GO BE­YOND SALES TO STAY AHEAD

Com­pa­nies need to im­bibe a ser­vice-ori­ented cul­ture as cus­tomer em­pa­thy and en­gage­ment mat­ter most in the long run.

Business Today - - THE HUB - By Devashish Das Gupta Illustration by Raj Verma

MAN­AG­ING PROD­UCT BRAND, as well as cor­po­rate brand­ing, has be­come a chal­leng­ing area. To­day, each firm is mak­ing ef­forts to in­crease brand eq­uity and pub­lic re­la­tions (PR) has emerged as the favourite tool. So­cial me­dia is the most-soughtafter medium now for mak­ing the cor­rect noises at the right time and places. More­over, of late, cor­po­rate so­cial re­spon­si­bil­ity and its dif­fer­ent off­shoots have been sought af­ter as a part of the PR strat­egy.

Re­searches of David Aaker and Jean-Noël Kapferer are still very rel­e­vant when it comes to brand man­age­ment. How­ever, firms in In­dia have moved far ahead when it comes to es­tab­lish­ing and main­tain­ing a sus­tain­able com­pet­i­tive edge through brand eq­uity. In­ter­est­ingly, with the ever-in­creas­ing ar­ray of prod­uct vari­ants and brands, cus­tomers were never more con­fused

IF EV­ERY STEP THAT A COM­PANY TAKES IS TIED TO IN­CREASE IN SALES, WE BE­COME TOO MYOPIC

than now. To top it all, an in­ces­sant bar­rage of mar­ket­ing communications has cre­ated com­plete chaos. So­cial me­dia chat­ter and paid blogs are giv­ing a rich flavour to this clut­ter.

To be seen as a re­spon­si­ble/pre­ferred brand in the mar­ket, firms have gone too deep into com­plex, strate­gic think­ing. An­other di­men­sion that has cre­ated a dou­ble whammy for busi­ness lead­ers is that all th­ese ex­er­cises have been tied to some tight and tan­gi­ble sales tar­gets. Nowa­days, most of the In­dian firms are driven by yearon-year and month-on-month sales fig­ure com­par­isons. But then, if ev­ery step that a com­pany takes is tied to an in­crease in sales, we be­come too myopic. This trend was iden­ti­fied and very well pre­sented by Theodore Le­vitt in his cel­e­brated work ti­tled ‘Mar­ket­ing My­opia’, pub­lished in the Har­vard Busi­ness Re­view.

In his pa­per, Le­vitt has said that by be­ing too prod­uct-cen­tric, we be­come myopic and it takes us away from the dy­namic re­gion of cus­tomer evo­lu­tion. For in­stance, when oil was the pri­mary source of en­ergy and light, the Arabs thought they were gods till Thomas Edi­son came out with the elec­tric bulb. Sim­i­larly, the US rail­ways lost 80 per cent of the freight rev­enue to road­ways be­cause the rail­road com­pa­nies al­ways thought they were the only play­ers in the mar­ket in­stead of con­sid­er­ing them­selves as part of the trans­porta­tion ecosys­tem. I also found the ex­act fig­ure of In­dian Rail­ways’ freight rev­enue de­cline when they in­vited me a few years ago to con­duct a train­ing pro­gramme on ser­vices mar­ket­ing. It means whether it is in the US or In­dia, cus­tomer em­pa­thy is the key to sur­vival. An­other fas­ci­nat­ing ques­tion is there in the pa­per. The au­thor asked what would hap­pen to the multi­bil­lion-dol­lar de­ter­gent in­dus­try when dirt-free fab­ric would hit the mar­ket. In brief, there will be a few short-term mar­ket lead­ers who will rule for a decade at the most. But the sun­rise sec­tor of to­day will be a sun­set in­dus­try to­mor­row. And yes, ex­cep­tions will ex­ist.

Le­vitt’s pa­per was first pub­lished in 1960, but con­sid­er­ing the ap­proach of the firms to­day, it is still rel­e­vant. For a firm, sales can­not be the only life­line for sur­vival. A firm is a per­pet­ual en­tity, but its per­ma­nence comes from its cus­tomers. It is a re­la­tion­ship, an as­so­ci­a­tion. And this as­so­ci­a­tion is built through ser­vice. Again, ser­vice means serv­ing and serv­ing is all about hu­mil­ity. It is about run­ning that ex­tra mile for your cus­tomers. Many in­dus­try pun­dits go against this viewpoint, say­ing cus­tomers to­day are dis­loyal and they will go to any­body who gives a lower price or some­thing ex­tra. I counter this ar­gu­ment with the fol­low­ing ex­am­ple. With the on­slaught of or­gan­ised re­tail, es­pe­cially the malls, un­or­gan­ised re­tail out­lets should have per­ished by now. But this has not hap­pened. Con­versely, many malls have closed down af­ter in­cur­ring huge losses. The rea­son why un­or­gan­ised re­tail has sur­vived is that it has cus­tomer em­pa­thy on its side. The out­lets had clung to it and changed their busi­ness prac­tices. They started of­fer­ing small ser­vices and adopted a more per­son­alised ap­proach. As a re­sult, the hith­erto un­known ‘store loy­alty’ has sud­denly emerged.

Then again, ser­vice is an in­tan­gi­ble thing and goes much be­yond the lit­eral mean­ing of the term. It can be some hand­hold­ing some­where – maybe, ig­nor­ing a small er­ror of a cus­tomer. It also high­lights the ba­sic ap­proach of the firm. For in­stance, there is an In­dian air car­rier that has been in the news for all the wrong rea­sons. I had flown with them and was greatly in­con­ve­nienced by the staff’s in­dif­fer­ence to peo­ple in chal­leng­ing sit­u­a­tions. I am also told no ac­tions are taken against the car­ri­ers in In­dia and hence, such an ap­proach. But if an air­line with sim­i­lar price points and flight cov­er­age ar­rives to­day, the sce­nario will change.

So, ide­ally, what should a firm do? How should it ap­proach the mar­ket in the present sce­nario? We need to look at it by ask­ing th­ese vi­tal ques­tions:

• What is my busi­ness?

• Who are the stake­hold­ers on whom my sur­vival de­pends?

• What is the role of th­ese stake­hold­ers in my busi­ness?

• How can I serve my stake­hold­ers’ in­ter­est?

• Can a firm sur­vive in the long run with­out a hu­mane ap­proach to­wards its cus­tomers?

• What prac­tices should I build in my sys­tem for greater cus­tomer em­pa­thy?

• With the change in ap­proach, how much cost will I in­cur? Can I cover th­ese costs in the long run? • What are the in­tan­gi­ble and tan­gi­ble gains from my change in ap­proach?

Please note that cus­tomers also in­clude your in­ter­nal cus­tomers – your em­ploy­ees, to be pre­cise. Af­ter all, some of the best in­no­va­tions and cri­sis man­age­ment mea­sures have been pos­si­ble be­cause of the em­ploy­ees. In such crunch sit­u­a­tions, des­ig­na­tions or de­fined job roles do not mat­ter. What mat­ters most is one’s pas­sion for his/her job and the sense of be­long­ing­ness to one’s or­gan­i­sa­tion.

Here, it will be worth men­tion­ing that R.M. Lala’s works on the Tatas such as The Cre­ation of Wealth and Be­yond the Last Blue Moun­tain can be of great guid­ance in this area. They can as­suredly an­swer at least one ques­tion: How to serve your cus­tomers?

A firm need not change its sales-ori­ented DNA to cre­ate a cus­tomer-cen­tric or­gan­i­sa­tion. Some small changes in the plan­ning and im­ple­men­ta­tion pro­cesses should yield re­sults. First, we need to doc­u­ment the gaps in the cus­tomer fa­cil­i­ta­tion process. We need to ask how we can con­trib­ute to the cus­tomer value chain in our busi­ness. Again, a very crit­i­cal prob­lem that firms need to ad­dress is the gen­er­al­i­sa­tion of ex­cep­tions. If 2-3 per cent of cus­tomers mis­be­have, we can­not as­sume that all will do so. But yes, we need to ac­cept that only 2-4 per cent of cus­tomers will land into some cri­sis where we need to sup­port them. It has to be a CEO’s en­deav­our to plan sup­port for this small cross-sec­tion of con­sumers. If you ap­ply Pareto’s Prin­ci­ple of 80/20 (20 per cent of cus­tomers give 80 per cent of firm’s busi­ness) here, it will not work.

SER­VICE MEANS SERV­ING AND SERV­ING IS ALL ABOUT HU­MIL­ITY. IT IS ABOUT RUN­NING THAT EX­TRA MILE FOR YOUR CUS­TOMERS

A firm al­ways keeps ser­vice scope for HNI cus­tomers, but there is no such re­lief for oth­ers. The touch­stone of your brand im­age will be in such sit­u­a­tions. Also, serv­ing a non-HNI cus­tomer gives you valu­able cred­its from a PR per­spec­tive.

We need to bench­mark with the best in the in­dus­try on th­ese pa­ram­e­ters. We need to mea­sure how proac­tive we are as far as cus­tomers are con­cerned. At the same time, recog­nis­ing the staff mem­bers who up­hold th­ese val­ues is es­sen­tial as it would help im­bibe cus­tomer-cen­tric­ity. Here, the role of knowl­edge man­age­ment is the key to suc­cess. The def­i­ni­tions of ser­vice, cus­tomer em­pa­thy and long-term per­spec­tive vary from per­son to per­son. That is why the trans­fer of value sys­tems should be an in­te­gral part of any ori­en­ta­tion pro­gramme for new hires. For in­stance, the def­i­ni­tion of ser­vice at Maruti will be very dif­fer­ent from many other play­ers in the pas­sen­ger ve­hi­cle seg­ment. So, a per­son join­ing from Or­gan­i­sa­tion X will only bring in the ser­vice def­i­ni­tion of his/her pre­vi­ous com­pany and must learn and un­learn cer­tain things.

To achieve all th­ese and more, chief ex­ec­u­tives need to be schol­arly peo­ple. They need to de­vote at least 15 per cent of their daily time to study this as­pect of the busi­ness. It can mean meet­ing with cus­tomers. It can also be achieved by meet­ing the front­line staff. Sug­ges­tion boxes have been use­ful in achiev­ing such goals. But busi­ness lead­ers have to ac­cept that they can­not ap­ply the con­cepts of yesteryears to win over to­day’s cus­tomers. In his book Busi­ness is Com­bat, au­thor James D. Mur­phy has de­scribed it suc­cinctly when he says, “You do not fire last year’s Pa­tri­ots on this year’s Scuds.” The au­thor, a for­mer fighter pi­lot of the U.S. Air Force, went on to ex­plain that the Rus­sian mis­sile (Scud) was de­signed to out­ma­noeu­vre Pa­triot, an ear­lier air de­fence mis­sile sys­tem de­vel­oped by the US. Un­der­stand­ably, we can­not use the same de­sign if we want to suc­ceed; we need to im­pro­vise.

Ul­ti­mately, brands are per­pet­ual en­ti­ties and it takes years to build the brand im­age. There­fore, com­pa­nies need to find a more solid foun­da­tion in the ser­vice-ori­ented ap­proach. It will not only strengthen the brand im­age but will also a valu­able dif­fer­en­ti­a­tion for cus­tomers. Cul­tur­ally, too, it will en­sure a bet­ter sense of be­long­ing­ness within the or­gan­i­sa­tion.

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