Don't Oversell!

Do you know that the automobile dealers earn more by servicing your car than selling it to you?

That's true!

Not only do they earn on labor charges but they also earn double the margin on selling spares that too recurring than selling the car that's one time.

That's why they keep proper record of your last servicing and remind you without fail to get your car serviced.

Last time when I went to repair a dent on my car, the service station promptly told me that the car was not serviced for last two years. That I'd not changed the engine oil nor the brake oil.

I told him that resort to condition based maintenance (CBM) rather than time based maintenance (TBM).

As a TPM (total productive maintenance) practitioner, I knew how to check the condition of the oils rather than blindly change it just for the sake of it based on time or the kilometres run. This is especially true if your car is yet to run the kilometres specified by the manufacturer.

The other day, I got a call from the refrigerator company reminding me to renew the service contract that was going to expire at the end of the month.

I called him for the last service of the previous contract in force since it wasn't cooling adequately. A worker-turned service mechanic arrived. He quickly trained me and my wife on how to optimise the settings: The rotary temperature switch, the diffusers near every shelf as well as inside the deep freezer, etc.

When I told him about my reluctance to change the gasket as told by the earlier mechanic, he demonstrated to me that there wasn't any leakage at all.

In fact he showed that the gasket was a magnetic one: a typical mistake proof (Poka-Yoke) design.

The younger service mechanic who had suggested replacement (saying "बदल डालो") was an employee of the outsourced service contractor. Typically they earn more on spare parts as I said earlier in case of an automobile.

In quality parlance, we call this as overselling!

The worker-turned service mechanic of the manufacturer didn't oversell!

I was impressed, offered some juice to the guy!
No doubt that I renewed the contract at once!
Became the Brand ambassador!

Brand image is built like this!

So next time, you think of servicing, remember this blogpost.

You may lose in the short run if you don't oversell!

But, customer will keep coming back to you!!

You'll win in the long run!!!

Do You Force Customers To Quit

Insurance policy of both my car and scooter was about to expire.

I'd sold off the scooter. So when my insurance agent called me to renew it's policy, I ignored it saying the new owner will take care of it.

After a couple of weeks, when my car went for road tax payment I realised that it's insurance policy had expired. Actually my insurance agent did call me to renew car's policy but I'd inadvertently ignored his reminder thinking it was for the 'sold scooter'.

Red-tape that followed was inevitable. The procedure explained to me by the insurance agent was:

Take the scooter to the insurance company.
They'll inspect it before issuing the policy
They'll charge fine for 'discontinuation'.

Making the job 3D: Dirty-Danger-Difficult for the customer. 

While the insurance agent refused to followup with the company, the road tax agent came to my rescue saying "don't worry". May be the former was lacking motivation due to 'smallness' of business while the latter was interested in acquiring a new customer: Market development strategy as the jargon goes in management world! Theory of relativity!

The road tax agent got the insurance done from another company. Everything home delivered at just ten percent charge of the total official receipt amount.

In fact the policy issued by the competitor was priced at almost thirty percent discount.

The indifferent procedure of the previous insurance company and the behavior of it's agent (the first touch-point as it's brand ambassador) to take the customer for granted costed them business.

The Cost-Of-Poor-Quality (COPQ) to them was not only the loss of business but also a permanent loss of customers. I said loss of customers because bad-mouth publicity by every dissatisfied customer takes away more than one potential ones.

What's the learning?

More than the hard quality itself of your offering, it's the lack of soft quality, your indifference, that forces customers to call it a Quit!

So better to be-aware of behavior!!

Also read a few relevant blogposts hereunder:

In-a-problem ? No-problem! Dwell-a-while!
Customer or Custo-Mer ? 
Experienced A Delightful Payment !
An Experience of Heart-and-Soul
Do you keep curing your brand ? 
A customer gets what s/he deserves: Shoddy Quality! 
Listen to iceberg of VOC to acquire customers
Less With More And More Gets Sore
Should one care for value ? 
Can-changing-thoughts-change-a-nation
Ridiculous Poison-culture versus Maverick Kaizen-culture
Tolerate Once, Twice, Thrice? 
The Business Of Businesses
That's how some business partnerships work
Taken-For-Granted ? You Deserve It !!
Strategise To Achieve Targets Daily
Does recognition really matter
That's How Morons Work
Simplicity Of Theory Of Relativity

A customer gets what s/he deserves: Shoddy Quality!

A Customer Complaint made to a reputed taxi service in Mumbai was: 

1/ The taxi booked was not found until few minutes after the appointed time. So the driver was called (by customer) to find out his 'whereabouts'.

Taxi was found to be parked away on road. The driver refused to go to customer's colony when requested. He threatened to go away if the customer did not go where the taxi was parked.

2/ Nor had he informed his arrival although he said that he had. In fact, customer called him up a few minutes after 'no-show'. Attached screen-shot of the customer's cell shows 'outgoing' to driver's number but not incoming from his number.

3/ On telephone as well as in person, when the driver was asked 'why he did not come inside the colony' he arrogantly replied: "Our Taxi-Service-Provider gives too much importance to Customer. (In his vernacular language: "Ye Taxi-Service-waleney Customer ko aisa, implying 'chadhake', banaya hai''...and so on).

Supplier's response after over a week of registering the complaint was:

"Please accept my sincere apologies for the inconvenience caused to you."

Where does the above real-life practice fit into business principles?

How should, a service provider wanting to stay and flourish in business, look at a typical customer complaint?

The above transaction is a typical case-study of INDIFFERENCE that should be avoided at all the touch-points with all stakeholders especially with customers by both the front-liners as well as the rear-end officers. (Reference 'world of Kaizen' book).

What is a customer's rightful 'expect'ation after a typical complaint (that hardly 4% of the dissatisfied customers choose to make):

1/ First of all the first-aid so that s/he gets quick relief. (In addition, apology is anyway expected but it's of no use without the First-aid.)

2/ Right to know specific details of what exact action was taken to prevent the situation from occurring in future.

How does a typical supplier respond. What INDIFFERENCE do most suppliers engage into:

1/ First of all they deny the complaint then they defend.

2/ They express dry apology without taking preventive action. Such an apology is like rubbing the wound. (The taxi service in above case fell in this category.)

3/ They don't keep customer informed about specific details of what exact action (if at all) was taken to prevent the situation.

4/ They expect customers to forget service-errors s/he had faced during the year in lieu of a yearly-gift-packet and/or sweets. While the gift 'dry-of-emotions' reinforces their vow to quit, most customers shamelessly accept it in exchange of an unexpressed abuse (to the supplier).

Funnily, a typical supplier doesn't mind recruiting a well-paid customer-care officer who is well-trained in handling an errate customer, and further training him in writing flowery letters so that 'issues' are taken 'care' of.

Result:  Customer continues the service provider only until s/he finds another option so that s/he can QUIT. Meanwhile, s/he plays the role of a devil-publicity-officer 'bad-mouth'ing the supplier's services among not less than a dozen prospective customers.

As someone says, it takes 10 times more money and efforts to acquire a new customer.

Isn't it wiser instead to invest this money in training associates on what the customer 'expects' rather than spending wastefully on reactively 'managing' the effects of indifference.

Should a customer bother about such 'small' issues?:

If s/he wants a change in such careless attitude, then yes!

S/he must play her small-bit-a-role though. Else, s/he should not blame suppliers for shoddy quality of service. S/he must help to get service-error out of the system which otherwise anyway will keep popping up above the carpet exactly when unwanted.

If and when it eventually does pop-up then the corresponding customer got what s/he deserved. Also s/he makes herself deserving to what s/he will get in future.

Who comes first: Current customer or New customer?

Sometimes companies tend to forget remedying 'lost sales' in the 'current-market-current-product-current-customer' quadrant in their enthusiastic quest to get 'additional sales numbers' by trying to acquire new customers with new offering in current or new market.

It is like pouring in a pot from top that has a hole in the bottom.

I had two cellphone SIM-cards: one from company-A, the other from company-B.

After exercising 'mobile-portability-right' to switch over from company-B, I received not less than 8 calls from them. 

Half the calls received were from their marketing officer with an 'attractive' offer to switch over company-A SIM to (his own) company-B. Perhaps he was ignorant that I had surrendered my other (company-B) card due to their unsatisfactory service. Their market-intelligence' seemed to be smart though to have list of the competitor's clients.

Balance half calls were from their customer-care officer to find out why I had 'switched' from company-B. Calls were backed by an apology letter.

So on one hand marketing was busy working on acquiring new customers while customer-care department was making a failed attempt to 'retain' current one. On the other hand operations department seemed to complacently (mis-)handle existing customers inadvertently forcing them to quit.

No doubt that balancing the act of working on current and new/diversified offering, (for) current and new customers, and (in) current and new markets is really a complex and an intelligent process. 

But retaining a 'current customer' and hence 'current sales' is relatively a far easier and economically more viable strategy that should be perfected by plugging loopholes/deficiencies in services before applying 'Penetration', 'Product/market development', and 'Diversification' strategies.

While the 'current customer' provides cues for loopholes, the later strategies to acquire 'new customer' need at least 10 times more investment (in time, efforts and money) than the former. As a student, I had often felt disgusted when photocopier shop near my college used to keep my 200-pages running-order on hold intermittently in order to service a single-copy customer (jumping the queue).

The former strategy is a play in current known-terrain. A satisfied current customer is more likely to be a brand ambassador providing leads to prospective customers in new terrain (environment).

Doesn't a bird-in-hand need to be cared for before the two in the bush as goes the old saying?

That's how some business partnerships work

Take-care Take-care 

Free-pack could be a Curse-pack Dear customer

That you may murmur later

These Maiku (My Haiku) poetic lines got shaped while I was on a flight.

Seat pocket in front of me was stuffed with reading material and 'offers-on-board' for 'captive target market'.

Here is a picture of one of that about 'business partnerships' and that of an 'air-pillow' kind of pack received free-of-cost (courtesy a partner). It was a delight.

I photographed them both ignoring embarrassing look by my co-passenger. That's how I behave: an idiosyncratic fellow taking odd pictures such as around even a wash-basin, catching 'innovative styles' of someone blowing nose.

My so-called delight was short-lived as I found only four biscuits inside, against expectations that the inflated 'air-pillow' size pack seemed to raise. The innovative shape of the biscuits made them 'look bigger' that actually were 'smaller in weight'. 

The pack itself was a 'bag full of gas': A near-empty ppromise! 

Isn't it too much that a miser customer like me expects on a budget-airline. No wonder that the co-passenger was embarrassed.

Anyway, coming back to business of this blog-post, that's how some business partnerships work if not most.

The other day someone asked my opinion on an offer that came his way: "Indigo diesel available for 2.5 lacs. 2012-model."

I told him what an old car dealer often suggests. Price may be good but mechanic should check out engine condition. Check if it's an accident-car (changed-color remark on RC book is one clue); Kilometers ran (check if the dial is changed); Single-owner (and a known owner is good); Clear papers, etc.

My friend appeared insistent: "It is available from Maruti's second-hand dealer. So the offer should be reliable."

I shared with him my learning "from reliable sources" that there do exist 'partnerships' as a part of a typical 'business strategy'. Sometimes they are in the interest of customer. Sometimes they are Cozy-Nexus solely in the interest of the supply-chain itself as in following example:

- A typical 'second-hand-dealer' (let's call him a SCD), for instance, has an arm's length connection with a 'new-car-dealer' (let's call him a NCD) who makes an 'exchange offer'.

- NCD sends a valuer of SCD while offering a test-drive of a new vehicle.

- After exchange-deal is through, the SCD takes away old car and sells it on demand-supply criterion or with a mark-up of 30% margin whichever is higher. 

- So both the SCD as well as NCD do have vested interests in trying to push through the respective deals. Rightly so for them although not for customer! They are in business!!

In such cases the marketeer tends to oversell. But a prospective customer should behave business-like when s/he comes across an 'attractive-offer' like "Indigo diesel available for 2.5 lacs. 2012-model". After all her money is 'hard-earned'.  

The old-car dealer's suggestions referred earlier need to be viewed in light of this. That's also a reason why a single owner, a known owner as a direct-seller (without a middle-man) in-for a 'distress-sale' is more likely to be a good value-deal. Provided of course a reliable mechanic certifies condition even if it means paying his fees to inspect for 'some strings attached', if any.

Is it a value-deal then you need to ask every-time someone claims it to be a 'Unique-offer'?

Is it a value-deal when you go to buy biscuits that 'look-bigger'? or
Is it a short-term value on offer when so-called 'partners' offer you something FOC (free-of-cost) with a pack that looks disproportionately bigger? Are there any strings attached to the offer? or
Is it a value-deal when a telephone subscriber gets a movie-ticket free if s/he buys one on Tuesdays?

Is it a value-deal when you get 'Buy-2-Get-3' kind of free-offers?

Sometimes yes! Other-times no!!