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V S Mahesh: Each customer is a brand ambassador

You can't brand services like you would a product. Focus on word-of-mouth referrals

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It would be interesting to find out if lost any business because their brand ambassador fell from his pedestal with a thud. It is hard to believe that a CEO engaging Accenture would have been affected by the iconic figure’s fall from grace. Nor would one believe that a CEO would have engaged Accenture in the first place because their “brand” was associated with Tiger Woods.

The fact is that major influencers on the purchase of fast-moving consumer goods (FMCGs) are vastly different from those that affect the purchase of services (such as banking, insurance, travel and management consulting) or product-service bundles (such as a car, air conditioner or computer). brands have been built on advertisements with models, cult figures and catchy slogans. Spending similar amounts to build service brands is a wasteful effort.

While we have the luxury of personally checking out a product – like taking a car for a test drive, or trying out a new cola – we cannot do that with a service. To take a simple case, imagine a lady trying out a new hairdresser before an important event! She might do so only if her normal hairdresser had not been available and the new one had been very strongly recommended by a friend whose judgement she trusted. As we cannot try out a service as we do a product, referrals from current customers become the most critical influencer on our purchase decision for either a pure service or a product-service bundle.

For service organisations to win in the marketplace, they must focus their managerial, financial and technical energies on consistently delivering the kind of customer experience – throughout the life cycle of ownership and usage – that would induce customer referrals. Such recall from customers forms the bedrock of any service brand. The more consistent these referrals are, the stronger the service brand is likely to be.

To better understand how service branding and recall work, let us imagine a total stranger enquiring what he could expect from a Kamath restaurant in Mumbai. He is most likely to be told: “You will get a range of low-cost hot, vegetarian snacks delivered quickly. The place will be crowded and not conducive to privacy. The staff will not have any time to chat with you, but the service is usually efficient. They are honest, and you will not be incorrectly charged.” Kamath provides consistent quality in its products and service through people who remain with it post recruitment, induction and training (and even live atop the restaurants). It is this consistency that makes its customers not only come back, but also provide free marketing through their referrals. Customers know the value they get for the money they pay.

On the other hand, most large corporations have become such unwieldy combinations of owned, franchised and outsourced agencies, with absurdly high employee attrition rates, that they find it next to impossible to ensure consistent delivery of customer experience. Let me cite a recent, live case to drive home this point. I reproduce a conversation I overheard between a white-goods customer in northern India and outsourced call centre agent in a suburb of Mumbai who had been on her job for less than three months — the latter fact not an unusual one, considering that most call centres have murderous attrition rates.

Agent: “X company, good morning, what may I do to help you?”

Customer: “Behenji, meri equipment kharab ho gayi.” [Sister, my equipment has stopped working.]

Agent: “Please let me have your details.”

Customer: “Details, petails, chod dho, sirf mechanic bej dho.” [Forget these details, just send a mechanic.]

Agent: “I am sorry, sir, I need details of where you are speaking from, your customer number and equipment details. First, what is your address?”

Customer: “Sector 24, ji.”

Agent: “Where is that? Where are you calling from?”

Customer: “Mei Haryana se bol raha hoon.” [I am speaking from Haryana.]

Agent: [types out thus]: “Address, 24 G; City: Haryana.”

[The computer screen immediately announces: “Incorrect address.”]

Agent: “I am sorry, sir, your address is wrong.”

This went on for another five minutes till the customer banged the phone down. It is no wonder a customer (kashta + mar) is referred to as “kashta se marnewale” (one who dies slowly in agony) in many parts of India.

Organisations that decide to reduce costs by outsourcing customer contacts to third parties ought to realise that it is possibly one of the worst decisions they can take, as they lose control over the very “moments of truth” experienced by customers that collectively cascade to create the service brand.

Several large organisations deliver such poor service to customers – leading not just to the defection of customers, but also to the generation of negative word-of-mouth publicity. No amount of advertising – including endorsements from icons like Sachin Tendulkar or Aishwarya Rai – can counter the power of negative word-of-mouth publicity generated by such poor service. In fact, advertisements by an organisation with a bad service reputation actually trigger off a spate of negative word-of-mouth publicity that might have otherwise remained dormant. Imagine what that Chandigarh customer would do if he saw a promotional advertisement from the firm he bought the equipment from!

My research suggests that customers in collective societies like India talk 20 times more frequently of negative experiences than of positive experiences. Add the ability of electronic media to spread negative news, and one realises that service brands that get established are primarily influenced by the word of mouth and “word of mouse” publicity spread by customers.

The enormous sums wasted on advertising services should instead be diverted to systematically building a service brand from within the organisation through selection, training, empowerment and retention of the right kind of employees so that they deliver the brand real-time to customers. Over Rs 2,700 crore were spent on advertising in the last fiscal year. Of this, probably half was spent on services and product-service bundles. Advertising agencies must be laughing all the way to their banks.


The writer, a former corporate executive, was the founder-director of the Centre for Service Management at the University of Buckingham, and is now MD of Chennai-based VSM Consulting Services.  

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