financial crisis – One of these days…

At the end of August I ordered just over €100 worth of schoolbooks from Schoolbooks.ie (I know, I know, I should have ordered them last JANUARY right?!)

The nippers started back in school on 30th August and no sign of the books. I couldn’t tell from the Schoolbooks.ie website whether they were to arrive imminently or not. Around this time I realised that I wasn’t the only customer whose books were missing but I took them at their word (to the media, mind, not me) that the books would arrive shortly. However at this time our (truly wonderful and sorely missed) childminder finished up with us so there was no one at home to receive our parcel. So I emailed them at orders@schoolbooks.ie and asked them could they deliver to my city centre office. 2 working days later I was worried about the lack of confirmation about this action.

Upon investigation online I realised that the situation was far worse than I initially thought. I also realised that I was dealing with people who were being a little loose with the truth claiming, for example, that they had contacted every single customer that was affected by what seems to be some sort of technical issue. Apparently I didn’t count as I have never received a single word of communication in any format from Schoolbooks.ie. as I’m trying to be nice I will refer to this as “not best practice” especially as we are repeat customers.

I continued trying to get through by phone and tweeting about the issue in the extremely vain hope that someone might respond.

At this point I emailed to cancel my order. I still have no idea whether they read or acted upon that email. I thought that the books may still arrive.

By the end of the first full week (9 days of school) we decided we couldn’t possibly send the kids back to school the following Monday without books. I legged it to Reads of Nassau st one lunchtime and despite the assistance of a really helpful staff member Reads didn’t have a single one of the books (please note I was looking for Irish language books only for my Gaelscoláirí).

En route back to the office I rang the National Consumer Agency who made all the right noises in a non-committal sort of way. They sent contact details to me but there was nothing I hadn’t already gleaned from the Schoolbooks.ie website. I asked the NCA whether they would be investigating the issue further but the very nice chap I spoke with couldn’t say at that point. He also reminded me of our rights as online consumers which I was very familiar with thanks to my last job. One point he made was that should the books arrive AFTER I had bought them elsewhere I could refuse delivery and Schoolbooks.ie would be obliged to refund. Good luck with that, Rosie!

Since then I have written to the Visa Chargebacks department in the hope that my money might be refunded. I finally received a complete refund on October 8th.

On September 21st I spoke about this during my usual monthly technology slot on Splanc, Newstalk’s Irish language radio show. Obviously I’m dismayed that I’ve been badly treated, annoyed that I was out of pocket but what bugged me the most is that with the application of a little cop and some cheap or free technology a lot of this could have been fixed. If they wanted to be old fashioned about it a few grand to a half decent PR company could have saved their business. What galls me the most however is that the MD’s attitude to his customers has at the least cost him business and at most cost him his business. While I have as little care for him as he obviously has for me, I think in these recessionary times (sorry) it is practically criminal to play so fast and loose with his staff’s livelihoods and other people’s money. When I got home that evening, lo! the books had arrived and are still sitting on our sideboard in their packaging.

So what you might say? Well I think that Schoolbooks.ie are in fact a perfect anti-case study. I would generally avoid using negative examples but Schoolbooks.ie tick all the boxes.

It’s easier to keep old customers than find new ones (or as the grown ups call it Retention vs Acquisition). We have bought our books from Schoolbooks.ie for the last 4 years, spending at least €50 every year. Schoolbooks.ie have always been poor at maintaining contact, not reminding us at crucial points in the year about themselves in order to ensure our repeated custom.

Join the conversation or they will bitch about you and not even behind your back! I already knew that Schoolbooks.ie were poor communicators, having not received much by way of correspondence from them over the last four years; a blessing you might say in these times of bulging inboxes. It’s possible that Mr. John Cunningham, MD of Schoolbooks.ie, thinks that he is being stoical by refusing to engage with customers on Faceboolk Twitter, Boards.ie and blogs like this. He may be of the mind that it will all blow over but Gawd help the poor sucker who has to manage their SEO in the future. Considering the company is unlikely to exist in the future

Social media is all media. A storm in a tweecup can quickly become national news because you can no longer presume that the busy bodies on social media are not influencing the busy bodies in national media. This story quickly became a running theme for back to school week on Joe Duffy’s phone in radio show. Schoolbooks.ie became synonymous with bad customer service and it will be some time before the market will forget. What a waste of a perfect URL.

Here’s a little piece I wrote for a project as part of my MBA. It’s on the concept of groupthink, whereby bad decisions are made by a group in order to avoid conflict and maintain group cohesion. The concept was described by Irving Janis in 1971*. Janis originally wrote about Groupthink in relation to The Bay of Pigs invasion, Vietnam, and the bombing of Pearl Harbour. My two-cents is on the current financial crisis. How’s that for an ambitious first blog post? For my next post I’ll put up something about how to avoid groupthink. I’m kinda obsessed with groupthink at the moment, me being a member of a cult ‘n all.

In the interests of altermodernism, any further additions to the list or corrections would be greatly appreciated, ideally before next Monday when I have my exam! (I’m supposed to be studying not blogging)

Groupthink: The Global Financial crisis

The current financial crisis is a clear example of the dangers of groupthink. The crisis is the result of the bursting of asset bubbles across the world, be they property, bank loans, stocks etc. Asset bubbles are not new. How they occur is not known exactly, but their effect on an economy can be detrimental as we can now see.

Who was “the group”? At the moment the “greedy” bankers are in the spotlight. Throw in the politicians, economists, builders and businesses and while you’re at it anyone who bought a house, invested in equities, or even put their money in a pension with the belief that prices will always rise and they will continue to make money on them.

But surely someone should have stopped all of this? Well some did shout but groupthink got in the way of sensible thinking. Here’s how:

Illusions of invulnerability

The financial markets believed they were in a new paradigm of economics where the business cycle was managed once and for all. Complex financial instruments such as securitisations or collateralised debt obligations meant risk was moved off. This led to more risks been taken.

Ignoring warnings/collective rationalisation

During the time the bubble was inflating (2002 – 2007) many economists across the world warned of a serious asset bubble but their warnings were ignored. Nouriel Roubini, an economist, warned the IMF of the bubble in 2006 but people thought he was delusional.

Illusion of morality

The smartest and brightest economists and bankers were convinced their “rational” economic decisions were for the best and could not see the ethical consequences.

Self-censorship

Robert Shiller, an economist who was also on the board of the New York Federal reserve bank explains how he felt he would be ostracized, would not be taken seriously or would have his professional stature questioned if he deviated from the consensus opinion of the rest of the board. Other economists knew what was happening but they would not talk about it professionally. (Shiller has a great article about this and because this is not an academic blog I don’t have to reference it..nice)

Illusion of unanimity

Because people didn’t talk about the problem collectively they all believed there was no problem

Mind guarding

Did any one individual protect the group from adverse information? Well, anyone with an interest in keeping the bubble growing which is almost everyone.

Why did groupthink occur?

Most people involved in finance or economics come from similar backgrounds, wherever they are in the world, and they certainly have similar ideologies. The mainstream media, from which there should have been greater insight or criticism, were almost complicit in the illusion.

*I can’t be bothered doing any of that tagging/linking lark. Find stuff yourself