Thursday 26 April 2007

In defence of Corporate Pedantism

I have seen several articles in the MSM recently bemoaning the state of our customer service culture. A good example of this is Andrew O'Hagan in the Telegraph this week.

Then yesterday Gwyneth Dunwoody and the Parliamentary Select Committee had a huge dig at Ryaniar for refusing to come and sit before them. Admittedly, not appearing before Parliament when requested is not really an adequate response, but I was pleased with Ryanair's answer, excerpt below:

Ryanair was unrepentant about missing the hearing, saying in a statement that it 'had far better things to do than waste time at a House of Commons Committee'.

"(The committee) is itself wasting time talking about passengers attitudes to air travel at a time when Gordon Brown is busy stealing an additional £1 billion from UK passengers and visitors this year."

Not only is Ryanair right to criticise the Government for its 'non' Green Stealth tax, it also refers to a wider malaise.

People hate the poor service they get from alot of suppliers these days. Companies like Ryanair and British Midland are driven by the market to offer amazingly low prices. In fact much lower than even the public can believe; flights for a £1!

To do this, they have to find other ways of making money, so they impose stealth duties and onerous conditions on you if you make mistakes or do not fully co-operate. But they do this because people want low prices. If you want to pay more and get better service, fly with British Airways or Virgin Atlantic.

This applies equally to many other areas of our economy. Bank charges are all the rage and yes they appear to be too much and not linked to cost; however we also have free banking for current accounts, almost uniquely in the world. Cracking down on bank charges will just end the era of free banking.

In summary, articles like Andrew O'Hagan's are just plain ignorant. If you want first class service pay for it, if you want cheap then accept the conditions that it come with that.


Anonymous said...

I remember in 1998, when i had my first overdraft, charges were only £10. My Barclaycard charged a £10 annual fee but no penalty charges.

Charges have risen dramatically since then. It's not all to pay for free banking, much of it is to pay for bad debts they have incurred, largely though their own silly lending practices (take Lloyds lending a total of £100,000 to a mentally ill guy on minimum wage).

Also, I'd suggest low interest rates and high competition for consumer credit means they are not making as much as they would like to on each loan.

If the high street stop free banking, then surely the internet banks will move in for the kill?

Anonymous said...

I hate, genuinely hate, the way some businesses treat you as a customer, but, and here's the rub, it is their business and nothing to do with Government. We as consumers have a choice and can exercise that right.

As to banks...I couldn't care less as long as they haven't formed a cartel and are fixing the prices between them.

Anonymous said...

But when they all say that they will all abolosh free banking - isn't that a bit cartel-like?

The upper-echlons of banking is a bit inbred.

Anonymous said...

Banks are quite terrible - as is Ryanair. In November last year I flew with Ryanair and joined the check in as soon as the desk opened. That was 2 hours before the flight - I got to the flight as they were about to start removing luggage from the 20 + people who had not got through. I made it by about 30 seconds.

CityUnslicker said...

Steven L - Banks are making less money in UK retail banking than they used too. All the announcements of record profits are due to overseas expansion and a bouyant mortgage market.

CityUnslicker said...

Shot - no they are not as far as I can see.

Mutley - i hate ryanair the one time I held my nose and booked with them they cancelled the flight!

I won;t be trying them again, cheap prices or not.

Newmania said...

Did you notice my answer ( on my blog) CU. Odd that there was a little cluster wasn`t it .

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