Rohit Mishra

Thoughts which don’t fit in 140 characters.

The Service Route to Sucess

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As the BSE Sensex tumbles below the crucial 14000 mark and inflation keeps setting higher records, you may find strange to see a post on the importance of better service for growth. Growth, as of now, is nobody’s concern. Everyone is looking to counter inflation. I would also have more likely written a post on how to cut your costs using public transport than on service now. But, the actual brainstorming part of this article was done on board Delhi-Patna Sampurna Kranti Express train some 20 days back, when I was coming back after giving my Amity interview. Since then, I have been away from home in Vellore and Bombay, so the delay.

I have often wondered on how new start-ups beat well established behemoth corporations in the battle for market share. Looking at a few examples, I inferred that they come with better products which connect well with customers. Also like any government, large companies generate a lot of negativity – sort of anti-incumbency factor about themselves due to their poor service, which leads to their undoing. Think of General Motors and Toyota/Honda. The one thing that I often read is that India is a cost-conscious country where people are concerned more about the cost than quality. This is an unjustified opinion in my view, as I will show.

When Tata Sky came on the satellite television scene, the general view was that the high-end customers in the metros will move to it. The installation costs were around Rs. 3000 and the monthly rentals were also more than that of cable networks in smaller cities. The lower middle class won’t be interested. But, the scene developed differently as two examples from my family show. My brother (who as a fresh out of college guy living in Delhi was not on the target-list of Tata Sky) decided to switch to the service after having a fight with his cable operator over poor maintenance. He told me that a lot of people prefer to pay higher cost than being subject to whims of their cable providers. But that’s not all. One of my uncles who lives in a village in North Bihar has also taken Tata Sky. There the reason is different. Cable providers used to charge a fortune during installation and any problem took days to be rectified. Tata Sky has trained a village man, who is always ready for help. And trust me, my uncle Is a cost-conscious type. But, the service advantage is too big to ignore. I have to concede that even Tata Sky has its share of service woes. It suddenly puts channels in new bouquets which increases the monthly bills and creates a lot of confusion. With Reliance ADAG coming out with its service soon, price wars are bound to occur. Let’s see what happens to service then.

The Mobile Wars

Multiple players, price war and you know I have to talk about our cellular networks. Nothing takes away from the fact that companies like Bharti Airtel, Reliance, Vodafone (previously Hutch), BSNL etc. brought a remarkable communication revolution in India. But, as you may know, our urban markets are almost saturated with new connections and prices are amongst the lowest in the world, so what will be the next attraction for mobile buyers. Vodafone gives a hint with this beautiful ad.

Sadly, our cellular providers have had a dismal service record until now. From unclear plans to special charges and unfriendly customer care representatives, consumers have often been left very frustrated. With number mobility coming soon, which will allow people to change their network without their number, service will become the most important factor. I hope our great entrepreneurs in the field of telecom take note of it and pull up their socks. They just need to give service higher priority.

The Financial Services Sector

One of the more popular attributes associated with our middle class is how carefully it guards each and every penny of its money. But, you will be surprised to know that India’s leading public sector life insurer LIC has a corpus worth hundreds of crores built from the money forfeited by its customers who fail to pay their renewal on time. With the advent of private sector insurers, this part of investments is steadily growing. I will explain with an example. My favorite teacher Archana Ma’am got an insurance policy from Bajaj Allianz where she was supposed to pay Rs. 10, 000/- annually for 3 years as premium. She got the policy after continuous pestering by the sales agent –calls after calls….. you know that. An year on, she forgot to pay the premium on time and was worried that the policy would expire and her investment will be forfeited. It would surely have if my father (who was an independent financial adviser at that time) not helped her out. You can blame Ma’am for forgetting to pay the premium. But, I wonder with all the computerization, couldn’t Allianz send a SMS or a letter or a call to remind customers about the pending renewal! Obviously, the sales agent didn’t. How could he? He might have moved to a different company and would have soon turned up with a product of his new company. And we all know that the renewal commission doesn’t match those of the new policies. This is the deficit in service that I want to emphasize upon. The only company that will prosper in the long run will be the one having the best service, as most insurers provide comparable returns on investment.

Final Thoughts

I was peeved to see better service being relegated as something which only the rich clients need. As urban markets mature, it will not only be the biggest differentiator, but also a tool to expand into smaller markets, as the Tata Sky in village example shows. When a person works hard on his own job, he won’t like to be troubled just because someone else considers his monthly sales target more important than the people who helped him meet an earlier one. Sales and service together only can make a business successful. As I noted down points for this post on the train, I had to stop early. Railways have provided reading lights in air-conditioned coaches. But most of them don’t work. This makes the journey a lot more boring. 30,000 crores of profit has not proved sufficient for Laluji to make the 3-Volt reading light on my berth to work. I wonder what will. No Laluji, the lantern (his party’s symbol) won’t do.