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Catalyst - Customer Relationship Management


Keep that customer satisfied

Ranjyoti Barooah

Nothing is more crucial in a slowdown than retaining customers. In the near future all companies will be service companies and the sooner they learn to satisfy customers, the better.

PAUSE. In a nutshell, I believe that is what the Indian consumer is doing. So, the Indian economy is expected to grow (only) by five per cent, despite what Mr Yashwant Sinha would want us to believe. Most consumers can't expand the GDP to its full form, so why would they pause in their consumer behaviour? The obvious answer seems to be, sentiment. The ephemeral term that we wring our hands when other explanations fail.

Considering that the markets are full of discounts, those who wish to buy (cars, houses, holidays, durables, toothpastes and so on) have rarely had it so good. So, what are we waiting for? Despite the hype, how many Indian jobs have really been lost? If we total all the temporary job cuts in the sunrise sectors they would still add up to an infinitesimal fraction of the Indian middle class. I believe there seems to be the confluence of a few simple economic premises.

Firstly, if a large body of people believe that things will be worse tomorrow, they will act accordingly. These collective actions trigger off lower sales, margins and profits, which cause downsizing and layoffs, fuelling the sentiment that things are indeed terrible.

The second simple truism of purchase behaviour for deferrable expenses is, if we believe things will be cheaper tomorrow, why buy today. To elucidate further, none of the clients I deal with have laid off employees, specifically due to the events of the past one year. Yet, walk into their offices, you can sense a feeling of impending doom and despair.

Yes, international travel bookings for the hospitality industry have fallen sharply. Please consider how strong was brand India as a tourist destination in the first place? Repetitive meetings with the Government and industry leaders spawn yet more sub-committees which result in no action. Substantive economic issues get lost in a morass of political gamesmanship. If the hotel industry (say) chose to charge some of the highest tariffs in the world, while in the context of a weak destination brand, we were simply waiting for a disaster to happen. Similarly FDI . When were we ever a hot destination? Country after country tells us about our bureaucracy, our red-tape and our corruption.

Now we would rather blame everything on a ubiquitous global recession, than fix any of the things that need fixing. The entrepreneurial environment in the country remains mistrustful, obstructionist and wasteful.

Is it pure coincidence that the most powerful economy on the planet is also the one believed to be best suited to foster a spirit of entrepreneurship? I am not for the moment trying to negate or emphasise the impact of the global economy. I am trying to raise the point of our many maladies before the onset of the global downturn, which were impelling us in a certain direction anyway. I believe we've had a terrible collusion of sorts to maintain the status quo.

Governments steeped in the mindless rhetoric of the past, and corporations avoiding real change is what we have. Lots of industry chambers are more focused on how to keep them out, rather than making ourselves more competitive. Of course, industry cannot be blamed entirely. Consider the tea industry, which for years fought the import of cheaper teas.

The industry is hamstrung by laws which institutionalise a high cost structure, so some laws (including labour laws) have to change, else the industry will die a slow death. Yet, we see no political consensus on the issue. One privatisation of a sick aluminium plant, to an investor with an investment plan, lead to countless wasted hours in the legislatures as well as the attempt to draw the judiciary into yet another aspect of governance. There's no point comparing ourselves with the stupidity of the past, compare (if we must) with the sagacity of others, who were comparable with us just a decade ago and are now decades ahead of us.

Lets try to view things as a continuum, rather than one dictated by specific events. In the year to come lets try to fix a few simple things. Of course, easier said than done. Industry and Governments are not short of brains to list out what needs to be done. Most importantly, change isn't a function of what they do, but the sum total of what we all do. His Holiness, the Dalai Lama, never tires of reiterating the value of ceaseless individual action, thereby rendering the philosophical version of micro economic activity.

So, as a group of professionals engaged in the business of consumer marketing, what should we do? Retain customers, is my belief. This belief has two words, to take up the second, i.e. customers. In the near future, all companies will be service companies, and we are not service-oriented people.

Most manufacturers rarely demonstrate any interest towards their consumer and except to make a sale. Obviously, there is no charity involved. It is simply good business to keep investing in consumer satisfaction. Look around you, what does your own company do to keep track and address consumer satisfaction issues? If any of you can list more than two initiatives, of which any one has been around for more than a year, I would be delighted to know.

We need to respect and listen to our consumers. We cannot expect loyalty from consumers when we ourselves do precious little to demonstrate our commitment and respect for them. It doesn't matter what particular business we are in, we are all in the business of satisfying customers.

There are innumerable anecdotal references, when we, as consumers, have railed at the sheer indifference of companies to whom we had given our hard-earned money for a product or service. Chalta hai forever seems to be the rallying cry.

As consumers we ourselves have to do our part. Stop putting up with shoddy products and services . Say no. This, I believe, is the strongest foundation for an effective customer-maker/seller relationships. Simply not using a particular product or service isn't enough, we'll have to help create a stink. Even a simple act such as going back to a shop and complaining to the retailer will have some effect . Over time (I hope), this will force a more responsive relationship.

Moving on to my first word, retain. Stemming from the above, even in these times, we continue to emphasise more on acquisition than retention. We all know that it is cheaper to retain customers than to acquire new ones. Yet, we act largely to acquire new customers, hoping that they will somehow become loyal once they start buying our products or services. It doesn't work.

Don't blame customers for indifference when that is all we give them (mostly). Caring for customers isn't only about smiling faces or glossy newsletters. Customers, who are smart enough to buy our product, are also smart enough to see through half-hearted attempts. If we start from a position of mutual respect, we'll be surprised to see how little customer loyalty costs (in hard money terms).

Customers do not crave for freebies (only), rather like a trusted friend, they want you, if they need you and expect to be recognised by you. Start with something as simple as this, and measure the results, I suspect you'll be pleasantly surprised. Bangalore-based BPL took the trouble to call its customers and leave with them a pager and phone number of their `BPL buddy'. As Anand Narsimha, VP Marketing, BPL, tells me that the results have been astounding .

How much did that one phone call really cost; most durable companies have extensive networks anyway. Why wait for something to break down and wait for the customer to come to us in a foul mood, when a proactive step could convert the same consumer to, not just a brand loyalist but a brand advocate. So, I'd love to see customers talking to companies and being heard.

Then lets talk about downturns and brand promiscuity.

(The author is CEO of brandquiver.com)

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Stories in this Section
All things must pass. Will this too? Hardsell Fair & lovely Activity toys Sleek watches When times are tough Marketing in the time of 'R' Keep that customer satisfied It's payback time, folks! Playing on emotions
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