Category: consumer

Why we should give Gerry Harvey a break

Big retail’s problems could be ours as well

Gerry Harvey’s been having a bad year. This time last year he was moaning about the Internet stealing his business and now his profits are down.

In Mark Fletcher’s Newsagency Blog, Gerry gets a serve for dragging the entire retail channel down.

Mark quite rightly points out that Gerry’s problems are of his own making and his chain’s difficulties aren’t necessarily those of the rest of the industry or even shared by individual franchises within the Harvey Norman group.

While I’ve been as critical of Gerry as anybody else, maybe it’s time to give him a break.

It’s worth considering how Gerry made his billions. When he started in business in the late 1950s, it was tough for the average person to get credit. At best working families could get something put aside at the local store or enter into an Encyclopedia Britannica style subscription plan.

Gerry and his generation of retailers changed that. They made credit available to the masses who could suddenly afford to buy household appliances and electrical goods without years of savings.

I remember my parents buying things from Norman Ross, Waltons or the ACTU’s Burke Street store (Bob Hawke once stepped on my mum’s foot while she was shopping for a sofe) because working class people could get credit there.

Gerry was at the beginning of the consumer revolution that defined the second half of the Twentieth Century.

In the late 1980s financial deregulation changed the game again and Gerry’s business took off as credit became even easier to get with new providers entering the market. First we saw three month interest free offers and by the mid-2000s six year interest free deals were available.

These deals were so good that Harvey Norman franchisees often made more money selling the credit deals than on the actually product that the ‘no interest’ loan had been taken out to buy.

For Gerry, this was insanely lucrative as his business was able to clip the ticket at almost every level of the retail and distribution chain while moving much of the risk and capital cost onto franchisees and landlords hungry for high traffic anchor tenants.

In 2008 this entire model changed as the credit boom came to a crashing halt and consumer spending with it.

Business models based on cheap credit now have to find something else that works and this is what Gerry Harvey is now struggling with.

To complicate matters, the Internet has changed the distribution model that worked for Harvey Norman and other bricks and mortar retailers. All of them are now having to make a major shift in the sales cultures.

Adapting to this new world is tough for everybody and we should have some sympathy for Gerry Harvey as our businesses and jobs are being affected by exactly the same forces.

How Gerry adapts, or doesn’t, could be a bellwether for our own industries.

Omni Channel Buzzwords

Can nice phrases save a declining business?

Retailer entrepreneur Gerry Harvey yesterday unveiled his strategy to arrest the declines in his home goods chain’s sales.

One of the key points in his investor presentation was “continued investment in strengthening our Omni channel strategy”.

When asked exactly what an “omni channel strategy” is, Gerry reportedly admitted that until last week he had no idea what it was.

For an entrepreneur whose business model is suffering badly in the face of changed markets, Gerry seems to be remarkably flippant about how he and his team are going to react to the challenges.

Gerry lack of understanding is bad news for his team, because appears there is no management commitment to the major changes Harvey Norman, and many other incumbent retailers, are going to have to make in order to recover the sales and margins they have long been used to.

The “omni channel strategy” is an interesting beast, which was described by Myers CEO Bernie Brooks last April on ABC’s Inside Business.

We’re building our own omni-channel approach, which will include everything from kiosks in store right the way through to being able to provide very good office online up to 250,000 items, free delivery.

What’s interesting with the retailers’ talk of “omni-channel” is the talk of service. Both Myer and Harvey Norman claim customer service is the centre of their strategy but their emphasis in the past has been to reduce customer service.

The reduced emphasis on service has been part of the decline of the both chains; Harvey Norman could get away while consumers were happy committing to “no-interest for 72 months” finance plans, while Myer steadily declined as their key difference with discount chains like K-Mart and Target was eroded.

Hopefully both Gerry Harvey and Bernie Brooks will get their omni channel strategy strategies working, though it will be interesting whether both can get their management teams to re-discover the meaning of “customer service”.

Without getting the service right, their “omni channel strategies” will just appear to be another management buzzword in a declining business.

The limits of SEO

Having a nice web site is only part of a winning business

On their busiest day of the year, the florist site Ready Flowers had a shocker. With dozens of customers upset their Valentines Day flowers didn’t arrive.

Their reaction was to stop answering their calls, as one Ready Flowers angry customer on the Whirlpoool website said;

Calling through to their 24/7 hotline was no good, all it told me (after 30 mins on hold) was a automated message saying it was valentine’s day (duh), that they were busy and that I should leave a message.

So on their one key day of the year, they didn’t have enough staff to meet demand.

Ready Flowers has been a success story expanding to 17 countries since being founded in 2005. The service is a modern version of the Interflora model where the company takes the order which they pass onto a local florist who creates the flower arrangement to Ready Flowers’ or Interflora’s specifications.

The risk for Ready Flowers is that the local florist isn’t very good and that’s where customer support and tight supplier management comes into place.

Which is clearly where they fell over on Valentines Day.

In a 2009 interview with the Financial Review that’s quoted in the Sydney Morning Herald, Ready Flowers’ founder Thomas Hegarty claimed his success was due to good search-engine optimisation, online advertising, and landing pages for every delivery location.

Missing is the term “customer service” – in that interview Thomas went onto say, “We saw that we could add value by applying more efficient technology without needing a large number of people to run the business”.

This is the flaw in the web 2.0 business model. In the real world, businesses don’t run on remote control – mistakes are made, deadline missed and people do dumb things which the algorithm can’t handle.

Over the last thirty years, customer service has been seen as an unnecessary cost centre. This was fine in a world where automated, low margin and fast moving goods were seen as the business model to emulate.

If you can’t compete on price, it’s service that matters and this is where you’ll need more than a lost cost call centre and a well optimised website.

Knowledge and power

Can we use the data revolution effectively and well?

In the 16th Century English courtier Sir Francis Bacon declared “Knowledge is Power”, something certainly true during the conspiracy prone reign of Elizabeth I.

Today the data available about ourselves and our communities is exploding along with the computer power to process that information to turn it into knowledge.

We see that knowledge being used in interesting ways – US shopping chain Target recently described how they used data mining to determine, with 87% accuracy, to figure out if a shopper is pregnant.

That 87% is important, it says the algorithm isn’t perfect and bombarding a false positive with baby wear advertising could prove embarrassing, or in some families and societies even fatal.

A good example of data misuse are the two unfortunate Brummies (alright, one’s from Coventry) who were deported from the US for tweeting they were “going to destroy America and dig up Marilyn Monroe”

For the US immigration and homeland security agents, they ready the jokey tweets by the Birmingham bar manager through their own filter and came to the wrong conclusion, although it’s likely their performance indicators rewarded them for doing this.
This is the Achilles heel in big data – used selectively, information can be used to confirm our own prejudices, ideologies and biases.
In 2003 we saw this in the run up to the US invasion of Iraq with cherry picking of information used to build the false case that the ruling regime had weapons of mass destruction that could attack Europe in 45 minutes.
For businesses, we can be sure data showing the CEO is wrong or the big advisory firm has made the wrong recommendations will be overlooked in most cases.

Despite the Pollyanna view of a world of transparency and openness driven by social media and online publishing tools, the information is asymmetric; governments and big business know more about individuals or those without power than the other way round.

In a world where politicians, business people and journalists trade on their insider knowledge rather than competing in the open, free market we have to understand that filtering this data is essential to retaining  powers and privileges.

Usually when the data threatens the existing power structures it is repressed in the same way a dissenting taxpayer, citizen, employee or shareholder is discredited and isolated.

At present there’s lots of data threatening existing commercial duopolies, political parties and cosy ways of doing business.

The fact many of those in power don’t want to see what their own systems are telling them is where the real opportunities lie.

Entrepreneurs, community groups and activists have access to much of this data being ignored by incumbents, it will be interesting to see how it’s used.

The New Soviets

For many companies, customer service owes more to the Soviet Union

US based investment writer Mike “Mish” Sherlock called Sony’s support line to get a repair for his recently purchased laptop computer.

What followed was something from the 1970s Soviet Union – a simple request turned into a twelve day, 34 step odyssey of structural incompetence on the part of Sony.

The tragic thing is Mike’s tale is all the result of mis-matched rewards in Sony’s organisation;

  • Sony’s management wanted to increase profits
  • Extended warranties were identified as a revenue generator
  • A senior manager decided cutting support costs would improve returns
  • The technical support is outsourced
  • Costs are saved by splitting contracts
  • Each outsourcer has a different IT platform
  • The outsourcing contracts have quotas and penalties
  • Individual staff are penalised for escalating problems
  • Support staff have tight performance criteria

At every level performance indicators were met, despite the whole process costing far more than fixing the problem efficiently would have had – not to mention the loss of Mike as a customer – something that Sony can ill afford.

Not surprisingly, the computer ended up being fixed by a local IT guy. Richard almost certainly earns a fraction of Sony’s Executive Vice President Group General Managers, or whatever the title they have to match their compensation packages is, yet he gets the job done.

In Sony we see the Soviet model of management at work – an unaccountable, out of touch cadre of apparatchiks meeting their requirements under The Five Year Plan and are rewarded accordingly.

Just like today’s Executive Vice President Group General Managers with their KPIs and bonuses.

As we all know, the Soviet Union failed in 1991. One wonders when we’ll say the same thing about Sony or the dozens of other large corporations that have lost their way.

Facebook and Families

Family use of social media can be problematic

As the Internet has become a normal part of our family lives, social media services like Facebook are becoming important in the way people, particularly our kids, socialise and communicate.

Most of this web use is positive however there are risks with these online tools so we do need to know how to manage social media services and reduce any problems we may have in our families and businesses.

Understand the risks

Facebook is an online service and all web based platforms share the same risks such as stranger danger, bullying, fraud and offensive behaviour – both kids and adults need to understand the risks.

A good start is sitting down with younger kids and using some of the online resources available, the US Virginia Department of Education has a good interactive presentation on online safety.

For Australian specific content, the Federal government’s Cyber Smart website offers advice to families at all ages; from grandparents to kids.

Respect the rules

All online services have rules that govern behaviour, one of the most common is a restriction on under 13s. This is partly because of the US COPPA law that restricts websites and social media services from advertising to children.

Of the other rules that can cause problems Facebook has bans on hate speech and an almost pathological obsession with nudity. It pay to read the terms and conditions so you know what is acceptable.

Under 13s should not use Facebook

While for many kids Facebook is the way to talk to their friends online, parents should resist the pressure to sign their kids up until they are of the legal age.

Regardless of what you think of the rules, many kids don’t have the maturity of to understand or deal with the issues of using social media sites. For that matter, neither do many adults.

Should Facebook find out that an account is owned by a child under 13, they will shut it down immediately.

Choose your friends carefully

Everybody – kids and adults – should be cautious about friends they make online. Just accepting friend requests from anybody, or from those who look cute or cool, can lead to problems later.

Set your privacy

In Facebook you should set your default privacy settings to “Friends”. You can do this by clicking the arrow pointing down in the top right hand corner of the Facebook screen and selecting privacy.

Having set your default privacy settings to Friends, you may want to further improve your privacy by continuing down the privacy screen and selecting functions like not allowing friends to post to your Facebook wall.

Be careful what you like

Liking products and pages can have consequences, at the very least others know what causes you’ve joined.

Joining hate or bullying campaigns or pages is not a good look, so don’t do it if you think you may upset people around you.

You are what you post

Anything you put online is in writing against your name. If it’s going to upset people or cause trouble then don’t do it.

In the United States one teenager found this out the hard way when her father discovered a Facebook post criticising him and her mother. He shot her laptop and then posted the video onto her Facebook page.

Practice Safe Computing

Services do get hijacked, so have strong passwords, up to date virus checkers and make sure the computer is fully up to date with security patches.

Never share passwords with friends or siblings and use different passwords on each service so if Minecraft gets compromised, Facebook or email doesnt’ as well.

Put computers in common areas

Kids’ computers should be in common areas and use of any Internet enabled devices like iPods and mobile phones in places like bedrooms should be strongly discouraged.

Be open to talking

If anyone in your family seems to have a problem with computer use such as getting upset, socially withdrawal or acting unusually then talk to them. This happens with adults as well.

One thing to remember is that punishing people, particularly kids, rarely works well with these technologies so it’s best to make it clear they won’t be in trouble if they come to you with a problem they are having on the net.

It’s not just kids

We have to remember its not just kids who get into trouble online, there’s no shortage of adults who have created problems for themselves and their families through irresponsible online behaviour. So parents need to watch their own social media usage as well.

Should someone in your family be having a problem, then don’t hesitate to talk to the school, employer or Internet provider if there’s issues that need to be addressed.

There’s lot of online services services and resources such as Cybersafe listed above. Also don’t hesitate to call any support lines such as Lifeline or Beyond Blue if you are seriously concerned about a family member’s wellbeing.

On balance, the web and social media are positive influences on most people’s lives so by using commonsense and playing safely, the majority of families will avoid the really terrible stories we hear about online problems.

Is it time for Microsoft to make a clean break?

Is Windows past its use by date?

Over the weekend Christina Bonnington in Wired magazine looked at how Microsoft is struggling to decide whether to have separate operating systems for their tablet and desktop products – as Apple have – or design one that works on both.

Creating another version of Windows risks further confusing the marketplace given Microsoft already has between its four different versions of Windows and six flavours of Office.

Although Apple haven’t suffered at all by having different operating systems. Mac OSX is more popular than ever and iOS dominates its markets.

Perhaps its time for Microsoft to copy something else Apple did and have a clean break – rework all the Windows code and build a new system.

Apple did this when they introduced OSX in 2001. Among other things it didn’t support floppy disks, the Apple Device Bus, floppy disks or the networking standards used by the older systems. At the time there were howls of protest from long suffering Apple true believers who had invested a lot into the earlier versions of Mac OS.

Despite the protests and early hiccups – we sometimes forget that the first version of OSX, named Cheetah, was terrible – Apple’s clean break with the past was a great success.

Microsoft’s selling point has been backward compatibility; software designed for one version of Windows is expected to work on the next version.

Backward compatibility is the reason for the spyware epidemic of the early 2000s as Microsoft ignored Windows XP’s security features so that they wouldn’t have to ditch older code in other products like Office.

Similarly, the contradiction of redesigning the Windows operating system while minimizing disruption to existing users was one of the reasons why Microsoft Vista was such a disaster.

Perhaps it’s time for Microsoft to bite the bullet and bring Windows into the 21st Century.

Whatever they decide to do, they better hurry as Apple and Google are carving out dominant positions; waiting until 2013 or 14 for the next version of Windows and Windows Phone may be too late in a market where Microsoft is quickly becoming irrelevant.

Too good to be true

The same old scams catch us all

As regular as the Olympic Games are, so too are the ticket scams. Every four years we see a ‘scandal’ of vendors, these days online, offering cheap or difficult to get tickets. This year’s London Olympics are no different.

The bait used by these scammers is the almost impossible to get tickets, the frenzy to get along to the opening ceremony or top days sucks dozens, sometimes hundreds, of enthusiastic punters into losing money.

It’s not just Olympic tickets, with the ease of setting up websites scammers can be online quickly with a credible, professional looking site and new services, like group buying and ‘penny auctions’ also offer great opportunities for the enthusiastic spammer.

While it’s sometimes difficult to spot the scams, there are some signs that can reduce the risk of your being caught out.

Check the site

How long has the domain been registered? You can quickly check the details by running a whois search, a kind of online registration check.

For .com sites, the authoritative Whois site is Network Solutions while for .co.uk sites (a likely candidate for London Olympic ticketing sites) it is Nominet. Each country has its own registration list and in Australia, for .com.au it is AuDA who run the My Web Name site.

A recently registered, or long standing, name doesn’t in itself indicate whether a site is a scam or not, but it is a good start.

What are the contact details?

A reputable site that wants your money should have a phone number and street address. A site that doesn’t have these is a warning sign.

Do a web search

The web is your friend. Use your favourite search engine to search the business’ name, for most people this is Google. This can show if there’s been complaints about the site.

Make sure you do a full name search, for instance if you are searching for Joe’s cutprice tickets put the name inside inverted commas such as “Joe’s cutprice tickets”.

Also do a search on the business address, if a company operates from the same location as dozens of others then it’s almost certainly operating from a service office.

While there’s nothing wrong with a business operating from a serviced office, if a company is claiming to be a large reputable multinational then it’s probably telling porkies.

Use a disposable password

If the site asks you to create an account or a password, use something different to your regular banking or other important passwords.

Some of these scammers are actually harvesting login details for online scams so don’t use the same password as your email or social media account as you may find your account hijacked.

Don’t use social media logins

Account hijacking is becoming prevalent on social media sites. The scammers get access to a victim’s Facebook or Twitter account and then contact all the victim’s friends posing as the victim. This is particularly effective for getting more people trapped in the scam.

Increasingly we’re seeing sites using social media logins, that is offering to use your Facebook account rather than a user name or password as a convenient way of signing up. These almost always give the site permission to post on your behalf and you should not do this unless you are totally confident in the site.

Pay by credit card

Even the best of us can get caught out by scammers, so paying by credit card means you have some protection from dodgy deals as you can dispute and reverse the transaction.

Note the words credit card, if you use a debit card many banks won’t give you the same consumer protections.

Avoid direct wire payments or online services like PayPal as you’ll probably do your cash or, at best, be bogged down in the dispute procedure.

Use common sense

The most important part of avoiding scams is common sense; if something is too good to be true then it almost certainly isn’t true.

An offer for hard to get Olympic tickets, fifty dollar iPads or a million dollars from a long lost cousin in Africa always come with a catch that leaves you out of pocket and possibly with your identity stolen.

Many of these scams aren’t new, they’ve just evolved to take advantage the online world.

During the golden era of the snake oil merchant in the 19th Century, the phrase there’s a sucker born every minute was coined. Don’t be that sucker.

The pay day

How does a local news agent exit their business?

Last Sunday Mark Fletcher celebrated his 10,000th post at the Australian Newsagency Blog. In seven years of posting that’s an impressive achievement for someone running both a retail store and a software company.

In his landmark post, Mark looked at the major issues he’s covered on his blog over the last few year and one stands out as the biggest – the payoff for newsagency owners when they sell their businesses.

The failure of many newsagents to manage their businesses for day to day profit. Too many newsagents expect their pay day when they sell and do not realise that their pay day is today, tomorrow and next week … and that this determines what they will receive when they sell.

For Australian newsagencies the news is bad; their established industry is struggling in the face of technological change and regulatory changes – both of which are other points Mark raises – but more importantly the buying and selling businesses in all sectors is undergoing a fundamental economic shift.

Lifestyle Businesses

The underlying idea is that these businesses are what Steve Blank calls “lifestyle businesses”; proprietors buy them to provide an income for their families.

For these “lifestyle businesses” to have a resale value another family is has to raise the funds to purchase the enterprise.

Therein lies the problem, most purchases of businesses are financed by bank loans secured against property.

Late baby boomers and Generation Xers – those born between 1955 and 1970 – are the obvious buyers of these businesses and they don’t have access to the same equity as their parents.

The situation is even worse for those generations following whose high education debts mean an even later entry into the property market and even less equity available should they want to buy these businesses.

For sellers, this means is buyers can’t pay the prices retiring business owners need as their nest egg to support them through twenty or thirty years of bowling or travelling in their later years.

This inter generational mismatch isn’t just restricted to Australian newsagents; it’s a problem around the Western world for business owners whose exit strategy involves selling the business as a going concern for a substantial amount.

Cash poor buyers

As we reach the end of the late 20th Century credit boom, the money isn’t there for people to pay the sort of sums required by existing local business owners to retire in comfort. Even if the banks were prepared to lend the sum required, the buyer’s underlying assets can’t secure the loans and, most importantly, the cashflows aren’t there.

In an Australian newsagent context much of the cashflow has changed because of deregulation and new competition but on the bigger scale changing consumption patterns at the end of the 20th Century debt binge coupled with aging populations and restricted credit are changing the economics of family owned, small local businesses.

For the current owners of these small businesses, it means the pay day has to be today as it won’t be there tomorrow.

The danger is how many will follow the example of the large corporations who find themselves in a similar situation and respond by excessively cutting costs or chronically under-investing which is what has crippled big store retailing across the US, Australia and the UK.

Mark’s constantly pointed out that Australian newsagents have to reinvent themselves, as he celebrates seven years of blogging and 10,000th blog post it’s probably worthwhile considering how many, like the rest of us, will be working in our businesses far longer than we originally expected.

The irrelevant operating system

No-one cares about operating systems anymore

Last decade, people queued around the block to buy the latest version of Windows, today no-one cares. What next for a market that has become commoditised?

When you visit a website your browser reports, among other things, what type of system you’re using. Net Applications – a US based web monitoring company who analyse online browsing statistics – keep a regularly updated list of what people are using when surfing the net.

On their latest statistics, Windows XP finally fell below 50% in September 2011, just on ten years after it was released. Windows 7 is taking over from XP while Apple steadily gain market share.

These statistics show how the operating system has become irrelevant, only really dedicated geeks really care anymore about their version of Windows or whether a computer is running an Apple Mac or Microsoft product.

As most computer users are drifting to cloud computing services and consumers are increasingly using their PCs to access online games and social media sites, it doesn’t really matter anymore what systems are used as long as they work.

For many in the computer industry, this is a problem as they desperately want to sell a product in a market that has become commoditised. It’s another example of the PC industry’s broken business model.

It’s not just the computer industry with this problem, the 3D TV hype of 2010 was a desperate attempt to sell new television sets in a market that had stalled; recession hit consumers had no desire to replace their perfectly good TVs that were less than a decade old, just like Windows XP users.

This year’s Consumer Electronics Show that launches in Las Vegas this week will see similar desperation as the various PC and mobile phone manufacturers trying to generate excitement about their new products.

For the journalists and PR folk at the CES the problem is customers largely don’t care anymore. As the failure of 3D TV illustrates, consumers aren’t buying the hype.

Just as with operating systems, most customers want something that works, if you’re going to get them to replace older proven technology you’ll have to show where the new product adds value.

The era of products flying off the shelves because they are new and shiny is over – just ask Microsoft about it’s operating systems.

The business of baffling choices

Why do computer and phone companies offer so many plans and models?

In his Daring Fireball blog, John Gruber’s takes to task the view that Apple suffers through not having a wide product range.

John makes the valid point that Samsung seems to stealing market share from HTC rather than Apple but the whole theory of offering too many choices strikes to the heart of two industry’s business models.

Those two industries are the mobile telco business and the Windows personal computer sector.

In the PC world, the wide range of models has been both an advantage and a weakness; it’s allowed Dell and others to create custom machines to meet customer needs but also leaves consumers – both corporate and home buyers – confused and suspicious they many have been taken advantage of.

All too often customer were being had; frequently buyers found they’d bought an underpowered system stuffed with software that either was irrelevant to their needs or an upgrade was necessary to get the features they hoped for.

The entire PC industry was guilty of this and Microsoft were the most obvious – the confusing range of operating systems and associated software like the dozen version of Microsoft Office was deliberately designed to confuse customers and increase revenue.

For the PC industry, the “baffle the customer” model reached its zenith, or nadir, with Windows Vista where Microsoft deliberately put out an underspecced ‘Home’ edition designed to push sales up the value chain.

Compounding the problem, most of the manufacturers followed Microsoft’s lead and put out horribly underpowered systems in the hope that customers would upgrade with more memory, better graphics card and bigger, faster hard drives.

Most customers didn’t upgrade and as a result the Vista operating system – which was horrible anyway – enhanced its well deserved reputation for poor performance.

In the telco sector, consumer confusion lies at the heart of their profitable business model; a bewildering range of phones and plans often leaves the customer spending too much, either through an overpriced plan or paying punative charges for ‘excess’ use.

Having a hundred different types of Android phone adds to the confusion and, by restricting updates, they can cajole customers into ‘upgrading’ to a new phone and another restrictive plan every year or so. This is why you get phone calls from your mobile phone company offering a new handset deal 18 months into a two year plan.

Apple’s model has been different; in their computer range there has never been a wide choice, just a few configurations that meet certain price points. The same model has used for their phones and iPads.

For Apple, this means a predictable business model and a loyal customer base. They don’t have to compete on price and they don’t have to fight resellers and telcos who want to ‘own’ the customer. It’s one of the reasons mobile phone companies desperately want an alternative to the iPhone.

Companies using the baffling choices business model – Microsoft, HP, Dell and your local mobile telco – may well continue to do okay, but that business model is coming under challenge as new entrants are finding new niches.

For all of us as consumers all we can do is make the choices that are simple are reject complexity. Warren Buffett has always maintained he doesn’t invest in businesses he doesn’t understand, perhaps we should have the same philosophy with the purchases we make.

The importance of transparency

The US Federal Reserve has announced they will release more details from the information they use on determining official interest rates. On the same day the social networking site Twitter is embarrassed when its opaque verified account policy fails.

Being open and honest is the key component in trust and in turn trust is the bedrock of society. If you can’t trust your neighbour, the local cop or the grocer at the shops then society quickly starts breaking down.

Many big businesses, particularly those in markets where they are one of a small group of incumbents get away with abusing your trust; they tell an illegal surcharge can’t be waived because “that’s their policy, you can’t change an account because of the “terms and conditions” and that the call centre’s operators name is Janet even though it’s Rajiv and you know that when you call back asking for “Janet” you’ll be told”there’s 35 Janets working in the department right now”.

All of this we’ve come to expect from big bureaucratic organisations like the phone company, the bank and the tax office. The interesting thing is how many new businesses that are adopting this anti-customer model of operating.

Rules and policies are fine – as long as everyone knows them, they aren’t too onerous and they are applied fairly and consistently.

The challenge for all businesses – particularly those taking on incumbents – is they have to show they are more trustworthy than the existing operators. If you can’t show that, then maybe it’s time to think about how you operate.