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The worst company to do business with

Posted by Tim Cummins, President of IACCM, Professor, Leeds University School of Law; Chair, International Commercial & Contract Management | Oct 22, 2015 5:24:15 PM

I was reading an article on CNN that ranks the world’s worst (and best) airports. Travelers ranked them on criteria of comfort, convenience, cleanliness and customer service.

Most of those at the bottom of the list are in emerging or highly troubled markets. For example, I doubt many people go to Kabul or Karachi airports with high expectations on any of the named criteria. Poverty and political instability clearly do not help when it comes to rankings for comfort, convenience or cleanliness.

The top of the list is dominated by facilities in Asia, holding 6 of the top ten spots. The remainder come from Europe (3) and Canada (1). In most – perhaps all – cases, I think these winners see themselves competing with alternative airports, both for originating flights and as destinations / transit facilities.

Continuing on the travel theme, I then noted a message from the Business Travel Coalition, bemoaning the state of competition in the US airline industry. It cites efforts by the four main carriers to disempower their regulator, prevent competition and eliminate distribution channels, backing this up with comments by Presidential candidate Hilary Clinton:

Over the past year, oil prices have fallen from over $100 a barrel to under $50, and the price of jet fuel has dropped more than a dollar per gallon. But the four major airlines—down from 10 airlines just 15 years ago—are charging as much as ever for tickets, even as they hit travelers with extra fees, for everything from checking a suitcase to picking a seat when they fly home at the holidays.”

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These articles caused me to think about the companies that I find worst to do business with and the criteria on which I make that judgment. I have clear winners and they come predominantly from the telecoms industry, though I would certainly add several airlines to my potential list and would also put car rental companies into the rankings. Software providers represent the fourth category on my personal hit list.

What is it that causes me to wish some of these companies would disappear? I think the main frustrations (as both a consumer and a business manager) are:

  • a sense of unfairness.Pricing and charging systems are often opaque and appear designed to limit transparency and increase the chances of maximizing revenue from hidden or unethical practices.
  • a sense of complexity. Complicated charging formulas seem to be linked to complicated internal systems and procedures, leading to a high ratio of mistakes. The focus on revenue is accompanied by tortuous internal control systems such that no one seems to be in control or to know what is going on.
  • abysmal customer service. A result of control and complexity is that no one has any authority to do anything. Even if you can reach ‘customer service’, chances are that they cannot help and need to transfer you multiple times – usually to other people who can’t help. In the end, you dread calling and so you give up.

In every case that I can think of, it seems to me that Finance is the most powerful function within the business. In many cases, they seek to use market power (or claims of hardship) to support consolidation and restrict competition. None of them can be viewed as innovators when it comes to commercial models and in many cases they operate through franchises, alliances or distribution networks which support their efforts to point fingers at each other and deny responsibility or authority over problems.

IACCM research has shown the importance of clear and fair business practices and of empowered interfaces. Companies do not have to be especially flexible in order to win customer loyalty – indeed, many that are flexible subsequently suffer in their ability to do what they promised.

So what do you consider the most important practices or behaviors when it comes to the best and worst companies to do business with? Share your thoughts – and we can perhaps test market sentiment with a survey.

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