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The
information age has dawned! Net offers tremendous
opportunities for marketers! E-commerce is revolutionizing
the economy! Proclamations
like these are hammering home the fact that the Net era is
well upon us, and is already re-defining the way companies
do business and manage their customer relationships.
Conventional paradigms
of sales and marketing have undergone major shifts with the
arrival of cost effective multimedia (e-mail, voice, fax,
web-chat or face-time) interaction opportunities with the
customer.
Customer Relation Centres, the new incarnation of call
centres, are fast
turning into one of the most effective means of
communicating with customers. By leveraging these
interactions into learning more about the customer’s
profile and preferences, and capturing and using this
knowledge, marketers are ensuring more effective and
profitable future transactions which are pleasant and
repeated with customer’s "permission".
The company’s web
site is no longer being seen as an information source and
showcase of the organization’s achievements. It has moved
on to become a medium of transacting business with
customers, in a way traditional methods find it difficult to
achieve or replicate effectively.
Delighting the
customer has never been easier, with benefits like
flexibility of shopping anytime from the comforts of the
home and comparison of prices before making a choice. Even
making recommendations to the customer based on
"community knowledge"–the insight gained from
the community of buyers sharing similar preferences and
tastes——a technique pioneered largely by pioneers like
Amazon.com.
Perhaps the biggest
gift of the Net era to marketing has been mass customization–the
ability to service the individual customer’s needs, while
retaining economies of scale in production, which is now
feasible for even small businesses.
However, many Packaged
Consumer Goods (PCG) marketers in India continue to take a
fragmented approach towards these solutions, thus losing out
on the enormous opportunities. Many of them are now
embarking on telemarketing and call centres but it will be
prudent for them to draw a blueprint for integrated customer
interaction centres rather than the "voice only"
option.
It is imminent for
them to move towards integrating knowledge gained from
different customer interfaces, if they are serious about
effectively managing their customer relationships, or for
that matter, even staying in the race!
Here is an example of
how Universal Battery Corp. (UBC), a representative case
example, learnt its lesson the hard way. This imaginary
example can be easily applied to many other PCG launches in
India.
The UBC
Legacy
An
established leader with more than 55 percent share of the
dry cell batteries and flashlights market, UBC’s flagship
brand Unicell was a household name synonymous with quality
and dependability. Moreover, with an extensive distribution
network reaching out to every corner of the country,
supported by a dynamic sales force, it also enjoyed
tremendous goodwill among the trade.
It was with this
confidence, coupled with its objective of being the first to
bring cutting-edge technology products to consumers, that
UBC decided to enter the cellular phone batteries market in
late 1997.
The timing was perfect–two
years after introduction of cellular services, the national
subscriber base had touched five lakhs and demand in the
replacement market for batteries was now taking off.
UBC finalized a
sourcing arrangement with Taiwan-based Power Pack
International (PPI), an ISO 9001 certified manufacturer in
the global cellular phone accessories market.
Dream
Turned Sour
With
a strong product and attractive packaging, backed by a
service warranty, UBC had hoped that trade and consumer
acceptance would be a smooth affair. Nothing could have been
farther from reality!
Gray channels have
dominated the replacement market. They were characterized by
huge margins and highly volatile price levels. Few OEMs like
Motorola, Nokia, Ericsson, etc. had managed a miniscule
presence and were available in select cities only. In such a
scenario, and with hardly any technology differentiation,
Unicell’s premium pricing made little sense.
A high-decibel launch
and an extensive brand-building exercise supplemented with a
flurry of consumer and trade level promotion schemes,
generated enough hype, but very little sales.
What made matters
worse was that there was hardly any networking between the
salesbranches, with the result they went in
different directions in trying to develop selling
methodologies.
Success stories (or
mistakes) and learnings were almost never shared, leading to
precious time wasted in re-inventing something already done
by another location. For example, details of the Calcutta
team’s success in hosting a joint promotion with a local
cellular operator were never shared. The Lucknow team, which
had been trying for a similar arrangement, spent many more
months before it could achieve success. Not surprisingly,
the sales force was constantly fire fighting even in routine
situations, and the morale was down.
Back to
the Basics
Clearly,
the market called for a customer-centric approach. More
importantly, UBC realized that this had to be supplemented
with a formal culture for capturing and utilizing the
knowledge and insights that was being generated at each
interface with its customers, as well as the experiences of
its employees on the job. Information was flowing in from
various points–retail
outlets, the company web site and its sales offices or call
centres.
After extensive
analysis, this team decided to focus on three basic customer
expectations, which would drive its renewed efforts:
n A
value-for-money proposition that was derived from what the
customer was willing to pay–a major shift from UBC’s
traditional cost plus pricing model.
n Continuous
availability of the complete range of models on the
"anytime anywhere" basis which was critical in
making or losing a sale. The company web site was integrated
with call centres in the major metros.
n An efficient
after-sales-service system, which not only addressed
customers’ problems promptly, but also used this knowledge
in building customer loyalty. The call centres and the
web-based customer support centre worked in an integrated
fashion.
Interestingly, the
benefits from this integration started flowing in almost
immediately.
Most visibly, the
Customer Relationship Centre, which had accumulated a huge
database of customer complaints and their suggested
solutions, based on past interactions, now could also
benefit from a wider range of customer feedback obtained
from its web site as well as from the retail points.
Similarly, when
competitors’ sales of a particular model were reported as
increasing, volumes of Unicell’s equivalent model has
dipped. Data mining instantly attributed this to the
increase in defect rate for the model, which had prompted
retailers to recommend other brands. Reacting swiftly, UBC
was able to recall existing stocks of this model in the
market, replacing it with fresh stocks and stem the negative
trend.
Again, by maintaining
profiles of customers transacting through its web site, the
company was able to track preferences. For instance, it
could conclude that small business owners preferred thicker
batteries, which gave longer operating times. On the other
hand, corporate customers were showing a general preference
for the slim and lighter batteries. This insight was not
only helpful in planning its demand mix, but also enabled
UBC to tailor its communication to each target group more
effectively.
Enabling these efforts
was the internal knowledge-sharing culture, by which
interaction with customers, retailers, and other team
members were constantly shared through the office intranet,
and the knowledge thus generated formed part of a Knowledge
Repository. An integration of its customer interfaces
ensured that customer understanding was also transferred
into this repository for use by all team members.
Leveraging this, it has been able to
transform its fortunes and in the process turn its
interactions with customers into more profitable and
long-term relationships.