B S Raghavan

Happy employees make happy customers

B.S. Raghavan | Updated on March 08, 2018

The greatest irony of a liberalised and competitive economy is that it is driving the average customer crazy. This is despite all talk of the customer being king and always being right.

A survey of shoppers conducted by Consumer Reports in 2011 found that nearly two-thirds of them walked out of a shop in the previous 12 months because of poor service.

Anger at the inability to reach a human on the phone accounted for 71 per cent of them, while rude sales people put off 65 per cent. Customer service comes very near the top of the list as the hottest topic in Google Search, throwing up an incredible 12,140,000,000 results!

A casual surfing of the randomly chosen web sites on the subject shows that the prescriptions for enhancing customer satisfaction have been standardised and streamlined, and holding the field for almost as long as there had been buying and selling.

In recent years, the advances made by technology have placed in the hands of providers of goods and services the power and ability to reach out to millions of customers at the click of a mouse. With all this, customer satisfaction continues to be an elusive goal.

An article published in the web site of Knowledge @ Wharton (March 14) asks mournfully: Is customer service a lost art, or are today's customers harder to please?

It points out how “moments of tear-your-hair-out frustration are commonplace — from shopping in stores where sales associates are nowhere to be found, to dealing with sales people unable to help locate a sought-after item, to encountering repetitive robotic voice messages that never lead to a live customer service rep”.

This is notwithstanding “the rise of 24/7 help desks, ubiquitous pop-up bubbles on shopping web sites that offer assistance, and the ease with which consumers can dress down businesses in 140-character tweets…”. Have these made companies more attentive — and accountable — than ever before? No, Sir (or Madam, as the case may be), not by a length of chalk.


The reason, at least as far as Indian business and industry in the private sector are concerned, is clear: For one thing, they are simply unable to cope with the velocity, volume and variety of transactions; for another, they have never had the experience before of having to handle the enormous pressure of the requirements and demands of customers numbering many times more than what they had been accustomed to.

In addition, the customers too have a much wider field of choice, with access to products and services of the same or similar quality.

The old-fashioned habit of customers loyally sticking to the same old shop, company or brand is almost dead.

They do not hesitate to switch firms and brands at a moment's notice if they feel miffed at being taken for granted or for a ride.

Lost customers can cause havoc to the company's profitability.

It has long been known from various studies conducted by think-tanks that acquiring a new customer can cost six to seven times more than retaining an existing customer, and that an increase of a mere 5 per cent in customer retention rate can jack up profits by as much as 95 per cent.

Yet another finding is that companies with high customer service ratings are not only more profitable, but also have stronger stock market performance.

Web sites are littered with hundreds of panaceas to keep customers happy, but the Wharton School article offers a new insight which had not been given much weight in earlier writings.

Its brief thesis is in its title itself: “Want to Improve Customer Service? Treat Your Employees Better!”

Marshall Fisher, Professor of Operations and Information Management at Wharton, has concluded from a recent study conducted by him and his colleagues that “When companies treat employees fairly and with respect, they have more loyal staff and they attract more talented people…”

And they treat the customers promptly, helpfully and cheerfully. Actually, a higher ratio of staff per customer makes for closer understanding and a more enduring relationship.

With India's customers seething with discontent at the treatment they receive from the governments and private and public sectors, it is high time the matter engages their attention with the seriousness it deserves.

Published on April 05, 2012

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