Monthly Archives: May 2011

How a business loses its old, regular, loyal customers?

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.

Why do our great strategies and plans fail?

A lot of time is spent in devising strategies and grand plans to get more customers, get more business and earn more profit. But, you may have observed. a lot of such grand plans fall flat. The projections made with a lot of fanfare just do not see the faintest light of the day. Why? What goes wrong?

I will narrate one very recent experience, relevant to the reason for such failure.

A world leader magazine publication repeatedly sent me promotional emails to “Get 12 issues for Rs. 500 only.” Many of us may also have received this offer email. I got interested and clicked the link in the email to find more details about the various subscription offers. I decided to subscribe for 3 years, which was the longest term available for subscription. I wished to send them a cheque of the subscription amount. For this, I tried to find out an address, email or phone number of some Indian contact, whom I can approach.

Unfortunately, there was no India contact detail on the magazine’s web site. Finally, I got email address of their Singapore office. I contacted them to help me out writing “Please let me know where can I send a cheque for the subscription for 3 years?”.

To this, I got a prompt reply from their Singapore office thanking me for my interest in subscribing and giving me two contact numbers of their Indian Distribution Partner ‘s office in Mumbai. Incidentally, their partner is the biggest media house of India. The Singapore mail also contained an inquiry serial number, which was quoted in subject line, in all the subsequent mails.

I tried calling the two Mumbai numbers given by Singapore office. For two days, both the numbers kept ringing. On the third day, one number was picked up by some person, who gave me other two numbers. I tried calling these new numbers again with the same result. No reply on the first day…! One more days later, the number was picked up by somebody, who asked me the purpose of my call. I explained. She said “Please give me your number, I will call back in half an hour.”. I gave her my number and waited. For 2 more days…!

Then finally, I wrote back to the Singapore office about my failure to get any response from their Indian partner. They replied back promptly and apologetically, that someone would revert back from India office, ASAP. Then, after 2-3 more days, one email came from somebody in their India office (no name of the sender, no phone numbers), instructing me to send a cheque for an amount, which was for one year subscription.

I wrote back to them that I wanted to subscribe for THREE years, which was mentioned in my mail clearly, and send me the form and details for the same. It has been FIVE weeks and I have got no reply…!

No wonder, I have given up on subscribing. If at the time of subscribing I have to pass through all these hassles, what may happen during the next 3 years when 153 weekly issues are expected. If they don’t arrive, I will have to go from pillar to post for getting my concerns addressed.

In short, the greatest magazine in the world, partnered with the best media house in India, lost one customer for 3 years…! At the time of forming an alliance, both the companies must have gone through a great deal of strategy formulation, planning etc. A lot of effort, time, money must have been made to think about how to get more customers, more business and earn more profit from this deal.

But the final result? Disappointing sales performance. Lost opportunities. Frustrated and angry prospects and customers. We also may have experienced such frustrations in our businesses. Many of our plans do not give desired results. The targets are not achieved, even if the product is excellent and there are customers in the market more than willing to buy our product.

Many a times, a grand advertising campaign is started and customers find that there is nobody to give proper reply on the phone numbers mentioned in the advertisements. The whole exercise becomes a wasteful expenditure. Remember, as it is obvious in the above incident, the best in the world organizations are also susceptible to such weaknesses in the execution game, due to poor quality of manpower handling customers’ queries. The problem is very commonly found in many of the companies.

What is the reason for this wide gap between great plans and actual, poor, mediocre results?

The name of that gap is poor execution. In the enthusiasm of planning and strategy making, the final link with the customer is not given proper attention.  Those persons in the organization who come in the actual contact with the customer are not properly trained or motivated to take care of the inquiries, concerns or grievances of the customers or prospects. The customers reach the company through these people who pick up phones or those who meet them on counters or receptions and handle their inquiries.

And, if these people, who are the only link of the company with the customers, do a shabby job, it damages the company’s business immensely. As the business owners, we must wake up the this reality and attach it the highest importance to improve this situation.

So, please find out, in your company who speaks to the customer first? How do they speak? What do they speak? How is their language? How is their tone?Are they well-mannered? Are they friendly and helpful or rude and unconcerned? Do they have proper information ? If they do not have proper answers, what do they do? Do they make customers wait for a very long time? Does the customer feel welcome? What is the customer’s experience after talking to our these people? Do they make the customer happy or unhappy?

Actually, one can call up their own company phone numbers as an outsider just to find out how outsiders’ calls are attended. Or, we can ask some of our friends to make some dummy calls and find out how the calls are being handled.

A lot of effort is spent in getting a customer to inquire for our product or service. And finally when he/she does, if they find some irresponsible attitude of our company people and give up on our company’s products or services, should the customers be blamed for our pathetic performance?

Please fix this final link of your company with the customers. On this link depends the performance of your company.Your company is as strong as your weakest link. If this vital link is left weak, the company will be weak. Strengthen it, as soon as possible, otherwise strategies and plans will remain unachievable.

Angrez style management practices must be adapted to Indian cultural sensitivities

Recently, while I was talking to the HR Head of a reputed company, he mentioned one very important point of impact of culture in organizations and management.  He was referring to an incident about a new junior executive joined in his company. The young man had previously worked with an MNC after completing his MBA. This was his second job. As could have been a culture in the MNC firm, as soon as he joined here, he started calling people by their first names. He did not realize this, but people started resenting him. They began to keep away from him. He did not get support from them. Many of the clients with whom he interacted also complained to his senior about his way of talking to them. He could not understand the reason. He approached this HR Head to find out what was wrong. After discussing with the young man, his senior and other colleagues, the HR Head found out the real cause of the problem. The young man’s habit calling people by their first names without the customary suffix or prefix that people were used to (e.g. Mr Ramesh, Rameshji, Ramesh Saab, Rameshbabu, etc.) was disturbing people.  He explained to the young man about the problem and suggested the corrective practice of calling people by the names they are used to being called.

The young man was puzzled. He argued, “But in my old company, this was the practice. We used to call our CEO also by his first name. This gave rise to an atmosphere of openness, you know. It fostered improved teamwork and bonding. Why can’t we have the same culture here?”

The HR Manager could empathize with the young man’s enthusiasm towards adapting newer, western practices. But, he was aware of the lack of social awareness on the part of the young man. He explained “I agree to what you are saying. But, we live in India. In Indian culture, we give a lot of importance to RESPECT. And one of the ways of showing respect is by how we address a person. In western countries, the person may be called only by the first name, but in India, sometimes some prefix or suffix is added like Rameshji, Ramesh Saab, Rameshbhai, Rameshbabu, Ramesh sir etc. This practice is a part of Indian culture of showing respect to seniors or elders.”

The young man was adamant. “But today, we are living in globalized world. We cannot continue this old fashioned practices of previous centuries. To be at par with the world, we must change to First Name Culture in our company. I urge you to implement this cultural change and start First Name Culture. It will improve out company’s image and performance.”

The HR Manager explained, “You may implement such practices with your foreign business partners or associates, but in India, it is not that simple and not advisable, too. You need to understand the language differences before implementing First Name Culture here.” He gave him an example :

For example, in English : Ramesh, how are you?

can be translated in Hindi in 3 ways :

(a) Ramesh, Aap Kaise hain? OR

(b) Ramesh, Tum Kaise Ho? OR

(c) Ramesh, Tu Kaisa Hai?

Now if we start calling everybody by first name, many people may not have the wisdom to use appropriate Hindi translations, when they speak to the same person in Hindi or other Indian language. This adaptation requires a certain degree of wisdom and intellectual capacity on the part of the person involved in the communication. In the absence of that, they may hurt the sentiments of the other person. Also, we may have got exposed to the global practices, but there are outsiders like customers, suppliers, associates and  millions of others in our country who are yet to be aware of many such practices. First Name Culture is just one example. There are many such practices, where mindless imitation is sometimes funny, appropriate or out of place. We may follow such practices while dealing with foreigners, to express our awareness and respect of their cultures, but by suddenly shifting to such superficial practices in our Indian work practices, we may inadvertently hurt sentiments of such people. By trying to call a big company’s senior manager by his first name who can be a big prospective customer for us, we may lose him forever.

The young man’s enthusiasm waned, but he was not convinced. HR Head was clear about the inappropriateness of changing some superficial practices, without understanding the underlying values in the culture.

Culture is the way we, as people, respond to various events. It gets manifested in various symbols, rituals, habits, languages, practices, images etc. The core of the culture is the values that we hold.  Values are the broad tendencies to prefer certain states of affairs over others. These represent the ideas that people have about how things “ought to be”. They are among the first things we learn as children, implicitly, not consciously. These values may remain unconscious to those who hold them. they can’t be directly observed by outsiders, but can be inferred from our behavior under various circumstances.

Respect is a very important part of Indian values. By adapting some practices like “First Name Culture”, we may bask in the satisfaction of being modern, but the reality of cultural difference remains and it may lead to some misunderstandings. Thoughtless imitation of western practices without realizing its repercussions may give rise to some undesirable outcomes by offending people’s sentiments and sensitivities. We must ensure that our organization does not jump into such superficial practices. We are Indians and we must be proud of our Indianness.

In my opinion, the tendency to adapt to such practices is nothing but a management wannabe-ism. We must not want to be a wannabe. Still a lot of our own potential is intact, waiting to be explored. Instead of being blind followers, we must be wise and selective. We must not sell our cultural values for some shallow management fads. If we do not exercise discretion, we will be left somewhere in the middle, neither in the West nor in the East.

That belonging to nowhereness will be similar to Shah Rukh Khan’s character in Subhash Ghai’s Pardes, in which towards the end of the film SRK reaches a bus stop somewhere in rural India, rejected by both the Indian as well as American families. On asked by a villager “Kahaan ke ho sahab?” he aptly replies “Kahin ka nahin….!!!”

Following quote of Peter Senge (Management Guru, Author : “Fifth Discipline”) drive the point home, precisely.

My intuition is that India and China will move somewhat together, but in very distinctive ways. But I think the thing that will be really common to both of them will be the fact that they won’t be able to do this without reconnecting to their heritage. They will have to develop a confidence that they can do this as Indians and they can do this as Chinese. They have learnt a lot from the west but they don’t have to copy, they cannot create an Indian or a Chinese version of a Western model. The Western model itself is basically bankrupt. It does not give enough side to the human side of development.

I think I need not say more on this…!

Customer ko baatli mein kaise utaarne ka???

Customer Ko Baatli Mein Kaise Utaarneka?

For a success in selling a product, the most basic requirement is a good, saleable product, which satisfies a need of the customers. But, I have seen a very common tendency in some business people where they think that the key success factor in selling any product is the selling skill of the sales person. Even if the product is weak or is not useful to the customer, a good sales person can sell it. And hence, we see comments like  the following praising a good sales person :

He can sell Ice to Eskimos.
He is a selu guy (whatever that means)…!

Woh kisi bhi customer ko baatli mein utaar sakta hai…

I remember an incident where I was sold by such a selu sales person. And in fact, it happened twice…!

We had gone for a quiet sit-down dinner at an upmarket restaurant in Malad-West. It is part of a chain of restaurants in the city and claims to be a leader in providing a wide range of authentic international cuisine from many countries. The ambience is good, the setting matches with the image and the rates in the menu were also in correspondence.

We, 7 persons, had gone to celebrate my wife’s birthday, along with a friend’s family. When we were seated on the table, the waiter came and gave menu cards. Then after some time, his senior came to take the order. When we started to order for starters, he said “I suggest you a today’s special starter. You take it, it is very good.” We agreed for it. Then came the order of soups. Again, he said, “Why don’t you take this xyz soup. That will be very good.”  When asked, why these items are not mentioned in the menu, his reply was “They are special items, which we don’t prepare daily. Hence, they are not on the menu.” His recommendations continued for each and every item that we ordered.

Also, when we selected some vegetable dish, his suggestion was to order two or three plates of the same vegetable, because otherwise, according to him, it will be insufficient for 7 persons. Because of this, lot of extra food was ordered and in the end, a lot of food was left unused. Secondly, when the bill came, it was realized that each item ordered as per his suggestions had price tags 30 to 40% higher than the highest rated menu items in that product category.

We were in celebration mood and hence, did not question much, but a faint feeling of being taken for a ride surely entered the mind.

After this outing, we went to the same restaurant after few months again with some other group, for a similar occasion. This time, too, the same experience repeated, although with a different waiter, at a different table. This time, when we finished meal and received the bill, it got clearer that the waiters in this restaurant are trained to dupe the gullible customers by such tricks to sell whatever they are told to sell, when the customers are in vulnerable situations, when they are with other guests and are not in a position to inquire much or argue.

After this, I talked about this to other friends and understood that this practice was prevalent at many branches of this famous chain of restaurants. All were sold the “Today’s Special” items and quantities more than they could consume.

Now, in sales parlance, such sales people are treated as wizards. They are celebrities, because of their selling skills.

They can sell Ice to Eskimos….

They are the selu guys….

Woh kisi bhi customer ko baatli mein utaar sakta hai…

Now, wait a minute.

Think of selling as an opposite of buying.

How many of us, who happen to be at the receiving end of such enthusiastic zealots trying to sell us things which we don’t need are happy after being duped by them? How many of us will trust some other sales person from the same company?  What will be our respect for the products and practices of the company?

If a sales person humko baatli mein utaarega to kaisa lagega?

Will we love that company? As a customer, will our relationship with that company be a long lasting one? Surely not… So, if we as a customer don’t like to be sold or duped like this. Will our customer like such practices?

Before our relationship with the customers suffers, we must stop trying selling ice to Eskimos who don’t need it. Instead, we must focus our energy and efforts on building good quality products which satisfy customers’ needs and on building long term customer relationships based on trust and credibility.

So, customer Ko Baatli Mein Kaise Utaarneka?

Customer ko, baatli mein utaarne ki koshish nahin karne ki…