Life After Sale
The best and the biggest international brands are here in India –but the irony if it all: where is the after-sales-service? So integral to a brand, so critical for it’s success and so taken for granted in developed markets! In India, after sales service is, for want of a better description, the pits.
So what’s stopping the best companies from pulling out all the stops when it comes to providing the best service? Do customers expect for too much? Or is it that in India they don’t really care?
Brand Equity fanned out to MNC as well as Indian consumer durable companies, stockists and dealers, analysts and market researchers to get a feel of what’s really keeping after sales from being used as a cutting edge marketing tool in pushing products across categories.
Take promise versus performance, and after-sales-service beats the worst performers on Dalal street. Expectations are built up by the company itself – not only during pre-sale activity but also with promises made during the sale. Common sense dictates that there are only two ways to satisfy a customer: either keep your word or don’t promise at all. If you promise to deliver in six hours, but take 12 hours instead, you are going to end with a dissatisfied customer. There are companies as well-known as Kelloggs who give email addresses on cartons for suggestions and complaints…but the address turns out to be defunct.
Today, companies in India are finding it hard to meet expectations, let alone surpass them. A large part of the reason is that margins are being squeezed and market growth has not been high as expected. Increasing cost of raw materials, oil and bloating advertising budgets in a market more cluttered that ever before… all put margins under pressure. Worse, average prices in the refrigerator and washing machine segments have even decreased slightly, what with the Korean brands introducing low priced products to push volumes. With big companies like BPL, LG, Whirlpool, Godrej, Videocon and Akai and Philipps advertising aggressively, industry ad spends are increasing dramatically.
The upshot: If you’re trying to make ends meet, after-sales service is to be low on the priority list. “Allocating resources beyond the sales period is not what companies can always afford as they have to give extra features are improve quality,”says Thomas Puliyel, President, Indian Market Research Bureau (IMRB).
Going forward, the market is only expected to become more price sensitive. Rising disposable incomes are creating new aspiration levels amongst the lower middle class and the middle class and a large part of market growth in the future is expected to come from small towns – and from lower income groups in large towns. Not only are companies devising aggressive market schemes to attract customers, scores of financing schemes are trying to attract the low and the middle income groups. After sales can go take a jump.
Buyer behavior compounds the problem. Customer care is often taken for granted. During the sale, what’s top of mind for consumers is price. And, ofcourse, the brand name. Jyoti Mitra, Manager at Vijay Sales, one of the biggest dealers of consumer durables in Mumbai says,“The quality of after-sales-service is not a factor during the sale. Customers only care about the brand and the price.” This applies particularly to first-time customers. Small wonder then, that companies fighting it out prefer to reduce the price and improve brand image rather than focus attention on after sales.
Privately, companies admit that customers, like Oliver Twist, are always asking for more. But can you really blame the Indian customer for wanting to use products beyond their life span, usually about 12 – 15 years for a refrigerator, six for a washing machine? For a typical Indian buyer of a consumer durable, it takes four to six months salary to purchase a durable. “Consumers look upon a durable as a life-long investment,” says Venugopal Dhoot, MD, Videocon International. ‘And it gets increasingly difficult to please them.’ At the same time Dhoot is keenly aware of the importance of customer service. “Service is the soul of the consumer durables business and unless there is good after-sales-service, there can be no sales,’ he says. Garrick D’Silva, CMD, Whirlpool Home Appliances, believes that “the cost of ensuring a high level of service is commensurate with high perceived quality of the brand. The lack of it results in loss of brand preference, brand loyalty and thereby declining sales.”
However top management in most cases does little else but pay lip service to after sales. D’Silva admits that there are problems. “There is poor general infrastructure, lack of skill and general service orientation in the non-dedicated service franchisees.” Industry observers couldn’t agree more. ‘After-sales-service in industry is far below expectations,” says Puliyel. “It’s usually second or third hand service without adequate supervision.” When service is carried out by franchisees who are often ill-trained, ill-equipped and have little contact with the company, there is not much that you can really expect, can you?
Where it works
Generally, after-sales-service is more organised and efficient in the automotive sector where the consumer is willing to pay for it. Read: service in itself is a profitable wing of the company. Cars require high value products and they are bought by well-to-do customers. Dealers also make fat margins selling accessories which can cost a customer anything from Rs 5000/- upwards. Besides, car owner often opt for a second or third car and/or replace their cars. “Cars are a status symbol and it’s is far more likely that a person will change his car rather than his air-conditioner,” says Sanjay Kadekar, Senior Manager, Used Cars, Sai Service, one of the biggest car dealers.
Hope for the future
It’s not as if consumer durable companies aren’t doing anything. Whirpool in order to control this major function, now operates centralised call centres –such centres has already been opened in the metros. Companies like Onida, Samsung and Bajaj Electricals plan to move towards operation exclusive service centres. And companies like Kodak and Godrej GE have built a database of customers going as far back as several years – tracking advertising, after-sales-service and customer feedback, a practice common in the automotive industry.
Finally, culture counts. How many organisations actually quantify the implications of just one customer moving away? For example, in the US, even a small pizza outlet would calculate the loss due to the loss of one customer and this could amount to as much as $12,000 per annum. Losing an automobile customer on the other hand could cost as much as $ 220,000. Says H. Pradeep, associate Vice President, Research International, “There is a service orientation in the automotive industry which has been built up over the years, unlike in the consumer durables industry.”
This culture is set by top management. If customer service is a priority, the bad news will filter up to them. Right now the situation is so bad that if a customer has a problem with the service he will find it difficult to talk to even the manager of the outlet. Only companies interested in hearing the bad news will hear it.
(Published in The Economic Times some years ago. Please note that some of the people quoted above may have moved.)
Note: After sales service in India has got worse if anything. What’s worse is the apathy, on part of both consumers and dealers. Recently when we went to purchase a television from Vijay Sales and asked about after sales service the salesman raised his eyebrows. No one really asks that question he told us, because after sales service of all companies was the same!
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