Losing sleep

Losing sleep

How many times have you been woken up at 3 in the morning by the beeping of your phone, signaling the receipt of another SMS spam message?

It is happening to me more regularly every week. It seems that every company in the country has jumped on the SMS spam bandwagon, blissfully unaware of the enormous damage they are doing to their brands. Companies that use SMS’s to market their services or products have very little understanding of consumer behavior and obviously don’t give a damn about the retention of their customers.

I am specifically referring to companies that use their own customer databases to perpetrate this evil and not the traditional spammers that use purchased databases to spam people. That is another topic that has been written about a thousand times.

Companies that send marketing messages to their own customers believe they have an inherent right to do so as long as they provide the requisite “Stop to opt out” at the end of the message. These companies, that included the top brands in South Africa, show their ignorance when it comes to electronic and mobile marketing and their total disregard for the privacy of their customers. The mobile service providers are the biggest culprits because they sell these services through the aptly names “WASPS” or Wireless Application Service Providers. Wasps are companies that are appointed by the mobile service providers to send spam. According to WASPA, their association, they don’t send spam, but as far as I am concerned they exist only because of their ability to send spam. They “sting” consumers millions of times a day and make a few cents on each SMS they send on behalf of these “respected” brands.

The Consumer Protection Act unfortunately has no sting. It allows for spam as long as the spammers comply to a few basic rules. Not that a few rules have ever stopped South Africans from doing whatever it is they want to do, whether it’s breaking traffic laws, evading tax, hijacking a few cars or sending spam. Companies think that if they include the opt out message and the customer interacted with them once, even if it was 10 years ago to get a quote, then it gives them the right to invade their privacy. If we want to stop getting these SMS’s then you must send the obligatory reply with “STOP”. This reply obviously costs money. I think the mobile service providers and the WASPS make millions every month from these opt out SMS’s that we are forced to send. What a blummin cheek! It costs me around R0.20 every time I opt out from an SMS that I didn’t ask for in the first place!

Not that the opt out works. I have opted out on numerous occasions just to continue to receive these SMS’s. Only after many phone calls, lawyers letters and threats with the ECT act do the SMS’s stop. And then sometimes they don’t. It seems that my opt out just confirms that I am in fact alive and my mobile phone works and I actually read my SMS’s. My value as a quality recipient of spam has just exponentially increased and the spam not only continues, but increases!

So herewith a short lesson on consumer behavior.

It has been proved through many recent studies that SMS marketing messages work on a very small percentage of consumers. If you send 1000 SMS’s and you get one sale then you may think that your campaign was a success right? Wrong. If your repeat business percentage (the number of customers that are going to buy from you again) is, let’s say, 20%, then of the 1000 customers, 200 of them will purchase from you again sometime in the future. These studies have shown that out of the 1000 people that receive your SMS, around 150 will be so upset that they will make a conscious decision never to buy from you again. 10 of them will actually go to their friends and family and influence them to never to buy from you again. So, you made one sale but lost more than 5 in the process. Not very smart.

Why would people get upset about receiving an innocent marketing SMS from you? Well, because it’s invasive. We use our cell phones for work and personal calls. Mobile phones have become much more than just phones. They are an extension of our lives and many people cannot function without their mobile phones. We need to be permanently “connected” and this perpetual connection has become very personal. My phone is a personal thing. It has my music on, my photographs, my email. It is my space and it is sacrosanct. The SMS that I receive invades that space with the subtlety of a carving knife. Now imagine if I get this SMS at 3am! Why not switch the phone off at night, you ask? Well, because I have a family. My kids are out and about and I cannot switch my phone off. Like many people I have given up with Telkom and land lines and cable theft and only have a mobile phone. Mine stays on through the night, and no way for me to avoid being woken up at 3am with the incessant beeping in my ear. This very morning I was woken up at 3am by 2 SMS’s from a jewelery company and I could not fall asleep again, so I decided to get up and write this article. It’s now 4:44am. Understandably I will never buy from that jewelry store ever again, and that is a promise.

So what am I to do? Today I am going to buy another phone and I am going to give that number to my family. It will become my family phone and I will leave it on at night and switch the other one off. I will become part of the 2 phone brigade.

And guess what? The mobile service providers will just make more money and continue to rape consumers with impunity.

I wonder, how do they sleep at night?

Travel industry shakeup looming

The assertion by the airlines that overbooking is in the interest of passengers is absolute nonsense. Passengers that purchase tickets and do not show have already paid for their tickets, irrespective of whether they fly or not. How is it in the interest of passengers that airlines overbook? The only interest being served with this practise is the interests of the airlines who make more money because they then manage to sell the seat twice.

CPA offers protection to travelers
The Consumer Protection Act (CPA) will address this issue and from April next year airlines will be prohibited from overbooking. Passengers who are “bumped” from a flight will have a big stick to beat the airlines with. The airline will have to refund the passenger the cost of the ticket plus interest and any costs the passenger incurred as a result of being “bumped”. This includes accommodation and car rental.

Anyone in the retail travel industry will understand the stress when called by irate consumers because the airline has cancelled flights or bumped passengers. The consumer has no interest in the airline because they are the client of the travel agent and the travel agent has control over the airline, right? Wrong. The travel agent has zero control over the shenanigans of the airlines. They are a law unto themselves and for many years they have acted only in their own interests. Of all industries I rate the airlines as having the worst customer satisfaction rating. Customer centric is not a term that they understand. Sometimes I am astounded by their arrogance. It is time that things change and hopefully the CPA will be the facilitator of that change.

Overall the travel industry is wholly unprepared for the CPA. ASATA, the Association of South African Travel Agents has been conspicuously silent on this issue and have, in my opinion, failed miserably to educate and inform their members of the consequences of the act. I suspect that quite a few agencies will suffer severely under the act. The fine for not complying is severe and few agencies will have the financial resource to survive. One of the biggest issues is going to be the ability for consumers to file a “class action” lawsuit similar to what is common practise in the US. A group can now collectively sue the agent for misrepresentation, false advertising, incorrect information or advice etc. The consumer will be able to sue the agency for the shortcomings of the hotel or any of the legs of the journey. It then becomes the responsibility of the agency to seek recourse against it’s suppliers. Imagine trying to sue a hotel in China!

The industry needs to wake up. Contracts need to be amended, consultants need to be educated and advertising needs to be reviewed.

Overall and on the balance of things I welcome the CPA and believe that all consumers will benefit. Companies that prepare themselves and act in accordance with the act will have little to fear. Those that don’t such as unscrupulous travel agencies that sell anything to anyone without any interest in the client and airlines that believe they are above the law have lots to worry about. Hopefully they will be out of business soon and assist us to clean up the industry.

My advice? Get informed and get liability insurance quickly, or get out of the industry and buy a hot dog stand.

Marthinus Strydom

Motor Retailers to clean up their act

Retailers must clean up their act

Unscrupulous motor retailers will need to get their act together before the implementation of the Consumer Protection Act (CPA) which comes into force in April 2011. Decent and honest motor retailers will have very little to fear. It is those who have been giving the motor retail industry a bad name that will be weeded out by the CPA.

The CPA will drive more responsible motor retailing in South Africa. While I welcome the Act I believe it will take some time to implement properly and there will be some teething problems, however I am confident that it will be sorted out relatively quickly. Consumer Protection Acts in other countries has been mostly very effective. In Australia for example, retailers are very weary of the CPA and this has resulted in more responsible retailing.

Changes to contracts, point-of-sale, advertising content and sales processes will be required as well as education of staff from motor retailers but there shouldn’t be any excuses to comply.

A key component of the CPA for motor retailers is that the consumer has a right to return goods for a full refund. This is a general right and applies when the consumer receives the product and on examining it realises that the product is not that which was ordered or that which was, for example, advertised in a sales brochure.

The Act changes the way warranties and returns must be handled. If the goods are not suitable for the purpose for which they are intended, the consumer is entitled to return them at the suppliers risk and expense and without penalty and may obtain a full refund or have the item/s repaired. It provides for the right to return goods in certain circumstances. A consumer must be allowed a reasonable time to examine goods. This right means that goods can be returned to a supplier, for a full refund, in the following instances: – If the consumer could not examine the goods; – If the consumer is exercising the 5 day cooling off period provided to him for goods sold by way of direct marketing;

Deputy Manager of consumer affairs Desmond Pillay said when the Consumer Protection Act (CPA) comes into effect on 31 March 2011, “it is fair to say voetstoots would not apply in such a case”. This is thanks to the addition of an “implied warranty of quality” in the CPA, which means that any and all goods that fall within its scope must meet certain quality criteria.

In addition to common law warranties and contractual warranties, the CPA creates an implied warranty of quality for all goods.
• The producer, importer, distributor and retailer each warrant that the goods comply with the quality provisions and standards (“the requirements”) set out in the CPA.
• This is a minimum warranty for all new and used goods (excluding auctions).
• This means that within 6 months of delivery, the consumer can return goods which fail to comply with the requirements, without penalty and at the suppliers risk and expense.
• The supplier may repair or replace the goods or refund the purchase price (at the consumer’s choice).
• If the consumer opts for repair, and the defect occurs again within the next three months (or a new defect appears), then the supplier must replace the goods or refund the purchase price! This may have serious consequences for the motor industry.

And if there are any defects at all, these should be explicitly described to the buyer. If the customer in the example bought the car after the CPA came into effect, the car dealer would have to take the car back and repair any defects or give the customer his money back.

When purchasing a motor vehicle, here are some tips to watch out for:

• Make sure you understand what the total cost of the vehicle is to you. This way you will not be surprised when you have to pay.

• If it’s a used vehicle, make sure you buy it from a reputable dealer. If you are concerned about the history of the vehicle have it checked out by the AA or the like. Buy from a dealer registered at the RMI (Retail Motor Industry www.rmi.org.za).

• Make sure the vehicle has a full service history. Check the service book for all the stamps before taking delivery of the vehicle.

• If you are financing the purchase, make sure you read the contract and understand how the payments are going to work. Make sure you can afford the payments.

• Ask questions. Make sure you understand what you are getting. Don’t be afraid to ask questions.

In conclusion, the CPA is good news for consumers in that they have recourse should they not receive the goods originally agreed upon or advertised, as well as for the motor retailing industry as it will force unscrupulous dealers to clean up their act.