A lot many factors like social media, exposure to the West and media have played a significant role in changing the rules of customer relationship in today’s day and age. We set out to find the changing dynamics of customer relationship in India.
As pointed out in a study by TNS, good performance alone cannot crack the complex code that governs the strength of your customer relationships and the sustainability of your business. As competition intensifies, it is essential to get smarter about the experiences that matter, and deliver return on the bottom line. The landscape of customer relationships is undergoing a fundamental shift. Today’s consumers have more information than ever at their disposal; they are spoilt for choices when it comes to acting on it. Customers are increasingly challenging; they are expensive to retain, and even more expensive and difficult to replace. And the disappearance of predictable customer loyalty is therefore putting profit margins under pressure across markets and categories.
We wouldn’t be exaggerating when we say that with social media available at the fingertips of a customer, they have the power to either make or break your brand if you fail to deliver the kind of customer service they expect. Negative experience has the ability to spread like wild fire but the good news is, so is a good experience!
An in-depth TNS survey of over 40,000 customers across 20 countries shows relationships being eroded even in traditionally ‘sticky’ sectors. Half of US consumers now replace their car with a different brand; 70 percent of Russians opt for a different company when replacing their TV; 12 percent of Germans have cancelled an insurance policy in the last year; 9 percent of Spaniards have chosen a different fixed-line telephony provider.
India storySetting the concept for the story, Parijat Chakraborty, Executive Director, TNS India shares on where India stands today when we talk of customer relationship. He says: “India is very matured in customer relationship management and many Indian best practices are being adopted worldwide. The unique challenges that the country faces are also working as a catalyst to invent different, newer processes and approaches towards successful management of diverse customers. In some industries, India enjoys one of the highest customer satisfactions against global benchmarks. For instance, Indian mobile phone users, in general, are one of the happiest in the world. Reasonably good services (yes, it is better than many advanced countries, like USA and Germany) couple with low expectation level of relatively newer user base make the satisfaction scores go up.”
Having said that, Chakraborty feels that, in this context, it is worth evaluating the fundamental question, if it is at all a good idea to provide truly satisfying experience to all customers. The answer is NO, if you look at it from the business benefit point of view. He explains: “Beyond a certain level, a highly satisfied or delighted customer does not do much good to the company. In fact, sometimes the cost of making and keeping the customer delighted is higher than the incremental business benefit the customer brings in. What is best of the customer is not necessarily right for the company. The challenge is even more complex in a country like India, where several customer segments have diverse and often conflicting demands. A successful company thrives by optimum balance of service delivery, customer expectation and economy of operation. A truly satisfying customer experience is often a mismatch to the context of optimisation.”
Hitting right on target why customer relationship is important to drive in repeat sales and reiterating the golden mantra of retail that maximum sales come from repeat customer and also why word-of-mouth publicity is the best, Avijit Dev, Head – Marketing and Institutional Sales, Episode (a brand dealing in silver gifts or artefacts), reveals: “From telephonic calls to our retail outlets in 2001, to e-mails to our information centre in 2007 serving as an all-purpose, one point of contact for our customers, Episode customers have seen communication channels and remotely rendered services evolve. Although communication channels in general have undergone a sea change, our customers are still reliant on telephones, both fixed and mobile, and on a few occasions on e-mail solutions. Understanding the preferences of customers, we rely completely on non-intrusive ways of communication to its customers and will continue to do so.”
He further adds: “It has always been a two-way connection with our existing clients in different segments of the market or various locations in the country or abroad, rather than a one-way PR. We make sure that the customer gets assurance in quality of product and at the same time finds it easy to connect with us at any time they may require. After all, more than 75 percent of our revenue comes from our existing clientele. We keep our customers updated by sending out mailers to them on product launch and festive occasions every year. Our special initiative to reach out to our corporate clients also has been successfully in operation since 2005.”
Catering to a niche set of target audience, Sangeeta Boochra’s retail entity, which is also on her name and is a part of the parent brand – Silver Centrre, understands the importance of being active on social media. Boochra shares: “We use an intelligent blend of different media platforms to drive our communication strategy. The communication mix varies from collection to collection. We use digital marketing media, e-mailers and SMS social media marketing and SEO extensively, as the target audience is familiar with these platforms. For collections targeted at smaller cities, we use print and letters to reach out to our audience. We do extensive trunk shows and fashion events regularly to connect with people.”
Talking on behalf of Odel, Otara Gunewardene, Founder and CEO, Odel Plc shares: “The loyalty programme of Odel is an important customer relationship initiative used to reward and recognise customers. The Odel loyalty programme started back in December 2011, and has grown its membership ever since. As a brand we were able to build strong ties with customers keeping them informed of the latest arrivals. We make sure that our communications are simple and relevant to the target audience and as a result the rate of response has been outstanding. The iPad surveys conducted in our main store gives us an opportunity for customers to provide their feedback on service experience. Commendation books are placed at every cashier point and the feedback is collated on a monthly basis.” Back in our country, the First Citizen programme by Shoppers Stop is a legendry programme for other retailers to follow.
As we notice, there is a mix of traditional and modern strategies for taking care of customer relationship and no one strategy works well independently. So it would not be right to say that with social media and the Internet ruling our lives, we should focus more on building advanced apps to keep in touch with the customers and let go of the traditional ways of calling individual customers or sending them e-mailers and snail mails to announce special offers and events.
Best practices to followCommenting on the best practices that a retailer should follow to ensure that there are no gaps in the customer relationship that is offered, Chakraborty suggests: “It is nearly impossible for retailers to fight the price war with their online counterparts. The business model does not support that. However, they do have some unique advantages, which even the online giants cannot copy. The most differentiating one is the complete experience of the brand-product-ambience. These three together provide a satisfying experience to the customer, which brings them back to the store again and again.”
The report points out that understanding customers and their individual and competitive contexts means integrating insights from an ever-expanding range of sources. CRM data, operational metrics and social media listing are all essential ingredients for cracking the customer code, and identifying the experiences that can deliver most impact and the best business outcomes.
This matters because, as such individual-level analysis often proves, the best is not always right for a company when it comes to customer experiences. Over-investing in experiences where you are already good enough can often draw resources from those better suited to building sustainable, motivating customer memories. Similarly, businesses are often guilty of racing for the cutting edge, without ensuring if new technologies or services really offer a competitive benefit that will drive preference.
Sharing a word of advice on what retailers should not miss when it comes to customer relationship, Abhineet Boochra, Director – Business Development, Sangeeta Boochra (a brand of Silver Centrre) shares: “Today, attracting and servicing customers has become a high priority task. In such a competitive global marketplace, companies must focus on attaining new customers, retaining the loyalty of existing ones, and enhancing customer satisfaction in a holistic manner. Customer relationship strategies vary widely across different industry verticals, and each has its own set of challenges.”
Changing dynamics of customer relationship
Gunewardene rightly points out: “How customers are contacted has evolved from traditional to modern methods. Using traditional methods, marketing managers knew that half of their advertising cost is a waste but they did not know which half. On the contrary, modern methods are more targeted and we exactly know the effectiveness of promotions and the Return on Marketing Investment (ROMI). Social media, mobile and e-mail are widely used today for promotions. Social media has enabled brand engagement and a dialogue between the customer and the brand, which is a two-way approach rather than a monologue. Customers today are increasingly using social media to recommend brands to their friends.
“Online channels have enabled customers to compare different options online, customer reviews and feedback and in addition experience augmented reality fitting rooms, which provide a more exclusive retail experience. It is also important to observe what our customers say about us and respond swiftly to suggestions on social media platforms. On our part, it is important to identify customers who act as advocates of the brand and reward them for their loyalty.”
Gunewardene further states: “Mystery shopper surveys are also conducted on a regular basis to ensure that our employees comply with the service standards set by the organisation. The results are shared with employees and strategies are drawn to bridge gaps, if any, in service delivery.”
Talking about India and the changing market dynamics, Chakraborty concludes: “Customer relationship in India is more heterogeneous than that of any other country in the world. While one can define and typecast customer behaviour in countries like US, UK, Australia, etc., India as a whole does not show any single and particular characteristic. It is because of the inherent differences that exist in many parts of the country. Different geography, culture, historical background and economic status make India behave like a cluster of countries and not like one country. As a result, companies need to adopt different strategies for different types of customer segments.”
According to Chakraborty, there are some trends that are visible across the length and breadth of the country, namely:
– Quality and value consciousness as opposed to price-consciousness
– Increasing need of speed on all aspects of relationship (delivery, resolution, et al.), thanks to more than half of the consumers being below 35 years