The Economics Of Bad Service

Roots Juice Bar At ODEL

An example of bad service at the ODEL Roots.

The Curionomist (great new blog) has a piece on the economics of bad service in Sri Lanka. He breaks it down roughly to competition, which I think is kinda true.

In Sri Lanka you can set up any number of businesses and be the first in that field, still. Many other companies also have age-old monopolies, or there are a few players which co-exist in a chummy statis. Disruptive innovations and competition are rare and quite possibly not rewarded.

Places can prosper by providing a basic service not that well and simply scaling up. It’s somewhat expected that in order to get good service you need to know the owner. But I think that is slowly changing.

The Curionomist focuses on competition, as per below:

If Serendib offered terrible service, I could just pop over to one of dozens of very similar places on either side of it or across the Lewis strip, with fairly similar prices. A case of near perfect competition. So, what keeps me there throughout the evening, and keeps me coming back? Good service quality. (The Irk Of Bad Service Quality In Sri Lanka)

I broadly agree, but I don’t necessarily agree that the Sri Lankan work ethic is bad. I just think it’s a family/feudal oriented culture that has yet to scale commercially. You can get stellar service at local or village kades where they treat you like family. You can also get amazing service anywhere if you know the lokka (owner or boss) and people have servants that will do nearly anything. I think Sri Lankans are naturally hospitable to people they know and, beyond that, a bit feudal.

Of course, that is changing. It has to. For a long time the pie wasn’t getting much bigger, so there wasn’t much incentive for competition. Now the pie is getting bigger (war is over, economy is growing) so competition matters again, and I think the Sri Lankan service ethic will modernize as incentives get in line.

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2012-11-12 14:28:27

Sri Lanka has bad customer service because you are comparing it with what you get in modern day Europe or Northern America. I’m sure that if you compare SL with UK customer service 150 years ago you won’t be this depressed about it.

Note that even in SL, the more high class the place is, better the customer service is too. The high class places in SL aren’t quite up to the standards of the developed world, but they are better than the customer service you get from a bus conductor.

So you have a private bus in one end, and ministry of crab at the other end. There are many other things in the middle and you’d see the pattern.

2012-11-12 15:36:52

= ) SL customer service, 150 years and still in the making. The reality is that customer service isn’t so valued at a lot of places in SL (example of poor customer service from HSBC, SL Airlines, Vijitha Yapa, etc.) the reason being sales.
If you sell and you continue selling then customer service can take a back seat and if you complain all they’ll do is nod and smile. If you’re a big shot or moneyed then chances are you’ll get some kind of resolution but this “exception to the rules” attitude is bullshit but what can you do?
This is SL and we’re stuck with it…

2012-11-12 16:52:18

Im not sure that’s true. You get some really excellent service at local shops, kades, roadside restaurants.
Again feudal style the more they know you, the more ‘face’ you show the better that service becomes but it can definitely out compete service at virtually any high-end establishment. If im short 100 bucks of change Keells doesnt give me credit no matter how often I go but my local tuk driver and grocery kade are happy to.
Also places like the Galle Face hotel, Mt Lavinia hotel have abysmal customer service(try making an order and getting your bill) and they probably count as high end, plenty of ‘high-end’ establishments deal in rudeness and indifference and many raodside kottu stops have great service..

2012-11-13 06:02:54

I live in Aussie and this country has the worst customer service anywhere in the world. When you compare Aussie and SL I still feel Sri Lanka is bit far ahead, we still have the famous Sri Lankan hospitality.

2012-11-14 10:12:24

Are living in Northern Territory?

2012-11-13 08:56:15

I think this depends mostly on competition. In competitive markets there is high likelihood ppl would get better customer service. As in most SLn business fields we lack competition and as customers we really dont have any other alternative, so we cant expect customer service.

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