Life in the penetration economy
I have just ended roughly six weeks of doing battle with a domestic satellite television operator (despite my justified frustration, to remain anonymous) to cancel an ill-fated subscription and, as it turned out, to highlight a new measure of where Poland is on the economic development map.
Today's Polish economy is a penetration economy – a market in which the business logic is to hoard clients in a free for all as long as penetration rates (measuring what percentage of the population is a client of a given service or product) remain low, structure pricing to rule out anything but long-term contracts in anything less indelible than blood, worry about customer service later.
Who can blame them? In this case, even the largest of the firms currently operating on the satellite TV market doesn't have a client base even one third the size of the number of households that don't have any pay TV at all, cable or satellite (6 mln). So get everyone out there knocking on doors and, if possible, force the people to sign multi-year iron-clad contracts that don't allow for an exit.
And with any number of industries in similar market positions, few, if any, leaders in customer satisfaction can stand out as would-be role models. It’s not that firm’s don’t understand customer service, it is that customer service – in relative terms – doesn’t yet pay.
That the scales are tipped towards new client acquisition is nothing new. Call any customer service number in the west and listen to the voice menu. Select the option for existing clients and get the Musak with the long wait. Select the options for potential clients and talk to a cheerful human being right now.
The deals going around Poland for television, telephones, internet, you name it, are horrendously priced if you sign up for an open-ended period, but very attractively priced and often with a no-fee initial period, if you agree to 24 or 36 months.
In our case: It was after activating the service that we could discover that 1) the operator didn't offer the channels they assured us were available and 2) our building's wiring didn't support use of their top of the line digital decoder/recorder. But it was only once we called the help line we discovered that, according to the firm, our legal right to cancel the agreement within ten days, was not valid once the service had been activated. How’s that for a Catch 22? A number of visits with a local consumer protection office, a slew of correspondence, a lot more calls to that helpline (their story kept changing – turns out that activation does not annual the legal right to cancel an agreement with 10 days depending on the degree to which you can quote the law and cite regulator decisions) and today I am a free man. Only that I now have to review rival offers and sign with a different operator. With all the trappings.
Absolutely do not be discouraged. And do not be down on “Polish customer service.” With Polish average wages growing at a double digit rate since late 2006, I am a believer that we will have the worst behind us soon.
The happy news is too frequently overlooked: banking has been in a more advanced stage for several years. Penetration of banking services is high enough for bank's to compete with one another for a defined group. While some banks inherited a large and non-discriminating (bottom shelf) client base and can afford to be non-competitive, constant price wars, the recent slew of deposit offers above 6% and fee slashings say most cannot. Or look to mobile telephony: penetration just shot above the 106% mark in Q1, the fourth mobile operator is making a name for itself and MVNO's (virtual operators that have clients, but beg network time from existing players) are finally set to make a mark. Customer service, not the strong suit to date of my operator to date, can’t follow with too great a distance.
A side note: A penetration economy is still a step up from the “nie ma” economy of the immediate post-communist era in the early 1990's – and presumably earlier. In my first week in Poland I remember asking a store clerk for a tube of toothpaste that I could see on the shelf (the days when nearly all stores still had employees hand over all goods, no self-service) and she gave a stubborn "nie ma" – a curt way of saying that they were sold out of the very product so neatly stacked up behind her. In the good old days of shortages, the clerk was king, the customer a humble penitent, even for toothpaste. I never learned what might have offended the clerk, and it was not my place to pursue customer rights.
