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Household appliance maker Eureka Forbes, which rules the Rs 3,200 crore water purifier market with 52 per cent share (brand: Aquaguard), attributes a large part of its success to relentless customer support. It works like this: Currently, over 6,000 engineers make 40,000 kitchen visits every day on behalf of the company. While Eureka Forbes works with franchisees for servicing, it monitors the entire process through a centralised call centre. As part of Aquaguard's annual maintenance contract (AMC), which begins once the product is out of warranty period, Eureka Forbes sends its service engineers two to three times a year to service a water purifier, whether there is a customer call or not. The company's service engineer just walks in, services the machines and exits.
What if such regular interactions between a customer and a company representative are converted into opportunities to inform the customers about product upgrades or to make a fresh sales pitch?
When The Strategist posed this question to servicing and marketing heads at a whole range of companies, an overwhelming majority found the suggestion impractical. Some went as far as to say it was "totally obnoxious". Trust us, that's the beginning of the problem. Globally, companies such as Haier, the Chinese multinational, and Japanese automaker Toyota have proactively used after-sales visits by company representatives as an opportunity to build a relation with their prospects. Through the course of a few calls and personal visits they try to know the customer and her potential desires and hesitations. The underlying belief is simple: having that information is the key to making the next sale.
That is because one-time purchases, as important as they are, don't always net you a repeat customer. Research shows that on average, it takes seven attempts to make contact with a prospect, after which you move into the sales process. All too often, sales professionals stop at two-three attempts assuming that their earlier attempts are a complete waste. To make successful attempts at converting a first-time buyer into a patron or a brand advocate you ought to learn the art of follow up. The best part about an after-sale interaction is you don't have to begin the sales process from scratch, which may significantly increase your success rate. When you know what your potential customer needs and which points of your offering are unclear/unnecessary for her, you are able to prepare a customised offer, one that would address her needs .
This is not to say Indian companies don't realise the importance of an after-sales interaction. Some, like Eureka Forbes, have started taking baby steps in this direction. Since last year, the company has been selling a portable fire extinguisher, Fire Guard, through the leads forwarded by its service engineers. Mind you, we are not talking about a cheap product here. The fire extinguisher, which could be used at home, is priced around Rs 5,000. Yes, it is too early to talk about conversion rates and sales numbers, but the company is hopeful. Says Shashank Sinha, general manager and head of marketing, direct selling, Eureka Forbes, "I believe if one is able to satisfy the product and service expectations of existing customers, there is no reason why they would not trust the company for advice on new offerings."
Easier said...
Take another brand from the same category, Kent RO Systems. Where proactive after service is concerned, the brand wins the day hands down, say marketers. Consumers in Delhi and its suburbs have the best deal: they get their products serviced the same day. But the company doesn't look at after-sales visits as a sales opportunity. Mahesh Gupta, chairman, Kent RO Systems, says sales pitches during a service visit may not be appreciated by the customer. Other than a machine breakdown, he says, an RO unit needs cleaning from time to time. It is not necessary that the decision maker will be available during such routine visits. "It will not be fruitful to make a sales pitch to the housemaid, aged parents or children in a household," he adds on a lighter note.
Strangely, the company doesn't even insist on AMCs with customers. "We understand that the purifier market in the country is largely unorganised; so we do not believe in cajoling customers to sign up for our AMCs." Sad, because unlike competitor Eureka Forbes, Kent has an interesting product portfolio with air purifiers, fruits and vegetable purifier and water softners. Since all these products have a common proposition - safety - it might have been an idea to pitch them to existing consumers of its the bread and butter offering, the RO system. Currently, the company has 350 service franchisees and sells more ROs through the retail channel than through direct selling.
Indeed, it is not just about making the next sale. After-service can be make or break for companies with shrinking lifecycles for products across categories. For instance, if the lifecycle of consumer durable items earlier coincided with the life span of its buyer, now it is down to seven, or, at the most, 10 years. For smartphones, it is one year or less.
Marketers say the concept of unique selling proposition is also under duress, thanks to rapid technological advances, burgeoning product categories and ever-changing consumer needs.
In this scenario, customer retention is the biggest challenge faced by big and small manufacturers alike.
Consider the example of BlackBerry to understand how service limitations can really undermine a brand's prospects in a market. While the company has been criticised for its lack of innovation, its long customer complaint resolution time also played a part in its undoing in India. That is because in India RIM ships BB handsets to Bangalore to fix problems of a certain nature. The company failed to realise that no smartphone user will part with her mobile handset for a period of three days or more. Says the ex-CEO of a consumer durables company, "Today a good service engineer-customer rapport works far better than any high decibel brand campaign. Good customer service will be a solid stepping stone to any big or small sales pitch."
...but doable
Now see how some companies are trying to get a handle on this issue. For companies eying customers in their service database for fresh sales pitch, selling low value products could be a starting point. Whirlpool sells accessories like scaling powder and plastic covers for its washing machines through word of mouth by service engineers. Says Shantanu Dasgupta, the politically correct vice-president of corporate affairs and strategy at Whirlpool of India, "We do not push these products. They are part of our differentiated offering to customers who have invested in our appliances." The company has a parallel sales set-up within the service infrastructure that sells water purification products.
To standardise its service delivery, Godrej Appliances has been investing consistently in training its army of 4,000 service technicians. The company has established training centres at each of its 22 service centres across India. AMC adoption level among Godrej's customers post the warranty period is 10 per cent of the overall products sold in a given year. On an average, the cost of an AMC to the customer comes to 8 to 9 per cent of the cost of the product. In fact, over the last five years, Godrej has worked hard encouraging customers who own the company's ACs to buy the AMC before the warranty period expires. The company claims to convert 70 per cent of its AC customers every year into AMC buyers post the warranty period.
Four years ago, when the company decided to push its water purifiers and UPS systems through the direct selling channel, it chose to rely on the marketing savvy on-ground service team. Kick-starting this initiative in Maharashtra and Karnataka, the service team was asked to make sales pitches for Godrej's UV purifiers during customer visits. Since the task at hand was to first resolve an existing problem, the team was asked to give its best shot and observe the customers' satisfaction levels first. For instance, even after resolving the problem regarding an appliance, the service representative may have to be patient and hear out an irate customer's outburst because the turnaround time for the complaint was long. In this scenario, the servicing guy left gracefully. However, if the customer was in good spirits after the service, the service representative was encouraged to make a fresh sales pitch. Says Ravi Bhat, national head, service, Godrej Appliances, "The idea was to pitch our products to happy customers. Today across major metros, Godrej's turnaround time for customer complaints is 24 hours."
To sum up, carefully preparing for your follow-up visits, learning about your customers' needs and modifying your offering to fit those specific needs is what makes the follow-up such a successful sales tool. Having all that additional information simply makes better sense than making a number of blind calls.
Mind the KPIs
Expert Take
Gopal K Gureja, author of Organisational Schizophrenia
If the product ‘upgrades’ call for replacing one plug-and-play equipment with another — as in the case of most white goods — it is, by all means, a sales function and one can use available data base to plan appropriate timing for making a targeted pitch for selling new upgraded products.
For selling add-on jobs to ‘upgrade’ the existing product and/or system, highly engaged, knowledge empowered service engineers are certainly a better choice. This is so because they enjoy much more credibility with the customers as compared to sales engineers. There is, however, one important caveat that must apply. Let us see what is it and why is it so important.
The needs of equipment users fall broadly under two distinct tiers and in each case they seek competent response as speedily as the situation demands.
Tier I: Optimum availability
Whenever a breakdown occurs time is at a premium. To deliver a positive customer experience it requires a high degree of responsiveness, optimum logistical support and technical competence.
Tier II: Optimum effectiveness
Sales of product or system upgrades call for a higher level of knowledge about the product as well as the process. However, unlike tier 1 needs, in this case there is no desperate pressure of deadline.
If service engineers are exclusively assigned to meet performance targets relating to either Tier-I or Tier-II tasks, the system can work fine. However, as usually is the case, if a an individual is assigned the task of meeting Tier-I and Tier-II needs, priorities can get distorted in favour of selling upgrades rather than attending to breakdown calls. This is because in service engineer’s perception, his self-interest is served better by performing those tasks which help him meet his quantitative performance targets. Tier-1 jobs are sure to get lesser attention ending up in customer dissatisfaction.
