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The cost of customer service

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In India, consumers want to have their cake and eat it too. Anyone who has run any business in India selling a mass product or service will vouch for it. Confused? Let me explain.

Have you ever been to Big Bazaar? They have created an  organized retail supermarket out of thin air based on a single mantra – “sabse sasta” meaning “cheapest of them all”.  They dont make any claims on quality of their products.  Or the customer service ( or lack thereof) that they offer. On weekends, the sheer numbers in a store can suffocate you if you are not careful. Thats how popular it is.

Take another case. Major FMCG companies push a lot of their products based on “freemium” model. That is , you get 1+1 or you get 50% discount or you get something free or you get more for the same price.  It is no wonder that premium products rarely do such promotions, they would rather position themselves on the promise of quality. If your kid dies after accidentally consuming a me-too shampoo from a local kirana shop, it is unlikely much will come out of Indian consumer courts in your lifetime.

Sure, you can blame the legal system or the companies in the way they segment the market or the low per capita income.  But the truth is, if you are an average Indian consumer, no matter what your income strata, you will consume anything as long it is the cheapest. Or free. We just love the word “free”.

I see the same sensibility playing out in telecom space. Everyone complains about pathetic customer care of mobile operators. On how they never answer or always answer incorrectly. On how they get taken for a ride with stupid cricket alert packs.  No one gives a thought on India having the lowest ARPU (average revenue per user) for mobile carriers.  The consumer still wants 50 paise STD calls and free (!!) local calls. Who will tell her that quality customer service is not free?

We at mobikwik have a very clear vision vis-a-vis customer service. We want to be the best at delivering whatever service we offer . Sure , we will be cost efficient but we will focus more on the other 2 forgotten C’s – Comfort and Convenience.

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Comments (7):

  1. Rajeev Gambhir

    September 17, 2009 at 7:31 pm

    The blog sounds as if it is imperative to choose between low price and good customer service. Is it true that they cannot sleep on the same bed? To bring a context to my comment, let me state that I hate going to Big Bazaar because of the crowds, and the long checkout que, however my wife likes the atmosphere. I suppose the crowded atmosphere and the wait at the checkout counters emphasises the “Sabse Sasta” philosophy, and for all we know, may have been designed so. If the place has very few visitors it may not give a sense of a place which has low prices.

    Now does that mean that I should expect a poor customer service? That is where the No comes into picture. Big Bazaar for Retail, or the telco for that matter determine their pricing with a definite overall revenue in mind. The costs of doing business and that includes the cost of providing customer service is already factored into the pricing equation.

    Reply
  2. bipin

    September 24, 2009 at 7:10 pm

    Hi Rajeev, you are right its not imperative to choose between quality customer service and low price. However, the point I am making is customer service is not free and there is a strong correlation between superior customer service and higher cost.

    Reply
  3. Nithya

    October 1, 2009 at 12:33 am

    Hi Bipin,

    Most customers want good customer service, but, as you have mentioned, not learnt to associate a cost to it.
    As a service provider, it is our responsibility to make them understand this.

    Reply
  4. Asif

    October 7, 2009 at 1:30 am

    Cost of Customer Service toh theek hai bhai, but paypal ka option kab live hoga?
    I bet, I’ll be the premium user of ur services.
    and best of luck Bipin Bhai read your Interview on TelecomTalk.
    Kabhi hamari site ki taraf bhi dekho leeejiye aur ho sake toh interview bhi de deejiyega.

    Reply

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