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Thursday, 12 January 2012

Consumer power?

Every little really does help...

Well well well. I guess Tesco are finally realising every little really does help when it comes to profits. This morning news has broken that they are 2.3% down on like for like sales and suffering from a 9-10% decrease in share prices. That equates to a loss in share price of £3.7 billion. That's 3.7 billion pounds wiped off their share value...incredible.

Perhaps the 'if you don't like it then shop elsewhere' attitude wasn't the most progressive for business development then?

Of course there are lots of factors which have lead to the downturn. Its hapeneing to lots of the major retailers. Tesco are certainly not alone. The thing is I think they could have helped themselves by helping those who shop with them.

Sure the recession has probably attributed to the fall in sales and shares. Although reportedly high street sales were up over the Christmas period. Maybe then its something more than that.

Maybe its their attitude? The fact they feel they seem to believe that they can do no wrong? Their constant bids to take over shares in other specialities, fields and trades? Too much ambitious expansion in a fragile market?
I think its a combination of all of these factors.

I had cause to contact Tesco customer 'service' a couple of months ago abut a letter they had sent me regarding parking. Apparently I had 'overstayed' at their car park on two occasions and they were not happy. They threatened to fine me on the next occasion. They re-iterated they did value my custom but still issued me with a 'warning' not to do it again.

As I had been in THEIR store, doing my weekly shop and then in THEIR in store coffee shop for the rest of the time, I rang their customer 'helpline' number to let them know that i was not happy to receive a letter containing both a threat and a warning. I was after all spending my money at THEIR benefit.

I honestly thought they would apologise and tell me they would amend their records. I really did. I maybe optimistically thought that they would perhaps thank me for my custom.

Did this happen? Did it heck. The operator actually said "well if you don't like it then you can just go and shop somewhere else". OK then love, i will.
I have not set foot in a Tesco store since that day. I never will again.

I wrote to them to point out that;
a) I was still not happy to have received their letter; and that
b) their customer service lady may need a bit more training...

They didn't bother to reply. Not even an acknowledgement of my letter. Nothing.

I know that its not a case of not having received it. My friend had the same experience and sent a letter also. They didn't reply to her either. Two letters sent at different times would be too much of a coincidence to get 'lost in the post'.

Its clear to me that they simply didnt value our custom. They didn't seem to feel that there would be any loss from one or two customers going elsewhere.

Could it be that other people have encountered a similar lack of response and decided to take their custom elsewhere also? 

In my letter I pointed out that although they had the leading majority of the market share, this could easily change. It can change quickly. Consumers are fickle creatures.
The recession has meant people look more carefully at where they spend their money. With so much choice in the open market, why stay with a company which doesn't value them?   That doesnt even bother to reply to their complaints?

I quoted the old saying in my letter; a happy customer may tell one other person about their experience but an unhappy customer will tell at least 5 others. Ive told anyone willing to listen. As a result my whole family and some of my friends boycott the store. My friend has also spread the word with imilar effects. That's two customers in our area. The effect being that at least 15 people have now withdrawn their custom.

If 5% of their customers have a poor experience and take the same action as me and my friend, surely that could have a devastating negative effect on business in the long run?

Its not just Tesco that fall foul of this perceived lack of care either. It seems that lots of big high street stores now feel that they are better than the customers they serve. They don't care if people threaten to take their custom elsewhere as they don't think that one person will affect their business. The thing is that it easily can affect it in a very real way. The just fail to appreciate the probable consequences.

Utility companies were in the news yesterday for similar fouls...theyve had to pay out because of their mistakes. Maybe retailers are just paying their dues in a different way?

The other problem i think Tesco have is their ever growing ambitious expansion plans.

Reportedly their plans to take America by storm havent panned out and theyve suffer significant losses because of that project. Thats not all though..
Tesco are guilty of constantly trying to move into and take over all sorts of other markets. In the legal world we have been living in fear of the introduction of 'Tesco Law' for several years. Its predicted that opening up the legal market to mean that virtually any Tom, Dick or Harry can provide legal services will devastate law firms. Barristers and Solicitors alike will directly feel the effects of clients being able to pop a divorce in their trolley on the way to the check out....

Its not just law that Tesco are meddling in either. They are having a go at anything and everything. Electronics, pharmaceuticals, gifts, cards, toys, holidays, insurance, phones.....the list goes on and on...you can pretty much re-design your life with one short trip to your local store.

This may seem like a good thing on the surface. You can get everything you need under one roof...the thing is that it has a massive knock on effect to the rest of society.

If you can get everything at Tesco...you don't need to go to the smaller independent retailers...they have no trade..ergo they don't exist.  Its simple maths.

The problem for Tesco is this; If you drive your competition out of business, how can you expect those who were making a living from it to shop at your store? They have no money to do so!

Its not just Tesco who have had difficult times recently. Argos, Mothercare, Mark and Spencer, the list goes on and on....are consumers fighting back in favour of independent retailers. Do we value our rights and want respect from those who profit from our money? Only time will tell I guess...

The message to retailers seems straightforward: value your customers. They may be in your store today but tomorrow they can easily go elsewhere. Don't take them for granted. Don't try to drive them out of business. Just do what you do and leave them to theirs.

Lets just say...CONSUMER POWER ROCKS!!

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