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Go Beyond Sales To Stay Ahead

Go Beyond Sales To Stay Ahead

Companies need to imbibe a service-oriented culture as customer empathy and engagement matter most in the long run.

Managing product brand, as well as corporate branding, has become a challenging area. Today, each firm is making efforts to increase brand equity and public relations (PR) has emerged as the favourite tool. Social media is the most-sought-after medium now for making the correct noises at the right time and places. Moreover, of late, corporate social responsibility and its different offshoots have been sought after as a part of the PR strategy.

Researches of David Aaker and Jean-Noel Kapferer are still very relevant when it comes to brand management. However, firms in India have moved far ahead when it comes to establishing and maintaining a sustainable competitive edge through brand equity. Interestingly, with the ever-increasing array of product variants and brands, customers were never more confused than now. To top it all, an incessant barrage of marketing communications has created complete chaos. Social media chatter and paid blogs are giving a rich flavour to this clutter.

To be seen as a responsible/preferred brand in the market, firms have gone too deep into complex, strategic thinking. Another dimension that has created a double whammy for business leaders is that all these exercises have been tied to some tight and tangible sales targets. Nowadays, most of the Indian firms are driven by year-on-year and month-on-month sales figure comparisons. But then, if every step that a company takes is tied to an increase in sales, we become too myopic. This trend was identified and very well presented by Theodore Levitt in his celebrated work titled 'Marketing Myopia', published in the Harvard Business Review.

In his paper, Levitt has said that by being too product-centric, we become myopic and it takes us away from the dynamic region of customer evolution. For instance, when oil was the primary source of energy and light, the Arabs thought they were gods till Thomas Edison came out with the electric bulb. Similarly, the US railways lost 80 per cent of the freight revenue to roadways because the railroad companies always thought they were the only players in the market instead of considering themselves as part of the transportation ecosystem. I also found the exact figure of Indian Railways' freight revenue decline when they invited me a few years ago to conduct a training programme on services marketing. It means whether it is in the US or India, customer empathy is the key to survival. Another fascinating question is there in the paper. The author asked what would happen to the multibillion-dollar detergent industry when dirt-free fabric would hit the market. In brief, there will be a few short-term market leaders who will rule for a decade at the most. But the sunrise sector of today will be a sunset industry tomorrow. And yes, exceptions will exist.

Levitt's paper was first published in 1960, but considering the approach of the firms today, it is still relevant. For a firm, sales cannot be the only lifeline for survival. A firm is a perpetual entity, but its permanence comes from its customers. It is a relationship, an association. And this association is built through service. Again, service means serving and serving is all about humility. It is about running that extra mile for your customers. Many industry pundits go against this viewpoint, saying customers today are disloyal and they will go to anybody who gives a lower price or something extra. I counter this argument with the following example. With the onslaught of organised retail, especially the malls, unorganised retail outlets should have perished by now. But this has not happened. Conversely, many malls have closed down after incurring huge losses. The reason why unorganised retail has survived is that it has customer empathy on its side. The outlets had clung to it and changed their business practices. They started offering small services and adopted a more personalised approach. As a result, the hitherto unknown 'store loyalty' has suddenly emerged.

Then again, service is an intangible thing and goes much beyond the literal meaning of the term. It can be some handholding somewhere - maybe, ignoring a small error of a customer. It also highlights the basic approach of the firm. For instance, there is an Indian air carrier that has been in the news for all the wrong reasons. I had flown with them and was greatly inconvenienced by the staff's indifference to people in challenging situations. I am also told no actions are taken against the carriers in India and hence, such an approach. But if an airline with similar price points and flight coverage arrives today, the scenario will change.

So, ideally, what should a firm do? How should it approach the market in the present scenario? We need to look at it by asking these vital questions:

  • What is my business?
  • Who are the stakeholders on whom my survival depends?
  • What is the role of these stakeholders in my business?
  • How can I serve my stakeholders' interest?
  • Can a firm survive in the long run without a humane approach towards its customers?
  • What practices should I build in my system for greater customer empathy?
  • With the change in approach, how much cost will I incur? Can I cover these costs in the long run?
  • What are the intangible and tangible gains from my change in approach?

Please note that customers also include your internal customers - your employees, to be precise. After all, some of the best innovations and crisis management measures have been possible because of the employees. In such crunch situations, designations or defined job roles do not matter. What matters most is one's passion for his/her job and the sense of belongingness to one's organisation. Here, it will be worth mentioning that R.M. Lala's works on the Tatas such as The Creation of Wealth and Beyond the Last Blue Mountain can be of great guidance in this area. They can assuredly answer at least one question: How to serve your customers?

A firm need not change its sales-oriented DNA to create a customer-centric organisation. Some small changes in the planning and implementation processes should yield results. First, we need to document the gaps in the customer facilitation process. We need to ask how we can contribute to the customer value chain in our business. Again, a very critical problem that firms need to address is the generalisation of exceptions. If 2-3 per cent of customers misbehave, we cannot assume that all will do so. But yes, we need to accept that only 2-4 per cent of customers will land into some crisis where we need to support them. It has to be a CEO's endeavour to plan support for this small cross-section of consumers. If you apply Pareto's Principle of 80/20 (20 per cent of customers give 80 per cent of firm's business) here, it will not work. A firm always keeps service scope for HNI customers, but there is no such relief for others. The touchstone of your brand image will be in such situations. Also, serving a non-HNI customer gives you valuable credits from a PR perspective.

We need to benchmark with the best in the industry on these parameters. We need to measure how proactive we are as far as customers are concerned. At the same time, recognising the staff members who uphold these values is essential as it would help imbibe customer-centricity. Here, the role of knowledge management is the key to success. The definitions of service, customer empathy and long-term perspective vary from person to person. That is why the transfer of value systems should be an integral part of any orientation programme for new hires. For instance, the definition of service at Maruti will be very different from many other players in the passenger vehicle segment. So, a person joining from Organisation X will only bring in the service definition of his/her previous company and must learn and unlearn certain things.

To achieve all these and more, chief executives need to be scholarly people. They need to devote at least 15 per cent of their daily time to study this aspect of the business. It can mean meeting with customers. It can also be achieved by meeting the frontline staff. Suggestion boxes have been useful in achieving such goals. But business leaders have to accept that they cannot apply the concepts of yesteryears to win over today's customers. In his book Business is Combat, author James D. Murphy has described it succinctly when he says, "You do not fire last year's Patriots on this year's Scuds." The author, a former fighter pilot of the U.S. Air Force, went on to explain that the Russian missile (Scud) was designed to outmanoeuvre Patriot, an earlier air defence missile system developed by the US. Understandably, we cannot use the same design if we want to succeed; we need to improvise.

Ultimately, brands are perpetual entities and it takes years to build the brand image. Therefore, companies need to find a more solid foundation in the service-oriented approach. It will not only strengthen the brand image but will also a valuable differentiation for customers. Culturally, too, it will ensure a better sense of belongingness within the organisation.

The writer is Associate Professor, Marketing Management, IIM Lucknow

Published on: Sep 17, 2018, 10:01 AM IST
Posted by: Anneshwa Bagchi, Sep 17, 2018, 10:01 AM IST