be cheaper, to offer value for money and to be much, much more desirable. But they are actually not the most important thing. There's something much more important.

The quality of the service delivered. More important that minor price reductions will be the emotional bond a company has made, or now tries to make with it's consumers. Good times produce careless, extravagant and sometimes even foolish consumers. The bad times give us much more careful, more prudent and more emotional consumers. They still want good value products but they also want feelings of security, safety and care. They want somewhere where their money can be well-spent and where they and well looked after. They'll want comfort and security, warmth and signs of genuine care. They'll want a bank, a store, a service that suggests solidity, conservatism and security and not something brash, risky and unreliable.

There are many psychological tricks you can use to do this. You can do this with obvious psychological measures like warmer colours, the right temperature and ambient music but there's something much more powerful than these tricks.

Old-fashioned, customer-focussed service.

Quality of service and trust are what will see a company through a crisis like the looming recession. In fact they might be the only things under a company's control that can help the company survive.

That's what companies can do, what about consumers? How can they protect themselves?

They can do it by doing exactly what they know to do already, only more so. They can be MORE demanding. Now is exactly the right time to shop around before buying something, to compare prices, to seek that wonderful deal. Now is the time NOT to be ripped off when you buy something expensive and you don't read the purchase agreement, the credit contract or the warranty before you part with your money.

This is going to be the time to tell Store B that Store A has an identical item for a lower price and get Store B to battle hard for your money. This will be the time to haggle with a store. Ask for a discount, complain that the price is just a bit too high for you. A smart store will either reduce the price a bit or they'll throw in something else as a treat. All you have to do is ask.

Above all, it's even more important not to fall for superstition.

There is some evidence that during recessions, entire countries become slightly more superstitious. They become a bit more likely to believe the unbelievable. During hard times people, presumably from desperation, turn more to quacks, charlatans and the villains who prey on the naïve and gullible.

That's one of our predictions for 2009. Rather than getting rid of the thieving scumbags we're going to encounter more and more crooks selling us miracle cures, salvation, prosperity and supposedly easy solutions to difficult problems. The common link will be money. They'll all want some. From you and me.

That’s where Consumer Watchdog’s appeal to reason comes in. We can all do it, it’s nothing to do with education, background, gender or age. All we have to do is not believe what we’re told until there’s a good reason to do so.

In the last week, members of the Consumer Watchdog team have been invited (yet again) to join the Success University pyramid scheme, to pay to join a silly South African coupon-based web directory, told that we should eat alkaline foods and that we should pay an American astrologer money because she felt “strong vibrations which have been amplified by the energy waves produced by the Reiki Grid which I performed for you”.

This is all utter nonsense but the danger is that in desperate times people tend to grasp at anything that offers a magical solution to a worrying problem. The truth however is that these miracle solutions are always fraudulent, naive or just plain stupid.

Money is going to be tight for a while, shouldn’t we all do our best to keep hold of what we’ve got and stop it falling into the pockets of frauds like these?

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