According to the Global Entrepreneurship Monitor (GEM) reports of 2010 and 2014, Uganda is one of the most entrepreneurial countries in the world.
Essentially, this means there are many opportunities that can, and that are being turned into business ventures every year. However, the reports go on to show that many businesses do not live beyond their second birthday.
A number of reasons have been advanced for this state of affairs, among which; corruption; changing customer tastes and preferences (will come back to this), few examples to copy from, etc…the list is long.
I would like to reflect on an observation I made one day when I went to get some goat meat at the local butchery. The price had gone up slightly and so I queried the butcher - his reply was that today goat's meat was scarce and expensive at the source.
When I got home I found that the meat was from the previous day. Okay, goat's meat was scarce today but why did I have to pay more for yesterday's goat?
I reflected a little more on the concepts of value for money, integrity and return customers. It has been said that the customers to be afraid of are those that do not say anything about how bad your services are because they will not hang around hoping that you will change; they will simply identify somebody else who competitively meets their need (Townsend, 1992.
With reference to integrity, I would like to bring up the issue of ‘return customers' in respect to business survival.
Sometimes we are so short-sighted in our dealings that we do not think that our actions today will affect our livelihood tomorrow - just like those birds - the chicken and the ostrich; one walks around the building and forgets it was beaten at the same place not more than three minutes ago, the other buries its head in a thicket and thinks that it cannot be seen. Take a moment and think about what happens when;
a) You buy a kilogram of fish and do not supervise the fellow as he weighs it out - you get home and half of it is something slimy.
b) Stop to buy some tomatoes, mangoes or oranges and you get home and the tomatoes will not last another day - they are going bad, or you find that the mangoes you have are mixed types.
When you ask for the price of oranges, they tell you that you can get five big ones or eight small ones for sh1,000. When you opt for the latter, you get home and unpack them only to find that you have two big, ones, one medium sized one and two small ones.
c) Go buy some trousers - if you do not try them on at the purchase place, you get home and they are two sizes too small - then you wonder if you have put on more weight because when he measured them, they were size 361/2.
The list is endless because you no doubt have your own experiences
I made an interesting observation about my favorite ‘fast food' (take away) place in Mukono. A pack of fries and chicken goes for sh7,000. Plain chicken goes for sh4,000. Every time I purchased plain fries, I got what I considered sh3,000 worth of fries.
When I purchased fries and chicken at sh7,000, I got a lot less fries. If I walked in and bought plain fries and after I had my package, then ordered for a piece of chicken, I still paid sh7,000 but this time I had sh7,000 worth of ‘junk'.
Also, when customers were lining up, I was sure that I would get a little more than half of the usual measure of fries - and still at sh7,000. When the owners get into the habit of giving fewer fries for the same amount of money, they become greedy because they think that they can do the same the following day and then indefinitely.
This reminds me of the times I would leave Mukono to go into Kampala to have a bite at ‘Tummy's Take Away' before the building housing them was pulled down to pave way for a modern structure. I travelled all this way because I was sure that it did not matter how many clients they had waiting in line; their rationing of Fries would be the same.
I mentioned the value of return customers. I also mentioned short-sighted birds. I have been buying from the same butcher for a long time. What he has failed to observe is that every time he plays a trick on me, I do not buy his meat for a sometime.
Initially, it was rare to find that his meat had stayed overnight but lately it is becoming a trend. Either the rise in the dollar affected consumption or peoples' ‘tastes and preferences' are changing towards another/ other butchers.
Traders have adopted the ‘VAT' approach - pass it onto the consumer; after selling it, it becomes the customer's problem. So the question - why is everybody so bent on getting more for less? Why do not people have integrity - give me what you said you would for that price.
The concept that a satisfied customer may tell one or two people, but a dissatisfied customer will tell 10 people seems to be confirmed.
It is hard to change tastes and preferences back to you when you lose them to a competitor. That is probably why after many failed businesses have opened up again they always put out a sign - open under new management - because if it is the same old management, nobody will give them a second chance, even then it is still a struggle.
More scenarios and experiences
I will share another personal experience:
I went out to buy a pair of shoes some time back. Sh200,000 I was told. I turned to walk away and the attendant asks, "How much do you have?" I responded that it was completely out of my budget. I only had sh100,000.
She asked me to "top up the money". I declined and turned to leave.
"Wait" she says, "let me talk to my boss". She steps out to make a phone-call and when she comes back she wants sh30,000 on top of what I had. Again, I turn to leave. "Pay!" she exclaims.
As I pulled out the money, I wondered to myself about the quality of the shoes, whether they were worth what I was paying for them, perhaps I could have gotten them for less because the rate and margin at which the price changed was frightening.
Let us consider a few other examples from our everyday lives:
If for every kilogram of goat's meat you serve two plates of goat & fries at sh15,000 per plate. This means that for every kilogram you make shs30000.
Then one day, three clients want goat and fries but you only have 1kg. Well, you rationalize and divide it into three plates and serve it. They all walk away after paying sh15,000. Wow, you made an extra shs15,000.
The next day you sell 3kgs and make sh90,000 but you say to yourself, I could have made an extra sh45,000. So, the next day, instead of 1kg for every two plates, you make it into three plates and make an extra 45,000. You keep doing this and now you think that you are a genius.
When your greed catches up with you
The thing about greed is that once you taste it, you are hooked. After about three months, you do not have any more patrons and you start to attribute it to the rise in the dollar; children going back to school; witchcraft and so on.
You see, those patrons may not exactly say what is value for money, but they know what it is. The first time they came to your place they were checking if what they got was value for money. So, in their mind they weigh between sh15,000 and so much goat to know if they got a good deal (because they know how much a kg of goat goes for and whether the value added warrants the price).
Along the way, when you changed your standards for no justifiable reason, except that you got greedy (lost integrity), the clients began to weigh their sh15,000 against what you gave them. Eventually they realize that the other new place that they visited was giving better value for money - now they start to change their ‘tastes and preferences'.
Unfortunately, when this new place sees the big numbers, instead of working harder to produce more kilograms of goat meat, or providing service on first-come-first-serve basis, they make the same mistake of thinking they can serve more people using the same quantity and soon the original patrons who knew the first standard will shift.
When they do, all those who got to know about this place through them will follow them. Before long, there will be a new place in town ready to go through the same cycle…do we ever learn?
Every time I want to reward myself for a job well done, I go to my favorite Chinese Restaurant, pat myself on the back and say "well done, enjoy a Chinese meal". What I truly appreciate about this place is that I have been going there for many years now but I can always be sure of value for money. When their prices change, it is within reason and that only happens approximately once every two or three years.
Under the Strategic Management Discipline, there are concepts that help to give you a competitive edge as well as to raise the ‘barriers to entry' so that it is hard for competitors to come into the same business.
If your customers can depend on you to do the right thing even when they are not watching, I see no reason as to why they would change their tastes and preferences.
Integrity dictates that you are not shifting your goalpost every time somebody attempts to score; that come sun, come rain you will give your customers value for money; that you can always be counted on to do the right thing even when you have the option to do the wrong thing.
Ugandan business people need to re-orient themselves to the standard measure of integrity so as to get and maintain customers; without loyal customers it is very likely that your business will not see its second birthday.