Customers generally remain loyal. But, if they are ignored by a business, they move to the competitors, even if they have been with a company since decades. Here is an example how some 50 years old firms can also ruin itself by its apathy towards customers.
There is a very old and very well-known sweet shop, in Malad-East, Mumbai, near railway station. We will call it Ajanta. It is about 50 years old and in the hands of the second generation now. It is known for its quality sweets. The shop has a very good brand image and people feel pride receiving or gifting sweets bought from this shop. In old times, people from other suburbs also used to come to Malad, specially to buy sweets from this shop. Similarly, some visitors to Mumbai, also came asking for this particular shop, to buy sweets to take back home.
But, 50 years and two generations later, the old shop has lost is edge and is losing its business fast. Competition has crept in and it has failed in holding its fort. It could not keep pace with changing times, changes in customer preferences and in market dynamics. Its business has become stagnant over last 10 years. It has not grown itself significantly. The old, loyal customers are moving away to competitor shops in Malad-West. The 50 year old name is not favorite of the current population any more. It is struggling to live up to its historical reputation but is poised for a not-so-glorious future in stark contrast to the shining past.
On the other hand, some 20 years back, a new shop came up in Malad-West, some 100 metres away from Ajanta. We will call it Emem. In last two decades, it has grown phenomenally. Today, Emem is a very popular name in Malad as well as neighboring suburbs. The reputation of Ajanta in older times, is currently enjoyed by Emem and people flock from all over to buy sweets from Emem. Now, it is a matter of pride to receive or gift sweets from Emem, just as it was from Ajanta earlier. The total store size of Emem is at least 10 times of Ajanta. Same is the size of its turnover in comparison to Ajanta. Emem has been growing by leaps and bounds, and it has taken over the market share of Ajanta rapidly.
What is the reason for Emem’s success at the cost of Ajanta’s failure?
The reasons are complacency and sheer apathy towards customers by Ajanta. Resting on its laurels, it has completely ignored its customers and their concerns. When you go to buy something from this shop, you reach a huge counter which is manned by the attendants who take orders and service the customers. The only interface a customer has is with these attendants, who are all equal, having no distinction in duties and responsibilities. A particular customer is attended by one attendant who will do everything himself e.g. give samples for tasting, inform rates, take orders, pack the products, refill the storage bins if the product is out of stock, find out the carry bag for delivery, go to order punching counter and get the printed order slip, collect payment, give it to the cashier and then deliver the goods and balance amount back to the customer. Till he completes one customer, he will naturally not be able to attend another customer. That is understandable. But the problem is, there is absolutely no mechanism to ensure that customers are attended in proper sequence or their waiting time is minimized. The one who shouts louder, gets the attention of one of the attendants. Others have to keep waiting. There is just nobody to take care of customers, while they wait.
The whole process is so highly inefficient, that it takes very long time to buy anything from there. There is no distinction for a small order or a 500 times bigger order. Nobody tries to find out if the customer is there to by goods worth Rs. 5 or Rs. 50,000. They simply do not listen. In fact, the attendants are just not concerned. You wait for half an hour just to get noticed by one disinterested attendant, who is too tired to attend to you with any enthusiasm. Even if you scream for attention, one of them will come and tell you “I have only two hands, I cannot do more than what I am doing. What do you expect me to do?” At such instances also, the boss, who is sitting at the centre of the shop, collecting cash, simply turns a deaf ear to the situation and leaves it to the whims of the attendants. At scores of instances, I have seen frustrated customers leaving the shop annoyed by too much of waiting and indifferent attitude of the attendants. But nobody seems to care…! Not even the boss, who does nothing more than collecting cash, throughout the day…! No wonder, customers go looking for other options.
And they found an option in Emem. It has taken some very important steps in building its empire. It has created a huge facility in front of the railway station. To attract walk-in customers, it started fast food counters. It started giving discounts on buying sweets for distribution after passing an examination. The various percentage of discount was linked with marks scored and the scheme became very popular with students. It also offers special prices on various festivals, for the special traditional sweets popular during those festivals. It also branded its Lassi and heavily advertised it. It has started a sit-in restaurant. It set-up bulk selling division to supply to offices, hotels and other catering agencies. In short, Emem has used each trick in the marketing books to gain customer acceptance and achieve outstanding growth. More than marketing, it has succeeded in attracting and retaining customers. This has enabled it to charge a premium over the prices of Ajanta. This is really a remarkable achievement.
On the contrary, Ajanta unsuccessfully tried to copy some of the initiatives of Emem, like fast food counter, discount schemes also. But the execution of all this was finally given to the same indifferent attendants, who always made a mess of the situation, driving the customers away. Their handling of the customers is frustrating, but the owner does not seem to care.
Ajanta’s sorry state of affairs is due to its complete negligence of how the customers are being treated at its counters. Its owners are too busy to find out the quality of customers’ experience at their shop. They seem to have concluded that the shop is an old, famous name, so its reputation for good quality will keep bringing the customers forever. Unfortunately, today’s customers have many choices and many demands. They want fast service, courteous people, efficient processes along with quality of products and good prices. Even though Ajanta has better quality than Emem, its failure on other important aspects is pushing the customers away to its competitors.
50 year old reputation or excellent quality also cannot retain neglected customers annoyed by the indifferent attitude of those who attend them. The customers go where they are attended well. So, to retain them, we must treat them well. We need to make their experience pleasant. As the owner we must be interested in knowing what happens to the customers at our establishment. We should not delegate the responsibility of gauging the quality of customer’s experience to somebody else. The owner must gather that knowledge himself, first hand, and if he finds some shortcomings, he has to ensure modifications, if required.