The number of middle class in India has doubled over the past decade. As per (National Council of Applied Economic Research) NCAER, this has gone up from 5.7% to 12.8% in 2010. Middle class is defined as those with an income range of Rs 2 lakhs to Rs 10 lakhs. That’s a little over 100 million today, but by 2025-26 the number of middle class households in India is likely to more than double from the 2015-16 levels to 113.8 million households or 547 million individuals. This combination of economic growth and bottom of the pyramid innovation has made products that were once luxury accessible.
RPG Cellular was my account at Ogilvy & Mather Advertising back in 1996, and boy, did I feel important walking down Mount Road with my Motorola brick making calls at Rs 16.80 per minute (complimentary, of course!) Today, anyone with a semblance of an income has a mobile phone. The Nano has made the car way more accessible than ever before. Low cost housing is on the rise. But all of these success stories are about products – not services. Products are non-linear – you can build a machine to churn them out and the only constraint is that of producing the (synthetic) raw material fast enough.
Hanging out on Twitter, it’s hard to miss the number of annoyed customers. One person is holding a tweetathon about his missing GPRS, another is ranting about a fridge that doesn’t function on arrival, another is staging a marathon whine about how long it takes for his bank to open an account. We’ve all been there (and if you haven’t yet shared it with your pals – go ahead and use the comment section on www.paulwriter.com)
The reason why we have so many unhappy customers is that we are a supply-driven economy. The huge surge in demand means that many objects have a waitlist – a train ticket, a seat in Starbucks, or a college admission. The new Honda Amaze has a three-month waiting period. A Royal Enfield bike might require you to wait up to a year. Most housing projects are delivered after three years or more. School admissions in many cities need you to sign up almost on conception.
If you are a producer, your biggest problem is satisfying the demand. You are entirely focused on delivery, not what happens afterwards. Whether it is the high-end IT firms struggling to hire people, or my neighborhood salon trying to retain stylists, they’re all in the same boat. Management bandwidth is entirely consumed with delivery, with not much energy left for after-sales or even sales.
A quick search on LinkedIn titles which have the word ‘customer’ in them gives the following break up:
United States – 81,10,440
United Kingdom – 11,55,870
India – 7,98,876
Canada – 7,87,473
Ok, not so scientific. But the United States – which has much higher customer expectations – has TEN times more number of these customer-loving designations than India. (And we have to discount even this low number for India – some of those located in India are definitely working for the US market, as India is a global customer service center hub).
But let’s step back. As we saw from the data, there are millions of a new consuming class being created every year. It is tempting to just sell them something and then move on to the next million. Sure, sure, there will be some collateral damage, but it is possible to make a quick sale to the next lot, right? Currently, this is probably true. But it won’t last because it banks on information asymmetry i.e. by the time the bad reviews hit, you will be able to complete the next sale.
What is customer centricity?
It means putting the customer at the heart of the organization and structuring the business around this. It also means focusing on the customer experience as the key driver as opposed to say, profitability. What? Customer happiness vs profitability? Yes, now you see why true customer centricity is a very big achievement. But it isn’t as wild as it sounds – let me give you three examples.
Example 1: I’ve done six transactions in six months with an online grocery site. They emailed me in month 6 to say that I hadn’t paid for the first transaction. I pointed out that they would not/should not have delivered the goods in that case, and anyway they should have spotted the anomaly much earlier when I would have had a better chance of recollecting the transaction. The founder got involved but insisted on getting the payment. I’ll pay. Some day. But I ain’t ever shopping with them again.
Example 2: We are investing in a flat with a reputed real estate firm. Right after the initial payment was completed and the documents handed over to them for processing, the sales person said that he made a ‘mistake’ and the rate was actually Rs 100 more per sq foot. Again, yes, we’ll pay, but will not recommend the builder to anyone else.
In both these cases – where the fault was documented as being from the seller’s side – a customer centric approach would have waived the additional charge in the larger interest of a happy customer.
Example 3: I bought a packet of chips which had unfortunately gone stale before the expiry date from Westside Gourmet Store. The customer service person I spoke to refused to confirm that they would refund the parking fees if I brought the pack back for exchange. I tweeted my unhappiness. Within a week a gift hamper with assorted goodies was hand-delivered by the store manager.
This is an example of being customer centric. Of putting money where you mouth is.
This is hard. Especially for smaller, newer businesses where every paise counts. But this is the kind of thing that builds loyalty, which in turn, in the long run, delivers better profitability. The online world relies heavily on user reviews and word of mouth – thereby rewarding acts of customer centricity.
So. Think about it. Do you have processes that allow your staff to choose customers over profits?
The article first appeared in Marketing Booster magazine
Good article. While the idea is not new the difference is in having systems and empowerment in an organization to act in favour of the customer when she is right or when the company is wrong.