Customer is King!!

Customer is King!! Oft repeated statement but is customer the king always? Is it true in these times also? Times when we are hear some market or economy melting everyday? As the owner of Balance Sheet, what is the most important to the CEO today? Cut costs to remain alive (to serve customers later) or to continue offering great customer experience despite higher costs? Or can both be combined?

These days the newspapers are replete with details on how organisations are cutting costs in every area. Be it knocking off toilet paper in the office to cutting down travel of its executives. But in this push to cut costs, is customer getting the axe too? The oft spoken statement about putting customer first, might be the most compromise-able commodity in these tough times.

Layoff of employees has negative connotation across the world. So the most common strategy adopted by organisations is to not to replace executives leaving, thus bringing down the cost. But to continue servicing the customers with fewer employees assumes increased productivity. This may not be the case all the time resulting in compromise on customer service. Less people on the floor in a call centre would mean lower phone calls picked. An alternate is to have full house but for lesser time. The reduced timelines of customer helplines by many banks are a result of this. Many of these banks would tout 24X7 customer helpline till a few months back. Now 12 hrs a day customer helpline with no access during weekends/holidays are getting to be a norm.

In a bid to cut costs, erstwhile partners have become vendors. So there is a maniacal push to redraft service agreements at lower costs. Dashboards indicating the service levels are scrutinised in lesser details. Compromise by vendors to manage within costs leads to a bitter customer experience.

Training is another area which typically gets lower focus while belt tightening. Training is important not only for personal enhancement of employees but also to provide for good customer experience. These days there has been increased activity from the so called wealth managers of various banks. They claim to help you wisely invest to maximise returns. What strikes you when you meet them is absolute lack of knowledge of the markets and various instruments. They repeat verbatim whatever they have been fed through internal reports and are at a loss to explain the offer beyond the rudimentary talk. Again in a bid to contain costs, lower quality manpower is employed (at lower cost, of course) and what they do is only push products which earns the bank (and them) high incentives. Whether the customer gets any return is none of their concern. Is Customer the King here? Why are incentives paid to the bank and/or wealth managers at the time of customer subscribing to the instrument hawked? If incentives are paid at the time of customer redemption and making money, then the wealth managers have interest in the customer's portfolio going up in value. What we have today is a scenario where the customer might be losing money on his investments whereas the wealth manager has walked away with a handsome bonus/incentive. Banks would have to invest in training of these people to be aware of the products they push. Train them to be aware of various levers and how they impact the returns. Train them to be partners in the growth of a customer's portfolio rather than be just a peddler of new instruments.

Needless to say, a great experience leads to customers sticking (again oft repeated statement). One of the best run loyalty program, I feel, is by one of the leading Airline in the country (one that has been in news recently, again trying to cut costs by laying off employees). The members of the elite tier of the loyalty program of this airline have gotten so used to the service levels that when they are forced to travel by other airlines (again, due to cost pressure on travel budgets), the experience is not in the same league. Good experience is addictive. Hopefully post the issues with layoff of staff, this airline would not look at other ways of cutting cost.

Yes, these are tough times. History indicates that excesses happen during the growth phase which needs to be corrected. We are in the midst of a correction time. Many working Indians are going through probably their first economy downturn. Ditto with most of the decision makers. So the requirement today is not to throw the baby with the bathwater but to plan it right. Great customer experience in these times would ensure continued business while at the same time building the base for great rewards once the economy goes up.

Customer sure is King!!