UK: EDITORIAL - ACT SWIFTLY TO KEEP THE CUSTOMERS.

UK: EDITORIAL - ACT SWIFTLY TO KEEP THE CUSTOMERS. - Never, ever lose the customer's confidence. If things start going wrong, act swiftly, decisively and unilaterally. These precepts should be so well understood that it seems pointless to reiterate them.

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Last Updated: 31 Aug 2010

Never, ever lose the customer's confidence. If things start going wrong, act swiftly, decisively and unilaterally. These precepts should be so well understood that it seems pointless to reiterate them. But for anyone watching the Government's jaw-droppingly awful handling of the BSE crisis, it is clear that they can't be repeated often enough.

The first mistake was the half-cock response to the scare in 1990. The reaction was to slaughter only infected cattle. Compare this with Eire where the 124 notified cases of BSE (there have been 158,882 in Britain) resulted in the slaughter of 15,000 head of cattle between 1990 and 1995.

The UK's failure to appreciate the fragility of public confidence was unforgivable.

The second mistake was to imagine that consumer confidence is happy to wait on the words of scientists. Just ask Unilever. Once the scale of the loss of consumer confidence in Persil Power became clear, Unilever realised there was no option but to withdraw the product, irrespective of what the scientists might have to say. When there's a run on a bank, only an idiot would ask depositors to hold back until the chief economist has concluded whether the bank is actually insolvent.

The farmers also have also shown stunning ignorance of the facts of commercial life. Their response to the market's demand for cheaper produce was to cut corners in their supply chain costs thus reducing the quality of their product. Their view that customers have now got what they were prepared to pay for is totally unacceptable. Quality and security of your product is paramount. If you can't produce a product of the right quality at the right price, producing it shoddily isn't the answer. It will take years (and cost the industry a fortune) for UK farm produce to escape the image of shoddy, if not outright dangerous, goods.

Only one entity has come out of the affair with flying colours - and that is a US corporation, McDonald's. The moment they saw the collapse in consumer confidence in beef, they immediately withdrew all British beef products from their stores. The move showed total understanding of their customers' perceptions and the importance of retaining their confidence in McDonald's. It was decisive, bold and unilateral. Their main rival, Burger King, owned by Grand Metropolitan, showed exactly why it comes such a poor second to McDonald's in the UK fast-food market. After initially saying they would wait until fuller scientific findings were made available by the Government, two days later they limply followed McDonald's lead.

The need for sharp decisions is going to intensify as markets change more quickly and information flows more easily. Those who don't have an immediate grasp of the prevailing principles of business won't stand a chance when confronted with such decisions. The organisations which are able to act decisively and unilaterally have a swingeing competitive advantage.

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