It’s the service, stupid!

Manufacturers need to worry about selling, or they may soon have no one to sell to…

Four months back I bought a fridge. Did I buy a product or a service? Is the car I own a product or a service? Your regular department store offers you hundreds of products, but what about its service?

Increasingly, the reasons for buying a product aren’t just its features, or the benefits it offers. It’s the service that accompanies its purchase or usage.

To illustrate, when I began my shopping for a fridge, I actually set out to pick one of the three short-listed brands. I ended up choosing one that didn’t necessarily offer the best value, but it most certainly offered me the best ‘purchase-service’ experience. This comprised of the retailer’s service and ease of finance.

How not to sell?

Take the case of a car. Despite being one of the two most expensive products purchased by an individual, the buying experience provided by most car manufacturers is, at best, lacklustre.

Worst, you are meted out the same treatment whether you visit the showroom to buy an Rs 9-lakh sedan or the ubiquitous small car.

There are no ushers, and the salesman behind the desk looks at customers with suspicion. I’ve yet to visit a car showroom where you get an impression that they are genuinely pleased to see you, where you get immediate attention, and someone welcomes you with a glass of water or other beverage. Yet the poorest Indian is unfailingly hospitable to every guest at his home!

The person who interacts with potential customers is the showroom’s least important employee – he’s the least paid, the least qualified or trained in selling and, not surprising, seems to be the least motivated!

If car dealers sell, it’s because we are car hungry nation, let loose with loads of car loans. And because the market has seen a few fantastic entrants like Swift and Innova.

But it can’t stay this way forever. Will car dealers change then? Let me put it this way, I haven’t seen one old-world make the makeover. Once protection went, and competition came in, they fell on the wayside. There’s nothing to make me believe that car dealers will fare better.

Moreover, since they’re oblivious of customers now, how will they ever realise that they need to change? Are market research agencies going to tell them exactly how disgusted customers are?

Exactly what am I paying for?

I can’t resist talking about the modern-day kirana store, the departmental store. Most do such wonderful job in the areas of comfort, ambience, and display that my expectations of having a pleasant shopping experience are invariably heightened. But once I select my wares and reach the cash counter, my happy spirits turn into angry frowns.

There is a mile long queue. Bar codes do help, but some items still have to be entered manually! Cashiers are blissfully unaware of the freebies that you are entitled to with purchase of certain items.

And you’d be lucky if they have sufficient change! Paying cash, the most critical part of the purchase experience, is the most cumbersome.

Compare it with your local grocer, who politely suggests, “Please carry on. I’ll reach the stuff to your home. Paise aate rahenge!”

One of the leading stores, where I enjoyed my shopping but detested the payment process, has now closed down. I’m happy.

I’m not suggesting that big departmental stores start selling on credit. But I do advise them to ask themselves a simple question: “Once the novelty wears off, why should customers continue shopping with us?”

As they say in retail, “There’s only one rule: location, location, location.” There are only so many people in any store’s neighbourhood. Few stores can rely on single-time buyers; survival depends on repeat business. What are these stores doing to get customers back?

The Moment of Truth

The simple moral is that a No 3 brand can pip the leading two if it provides a significantly better purchase or service experience. The technically backward can make up simply by being helpful. This lesson applies across categories, across borders.

We live in a world where most brands in a category offer just about the same quality and features, use similar technology, and are priced about the same, give or take a percent or two.

Thus, the most critical differentiator for a brand can only be the service that the customer enjoys each time he interacts with the brand. A brand’s past leadership and market share don’t guarantee future success.

Because the service I experience NOW makes me decide whether I’ll buy it NOW.

Jan Carlzon, as CEO of Scandinavian Airlines, turned the loss-making carrier into a highly profitable one within a year of taking over. He refers to these interactions as ‘Moments of Truth’. In his book, by the same name, he says, “During or post each interaction a customer has with the brand, he decides whether he will buy or use it the next time or not.”

An aspect of service that often goes unrecognised is that the customer often links the quality of the service to that of the product. Restaurants are a case in point. Perhaps it’s unfair, but that’s the way people decide.

If marketers want to see their customers again, they should be focused on providing them a consistently delightful experience. Or, what they will see, consistently, is their customers’ back!

(Published in Business Standard in 2001)