The Hindu Business Line : Making room for IT

If X comes to our resort, I need to know where he went last time, what his experience was like, does he like a beer in the evenings by the pool, is he fond of Heineken so that I can source Heineken and offer it to him before he asks.

Al Majumdar

His designation belies his age. Al Majumdar is young and is Division Manager, Strategy & New Projects at Club Mahindra Holidays. With little waste of time, Majumdar delves right into the topic for the day: how did Club Mahindra benefit from the customer interaction management solution that Talisma Corporation had implemented?

But, before he did that, he wisely introduced us to the business of hospitality that his company is in. After all, if you don't understand the business, how would you understand how technology helps it? For those details log onto our Internet edition.

Meanwhile, here's the technology story:

You talked about your field staff having laptops...

The moment a marketing campaign is run, it generates leads for us and gets loaded in Talisma's software. These leads get assigned to sales people, who make calls, come back and update the data. It has been reasonably successful; we still have to make some improvements on that side.

The real story begins when prospects convert into members. From that point onwards the entire process kicks in: sending out the kits, calling the members and dispatching the membership kit. Certain criteria have to be fulfilled — some could be time-based, some could wait till the money comes in: all that the system tracks, because Talisma has been integrated with the financial accounting system. Talisma is structured in such a way that you could figure out a solution to create workflows based on any of those parameters.

So a field, a column or property in a Talisma table, which is storing a principal paid by the customer, could be used to create a rule — if that value exceeds x or y then flag it, make a phone call and so on. With a bit of training even the administrators can do it.

Before Talisma came into the picture you felt a certain need for all this?

Absolutely. These transactional things earlier were a complete nightmare because we didn't have systems that actually talked to each other. Take, for example, the process of sending out a membership kit. It is quite elaborate and costs a lot of money. So when we send it, we have to be sure that the member hasn't cancelled it. For there's a clause in our membership that allows a member to change his/her mind in the first few days after making the purchase.

Before Talisma, we had to run a query on the financial accounting system for those members who are new, those who are qualified and then, have them sent the membership kits. We also had to maintain, maybe on an Excel sheet, the dispatch of those kits. Some of them would be returned as the address might not have been correct, or updated. If a member called up and said he/she hasn't received the kit yet, we wouldn't know where to look for information. In a branch like Mumbai, where 500 members sign up every month, it is difficult to remember the transactions that take place. All these processes have today become automated. Talisma captures every interaction and so resolution of issues, if any, is much simpler.

Tracking and automating these workflows, where it has to talk to the financial system primarily, at the same time capturing every interaction made across media, whether e-mail or phone, is critical. It has to be automated.

If a member writes to us on to an ID that has been publicised and if that member's e-mail ID is also with us, then Talisma identifies him as a member and automatically creates what you call an interaction in the system. You can help resolve issues quicker with this.

So every interaction is being captured. Resolution of member issues is much simpler today. Sometimes you have employees avoiding calls because they recognise the caller, remember the problem but are unable to resolve it. Only that employee, because of the historical record that they have, can help resolve it.

Today, I get a call, open the relevant record in the system and I know the history of the member. I even know who made what commitments to the customer and whether that is still unresolved.

How do you capture data that comes from the interactive voice response system (IVRS)?

That's a phone call. I have to enter that interaction manually. We are just moving into the IVRS right now, where the telephonic data gets integrated into Talisma.

So as I speak it gets transferred into the system... ?

First it just identifies you as a member based on some sort of identification or authentication. And then, what you speak is captured.

I understand that updating data was a challenge and Talisma helps on that count. An example?

I'll give you a very critical example. We finance our products and have tenures running up to 36 months. Members make EMI payments. Earlier, I used to pick up the phone, speak to the accounts; they would say it's done, it's realised. I would go ahead, make a confirmation voucher. Today, unless I update the payment, the system will not log.

So dispatches of the premium items, the gifts that go out in the membership kits, are all based on these payment plans. So, unless you update the transaction into the financial accounting system, Talisma will not read it, update the flag inside on its own and take the next step. So people have become very proactive. When the cheque/payment comes in, it has become part of this compliance.

Talisma allows you to create out of the box, uses drop down lists, throws up periodic data on properties (i.e., their condition) and the like. Earlier, if the field took a certain value, the field would be mandatory.

Now these are out of the box searches. Depending on your business requirements, these rules can change and are part of the configuration.

They are not customised, so you can use the standard tools to customise the configuration set up.

In fact, the Talisma solution that we implemented in 2005 has been enhanced so much more today. We had the required skills and were trained by Talisma. Our personnel have now been able to build some amazing models onto Talisma.

Do you have an in-house team? How many people are there in it?

Yes, we do. But I'm not sure of the number as they are outsourced through one of our group's companies. Mahindra Group of Companies has Mahindra Logisoft & Business Solutions. This company runs the facilities management for us and gives us software development crash courses; about seven or eight people at the most.

When you were considering software, or when you realised you had all these points to resolve, did you consider Mahindra's partners or somebody else to develop this, in cooperation with Talisma?

We were assisted at the time in the whole project to establish where we stood, where we wanted to go, do our current applications. If what we have does not suffice, what do we need? How do we choose the right product, go for the implementation?

We were assisted in the project by KPMG. We were very clear that we do not want something built from scratch, because that would take a lot of time. The first choice was to look at what's available, and then in the CRM space. We looked at the companies we short-listed and finally decided to go with Talisma.

If you had to do this differently, if you had a second chance what would your choice be?

See, now that you have 20-20 hindsight, you could perhaps have looked at the solutions we made subsequently. We could have done that right upfront but we lost a bit of time.

So as a client you should have thought of those earlier?

Yes, but in terms of requirement and planning, there was a dedicated team from Club Mahindra, which was completely put on to developing the solution on Talisma for us. This team consisted of about five members from various functions. Credit to our Managing Director for ensuring this. For, I've seen a few companies fail at the implementation stage, because the company's involvement had been diluted. Even after macro-level decisions have been taken, the people have to sit with the vendors or the implementation partner to create the final solution with the nitty-gritty in mind, such as the user interface, what the report should look like, etc.

There is a gap there because the company does not place enough people there. Most of the time they are part-time. I'm not talking about the project manager, but the resources available to you, because they'll hold meetings, they'll be travelling. For this, we took an office in the same premises so that no one can pull them out for meetings or calls.

If that was the kind of importance given to this team, what are the kind of returns that you are expecting? I know you have been using Talisma for long and that you've been able to measure some kind of returns.

We haven't yet attempted to quantify the returns financially, but we certainly see a lot of improvement in operational efficiency. I'm sure if we earn enough income, it could quantify financially. Let me be very frank, we just got past the first stage.

We are now looking at the second stage when we will really start when Talisma goes to our resorts. We've largely automated our process right now, so we are taking away a lot of what I call poor hygiene. For a lot of companies this is the end of the CRM solution, whereas for us this is just the basics.

The second stage is where you know if X comes to our resort, I need to know where he went last time, what his experience was like, does he like a beer in the evenings by the pool, is he fond of Heineken so that I can source Heineken and offer it to him before he asks.

If Y comes to our resort, I will find out if he is diabetic. I will offer him a dessert, and when he says no, I'm going to say its sugar free. That's the level we want to take it to, and we know that's not yet happening.

As to returns or savings, not necessarily financial, has it been of help in terms of time, effort or manpower? Or if new processes have been enabled or if redundant processes have been thrown away?

Absolutely, our entire gift process, which is the sign-up offer, is an example of this. Earlier, at the time of sale, this sending of gifts was a very time-consuming process because it was not automated. For example, the selection of gifts depended on what a member got the previous month. A customer said, "I want to buy this month, but I saw your ad last month.

You were giving that; I want that, I don't want what you're offering now." Now this process had a very small level of automation at that time, and hence was time-consuming and prone to huge errors. The next step would be to tell the person that the gift is available, check if it's available, establish eligibility and after many manual processes, courier it to him. But all this is automated in Talisma.

What is the time consumed, for instance?

This whole manual process resulted in delays in sending gifts to the members, sometimes up to 2-3 months. But today the efficiency in terms of accuracy and delivery has improved three times.

Three times more accurate and three times more fast?

Absolutely, at the same time this transcends everything, not just the gifts issue. If a member calls, I have this information in the system, I know your gift has not gone, the service personnel can tell the member this is the problem. It's now about availability of data, visibility of data that is relevant and updated from a wide variety of sources.

Have you been able to measure the decrease in complaint calls?

Yes, we have. They have decreased. However, in some states, reporting upfront when you want to show a decline in the crime rate, you don't record, don't lodge the FIRs, so what we had earlier is we did not record the complaints, so when we started with Talisma, boom, it just shot up. Today we are recording them, but we do notice a decline.

How do you measure the effectiveness of the promotional campaign?

Yes, measuring results at the end of the month, the technical marketing team will solve their issues. They look at the campaigns, how effective they are, how many leads they have generated and how many have been converted. After you get the lead and the sales team takes over, it is no longer the campaign's effectiveness. And then it's about how the sales machinery comes in, so that the closure and conversion rates are not completely dependent on the campaign. So campaigns are just to generate the primary interest in the customer.

How does the system help you in this?

Every lead that comes through is tacked to a campaign.

Earlier it wasn't?

It was there but it was not precise.

I understand that lead poaching has been reduced with technology.

Once the sales team pitches it up, working in the same city you are not able to geographically demarcate.

In this business, you have someone you really can't demarcate geographically in these sales parameters. The prospect may ask you to come to his residence for a talk. Another sales team with a different geography responsibility could attempt to talk to the same chap in his office.

So, if you have leads and you assign leads on the system, the invisibility should be there to make sure that one sales team does not have access to the leads of another sales team. With technology, that has reduced.

You said you chose Talisma out of two short-listed companies. Why Talisma? Lower costs?

Combination of everything — confidence in their pre-sales team when they came and the preparedness while they were making the presentation.

So is this a software product that you have implemented here, or was a part of it customised?

There are certain pieces or components that were customised. Talisma is a product but it allows you to configure. We have an annual maintenance contract in addition to an initial licence fee. We had a fairly elaborate and sophisticated ranking system, the product, who owns the product, what are the future plans for the product, we've seen several releases already and because of that we did not consider a few products, as we were not very clear whether this product will be supportive in future or not.

If you look at Talisma's architecture, it is very open to you to co develop it with them. Obviously there is a core piece that is proprietary.

The willingness and openness to share things is something that we saw right from the beginning. The confidence is there and we look at them as a partner and to have a long association with them.

Can you give us a brief of what exactly your company does?

We are positioned as a family holidays company. We are the only ones very active in this sector. I think hospitality, as a service, is probably the most challenging among all services. This is because in most other services, the proposition is tangible.

Say, for example, banking and other financial services — the ultimate aim is to bring some sort of financial return to the customer; airlines — theirs will be to transport their customers from place A to B — with or without frills is the customers' choice. Cut to hospitality and that too, to a family hospitality company — we promise a great holiday for the entire family. Is it the sightseeing, is it the resort, is it the swimming pool — there is no single universally applicable thing you can do. So given the challenge that it is very subjective, we do the best to provide the family with a great holiday. Apart from these functional needs, we also need to take care of the emotional needs of the family.

The reason why I say that is if you look at most other services there is a core proposition in there which is fairly universal, it is pretty tangible and what I mean by that is: take banking services, financial services, everything else should do, the bells and whistles that you do is fine. These might be appreciated but at the end of the day the customer is looking for some sort of financial return. If you have mutual funds, you have your online statements, your access and the like. But if your portfolio is not performing, then nothing else matters. Look at airlines. Frills or no frills, the core is I need to get from place A to place B in the time committed.

Cut to hospitality and that to a family hospitality company, what is a great holiday, and we complicate it further for ourselves by positioning it for the entire family. Is it the sightseeing, is it the resort, the swimming pool, there is no single universally applicable thing that you can do, yes of course basic quality, hygiene, those things are all there, so given that challenge that its very subjective that we give them a great holiday. In fact, the functional and emotional needs exist across all services. In certain services, functional components are more important than the emotional components. For example banking. In hospitality, on the other hand, it's all about emotions. At the end of the holiday, the customer should have felt great. And again this is subjective. What made one member of the family feel great will not hold good for the others. There is segmentation. For them the holiday qualifies as great if their kids have had a great time. Given this, we believe that unlike any other service, here the satisfaction cannot be measured. With this background, the whole thing boils down to what the customer really wants.

It's all about emotions. At the end of the holiday he should have felt great. Again very subjective, what makes one family member great would not be as exciting for another. For some, the holidays is great if the kids have had a great time, so given the category as it stands we believe that unlike any other services where the satisfaction level can be measured.

Again, here, it is not the numbers or average or clusters, it is the individual. We are dealing with individual emotions, so it becomes critical to know every single customer. It is not a rhetorical line saying `know thy customer'. We need to know every individual, their families, and their children. We need to be proactive too; as children grow up, they become troublesome. You need to do something different when they come to the resorts. This is where technology steps in, in a big way. We need to be more functionally satisfying. We need to be accurate. We should know how much credit or balance we have of the inventory as we have a membership product

Can you explain the membership format and the concept of `inventory' in your business?

We offer membership and members buy our product — the membership products. This entitles them to a certain number of holidays every year for 25 years. So when they visit our resorts they do not pay for the rooms. This is something they can accumulate over a period of time and can bring forward. Essentially this is what we call the members' inventory, inventory of days that they can use at our resorts.

So does that bring in a significant portion of your revenue from non-members, that is, those who would like to take holiday only for a year or so?

That is the significant portion. This year we modified our strategy a little and decided to position ourselves in the mainstream space. However, we do not consider ourselves as just a time-sharing company; for us time-sharing is just a format. We are clearly positioned in targeting families and family holidays.

What portion of your revenue comes from members and non-members?

85-90 per cent of our revenue comes from members. Existing members pay an annual maintenance fee also called the annual subscription fee.

So other than new members every year, is there a static data base that you have which helps you maximise revenue?

Static in the sense, yes, there are members. But dynamic too, because there is an active history being built up. So, yes, it needs change, because we are offering 25 years exchange options for evolving families. There are young kids, there are youngsters maturing; so we need to keep track of those changes. This is where technology comes into play.

Having said that, there is a lot of technology in use in our company addressing all these functional and transactional processes, workflow automation and information flow.

How do you target clients?

Yes. From the time a customer takes a holiday we believe he is fresh. He is on a certain high that starts to dip as he gets back to work. We do not want it to flag off in excess. So in order to boost it, we have something called the post holiday call. Numerous installments of post holiday interaction go on with the member who has holidayed with us. Some happen from the resorts and some through our central member relations — a function which handles the members centrally. The purpose of this is to reinforce another holiday and at the same time get feedback on the holiday he has had.

We also have certain systems at the resorts where instant reactions are captured when issues happen there. Most of them get settled there. With access to that information after the holiday, the central team gets into action.

Technology helps us look up our member base and see who has not taken holidays, who asked for a holiday but couldn't take it due to lack of space from our side. They are then put in our priority list. When that is done and the `situation' is resolved, we ask them `why not take a holiday now?'

Are you happy with the process?

Not really. We've got a lot of our basics right as far as the key transactions are concerned. Here Talisma has been of great help. It's a product that allows us to map and create a solution. It maps pretty much all processes- right from the time the customer was a prospect, through a marketing campaign and sales machinery. Then there is the welcome process, which is very elaborate because ours is not an easy product to sell or accept — it's a concept. So there is a lot of information and collateral material that goes out, rules that have to be explained clearly, and expectation management that has to be done. Post-holiday it keeps track of members who get into the recurring holiday cycle.

Do you own or hire the accommodation you provide?

We have a combination. Majority of our inventories are our own properties. In some cases we acquired properties. Acquisitions are a slightly tougher route for us. Our facilities are like apartments unlike hotel rooms, which are much smaller. If we were to buy existing properties, we will have to modify them to bring them in line with our existing facilities. Our preferred option is to own the property as well as the management.

However there are some time-share operators who have been there during the boom days. Many of them leased a numerous pieces of property that are very long-term leases.

If you get to own the property to use for your holidays, and if there is a slump in the demand, you are stuck with that property. How do you maximise the revenue?

In fact it's quite the contrary. Look at just the occupancy metric. Members pay a fairly significant amount of money that they commit towards their holidays.

We are insulated from demand fluctuations from the cyclical trends that happen in our industry. It's far more acute in city-based business hotels.

So the notional loss is on electricity or the food that you consume?

The food is an expense only when ordered. So that is not an issue. The room revenue, which a hotel gets only when the guests walk in, is also previously collected.

So in terms of a revenue model, it is far more advantageous for us because the cash is collected a lot faster. In a typical hotel, paybacks take much longer. Here, if you plan your inventory right, then your risks are lower. You could have your entire construction of capital expenses paid for by the customer.

Is the amount of property that you acquire a reflection of the estimate of new members joining here? What problems do you face in terms of properties?

The lead time for property right from acquisition of land to getting clearance takes a long time. It's much easier to get clearances inside cities than in outside locations.

In many cases you are not allowed to construct anything more than what exists. Legislation for beach properties has instructed properties to be 500 meters behind the high tide. The entire Fisherman Cove came up when the law hadn't been passed. Mahabaleshwar is a place where you are not allowed to build anything anymore. Similarly in Himachal Pradesh it is impossible to construct anything at all because of the environmental degradation that has happened — flooding, land sliding, deforestation, etc. Unlike any other clearances if your property here is even reasonably large, the clearances will have to come from the central government, and not the state government.

So how does the existing member information and estimate of new membership drive your appetite for property acquisition?

For existing member information, we try and balance the demand regionally. We've seen people's tendency to holiday. Most preferred is to take a holiday within your region i.e. west members would by and large like to take majority of their holiday in the western region. Similarly, in the north and the south.

How do you map it? To what kind of property do you send them?

That depends on two factors. The time of the year they choose, and the apartment size they buy. In our selling process, where we help the customer choose based on their needs, the apartment size will be driven by the size of the family.

Studio, for example, is the smallest apartment that we sell. If a family does not have children or has very small children, then a studio is fine. You could even choose to buy a slightly lower season because they probably are not of the school going age or are in nursery or kindergarten where you're not really waiting for school holidays. The moment the kids are older, you will need a bigger accommodation. Plus your season has to be that which allows you to holiday during the school holiday season which in fact is the peak season.

This process is very much driven by the needs of our customers. It helps the customer in choosing the right product. Here again technology comes into play. We are one of the few companies in this category, for that matter any category, where our front line sales men carry their laptops and make presentations to the customers. It's an interactive presentation where the customer can enter, pick and choose through the right one.

What helps you determine the estimate of new customers and their profiles?

It's cost projections for the following year. There must be certain members who drop out, we have ratios on that. Another angle helps us too: When you buy this membership, you are not eligible to buy a holiday immediately. You have to pay a certain amount of money before you become eligible for it.

At present it is not based on the amount of money but based on the time frame. So it's a projection from the existing member base. That is, members who were not eligible but will be eligible in the time frame we look at. So the number of members who will be eligible, and thus the sales, will be much more than those who are going to cancel.

Past data is critical?

Past data, the projection of costs which is a future projection, so its estimates as well as past data, the sales team will commit to doing next year, how many new members we will get or members who drop out... ... ..

On forecasting, what is the level of sophistication that goes on? Do you actually take macro-economic data for this?

The macro-economic data and the outlook that you forecast reflect in our three-year cycles. The Mahindra group requires all group companies to plan for the next three years. In fact we've come to an exercise where all group companies are asked to project even further than that and look at long-term strategies. This strategy will obviously be governed by a lot of macro indicators.

How do you project your next year's numbers?

It's a combination, which is part of the strategy based on the macro style. At the same time it looks at past data and upcoming plans for the year. We've been looking to increase the number of members. This month we crossed the 50,000-member mark. At present our average ticket price product is just below Rs 2 lakh.

How do calamities affect your projections?

There might be a minor effect because these calamities are fairly localised — more in terms of logistics and our sales team's mindset. But we find that the effect never lasts for more than a month; also that's the long-term nature of this product. It actually helps when things are a little down — it is like almost an escapist thing. We were surprised when the earthquake took place. We were very much affected logistically and people were not willing to give us appointments. This period lasted for about a couple of weeks, but after that sales went up.

They wanted to get out, I understand that, but if you had a bit of property say on the East Coast of India people who would have been planning for holidays wouldn't want to come this side, say, Srilanka, etc, and even that is temporary and say I don't want to go to the east coast of India but let me try some other... ... ... .

If you have property already booked there, then you actually go out and temporarily hire out places?

Yes we do hire temporarily but not for a reason like you mentioned. We always add a little more inventory during the peak season. We also have short term tie-ups, deals and other arrangements and thus an extensively built network. We are also affiliated with RCI and that network too opens up a huge number of benefits.

More Stories on : Interview | Software | Resorts & Amusement Parks

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Update your contacts - the easy way

The message and the medium

Tech vs the underworld

`Don't take VC money too early'

Quiz

Political unrest can be costly to offshoring biz

BlackBerry goes white!