J.D. Power trac­tor cus­tomer ser­vice study hones prod­uct, ser­vice qual­ity

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J.D. Power, the Sin­ga­pore-based re­search and con­sult­ing ser­vices, in the In­dia Trac­tor Cus­tomer Ser­vice In­dex (CSI) Study 2018, has found that cus­tomer sat­is­fac­tion with the trac­tor af­ter-sales ser­vice was higher (up 28 points on a 1,000-point scale) when own­ers have their trac­tors ser­viced at their own premises, than when they were not of­fered this op­tion, though they wanted it, by their dealer. The com­pany, which has its pres­ence in many parts of Asia, con­ducts sur­vey and re­search in var­i­ous fields that in­clude au­to­mo­tive, in­for­ma­tion tech­nol­ogy and fi­nance in­dus­tries in the Asia Pa­cific re­gion. In an in­ter­ac­tion with Sricha­ran R of Auto Com­po­nents In­dia, Yukti Arora, Prac­tice Lead, Agri­cul­ture and Con­struc­tion Equip­ment, J.D. Power, said, “In a rapidly trans­form­ing sec­tor in­flu­enced by grow­ing in­no­va­tion, cus­tomer ex­pec­ta­tions of what de­fines an ex­cep­tional ser­vice ex­pe­ri­ence keep chang­ing.” Edited ex­cerpts:

Q: How do the In­dian agri­cul­tural and con­struc­tion equip­ment mar­kets fare now?


Agri­cul­ture is the pri­mary source of liveli­hood for about 58% of In­dia’s pop­u­la­tion. In­dus­trial de­vel­op­ment in ru­ral In­dia has in­creased house­hold pur­chas­ing power and in­come sta­bil­ity. The gov­ern­ment tar­gets to dou­ble the av­er­age in­come of a farm­ing house­hold by 2022. Rid­ing on the back of two high growth years (FY 17 and FY 18), the In­dian trac­tor in­dus­try is pro­jected to grow 8-10% in FY 2018-19, with pos­i­tive growth mo­men­tum ex­pected to spill over into the next fis­cal pe­riod.

Some of the key el­e­ments that will help to in­flu­ence the de­mand for trac­tors across In­dia in the com­ing years will be fi­nanc­ing avail­abil­ity, loan waivers in some cases, scarcity of farm labour, an in­crease in the us­age of trac­tors in con­struc­tion and other com­mer­cial ac­tiv­i­ties, gov­ern­ment’s push to­wards suc­cess­ful im­ple­men­ta­tion of a sys­tem to war­rant min­i­mum sup­port prices to the coun­try’s farm­ers, a fo­cus on in­creas­ing ir­ri­gation in­ten­sity and im­prov­ing the over­all in­fras­truc­ture in­clud­ing ware­hous­ing and cold stor­age fa­cil­i­ties. This, in turn, will boost the de­mand for trac­tors.

In or­der to im­prove pro­duc­tiv­ity in the agri­cul­ture equip­ment mar­ket, farm equip­ment man­u­fac­tur­ers are con­cen­trat­ing on in­te­grat­ing tech­nolo­gies like robotic sys­tems, GPS, and Google Earth nav­i­ga­tion sys­tems in ex­ist­ing In­dian agri­cul­tural ma­chin­ery. Many AgriTech star­tups are work­ing to­wards ad­dress­ing in­put chal­lenges of the in­dus­try and a lot of fund­ing has been raised by these star­tups to in­vest in pre­ci­sion agri­cul­ture tech­nolo­gies in­clud­ing data- cap­tur­ing de­vices and farm

man­age­ment soft­ware. Cus­tom hir­ing cen­tres (CHCs) which of­fer ex­pen­sive farm equip­ment on rent to farm­ers - who can­not oth­er­wise af­ford high-end ma­chin­ery - can also play a piv­otal role in boost­ing crop pro­duc­tiv­ity and ef­fi­ciency of agri­cul­tural op­er­a­tions.

Con­struc­tion equip­ment (CE) sales in In­dia grew 17% in 2017-18. Rapid ur­ban­i­sa­tion, in­creas­ing for­eign in­vest­ments and surg­ing de­mand for cus­tomised equip­ment are just some of the ma­jor fac­tors ex­pected to boost de­mand for con­struc­tion equip­ment in In­dia in the com­ing years. The in­creas­ing num­ber of pub­lic-pri­vate part­ner­ships and gov­ern­ment ini­tia­tives, such as smart city de­vel­op­ment projects, will also help to aid the CE mar­ket in the com­ing months.

In­dia’s pro­duc­tion of CE is ex­pected to dou­ble over the next 5 years, given the ris­ing do­mes­tic de­mand as well as, in­creas­ing ex­ports to the coun­tries in South­east Asia, Africa, Mid­dle East and China. OEMs are also har­ness­ing dig­i­tal tech­nolo­gies in CEs through the in­te­gra­tion of IoT and Big Data through an ad­vanced telem­at­ics tech­nol­ogy. These telem­at­ics sys­tems are widely used in the heavy equip­ment in­dus­tries to alert users to part fail­ure and main­te­nance alerts. These tech­nolo­gies are be­com­ing in­creas­ingly ad­vanced and pre­dic­tive, help­ing max­i­mize prod­uct up­time.

The gov­ern­ment’s stim­u­lants and in­vest­ments to fast for­ward in­fras­truc­ture projects pri­mar­ily go to­wards the de­vel­op­ment of roads and high­ways, re­new­able en­ergy and ur­ban trans­port, coal min­ing, upgra­da­tion of air­ports, metro rail projects, etc. which will all have a pos­i­tive im­pact on the CE sec­tor. Ad­di­tion­ally, the gov­ern­ment is un­der­tak­ing re­form in its pro­ce­dures and poli­cies such as the in­tro­duc­tion of the Real Es­tate (Reg­u­la­tion and De­vel­op­ment) Bill, along with ad­dress­ing en­vi­ron­men­tal is­sues, for­est clear­ances and land ac­qui­si­tion is­sues to boost de­vel­op­ment. Rent­ing heavy equip­ment, as op­posed to own­ing it, will also prove to be ef­fec­tive.

Q: How do you an­a­lyse and help cus­tomers in the ar­eas they re­quire? What is the process? Yukti:

The syn­di­cated trac­tor stud­ies help to bring the voice of the cus­tomer to the trac­tor man­u­fac­tur­ers so that they can use the in­sights from the field to en­hance prod­uct per­for­mance, qual­ity and af­ter-sales sup­port to match cus­tomer ex­pec­ta­tions. Cus­tomer griev­ances and dis­sat­is­fac­tion with prod­uct qual­ity and ser­vice sup­port is sys­tem­at­i­cally cap­tured through a se­ries of tar­geted ques­tions in the sur­vey. Their sat­is­fac­tion rat­ing is ob­tained on sev­eral prod­ucts and ser­vice re­lated at­tributes to as­cer­tain the gaps in ex­pec­ta­tions and prod­uct per­for­mance or ser­vice de­liv­ery.

Q: In your re­cent 2018 In­dia Trac­tor Cus­tomer Ser­vice In­dex (CSI) Study, Mahin­dra was ranked high­est. Please share us some points on which they over­took their com­peti­tors? Yukti:

Mahin­dra scored the high­est on cus­tomer sat­is­fac­tion with

both af­ter-sales ser­vice and parts op­er­a­tion. Mahin­dra has the high­est per­cent­age of cus­tomers (68%) who say they will def­i­nitely rec­om­mend their au­tho­rised dealer to a col­league, rel­a­tive or friend. They also re­port the high­est per­cent­age of cus­tomers (49%) who said that their trac­tor was re­turned to them cleaner af­ter the ser­vice and has the high­est per­cent­age of cus­tomers (85%) who men­tion that they were pro­vided with a ser­vice cost es­ti­mate by their au­tho­rised dealer when they con­tacted him for an ap­point­ment. Nat­u­rally, Mahin­dra has the high­est pro­por­tion of cus­tomers (93%) who state that the amount they paid for ser­vice was in line with their ex­pec­ta­tions. This year’s stud­ies also found that Mahin­dra has the high­est pro­por­tion of cus­tomers (82%) who men­tion that at least 70% of the parts were avail­able at the deal­er­ship on av­er­age when or­dered. They also have the high­est pro­por­tion of cus­tomers (27%) who are de­lighted with the qual­ity of parts.

Q: How the study is go­ing to benifits the con­sumers? Yukti:

Trac­tor man­u­fac­tur­ers are work­ing dili­gently based on the study in­sights, to­wards fur­ther re­fin­ing the prod­uct qual­ity and fo­cus­ing on im­prov­ing the prod­uct-mix, as well as stream­lin­ing their dealer ser­vice to of­fer un­par­al­leled af­ter-sales sup­port to cus­tomers. This is re­flected in the con­sis­tent in­crease in cus­tomer sat­is­fac­tion scores ob­served on Over­all Prod­uct and Ser­vice, as seen in our trac­tor stud­ies over the last 2 con­sec­u­tive years.

Q: How the trac­tor com­mu­nity gets ben­e­fited from the sur­vey? Yukti:

The stud­ies help man­u­fac­tur­ers iden­tify weak­nesses in prod­ucts and ser­vices and tap into rapidly chang­ing cus­tomer re­quire­ments, to of­fer higher qual­ity prod­ucts and ser­vices aimed at en­hanc­ing trac­tor own­ers’ sat­is­fac­tion. They also pro­vide spe­cific bench­mark in­for­ma­tion to en­able OEMs to iden­tify best-in­class per­for­mance and un­der­stand prod­uct and ser­vice qual­ity that res­onate best with the cus­tomer, and thus de­sign and tar­get their of­fer­ings ac­cord­ingly.

Q: Last year, you said that there was a growth in the unau­tho­rised ser­vice cen­tres. How is it now? Yukti:

Ser­vice de­fec­tion rates are con­tin­u­ing to in­crease among trac­tor own­ers who are not sat­is­fied with the ser­vice ex­pe­ri­ence at their au­tho­rised deal­er­ships, and such cus­tomers steadily pre­fer unau­tho­rised or lo­cal ser­vic­ing op­tions even within the war­ranty pe­riod. To man­age the liq­uid cus­tomer ex­pec­ta­tions, the trac­tor in­dus­try needs to ex­plore new di­men­sions of un­der­stand­ing and sat­is­fy­ing their tar­get au­di­ences whose ex­pe­ri­ences are be­ing con­stantly shaped by their in­ter­ac­tions across dif­fer­ent sec­tors.

Q: What are the new up­com­ing trends in the agri­cul­tural and con­struc­tion equip­ment mar­ket? Yukti:

Pop­u­la­tion growth, ris­ing in­come lev­els lead­ing to in­creas­ing con­sump­tion, and in­creas­ing ex­ports favour the growth of agri­cul­ture and CE in In­dia. Fi­nan­cial avail­abil­ity and in­cen­tives from the gov­ern­ment will drive mech­a­ni­sa­tion in the com­ing months and years. Im­ple­men­ta­tion of sci­en­tific farm­ing prac­tices and an in­creased fo­cus on agri­cul­tural in­fras­truc­ture such as ir­ri­gation, high yield­ing seed va­ri­eties, fer­til­iz­ers, ware­hous­ing and cold stor­age fa­cil­i­ties will boost farm mech­a­niza­tion and there­fore the de­mand for trac­tors.

In­creased use of trac­tors for non-farm­ing ac­tiv­i­ties will fur­ther pro­pel their de­mand. With the trac­tor OEMs of­fer­ing in­creased price dis­counts, un­der­tak­ing ag­gres­sive mar­ket­ing ac­tiv­i­ties and of­fer­ing a wide prod­uct range to choose from, more and more farm­ers will be en­cour­aged to em­brace the ben­e­fits of in­creased mech­a­niza­tion. In­no­va­tive ap­proaches such as trac­tor rentals or pay-per-use model, would also sig­nif­i­cantly in­crease trac­tor de­mand.

Go­ing for­ward, the In­dian con­struc­tion equip­ment mar­ket will con­tinue to be driven by con­struc­tion, min­ing and other in­fras­truc­ture in­vest­ments. The macro-eco­nomic sit­u­a­tion,

gov­ern­ment pol­icy and avail­abil­ity of fund­ing will sup­port this up­surge. With sec­tors such as ir­ri­gation, ports, and wa­ter con­ser­va­tion show­ing po­ten­tial, it will start driv­ing de­mand in the com­ing times. The Union Bud­get 2018-19 has al­lo­cated around $92 bil­lion for the in­fras­truc­ture sec­tor. Such a fre­netic pace of ex­e­cu­tion over the com­ing years will mean a fur­ther surge in de­mand for con­struc­tion equip­ment. In­dia is also wit­ness­ing sig­nif­i­cant in­ter­est from in­ter­na­tional in­vestors in the in­fras­truc­ture space. Be­sides the afore­men­tioned in­di­ca­tors, ad­dress­ing the CE in­dus­try’s skill de­vel­op­ment needs, clear­ing im­ped­i­ments to rent and leas­ing of CE, and es­tab­lish­ing strin­gent qual­ity norms and bet­ter process con­trols in the project im­ple­men­ta­tion, would be some key im­per­a­tives for in­creas­ing CE us­age in con­struc­tion ac­tiv­i­ties.

Q: In the study, what are the ma­jor dif­fer­ences you found be­tween the first and lat­est? Yukti:

Cus­tomer ex­pec­ta­tions have soared over the years and their tol­er­ance to­wards poor qual­ity prod­ucts and ser­vices has de­creased. As cus­tomers in­creas­ingly de­mand con­ve­nient door-step and im­me­di­ate ser­vice, ser­vice de­fec­tion rates are in­creas­ing, and

cus­tomers are turn­ing to­wards unau­tho­rised ser­vic­ing op­tions when they are dis­sat­is­fied with the ser­vice ex­pe­ri­ence at their au­tho­rised deal­ers.

The con­sis­tency of prod­uct and ser­vice de­liv­ery is not solely suf­fi­cient to de­liver growth and cus­tomer loy­alty. An ac­com­pa­ny­ing need to proac­tively meet ev­er­grow­ing cus­tomer ex­pec­ta­tions is also re­quired. With in­creased in­for­ma­tion avail­abil­ity and prod­uct choices abound across HP seg­ments, cross-shop­ping rates have gone up, push­ing down the pro­por­tion of pre­de­ter­mined buy­ers.

Cus­tomers no longer rely solely on word-of-mouth for their new trac­tor pur­chase. Deal­ers thus, need to fo­cus on build­ing their value propo­si­tions to at­tract these new-age trac­tor buy­ers. They need to em­pha­size not only on the prod­uct’s func­tional ben­e­fits but also on meet­ing unique cus­tomer re­quire­ments per­tain­ing to their na­ture of the ap­pli­ca­tion, type of land or soil, a va­ri­ety of im­ple­ments be­ing used as well as, spe­cific needs of in­di­vid­ual de­mo­graphic seg­ments.

In­dus­trial de­vel­op­ment in ru­ral In­dia has in­creased house­hold pur­chas­ing power and in­come sta­bil­ity. As ru­ral

in­come rises, ru­ral con­sump­tion is shift­ing from ne­ces­si­ties to buy­ing dis­cre­tionary goods and life­style prod­ucts, in­clud­ing mo­bile phones, tele­vi­sion sets, two-wheel­ers and cars. Ru­ral con­sumers have been trad­ing up, and their con­sump­tion bas­ket is be­gin­ning to mir­ror that of the ur­ban con­sumer. Even though ru­ral cus­tomers re­main price-con­scious buy­ers, low prices alone are no longer the driv­ing force be­hind their new trac­tor pur­chase. These cus­tomers are in­creas­ingly seek­ing bet­ter util­ity, im­proved fea­tures, greater com­fort and eas­ier main­te­nance from their new trac­tors. With ex­pe­ri­ences seep­ing over from one in­dus­try to an­other, they ex­ert pres­sure on trac­tor man­u­fac­tur­ers and deal­ers to re­think their strate­gies and tai­lor their of­fer­ings to trans­form the cus­tomer ex­pe­ri­ences and main­tain their com­pet­i­tive­ness in a fastchang­ing mar­ket.

Q: Go­ing for­ward, what will be the new as­pects that you will in­clude in the next sur­vey? Yukti:

We be­gin each study with a re­view of the pre­vi­ous year so that we can pro­vide per­spec­tives and in­sights that are trend­ing and rel­e­vant to the in­dus­try and for the con­sumer. We are still in the process of fi­nal­is­ing our 2019 stud­ies.

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