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.

RSS feed | Trackback URI


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.

Name (required)
E-mail (required - never shown publicly)
Your Comment (smaller size | larger size)
You may use <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong> in your comment.

email indi AT

Recent Comments

How The BBS Attacks (A Tale Of Two Cities) (6)

Jack Point: The BBS is tapping into resentments that are buried deep in the subconscious. What they do it to tap in to them, nurture them and magnify them. Exactly what 969 is doing. Exactly what the Nazi’s did. http://jestfork icks.blogsp...

shammi: But you do agree that not arresting G.A. Gnanasara and any other lawbreakers from both sides will only serve to deepen this mistrust? If you don’t, you must be living in said land.

Liberal One: I was talking about the distrust between Sinhalese and Muslims. If you think distrust between these two communities didn’t exist before Gnanasara thero entered the scene you must be living in the la la land of the Colombians.

Damian Poosa (2000-2014) (1)

greene: innalillahi wa inna ilaihi raajioon.

Buddhism And Racism (2)

Johan: Temples tend to be quite skilled at fund raising for building projects within temple premises; perhaps they could mobilise those skills to raise funds to rebuild the damage wrought in Aluthgama and Beruwela. If you go to a particular...

Nandasiri Wanninayaka: Nice to see you are blogging again.

What A Colombo Revolution Might Look Like (Thailand) (6)

Shirley Silva: Good analysis but you failed to mention that unlike in Bangkok a good shower would send the UNPs scuttling home. Above all there is a big leadership vacuum. No charismatic leader like in Thailand

sharanga: Good constructive criticism.

sharanga: >the electorate is too ill-informed to decide This is almost always true in any country. It’s one of the greatest faults of democracy. The electorate is ill-informed and as public choice theorists put it, systematica...

Anti Christian Christmas (2)

Jack Point: I found this video very disturbing. v=EUHCQyxK3ps&a mp;feature=yout http://dbsjeyar hives/27450

Damian Poosa (2000-2014)

Our family cat Damian passed away last night. He was an American cat and it was fitting that he passed on the Fourth Of July. Damian was an ornery cat made happy by the love and care of my sister and parents. I brought him home on the day of my high school graduation (a stunningly thoughtless thing, in hindsight) and my sister and mother actually raised him. He then travelled back to Sri Lanka and had a great time till he got old.

How The BBS Attacks (A Tale Of Two Cities)

This seems to be the basic BBS gameplan (for fucking up everything we’ve worked so hard to build after the war). It’s a cycle of outrage, riot, fear, repeat. It’s like the eightfold path to not being a Buddhist:

Buddhism And Racism

Buddhism is not racist. The ideas and practice of Buddhism involve meditation, perception of impermanence and ultimately what we would call a renunciation of self. Being a Buddhist, however, is not just that. Being a Buddhist fundamentally involves taking refuge in three things – the Buddha, the Dhamma (his teachings) and the Sangha (the community of practice). As a Buddhist, this is why the violence in Aluthgama is so troubling. Becomes it comes cloaked in the colors of the Sangha. The main racists and instigators of mob violence are monks.

The Tragedy In Aluthgama

I haven’t written here in a while because, well, I guess I haven’t had much to say. I’m been writing about food and leisure at YAMU but, well, somethings gotten in the way of that now. In a way we could sense it because of the constant halal debate on YAMU, which is mainly a food site. That food issue in many ways has become a touchstone for the Muslim/Buddhist tensions rising in this country. Yesterday those tensions seemed to explode in Aluthgama and Beruwela on the Western coast. The racist BBS staged a rally there and then paraded thru the streets. This exploded into violence, attacks on businesses and homes.