Indian Service Firms: Customer centric or customer antagonostic?

Shailendra Dasari Faculty,IBS Bangalore

Introduction Services contribute almost 60% of Indias GDP. Marketers of services are fully aware of the specific strategies to be adopted for marketing of services as opposed to goods. Further there is no dearth of literature on this subject and most of the business schools in India offer specialized courses on a full time basis for marketing of services. Case studies of successful Indian service firms are available on the web as also in the text books written by renowned Indian academicians. In spite of all this the degree of customer centricism of Indian service firms leaves much to be desired. Most of them are very tentative in their approach and lack consistency in their dealings. Surprisingly multinational firms which have set up shop in India also do not exude the professional commitment when it comes to embracing customer centricism as a philosophy. This article attempts to highlight the need and importance of service firms to be customer centric, present state of affairs, reasons for customer centricism receiving mere lip service and steps to be taken immediately to correct the situation. Service encounters that are not very pleasant The other day one of the delivery boys from a courier company of international repute brought an important document to be delivered to me. Being a working day I was not at home and my wife who is also a working lady also was not yet home. The delivery boy left a slip stating that he missed me and provided some numbers to be contacted for further assistance. The next day being a Saturday, I made it a point to be at home so that when the courier boy made the next trip I was around to collect the document. When he did not turn up up to 3.30 PM,I rang up the number provided by the delivery boy. After explaining my case to the girl who picked up the phone ,I was asked to furnish the 10 digit airway bill number. I promptly furnished the required information based on what the delivery boy mentioned in his note. The girl presumably fed the airway bill number given by me to the computer. Apparently there was some mistake in the number and the computer asked for the correct number. The girl in turn asked me to furnish the correct waybill number. In spite of my pleading with her that there was no way I could access the correct number and whatever number mentioned in the slip left behind by the delivery boy was what I gave her, she regretted her inability to be of any help to me. She even suggested that I got in touch with the consignee who was located in Mumbai who would hopefully sort out my problem. As for the whereabouts of the delivery boy she expressed her helplessness as she was responsible only for tracing the missing documents and there was no way she would know the name or other particulars of the delivery boy. All this unproductive interaction took more than 15 minutes. I found the cell number hurriedly scribbled by the delivery boy. To my dismay it contained only 9 digits. Though I had some urgent personal work I stayed put at home lest I missed the boy for the second time in a row. Unfortunately for me the delivery boy chose to skip my place, for reasons best known to him. Next day being Sunday there was no way the delivery boy was going to come back to deliver my document. Monday morning, before leaving for work I wrote a letter of authorization in favor of the security guard and to my great relief when I returned home late in the evening on Monday I was handed over the document by the security guard.

This is not just one stray incident reflecting total lack of concern for customers by service providers. One should consider ones self fortunate if one does not frequently bump into unfriendly service providers. This apathy and scant regard for customers expectations is not unique to service firms of Indian origin but is widely prevalent even in multinational companies. Services that are not so standard I have availed home loan under the Home saver scheme offered by one of the multinational banks. I am sure the bank does not expect their customers to visit them for every small query. Unfortunately their telebanking executives are terribly short of the skills and training required to man those positions. The other day when I called one of the Customer Service Executives regarding certain clarifications in the monthly statement received, to my utter surprise the lady who took the call did not have the updated statement on her system. When I expressed my dissatisfaction over the way my queries were handled, after consulting her supervisor she suggested that I fax her latest statement of account so that she could get back to me with the information I needed. I was not particularly impressed with her suggestion and chose to visit the branch where I had my account, though it was a 45 minutes drive and finally got my queries resolved with the help of the Customer Service Executive whom I met in person. Students of services marketing would know that several provider gaps viz. knowledge, design and delivery gaps need to be addressed by this multinational bank, if they really want to be customercentric. Training on the wrong basics? How do you fire customers? This is a topic on which lot of Customer Relations Executives of banks and insurance companies receive extensive training. Either down grade their status from platinum to gold or levy some unilateral penalties for not maintaining the minimum quarterly balances and deprive them of value added services like anywhere banking and multicity cheque book .This is what happened to me when I lost my Powervantage status with one of the multinational banks and relegated to an ordinary SB account holder, that too with so many strings attached ultimately forcing me to terminate my relationship with them. Through out this process the bank did not have a human touch and took shelter under their policies and procedures. This was the same bank which aggressively marketed themselves to me seven years ago when the conditions were more favorable at an individual level as also the economy as a whole. Are the banks customer friendly? While dropping the cheques in the drop box provided by the bank may be a very convenient option for most of the urban high end customers, what if one of the customers say a retired person who lives on the pension he or she gets wants to exercise the option of using the pay-in-slip with a counter foil? Apart from the customary dirty looks they get from the staff at the bank ,such people are often criticized for being much behind the times and hampering the smooth ushering in of the technology. However robust the banking systems are there are instances of cheques being misplaced necessitating prolonged enquiries before the instrument can be replaced and it is the customer who always suffers. Not the bank. No doubt there is a system of grievance redressal in place. But how many of us have the time and patience to approach the ombudsman appointed by the bank?

Indian Ethos up for exploitation? Well Indians as a race have unlimited patience and by nature most of us are peace loving. But it is very unfair on the part of the service firms to take their customers for granted and provide them with mediocre services. Such gross lack of concern for customers may not have much impact on the top lines and bottom lines of service firms in the short term. But its long term effects are not difficult to predict. This brings us to the fundamental question of why should service firms be customer centric? What are the benefits of being customer centric and is there any price to be paid for not being customer centric? Let us try and address some of these issues. Need for being customer centric Customers in the new millennium have many more choices when compared to what they had a decade or two earlier. Customers today are more knowledgeable, demanding, value-conscious, clear about their choices and above all more environmentally aware. With the increase in global travel whether on business or for pleasure and the advent of globalization Indian consumers are exposed to high quality services offered in developed and emerging economies outside India as a result of which their service expectations have gone up over the years. Customer centric orientation therefore is no more one of the discretionary options marketer can exercise during difficult times but something which is mandatory for the survival and growth of their business. Benefits of being customer centric 1. Service Differentiation-. Degree of customer-centricity could indeed be a good differentiator. While service features, price, quality etc have been the traditional tools for differentiation, customer-centricity, being a basic philosophy of the organization is bound to be an effective differentiator. 2. Relationship marketing-Customer-centric organizations are more likely to pursue relationship marketing as a strategy, as opposed to transactional marketing. Customer life time value and life time profitability are the concepts that help understand the economic value each additional customer that remains loyal to an organization brings in. Findings of research conducted on the subject suggest that a 5% increase in customer retention can boost the profits by 35-95%. 3. Mass customization skills- Companies that embrace customer-centric approach are more likely to build up the expertise to manage the complexity and divergence of customer needs through mass customization than their counterparts who are process oriented. This greatly enhances the competitive advantage of the organization, apart from empowering the front line employees there by enhancing the customer retention levels. What if you are not customer centric? While in the short run service firms may not feel the pinch, in the medium to long term they will pay the price for not paying enough attention to customers needs and expectations. Services like railways, which are a monopoly, may still continue to attract customers who have no choice. But their big brother offering air travel services (Indian Airlines/Air India) have not been that fortunate. State owned organizations in service sectors such as communications (BSNL), banking (public sector banks), insurance, hospitality, energy, infrastructure etc will not survive the onslaught from their private

sector counterparts unless they metamorphose themselves into organizations that care. The writing on the wall is very clear and privatization is not the panacea for all the service deficiencies. How to stem the rot? There is no unique solution to the service providers not building enough bridges with their customers resulting in their alienation. However the strategies to be followed by service firms of Indian origin are going to be distinctly different from the ones to be adopted by MNCs operating from Indian shores. Let us tackle the Indian companies first. Traditionally Indian companies have been process oriented than being truly customer centric. Improved efficiency, cost reduction, operational excellence and productivity improvement have been their main areas of focus. Those manufacturers who have entered the services sector failed to shed this mindset. But customers expectations have been going up due to reasons highlighted earlier in this article and it is high time that the service firms changed their orientation by keeping customers at the center and organizing themselves around the customers. An occasional speech by the companys Chairman in the share holders meeting or well planted articles in newspapers/magazines by the CEOs offering lip service to customer centricism is certainly not going to help. While one can give some benefit of doubt to service firms of Indian origin which presumably are still on the learning curve ,it is very difficult to fathom the overly apathetic approaches of MNCs when it comes to customer centricism. Most of them have pioneered the best practices back home in US or Europe some of which have even been patented. They can not argue that they are still trying to understand the psyche of Indian consumers, as most of them have been around for more than a decade. The only reason why they are found wanting on providing satisfactory services to customers is their myopic approach coupled with professional arrogance both of which do not help their cause at all .By withdrawing certain facilities provided free of cost to customers are making them chargeable they are sending out totally wrong signals to customers. They do not seem to believe in involving customers while finalizing service standards which not surprisingly are more company defined than being customer defined. May be these MNCs think that customers do not deserve anything better during recessionary times. Time only will prove how wrong and short sighted their approaches have been as customers are not going to take such non customer friendly practices and policies lying low and will hit back strongly when they have some good service alternatives. Suggestions to stay connected with customers Whether it is Indian firms are MNCs, the following actions will go a long way in restoring customers trust and confidence. 1. Never lose sight of the purpose of your business. Maintaining the proper perspective calls for a customer-centric orientation and a positive service attitude. 2.Stay in touch with customers-Socializing with customers in between service encounters by sending greeting cards, gift vouchers etc is an effective tool for building long term relationships.

3. Involve customer in the service delivery process-Customer as a co-producer provides an opportunity to the service provider to fine tune the service delivery to maximize customer satisfaction 4. Do not ever avoid customers-The last thing a customer expects from a service provider is being cold shouldered when he (customer) is faced with a problem and desperately needs some help/advice from the service provider. Such a short sighted behavior on the part of the service firm will prompt the customers to seek new avenues. 5. Walk that extra mile-It is not the stated needs alone that need to be met. A service provider who takes the pains to meet the unstated or implied needs by his proactive approach will always be remembered by a customer as opposed to someone who merely complies with the technical aspects of service delivery. All the above suggestions reiterate the importance of customer-centric approach for building long lasting relationships. Conclusion Companies with a long term perspective who always stay connected with customers and never compromise on their strong fundamental values enjoy a better chance of survival and consequent success during good times and bad times. People at the top have a well defined role to play in ushering in customer-centric culture and by providing the required inspiration and leadership to their teams. Adopting customer defined standards, careful nurturing of human resources and building up strong bonds of a permanent nature with customers fortify the organizations against all vagaries of market .To conclude, there can be no better strategy for organizations to fight the current economic slow down than adopting customer-centricism to sustain their growth and profitability . ----------------------------------------------------