Class Discussion 1

Customers are Forever

Tridip Roy, VP Customer Services at Crysta White Goods, was in for a rude shock when he met Kavita Khanna who had hosted a dinner in honour of Roys new appointment. Full of optimism, he asked Kavita when she would like to purchase a Crysta washing machine. As a friend, probably he could work in a discount as well. Kavitas response was very curt, I do not want brands anymore. All brands are the same-Videocon to Electrolux. They all just wash clothes. If they were really different from one another, people would have upgraded their machines by now. Tridip realized he had a very disgruntled customer here. He probed deeper, So Kavita, what are you looking for in a washing machine which you havent found? Kavitas reply was to the point, I want a company which knows how to handle its customers. Instead of fuzzy logic and silent driers, I would prefer a human voice when I call in to complain, not a voice recording machine. This set Tridip thinking. In fact he had been thinking about Crystas future for some time now. Competition was increasing. Players were becoming aggressive, physical product differentiation was merely cosmetic and customer interest was declining. The loss of consumers to other brands was a small problem in comparison to the larger problem of how to retain Crystas existing customers. Roy believed that customer bonding was the way forward. The company had to build relationships along with the markets. Further, as Crysta planned to enter the refrigerator and dishwasher markets, Tridip was acutely aware that the market would make or break Crysta depending on how they perceived the promise delivery on the washing machine. He was also concerned whether some years down the line, when existing customers decided to change their equipment, would they still opt for Crysta products? Right now, when new products are launched, will consumers choose Crysta over its rivals? Tridip realized that consumers were becoming increasingly aware of product usage. He had a plan in mind. He called in Girish Vyas, Customer Services Manager, and gave him the following brief: Lets examine the common grouses that consumers have with servicing and product delivery. Customer servicing is an important part of product delivery. It is an assurance of product performance from the manufacturer. Since we are planning to keep our customers with us in the long run, we need to find out what makes customers change their brands. Go out and interview 25 consumer durables consumers, study their experiences with their current brands and find out if they are likely to buy the brand again. Girish was also instructed to listen to every respondent carefully and tape-record the conversations. Then he was to tabulate them across common issues. Tridips logic was simple: The more

we build into our service what they want, the more difficult it will be for competitors to eat into our marketshare. Girish returned a month later, having executed his brief, respondents interviewed, conversations taped and data ready. Some responses:

Archana Tuli (Water Purifier Owner) Very unhappy with the preventive maintenance contract from Purifo, her brand of water purifier. No service person shows up for 10 months. And then someone just 4 months old in the company, with not much information on what to offer customers, turns up at Archanas place without even a prior appointment! When Archana asked him why nobody from the company had turned up before (as in the contract it was mentioned that the company would service the purifier twice a year), the careless answer of the technical service person was, You should have called the company. When he eventually came around to servicing the purifier, he dirtied up Archanas kitchen and was rather clumsy too while handling the equipment. Finally he said that one of the filters would have to be changed and she would have to pay for it. Archana blew her top,But the service contract clearly mentions I do not have to pay anything extra, that the company is supposed to change it once a year FOC. She was shocked when he admitted he had no clue about this. Now Archana was a very disillusioned customer indeed. She could not believe that any company could treat her so badly by sending such an untrained, inexperienced, unaware person for a product in which she put her faith. In the end, when she switched on the machine after servicing was over, water would not flow. That was the last straw. She tore up the contract and shunted out the service man. Ritikant Sharma (Credit Card Holder) A Monet Bank credit card holder for the past 3 years and a regular payer of dues, one month he gets his bill 10 days later than the usual 22 nd with a charge of Rs 675 for overdue interest. On complaining the manager stuck to his guns that the statement was sent on time and that it was Ritikants fault. 6 letters later, including one to the MD of the bank, the overdue interest was waived off but it left a bitter aftertaste in Ritikants mind. What about all the months when he had paid before the due date? What about the fact that he had never defaulted before? Was it not important to the bank that the customer was right? Was the Rs 675 worth all the hard feelings between the bank and the customer? With these thoughts Ritikant picked up a letter which he had received a few days ago from another credit card company to

become their member. immediately.

He planned to surrender the Monet Bank card

Divya Sharma (Washing Machine Owner) Crysta washing machine owner, Divya Sharma realized she is just a number for Crystas customer service centre. 6 months ago she started complaining about problems with her washing machine. A month ago when she called again to followup on the old complaint she was asked to provide once again all the details. On being told that the details have already been provided many times over, the customer service person stated that since she was just a stand-in for the regular employee, she could not boot the system and so Divya would have to give her the details all over again. Divya complained to Girishs field personnel Tell me what am I getting for being your customer? The V-belt in the machine has been making creaking noises and I have complained for that also and am now told that the new vendor which is supplying these V-belts to your company has been supplying defective goods. That frightens me. I bought a product from a company which does not even have proper QC checks in place? Why should I be your customer ever again? The pattern Ritkant saw emerging from more such stories was that even for products that were not new to the Indian market, such as refrigerators and air conditioners, there was a rush merely to achieve larger volumes. None of the innovations introduced in the newer models was being translated into real benefits by fitting them into customers needs. For instance a four door refrigerator has a deep freezer section which no brand actually guides customers on how to use. Non vegetarian customers could buy and stock large quantities of meat and avoid going out every time to buy fresh meat. But what about vegetarians? Do the deep freezers also allow vegetables to be stocked for long periods? No brand advises on this either. One finds out later that one has to invest in deep freeze boxes and zip lock pouches to use the deep freezer section. Couldnt the company have included this as a value add feature? No thought is given to what customers actually need. Shampoos, soaps, washing machines and refrigerators, whatever the product, these are all being offered to underdeveloped or developing markets without consulting the consumer. We just assume 2 things, Tridip felt: 1) Propensity to consume and 2) purchasing power exists here. There is a hunger, so feed it. Does any brand really think about life after sales? Tridip came to the conclusion that a sale is not over when the cheque is received. It is a lot more than that. A sale is a relationship that continues for the life of the machine or product and the buyer. Customers are forever.

Discussion questions: 1. What affects consumer behavior strongly enough for people to stop buying from a company? 2. Service is vitally dependent on people. What are some ways of ensuring good service happens? 3. Do first time buyers and second time buyers place the same emphasis on a given set of deliverables from a product? Discuss with examples.