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Customer Satisfaction Sucks !!!

September 27, 2011 Leave a comment

Yes. That is right. CUSTOMER SATISFACTION SUCKS!!!

In a networked world, customers today are spoilt by choice. Customer expectations are increasing every passing day. 

What was exceptional yesterday is expected today and will become irrelevant the day-after.  

World class customer experience is quickly becoming the price of entry.

Also, Satisfied customers are so boring.

&They do not demand more out of you (thereby not challenging you to continuously improve)
&They instill a sense of complacency in your organization (which in today’s fast paced world can be very dangerous)
&They do not go out of their way to promote your product/services (thereby not helping you add more customers)
&Usually, they are not your most profitable customers either (as they are satisfied for the very reason that they get what they want from you, which is a combination of low price, decent quality product/service)
&They resist change in the existing order (thereby making it difficult decision for your organization to implement the new change as your most satisfied customer will not like it). This is one single reason which kills so many new creative ideas in any organization.

So, what should you do instead?

&Seek out the most vocal un-satisfied customers that you have and find ways to engage with them. They will show you, the real improvement opportunities and will become raving fans if you are able to satisfy them.
&Seek out customers who are using your product/service in ways that it was not designed for. They will help you identify new markets for your products/services.
&Seek out customers who exhibit a different buying pattern from all your other customers. They will help you identify new customer segments and distribution channels for your product/service.

In order for you to be able to do these, you have to recruit, train and empower your customer facing employees to look out for these traits in their customers and to be able to actively engage with these customers in ways that befits the customer.

All this does not mean that you should not provide a good quality customers service. On the contrary, faster, cheaper and better products/services are the price-of-entry.

The only argument is that you should not be obsessed with customer satisfaction as this can be very misleading and harmful in the long term.

The time and effort you spend on creating and running customer satisfaction surveys (which only 30-40% of your customers respond to) can be better utilized somewhere else. 

Business opportunity for Gillette

September 26, 2011 Leave a comment

Today, I went to a barber shop to get a haircut and a shave. I must say that I was not surprised to see that the barber shop was still continuing to use the regular old shaving blades and had not upgraded to multiple blade products introduced a decade before by Gillette and other such companies. When I asked the barber why he did not upgrade to twin blade or other such razors, he cited the cost of such blades as the reason. 

I think that inertia is also one of the reasons. This is how everyone does it and so I do it this way too. 

This provides an excellent opportunity for Gillette to penetrate a market which is completely.

This got me thinking and the result is this idea post.  

Idea: 
  • Gillette to introduce a twin blade, single use razor to be sold exclusively to the barber shops or beauty saloons directly.

@Price point: 
  • 1 or 2 INR per razor is the ideal price point for such an offering in order to get these barbers to start using these twin blades. It is absolutely essential that the cost is less than 2 rupees that the blade is only suitable for single use due to hygiene reasons.

Distribution
  • One more critical success factor for this to work is also to have a direct selling team that can reach these barbers directly away from the regular distribution network. 
  • Gillette can promote this as a self-employment opportunity to young entrepreneurs who want to start their own businesses. 
  • This will ensure that Gillette does not incur high costs on the distribution of these product and at the same time provides self-employment to a multitude of people (worth talking about in the press and has the possibility to generate a lot of good PR around this).
  • Once the network is in place, Gillette can use this to cross-sell its other products to the same customers.

Whats in it for 

Barber shop: 
  • Provide better shave to their customers 
  • Increase their customer retention
  • Beyond a certain level of adoption, this becomes the price of entry
  • This can also help them slightly increase their service fee 

Gillette:
  • Increased sales by tapping a completely new segment 
  • Increased brand recall by customers who use the barber shop
  • Availability of an alternate distribution channel which can be leveraged for other products as well
  • Good PR opportunity
Consumer (Customer of the barber shop): 
  • They get a a better shaving experience at the barber shops.  

Distributors: 
  • Self-employment oppportunity to 100’s of young people. 
  • They can also then start cross – selling other skin-care or beauty products to the customer community and thereby grow their business. 
Hope someone is listening and explores the feasibility of this approach. 

Now the questions is, will someone be open enough to take a serious look at this opportunity? 

What ails the airline industry?

September 14, 2011 1 comment

I am always fascinated and surprised by the fact that the most of the airlines in the world are operating under losses. This baffles me due to the following facts:

  1. There number of people flying is increasing by the day.
  2. The cost of new entrants is very high à Existing players have an opportunity to charge a healthy margin.
One reason that many argue is that the input cost (cost of aircraft, fuel, airport usage charges, maintenance of the aircraft, salaries, etc) is spiraling upwards and the fare is dropping due to intense competition.

Though the above argument is true, I believe that there is a much more fundamental issue in the way the airlines operate which does not allow them to grow their margins. Most of the airlines operate on principles that are outdated for the current economic environment.

For example:

  1. The booking system that the airlines use has been in use since a very long time. From the time when the travel agents were the influencers and they dictated how the system has to behave so that it is easier for them to book tickets. Now, the only thing that has changed is the fact that due to internet and technological advances, it has become easier to access the same old system. What stops an airline to take their sales away from the Sabre reservation system?
  2. All airlines operate on an optimization model. They need to optimize their usage of the airport facilities; optimize the seat utilization; optimize the maintenance cost & spares. This concept of optimization does not seem to work for reasons I do not know yet. However, this does not work is very clear from the fact that most of these airlines are running under losses.
  3. There is almost no differentiation between different airlines and their customer facing staff. The uniform changes, there is slight change in the comfort of the seats or maybe the food that they offer on-board. We know that where there is little or no differentiation in the levels of services provided, price becomes the only competitive advantage. So, all these organizations are so focused on reducing their costs that they are almost blinded by this obsession.
What could they do differently? I think there are multiple ways an airline company can re-position themselves. Some of them as below:

  1. An airline can position itself as the 5 star airlines. Every single interaction with the customer has to be absolutely impeccable. Every single employee must be completely focused on providing insanely great experience. Anything short of insanely great should not be tolerated. Some wild things that they could do to differentiate themselves could be
    1. The experience needs to start from the booking. Minute details of the customer needs to be taken into account. His preference of meal (customize the menu for the customer), remember his choice of seats, etc.
    2. Call and check what time he will reach the airport. Arrange for a chauffeur to escort him to the check-in counter. Express check-ins and baggage drops.
    3. Once the security check is completed, provide them a waiting lounge which is no less than a lobby of a 5 star hotel.
    4. Board the customers by announcing their names (This can takeup some additional time, but can be a great experience for the customers (touch their ego).
    5. Have a live performance in the air (could be singing, stand-up or rather sit-down comedy). Be creative to entertain the guests.
    6. Ensure that there is enough leg-room, seats are highly comfortable. Food and drinks as per their choice.
  2. An airline can position itself as the preferred choice for business traveler
    1. Ensure that the booking of the ticket is fast & smooth.
    2. Preferred mode for check-in could be self check-in. Increase the limitation of cabin baggage so that they do not have to check their baggage in the flight.
    3. Provide in-flight internet & communication capabilities.
    4. Have enough space in the flight so that people can comfortable work on their laptops/handhelds.
    5. Provide business newspaper, magazines, some novels, etc.
    6. Have a tea/coffee vending machine installed in the aircraft. Provide (explore how you can) self-service option to the customers.
    7. Simple options for meal (single course).
    8. Provide some (5%) sleeper seats which the customers can use only by redeeming their miles.
    9. Have a highly rewarding Frequent flier program.
  3. An airline can position itself as the carrier for the common man (aka, low cost airlines)
    1. Fares need to be the lowest in all categories, always. Be fanatical about this. If this means re-creating how bookings, cancellations and payments are processed. Completely automated.
    2. Only option for check-in is through self – check-in kiosks. No hand baggage allowed. All baggage to be checked-in at the kiosks.
    3. Functional seats.
    4. Single options, single course meal.
    5. Only 1 or 2 air-hostess in the airplane. Partner with a coffee chain like Café Coffee Day or Barrista to provide a In-flight coffee shop.
    6. Leverage technology to the maximum. Minimal human intervention.
    7. Single fleet of aircrafts to save costs on maintenance.
    8. Identify other stream of income possibilities within the fly time.
    9. Provide pay-per-watch movie options.
    10. Introduce advertisements everywhere possible to re-coup some costs.
These are just some random thoughts from a customer’s perspective. I am sure if airlines identify good people within their organization to brainstorm, they will come up with a lot more creative solutions.

The summary is this:

     The airlines that will differentiate themselves from the pack will command better margins and will be able to continually grow and stay profitable. 
Categories: Uncategorized

Interesting advertisement that left me wanting for more..

September 2, 2011 Leave a comment

The latest ad from Airtel (HFZ) has left me wanting for more. I think the reasons the ad works for me are:

  1. Everyone has friends and some special friends. So, the ad which is primarily shot with young college kids also connects with everyone at an emotional level.
  2. The music & lyrics are very peppy and put life in the concept. This is also because, everyone of us have friends who fit each description they have used in the lyrics.
I think that Airtel needs to come up with service offers which can feed off from this advert. Maybe introduce something like a HFZ plan. The plan should enable people to define a friends circle and then the plan should make it easier for these people in the circle to stay in touch.

For now, let’s just sit back and enjoy the advertisement. 


Categories: Uncategorized