The Hindu Business Line : Customer service beyond after-sales and rewards

SINCE the early 1990s, the services sector in India has been paying a lot of attention, or so it would seem, to delivering customer service and satisfaction. Service brands across categories from banks and credit card companies to airlines and retailers have been jumping on the `our customer is important to us' bandwagon. This is most evident in service brands attempting to impress their target group through brand positioning that uses customer service as a differentiator. ICICI Bank says `We make banking a pleasure'. Sahara Airlines signs off all ads with the tag line `Emotionally yours' and BSNL releases an ad on Consumer Rights Day that states, `We have decided not to make any tall claims on Consumer Rights Day. Because at BSNL, every day is a Consumer Rights Day.'

The other evidence that service brands in India have begun to pay attention to customer satisfaction and loyalty is the growing number of rewards programmes being offered by airlines, hotels, retailers, credit cards et al. Yet, one wonders if service brands in India have really come to grips with the fact that true customer service goes beyond polite personnel, friendly ads and reward programmes. Judging by the way service brands in India are marketed, it does appear as if most service organisations and brands have yet to implement the core fundamental of delivering customer service. Which is that quality service has to be made part and parcel of the entire business organisation starting with corporate policy and percolating to every other aspect be it product and service design, marketing programmes or service delivery by frontline personnel.

Once a customer is acquired, most marketers of service brands seem to presume that the intrinsic quality of the product and service will take care of customer satisfaction and if at all the customer has a problem, the customer relations department carries the responsibility of ensuring that the customer remains satisfied. While the aforesaid facts may be true, the marketing function in a service organisation can add tremendously to customer satisfaction through developing marketing and communication strategies with the sole aim of ensuring customer satisfaction and retention. And in doing so add significantly to meeting customer acquisition objectives through positive word-of-mouth from satisfied customers. This is rudimentary to service businesses - yet most service brands in India (with a few notable exceptions) seem to focus purely on customer acquisition with very little evidence of customer retention marketing and practices.

Take, for instance, regular monitoring and benchmarking of customer satisfaction levels. How many service businesses (other than some airlines and leading hotel chains) are doing that?

One would imagine that such monitoring exercises are invaluable to marketers of service brands not just in terms of ensuring that product and service design are in line with customer expectations but also because the effort contributes to building an image of `here's a brand and service company that cares'. Many customers may never respond to questionnaires on satisfaction ratings but will definitely retain a positive image of the company being a service-oriented one.

It has been my observation (purely in my individual capacity as a consumer) that most service brands ranging from banks and credit card companies to insurance and cellular service providers send out a lot of mails in the form of billing statements, reward points statements and so on, but other than that, not one of my service providers has ever made contact on the subject of satisfaction levels. Even on the rare occasion that I have phoned or visited the office of a service provider I have never been questioned on my levels of satisfaction. If such service providers are indeed investing in market research one wonders as to why they have failed to recognise the importance of actively researching the needs and wishes of their existing customers in a manner that is visible enough to add to customer retention and satisfaction rates and equally important to brand image.

The second area where marketers of service brands have a key role to play is in taking care to segregate marketing to existing and potential customers. Indeed, marketing programmes designed exclusively for existing customers can add tremendously to customer retention and satisfaction levels. And the failure to do so can well result in customer dissatisfaction and attrition. This point is best illustrated through a recent experience I had with the credit card division of Standard Chartered Bank (my credit card company since 1995). I hold two Gold cards - both MasterCard and Visa. Last year I received a complimentary Executive card from the bank out of the blue - a card that I had not asked for or needed! Of course, the card was hand-delivered by courier, beautifully packaged and presented with a very nicely worded covering letter, but instead of pleasing me the whole effort only succeeded in highly annoying me. For one, the incidence clearly told me that the bank had not distinguished between existing customers and potential customers. Second, I was even more annoyed because I would now have to take the effort of cancelling the credit card. Quite obviously, such marketing efforts are the result of what I would term as `blind marketing' in as much that communication and sales efforts are sent out to subscriber lists without first checking such lists to weed out existing customers. I shudder to think about the sheer waste of marketing expenditure and effort. Though, of course, the real price being paid is in terms of alienated rather than flattered customers. Just imagine the reaction of a Gold card member receiving a less premium card with a much lower credit limit, even if it is complimentary!

If, on the other hand, my credit card company had acknowledged that I was an existing customer of theirs but were contacting me to check if I would prefer to switch to a card more suited to my needs such as, for example, a card that only clocked `frequent flyer miles' on expenditure, I would have been left with not only a very positive image but an affirmation that I had placed my business with the right people. For, here would have been a service provider who was taking the effort to find out if I knew about recently introduced options and would prefer to switch or upgrade as the case might be. While such a strategy will involve a cost in keeping up a dialogue with existing customers, it has been well established by successful service organisations such as Southwest Airlines in the US that meeting customer needs on an individual level outweighs the cost. For the simple reason that in the final analysis it is far more costly to continuously acquire new customers to maintain market share. A fact that is already recognised and acknowledged judging by the fact that most large service businesses have a unit that focuses only on customer churn and recovery.

What one is suggesting here is that conscious marketing to existing customers or customer retention marketing using one-on-one marketing techniques can actually contribute to reducing customer churn and what's more, also result in tangible business gains such as a higher share of the customer's wallet.

One service company that seems to be quite visibly practising customer retention marketing is Orange. For one, Orange customers receive regular booklets offering discounts on a host of products and services in an effort to enhance brand value and customer satisfaction. Second and more importantly, Orange obviously has instituted systems and processes to track customer usage and preferences that allow the company to individualise and personalise customer retention and satisfaction efforts. Recently, the brand invited several of its customers who the company knows are cricket buffs to meet Sachin Tendulkar at the launch of Orange's co-branded credit card with Visa and Standard Chartered Bank. This was done through tracking the use of cricket SMS messages. The brand also makes regular efforts to gain more business from its existing subscribers by telemarketing its other services such as the roaming facility. What is particularly noteworthy is that the telemarketing executives seem to be well-trained to interact with customers with the end result of building highly positive brand associations if not more revenue. The call routine and procedure has obviously been determined based on Orange's knowledge of its customers. In this particular case, Orange had taken into account that its customers did not like receiving sales calls on their cell-phones. Therefore, the roaming tele-marketing call begins with a pleasant voice identifying the source of the call as being from Orange, then wishing the customer followed with an assurance that the call is not chargeable before getting to the purpose of the call as in seeking subscription to the roaming facility.

A third and an important aspect of marketing a service brand is the need to manage customer expectations. While this may be true of all brands, the significance of doing so is much more critical in the marketing of service brands since customers buy into the promise of a service experience making `the field into the product'. Manage customer expectations well and delivering a pleasant service experience becomes that much easier. Recently, customers of Jet Airways received a communication from the airline that requested their co-operation in observing the revised check-in timings and helping the airline in working towards on-time flight departures. The communication explained that the need for heightened security checks was leading to delays and in an effort to prevent this; the airline had revised its check-in timings. This is a very good example of managing customer expectations. In sending out this communication, the airline has placed in perspective the main reason behind flight delays (most airline passengers simply assume that the airline is at fault) and solicited its passengers' co-operation in ensuring that flights leave on time. The other benefit in such an exercise is that the airline's frontline personnel would now be more effectively supported when faced with passengers irate at flight delays as well as late coming check-ins. Compare this with a cable ISP in Mumbai whose marketing promises 24 x 7 customer support whereas in reality, the company is only contactable between 1030 and 1830 hours Monday-Saturday! I don't think one needs to spell out the consequences of such marketing and I am pretty sure that it will soon discover the price, as in customer attrition to an ISP more focussed on customer service.

A fourth and critical aspect of customer retention marketing is a discipline whereby customer acquisition strategies are evaluated for any possible adverse impact on customer satisfaction levels. The importance of this is best illustrated through a live example of HSBC - a rather late entrant into the already crowded credit card business. A year or so ago, HSBC embarked on a drive to increase its credit card customer base through linking the use of its ATM machines with its credit cards. Now the fact is that I had been operating my savings account through HSBC for almost a decade largely on account of the fact that the bank had the best ATM network for a very long time (of course, today there are many other banks that offer equally wide, if not better, distribution of ATM machines). All those years of banking with HSBC and I used to wonder why the bank had never attempted to procure more business from me for their other products and services. So when I received a courier with a complimentary credit card (yes, I had the dubious honour of receiving five credit cards in 2001 from different banks - all unsolicited and all of which I had to spend time and energy in cancelling!), I said to myself, "Well, they seem to have finally woken up", till I read the accompanying letter and saw red! For, the letter informed me that the credit card would now replace my existing ATM card, which would be deactivated 21 days from receiving the intimation. In other words, my bank was forcing me to subscribe (membership fees of Rs 2,100 per annum) to their credit card product if I wanted to continue accessing their ATM facility. The net result? I wrote a very strongly worded letter to the bank terming their move as tantamount to coercion (even if the card was free for one year) and threatening to move my account. What followed was worse. Not only did I not receive any reply from the bank, some months later when I finally got round to cancelling the credit card they offered me a debit card with nominal annual charges. Leaving me to wonder if there were other customers who were unknowingly living with a credit card that they hadn't asked for but were now going to pay Rs 2,100 as membership fees. The clincher came when I spoke to HSBC about shutting down my account and was offered reinstatement of my ATM card on the bank discovering the reason for closing the account. A classic case of `Too little, too late' since I have increasingly moved all my business to another bank.

Speaking of which it would bode well for all marketing people in the service business to remember that the majority of customers never complain. They simply take their business elsewhere!

(The author is a marketing and advertising professional who has spent many years in organisations such as Lowe India and Jet Airways. Feedback can be sent to bleditor@thehindu.co.in.)

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