Category: When Customers Rule!

Volvo’s Quest For Customer Centricity

volvo

Here is an interview of Volvo’s Stuart Lennie where he shares some of the thought processes behind Volvo’s quest to become customer centric.

Customer Centricity: It’s Not Easy, But Worth It

In this interview with Stuart Lennie, President, Volvo IT, North America and VP, Volvo’s Global Sales to Order Solutions Unit, we get the opportunity to learn from another company that is not just talking about the customer, but actually implementing the significant strategic shifts required to become customer centric. Volvo has developed a vision, a strategy and a methodology to keep existing customers by understanding what is important to them.

Leadership Lessons From India

Shub_IndianBusinessLeaders

Reading a print version of the HBR always reminds me of what I miss most about college – the library. In the March 2010 edition of the review, I came across a rather interesting article Leadership Lessons From India.

In the article, the authors identify common leadership traits of Indian business leaders. There are quotes from a wide array of well known organizations & leaders.  Comparisons are also made with the US leadership style & ethos.

Indian leaders prioritize their key responsibilities in the following order:

  1. Chief input for business strategy
  2. Keeper of organizational culture
  3. Guide, teacher, or role model for employees
  4. Representative of owner and investor interests

Shareholder interest (4th for Indian leaders as above), is usually the top most for US leaders.

“Employee first, customer second”, a HCL motto, seems to echo across the Indian leadership. Leaders tend to attribute company success to employees’ positive attitudes, persistence, and sense of reciprocity. Four ways leaders inspire employee commitment are:

  • Creating a sense of mission  ..led by CSR activities & interweaving CSR & strategy
  • Engaging through transparency and accountability  ..mutual accountability between management & employees
  • Empowering through communication  ..E2.0, joint problem solving & empowerment
  • Investing in training  ..development of employees & coaching

So will India be an exporter of managerial practices? The authors make a positive argument. While there are some easy practices to emulate, creating a real sense of social mission & becoming role models to employees might be harder for CEOs elsewhere.

Read the full article Leadership Lessons From India here. 

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Pay For Customer Service

Airtel – a leading Indian cellular service provider has (supposedly) announced that it will start charging customers for service calls to its call centers. Though a nominal amount, the first reaction to the news has been indignation. Here below is my take on Airtel’s move.

(Image referenced from Livin’ On Tulsa Time)

From being one of the most expensive countries to make cellular calls in (and from), India has fast progressed to being one of the most economical. Its not only the fastest growing cellular market, but also very competitive. Multinational service providers from all over are swarming into the ‘market of tomorrow’ by the dozens. Whereas the mature markets are all about maximizing margins per customer, India has been about maximizing a customer base with very low margin per customer (profiting from the bottom of the pyramid). With increasing competitive & stock market pressure, managing costs is understandably a high priority for cellular businesses in the country.  From this perspective, the move to charge for customer service does sound like a logical step. 

Calling a service desk is a rare scenario in which a customer initiates direct contact with a business. Do you see this as an opportunity to charge customers? Or, as an opportunity to develop better customer relations?  Proponents of customer centricity will argue that this is the best opportunity to better understand customer’s needs & to delight her.  But what is Airtel doing? Instead of wooing customers into this channel of interaction, they are going to shoo them away? Isn’t the cost worth the opportunity to stay in touch with customers? Are they trying to convert an operational cost into a profit?

Anything given free looses it value. Suppose Airtel is coming with the line of thought that its customers are not optimally utilizing the service framework it provides. With the nominal charge, Airtel (maybe) just wants to nudge customers into better using this facility (a more efficient cost line in its P&L). Can charging for the service make customers value the service any more? Maybe. But then, if you charge for something, it better provide its money’s worth. Else, you stand the risk of turning an already disgruntled customer into a churn statistic.

Players in other industries have used a similar strategy earlier. Computers & peripherals is a segment that comes to mind easily. Such a strategy has resulted in the evolution of an ecosystem of maintenance service providers – an alternative for customers to get their issues addressed.  In many cases, these service providers are better positioned to address customer needs & wants than the parent business itself. Also, it has resulted in increased customer value & satisfaction. I don’t believe in this being a strategy for Airtel.

In many ways, Airtel has been a pioneer in the industry & has successfully managed its leadership position. The Indian market too has been known to evolve in surprisingly different ways across industries. Innovative practices & products have come out of the market at a sprinting pace. Dismissing the current move of Airtel’s as thoughtless is to be done at the risk of being short sighted. Being an Airtel customer (a life long one at that) & a share holder, I sign off this post with the hope that this is just another ace up its sleeve.

Customer Service Champs

I finally got up to reading the BusinessWeek 2010 listing of customer service champs. LLBean (retailer), USAA (financial services & insurance), Apple (cool gadgets), Four Seasons (hotels) & Publix (retailer) share the spoils at the top of the table. 

Some snippets that caught my fancy amongst the leading customer service champs are :

  • Four Seasons Hotel – to beat the recession blues, Four Seasons got human resource managers to take on additional responsibility of manning spa desk. Both roles are about keeping customers happy – one is internal while the other is external.
  • Lexus – not only allows its customers to book service schedule online, but also allows them to pick the service representative they trust. 
  • Jaguar – is at #16 position. Apparently the exemplary customer service (especially during the sales cycle) remains the same even after the Tata take over.
  • American Express – New training programs rolled out in 2009 switched from 70% technical know-how to 70% soft-skills teaching to help agents better relate to customers.
  • Dell – is braving its way through social media (has had its share of customer ranting on Dell customer blogs)  & making the best of getting closer to customers. From a social media perspective, this is working as per plan – Dell is creating & sponsoring a platform for its customers to vent.
  • Southwest – has a “senior manager of proactive customer service”!