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Large consumer groups key to municipalities becoming successful

By Empril Matthew, an associate partner at Ntiyiso Revenue Consulting

Given that municipalities should essentially operate like any business that sells services and products, attracting new business, while stemming the exodus of existing business, should be one of the main goals that municipalities pursue.

The constitutional mandate for municipalities is set out as the provision of basic and essential services to the public. In simple terms, municipalities are in the business of selling essential services such as electricity, water, refuse, waste disposal and property rates.

While municipalities are primarily dependent on their customers for revenue, there is a significant portion of this revenue that comes from a select group of consumers: business, industry, government and large residential estates.

This group of consumers is known as the ‘large consumer groups’ (LCGs), and they form the backbone of the local economy, with direct and indirect benefits for the municipality’s finances, its ability to create jobs, and its growth.

To operate as a business, municipalities need to carry out enabling functions, namely retention, attraction and development that will ensure that large customer groups remain within the local economy and continue to invest to the advantage of the municipality.

Therefore, ensuring uninterrupted service delivery to these clients becomes critical if the municipality is to maintain its rates and taxpayer base. Often, however, these important customers complain about being sent from pillar to post to access even the most basic of services or query resolution.

A quick search on social media reveals alarming levels of dissatisfied customers, many of them defaulting from paying their municipal accounts due to the number of outstanding queries or service requests, which take an inordinate amount of time to resolve.

As such, no municipality can afford to mistreat or ignore its large consumer groups, especially in the economic climate we now face, when customers need engagement and support more than ever.

It is therefore vital that municipalities evolve with changes in the business arena, by establishing one-stop centres for all LCGs. This should be done sooner rather than later, reducing red tape and bureaucracy, as prescribed by the department of trade & industry in 2014.

These one-stop centres should include one-on-one interactive booths for consumers, and the centres should act as single contact and co-ordination points between customers and all relevant municipal departments. Only a fully ‘engaged’ municipality can efficiently respond to the business realities of tomorrow.

The major benefit for municipalities when adopting this one-point-of-contact model for a select group of clients is that these entities will be persuaded to remain within the municipality, resulting in their employees also taking up residence in the area, with a subsequent benefit for the housing market.

It is a proven fact that people find it convenient to stay closer to where they work. This will also stem the tide of buildings falling into neglect, due to disrepair that is caused by low occupancy rates and continued movement of people out of the area.

It is evident that municipalities need to think and operate like businesses to sustain themselves. Part of this translates as prioritising the municipality’s most impactful customers to ensure organisational sustainability. Such sustainability can only be attained by putting the customer first.

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Ntiyiso Consultinghttps://ntiyisoconsulting.co.za/
Founded in 2005, Ntiyiso Consulting is a fast growing authentically African and globally wired management consulting firm that seeks to empower institutions that enable Africa’s development. Ntiyiso Consulting helps improve cash positions of large and medium sized municipalities; turnaround or improve the revenue, profitability or social mandate profitability or social mandate performance of large and medium organizations; and unlock economic opportunities on behalf of communities & regions.