That Cell C banner is just the start of South Africa’s consumer backlash

South Africa’s Great Consumer Backlash has only just begun and can be expected to get bigger and angrier if nothing is done. Should service standards get worse, undeclared ‘war’ could erupt, with consumers becoming increasingly antagonistic.

The display of a banner denigrating Cell C’s service levels on a Johannesburg highway indicates a tipping point. The customer who displayed the banner presumably incurred significant costs when commissioning and positioning this attack on Cell C. He then ignored legal warnings to desist.

This shows the customer was — to put it bluntly — the hell in. This level of anger and frustration is no longer unusual.

Government, parastatals, the bureaucracy and corporates should not under-estimate the impact once consumers begin to scream, ‘We can’t take any more of this’. The public could go to ‘war’, using protests and defiance campaigns to fight back.

The private sector was vulnerable to ‘collateral damage’ at a time when state enterprises charged more and delivered less. The Post Office has not delivered a thing for months because of the strike by the Communications Workers Union, but taxpayers will still be expected to pay up.

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Eskom can’t maintain regular electricity supplies. That’s no surprise. It can’t do its sums either. Tariffs may be going up another 13% because Eskom costs for the three years to 2011 were higher than projected.

Eskom, supplier of 95% of the country’s power, was both a monopoly and an essential service. The public therefore had limited capacity to hit back, said the customer service consultant. In other cases, customers may hit back hard.

It’s already happening. Banks have reportedly cut their mail by 25% and retailers by 20% while Telkom has reduced mailed statement volumes by 80% in five years.

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Public defiance is already making a mockery of Sanral’s projected e-toll cash flows. Even if e-toll compliance increases, the odds are motorists will flood alternative routes, creating chaos and making new spending on Johannesburg roads unavoidable.

Knock-on effects in the private sector were beginning to come through, said Kalliatakis. Online delivery delays were reportedly being experienced – perhaps because capacity was stretched as a result of the postal strike.

Meanwhile, there were reports that demand was pushing up some delivery charges.

This highlights the private sector dilemma. You can apply the simple laws of supply and demand and fatten your margins. But consumers have long memories and could carry a grudge if they think you’re profiting from their pain.

Pricing should be kept fair while service standards should be stepped up. You antagonise customers at your peril. Ask Cell C.