S. Shyam Prasad
In today’s world, where the customer is in control of making choices and in deciding what to buy and what not to buy, there is a great attention being paid to them by the marketers. Efforts are being made in large scale to understand the customers, collect all kinds of marketing and personal data and then mine the data on customers and use CRM etc. In this process, marketers are talking of treating customers as “Kings”. This article tries to explore this statement from a general perspective.
We hear people saying ‘The customer is always right! He is king’. Many businessmen would avoid antagonizing the customers. Few of them do all that they can do to please the customers. This is because, the adage ‘Customer is King’ seems to be the focus created more by the CRM vendors than the business evolution. But what is this hype all about? Unfortunately, most of the CRM processes are used to direct the corporation strategy and their tactics. This is what Patty Seybold, the president of Patricia Seybold Group, a market researcher and consultancy in Boston had to say, “Sadly, most of the CRM business processes and best practices are used to fine tune the agenda of the corporation, not the customer”.
Sheryl Kingstone, an analyst with CRM Strategies Group, a Boston-based market researcher recently observed, “If the customer were really king, businesses would be reinventing around the customer and reorganizing around the customer. That is not happening.” “Technology does not make the customer king.” Says Kingstone by citing the example of Walt Disney Co. The company, Walt Disney, using CRM technology attempted to segment its businesses around customer demand and map technology to support the effort. That was two to three years ago. However, the plan never fully succeeded.
“Saying the customer is king is industry double speak–but double speak with a caveat” says Denis Pombriant, an analyst with Aberdeen Group, a Boston-based market researcher. “The longer the CRM trend evolves, the truer it becomes. Early CRM was all about transactions and tracking data, not about the customer. Modern CRM is taking a stab at implementing best practices and processes that put the customer first.”
“The goal of a CRM system is not to make the customer king, but to treat the customer appropriately,” says Andy Goreing, senior director of service product development at Oracle Corp. “It doesn’t mean customers get an increased level of service, but the appropriate level of service.” I think nothing could be more right.
Is a Customer ‘King’ or ‘GOD’
Mahatma Gandhi seems to have said on Consumers:
“A Customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is a part of it. We are not doing him a favor by serving him. He is doing us a favor by giving us an opportunity to do so.”
Mahatma, as he is, if he had said the above, he would probably have meant ‘service’ or ‘seva’ when he talked about consumers. At present times of cut throat competition, it is extremely difficult to believe that the modern business exists to provide ‘seva’ to the customers.
In 2007, the Delhi consumer commission fined the ICICI bank a whopping Rs. 50 lakh for employing “goons” to recover loan. It condemned the practice of the banks bullying consumers to pay the dues. The commission also ordered the ICICI to pay Rs. 5 lakh to the consumer, who was mercilessly beaten up by the recovery agents. They snatched a loaned car from him. Was he ‘King’ or ‘GOD’? The obvious answer is neither. He was treated like more like a pest which needs to be crushed. It can be argued that a habitual defaulter may not be true customer yet, a true customer can default due to many genuine reasons and if he is not treated as either king or God, he is at least entitled to be treated as a human being.
Who’s controlling the market?
Seybold cites airline frequent flyer programs as the first and most explicit time when companies showed individual customers their value. Credit card companies also let rank the customers according to their value, by offering different levels of credit. Customers in general, would not know their value to the vendor they buy from, however with the highly sophisticated CRM systems and tools at their disposal, the vendors certainly know the value of their customers, how loyal they are and much more.
The use of CRM is now a common knowledge to the customers, if not in India it is surely in advanced countries such as US, UK, Europe etc. This has raised the expectations of the customers higher. “People expect a higher level of service,” says Holly Holt, senior product manager of CRM for Microsoft Great Plains Business Solutions, in Fargo, ND. Dianne Durkin, a Customer loyalty expert agrees.
Take the case of banking industry in US which is under economic pressure. According to The report, “Competitive Strategies in the Consumer Age,” issued by Meridien Research, marketing strategies such as product leadership, market leadership, and cost leadership, are not successful for financial institutions. “While each of these has merit, for the majority of institutions only customer intimacy provides the basis of a sustainable strategy,” says the report’s author, Richard Bell, a senior analyst at the Newton, MA, market researcher. “The engagement (customer intimacy) is complex, but the value to the customer is large and the profitability for the bank is even larger,” he says. The real meaning is that treating customer as a king – having strategies that are customer oriented – is the only way to generate profits.
Customer is king always
Whether marketers treat a customer as a ‘King’ or not, he is always a ‘King’. He has the money the marketers want. He is not going to give that away for free. He will part with it only when he is satisfied with a particular product or service. Marketer should primarily satisfy the customers if they are to remain in the business. They should deliver what they promise and remain ethical and courteous in their behaviour. This is akin to treating the customers as ‘Kings’. The only worry is, do the marketers treat the customers in the same way in all markets i.e. in urban and rural areas? Do marketers display similar courteous behaviour in a rural centre as they do in say Bangalore, Delhi or in other metros? Do MNCs treat their European and Asian customers similarly? Definitely not. As this article is more general in nature, the specifics are out of scope. However, it is intended to take up the differential treatment of rural vs urban and European vs Asian customers separately. The treatment meted out may be different but the business exists only due to the mercy of the customers. He is always the ‘King’.
Treating customers with respect and treating the right customers with regality would surely help the business to make good profits. The customer needs to be delivered what he is promised, in time and in an acceptable manner. The king always pays and it pays to treat the customer as the ‘King’.