GIBS senior lecturer Kerry Chipp has just won the best research paper award at the Institute of Management Technology’s Emerging Markets Conference in Dubai. The paper, entitled A Little Respect: CVP Development and the Low Income Consumer, reveals the importance for this group of value in acquisition, or the value embedded in the experience of purchasing.

GIBS senior lecturer Kerry Chipp has just won the best research paper award at the Institute of Management Technology’s Emerging Markets Conference in Dubai. The paper, entitled A Little Respect: CVP Development and the Low Income Consumer, reveals the importance for this group of value in acquisition, or the value embedded in the experience of purchasing.

|inline||portrait|t|jpeg|Kerry Chipp 2.jpg||left|You found a high level of disrespect at the bottom of the pyramid - poor people being treated badly?

 Yes, in the service encounter. There was a lot about rudeness, a lot about not being listened to. The people we interviewed used the word “listen” a lot – “no one would listen to my story”, “no one would give me time to understand me”, “I was shoved around”. What was quite interesting in a sad/funny way was they said “I got more attention from the store security guard than I got from store staff”. Also, “I’m treated as a suspect”, “I’m not treated as somebody, the colour of whose money is the same as the next person”.

 How do people react to being shown disrespect?

The literature suggests that low-income people would rather stay away, or boycott, than actually voice their dissatisfaction. But we found that they were very vocal and very willing to voice their discontent at the service provider. Which was unusual, because the literature says that shouldn’t happen.

On what basis would a store staff member make the assumption that I am worthy of disrespect?

A lot of our interviewees spoke about stores in their local environment. In the township this would be a Spar, a Checkers or even a local spaza shop, staffed by people from the local area. They said they would get “treated like a little brother or a little sister”. Phrases like “Agh, you’re just a local kid”, regardless of their age, “you’re just from around here, you’re nothing special”.

Does this lack of respect damage the product or brand or does it just damage the store where it’s experienced?

It damages the store because it’s distinguished on geography. It’s not Spar in general, it’s this local Spar around the corner. And when they were talking about Nike, and they went into a Nike shop, it doesn’t actually damage Nike, it’s the retailer of Nike.

Is this one of the factors in Capitec’s success?

Definitely. Their whole service environment is very open, very friendly. Related to that, FNB had a similar experience in India, where they didn’t actually understand the Indian system, which turned out to to their benefit. They rolled out a brand look-and-feel and planned what they imagined a branch should be, but they didn’t know that Indian banks discriminate massively on caste. The lower your caste, the worse you are treated and the shabbier the offering to you. Even from the point of actually entering the premises: it’s degraded, shabby, dirty, because it’s for a lower caste. FNB had none of that history, put up their brand logo, defined their service experience in what to us would be a normal way, and had massive adoption by the lower castes: “They are treating us well, treating us like ordinary human beings. Where the other banks in India treat us like something found on the bottom of their shoe.”

Your research also found that poor people are prepared to pay a premium for respect?

It’s about the experience. Generally, low-income consumers don’t actually have a lot of opportunity to participate in the consumption culture. But when they do, when they’ve got the money and are going to buy, it’s around “I can actually participate, so I will pay the premium”. Woolworths comes out very strongly, because this is where “I’m treated well, and I like being treated well”. In fact, the only retail brand that came across as getting it right was Woolworths, which really stood out. The interviewees said they loved Woolworths: “I was so proud of feeling like a respected person.”

Respect is very widely used word. Does it need closer definition?

The essence of respect is being treated by others as you would you wish to be treated. In a Kantian sense of how a man needs to be recognised as a man. There was a lot about being recognised for being a fully participating, equal member of society.

What alerted you and your collaborator, Patricia Williams, to the possibility that there might be something worth investigating here?

Patricia is very passionate about helping low-income people and does a lot of charity work. When we were looking at how to investigate this market, she said she felt that in a lot of instances such people are perceived as second-rate citizens. We were keen to use the critical incident technique to see in a consumption or retailing experience, what was your last memory, what stood out for you? We were shocked at how many of these memorable experiences centred around being treated like a second-rate citizen, being shown disrespect; and they used the words “respect” and “disrespect”. “I feel like a respected person”, “I was appreciated”, “I wasn’t given any respect at all”, “Their tone to me was one of no respect.” “It’s push and shove”, “They need to treat people special, I’m a customer”. And the whole idea of the use of the word “customer” is, “I’m not their younger brother or sister, I’m a customer with paying money”. As if they’re saying, “I can participate, why are you not treating me like customers are supposed to be treated?”

What are the key lessons here for marketers - retailers in particular?

How does your staff treat low-income consumers?  These are consumers who see the staff as equal to them, but the staff doesn’t see it the same way. By whatever signals or signifiers, they pick up that this person doesn’t have much money. So, how does the staff treat people who have low-income? Or do they treat people the same?

 In a variation on the theme, I was talking with people from Kenya, who told me that they were treated badly by Sandton City service staff because they were foreign and their credit card was foreign. In those instances, the staff were providing the service but conveying disapproval through tone of voice and body language. Literally, how they take the credit card, how they handle their credit card.

 If you live in an environment where there is discrimination, how is your staff briefed on that? Are they given the tools to recognise what their own prejudices are and how to overcome them in a service environment?

Which stores are getting it wrong?

The Spars are quite vulnerable because they’re in the low-income areas. One respondent said, “You know, I felt that if they were not dealing with a black person, they wouldn’t do this to me. Because it’s in Alex, because it’s our community, then it doesn’t matter whether you’re a customer or not, they talk to you like they’re talking to their younger sister.” If your brand is in a largely low-income area, those outlets are extremely vulnerable, especially if they’re staffed from that area.

How did you feel when you heard you’d won the award?

I was stunned actually. But what struck me were the conference delegates from emerging markets who really bought into this. They told me, “This is so true. Low- income consumers get treated badly, treated as second-rate citizens. This is endemic.”



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