Happy to help

Steadfast focus on customer service has given Samsung India an edge over rivals.

A few months ago, Delhi-based K Singh’s wife complained about inadequate cooling in her three-year-old refrigerator. Singh, often skeptical in such matters, argued that the cooling was probably ineffective because the fridge was always over-stuffed. However, the wife’s persistence pushed him to dial the toll-free service number of the company one evening as he got ready to drive home from work. The customer service agent told him politely that it was closing time, but he would see what he could do.

Seven minutes later, as Singh began his daily battle with Delhi’s traffic, a service engineer from the company called to inquire about the exact nature of his complaint and his residence address. Singh asked him to call later since he was driving.

Forty minutes later, when Singh reached home, he found a service engineer inspecting his refrigerator. “They managed to pull out our details from their database. The machine was fixed the next morning and, since the product warranty had expired, we had to pay. But I was a happy with the efficiency of the company,” says Singh. The company in question is Samsung India Electronics, the Indian arm of the South Korean chaebol, and Singh’s story is exactly the kind that warms the company’s deputy managing director Ravinder Zutshi’s heart. “Appreciation of our after-sales service gives me a high. Satisfied customers are my brand ambassadors at social gatherings,” he says.

To be sure, Samsung has painstakingly built a reputation for efficient after-sales service unheard of, until a few years ago, in the consumer durables sector in India. It has put systems in place and developed a competent service network across the country – a model being replicated by rival companies with some modifications. The result is that customer service in the Rs 30,000 crore-a-year sector is finally getting fixed.

How it began
Ask Zutshi when Samsung started focusing on the after-sales service needs of its customers and you would get a predictable response: from day one. He claims that Samsung began its India journey in 1995-96 with an eye on providing good after-sales service. “Of course, we did very little business then. Yet we had service vans plying in the city and service engineers in uniforms who attended to the complaints,” he recalls. The vans were painted in Samsung colours and the engineers carried pagers (the few cellular phone users in those days paid Rs 16.80 a minute even for incoming calls).

In the last two years, as the company acquired scale and touched a $1.3 billion in turnover, it began to focus on customer services in earnest. Today, with 5,000 employees, Customer Satisfaction, as it is called, is the company’s largest division, says Naraish Razdan, its general manager.

When it put the customer service systems into place, the company decided to keep the “management” of the business under its control. That, probably, is its biggest differentiator. Even though, like other companies, it does outsource a portion of its after-sales services (the call centre, for instance), it monitors them closely and “manages” them.

“The 350-seat call centres – one each in Noida and Chennai – are outsourced but managed by us,” claims Razdan. “We own the equipment, technology and the Customer Interaction System. Even the salaries of the agents who work there are decided by us.”

It was a deliberate move to steer clear of recorded responses when a customer calls the toll-free lines for Samsung’s customer service. After the initial welcome, the voice service is replaced by an agent who interacts with the customer. “Opting for human interaction was a conscious decision for two reasons. One, we wanted the customer to get the feeling that he was being heard. Two, we did not want to irritate him by asking him to press too many buttons to register his complaint,” says Razdan.

Samsung’s call centre agents can talk in different languages, including English, Hindi, Bangla, Gujarati, Tamil and Malayalam. “The system maps the calls and if a call is traced to, say, Kolkata, there is a 90 per cent chance it will be transferred to a Bangla-speaking agent,” says Razdan. The Tamil and Malayalam services back Zutshi’s claim that sales in the southern markets have overtaken Samsung’s sales in the north, even if by a small margin. Today, South contributes 33 per cent of the company’s total sales, North 31 per cent.

Some of the problems are resolved at the call centre level. For other complaints, the call centre system maps the location of field engineers — there are 7,000 of them all over India — and informs the one who is closest to the area where the complaint has emanated from. The company boasts of an online call management system, where calls from the centre are transferred to the service centres on a real-time basis. “If a call comes from a remote town, the nearest service centre is alerted. Engineers visit such centres on designated days, pick up the complaints, and address them,” says Razdan.

Calls registered till 4 pm are attended to the same day, while those after 4 pm are addressed by noon the next day. In a city with a service centre, the turnaround time is 24 hours. At white goods company Philips, 80 per cent of the calls are completed by the third day, according to the company.

At Samsung, at the end of the call, the customer gets a business process number (or a complaint number), which also goes into the company’s database with the details of the customer and his complaint or query. “There is a system of Happy Calling just to check the customer satisfaction level once the complaint has been addressed,” says Razdan.

Competition calling
Samsung’s arch rival and compatriot LG launched its 211 service this year, where it promises to call back the consumer within two hours, fix an appointment within a day of registering the call, and allocate a one-hour slot to address the complaint. Samsung executives, however, claim that its competitor has emulated its customer service model.

“Our new initiative 211 emphasises on ‘service when you want’, which came as part of a consumer insight survey conducted by our team. It has significantly improved our customer satisfaction and service reliability in those cities where we have launched the project,” says Santosh Das, head of Customer Support at LG Electronics. LG’s 211 is available in 120 cities. It has 8,000 engineers, 1,200 service centres, and a 500-strong call centre that handles 50,000 calls a day.

Samsung has a network of over 900 service centres. Of these, 34 are company-owned, 218 by franchisees, and the rest operated by dealers.

Like LG, Philips, too, revamped its after-sales service this year and renamed it the Consumer Care division. It has 220 franchisee service centres. Its vice-president (consumer lifestyle), S Nagarajan, says the company has integrated all complaint and customer services numbers into one, and monitors them through a call centre. Whirlpool, which started its customer service as an in-house facility, now has an outsourced franchisee network of 600 customer care centres.

Ramesh Sharma, head, consumer markets, at KPMG believes that a franchisee network cannot ensure the quality of service that a company-owned service network can give. “Most companies have a centralised call centre, but the franchisee route is adopted for the actual service,” he adds.Independent brand consultant Giraj Sharma, who has worked with Onida and LG, agrees that the franchisee network system is not flawless. If the franchisee model is target-driven, it could boomerang, like it did at one of his former employers. “Franchisees either cut corners to make money or over-charge. We found that the service guys employed by them would change parts even when there was no need to, because they had to meet revenue targets,” he says.

Rajiv Kapur, vice-president, consumer service, at Whirlpool of India Limited, does not agree. “Unless the franchisee has a profit motive, he will not deliver,” he says. In his view, the franchisee model works everywhere else in the world and is sustainable. Whirlpool, he claims, has a profitable customer service model since “we also sign up annual maintenance contracts with consumers and sell product accessories. We have balanced the business well,” he says.

Putting profit second 
Samsung’s service network is different. The company “manages” its franchisees. “It was to keep problems under control that we evolved a distinct system where we support our franchisees, pay their engineers and even reimburse some of their costs like telephone bills. It is not a revenue-target-driven model,” says Razdan.

The company has stayed away from the money-spinning annual maintenance contracts business. It focuses sharply on plain vanilla service, instead, as a pursuit of profit in customer service may “leave the customer dissatisfied”. So, is Samsung’s Customer Satisfaction division making losses? “Let’s say it is not a profit engine for us,” says Zutshi.

Increasingly, though, the companies are investing in their service divisions. Samsung refused to divulge its investments in the division, but LG’s Das says the company will pour Rs 75 crore into customer service to build scale.

As competitors revamp their service, Samsung is not sitting idle. It has launched “home doctors” -- a special taskforce for the premium customers who have purchased high-end products like LCD (liquid crystal display) and plasma televisions, and side-by-side refrigerators. These teams are trained only for dealing with such products. However, to accommodate the busy schedules of the premium customers, they are also available after work hours till 10 pm. Samsung trains all its engineers at its academy in Noida.

More recently, it has expanded its central spare parts unit in Noida. “The spare parts capacity has now been increased to meet the demand till 2011,” says Razdan.

It is easy to see why white goods companies are suddenly worrying about after-sales service. The Indian consumer has become more demanding, quick to knock at the doors of consumer courts.

Rajiv Kapur of Whirlpool makes another point. The customer, he says, is not only demanding, but also does not do anything on his own, “not even change the plug socket, unlike in the West”. And probably he expects it to be done free. “So, for a company, after-sales service has become a very important touch point with the consumer. We actually give world-class service,” he insists.

For some, there is money to be made in the business. Giraj Sharma says that modern trade, retailing consumer durables, wishes to get into customer service as it is lucrative, especially if annual maintenance contracts are thrown in.Companies say customer service can build brand loyalty among consumers, who are fickle and increasingly disloyal. The glitch is that, with or without a profit motive, company-driven after-sales service is more expensive than getting work done by a local mechanic. Razdan agrees, but harps on the benefits: company personnel are trained, well-behaved, and use genuine spare parts.

There is an instance which he is not sure should be used in print, but it reflects the company’s spirit. The screen of a customer’s new LCD (liquid crystal display) television had got shattered. His son had toppled it over. He was given a 50 per cent discount on the actual cost of repairs “since the guy was honest about it and had spent so much money on the new TV just a month ago”.