Monthly Archives: April 2010

Retaining Customers

So, after my two year stint at IIM Calcutta, am back in Mumbai. While it has been only a week since I came home for good, I’ve already shaken up the incumbent service providers…

When we shifted to the new place, the MTNL landline took a bit more time than anticipated to shift – involved changing exchanges, and no one knew which telephone exchange served the new building. And, as one may imagine, living without a telephone connection is rather difficult – plus, not everyone at home had cell phones then. So we got the just launched Reliance FWP connection – now called Reliance Hello.

Only, now the situation has changed – everyone has cell phones. Despite reducing the rental to the lowest (officially) possible, we don’t end up consuming all the “free” calls; essentially, we are paying an amount to Reliance to just retain the number – which everyone uses to call us, even if we don’t use it to call them. So terminating the connection, while an option, is not the preferred one. Instead, I researched on the Reliance website and discovered it is possible to go the “prepaid” way.

So, I first called their call center, explaining what I wanted done. They wanted to know why I wanted to convert. Told them. As expected, they tried selling me “special plans” reducing rentals – a strategy that I’m too aware of; after all, I did study Services Marketing, Consumer Behaviour and the like! So I tell them, nothing doing, I want to go prepaid. So they ask me to submit necessary docs and request to their center, which I did – repeating the entire conversation once more to the customer service agent at the counter there.

Finally today they called me, and after the same conversation being repeated – “Sirji, Reliance ke liye aapka yeh number bahut important hai…” Yeah, right! So they ended up offering me zero rental for three months with 60p calling. I demand – what after three months? We’ll then offer you the best plan available then. Hmmm, unless you can guarantee me a lifetime zero rental scheme, no thanks! But sir, she rambles on. Time to go in the firm mode: Look, either convert this line to prepaid right now, no questions asked, or I apply for disconnection! Now, I’m talking – and they are listening. She finally relents.

The other incumbent that got thrown out was Hathway – my ISP of about six years. They are fairly decent, only they have forgotten to keep up with the times – or so it seems. I got a very sweet deal from MTNL Triband – unlimited 1mbps connection – four times the speed of my previous connection at a marginally higher cost.

Here’s a verbatim conversation I had with Hathway:

“Sir, your account is due for renewal…” “Yes, I know. But we don’t want to continue. We’d like to disconnect.” Panic! “Disconnect? Why sir?” “Because your prices are too high!” “Sir, it is only Rs.XXXX”. “Yes, but have you seen the competition? They are giving me Y at price Z.” Background discussion with his supervisor. “Well sir, in that case, we would like to offer you the same plan at reduced price of Rs.XXXX/2.” “No thanks. I already have subscribed to your competition. Now, let me know your termination policy…” Gulp! This customer is now a lost case! How will I achieve my targets now! “Alright sir, you need to return the cable modem to our office, and send us an email for termination.”

I almost feel sorry for them – they have been generally decent with their service, and have served me well. And I have some loyalty – I’d even have negotiated with them for a better deal. But what irked me, is that they did not offer me that discount upfront. They were completely alright ripping me off only moments ago. There! I quit! I will go to your competition AND you will not be able to do anything about it! I’m the devil! And if I am in an especially foul mood, I will completely ruin your day by blogging, tweeting and crapping the daylight out of your reputation.

The point is, service providers will go through a lot of trouble to try and retain postpaid customers – a constant revenue stream, generally uncomplaining cash cows that can be milked forever. And, they will only offer the wicked dirt-cheap plans when you threaten to leave. This creates bad incentives – similar to what happens in any job – pay me more, else I’m off. The flip side is the providers point of view – they are probably at their wits end trying to retain customers. The churn, that is, the number of customers discontinuing, is a big worry. Competition does not make it any easier. They try to pacify customers by offering one time discounts and the like, but obviously, only if you “threaten” them to leave. And many stay – making it a self-fulfilling prophecy. The only real deal is the tact and technique that the touch point has – the experience to figure out if the customer is bluffing – asking for a discount for getting the discount, or really wants to quit.

The other thing with these changes is that it increases transaction costs for everyone – the provider side is obvious, they have to recommission everything. But even for the customer, it could mean downtime, changes, training etc. This represents significant productivity loss for the society as a whole. Rather unfortunate then, that there is no solution to this issue. At least, I didn’t find one. If you have one, do comment below.


A Lot Of Thinking…

“I’m getting married next week!” she said.

And his world came crashing down. Life would never be the same again!

But he would obviously put up a brave face. After all, it had entirely been his fault. He had started off the relationship with the premise that it was to be only a fling, and nothing more. It would have no seriousness, and while it may have all the emotions of a conventional relationship, it would never progress to a level where it becomes difficult to live life normally.

Clearly, he had not stuck to his end of the deal – he had fallen in love. Or so it would seem to an external observer, in such a scenario. Because, while he was indeed hurt by the declaration, it was not so much because he was in love with her; he was in fact in love with no one but himself. It was more becuase she represented a lot more to him than what she should have represented.

She was an epitome of life passing by, of things changing, and of people taking stock of their lives and moving on. And while he understood, nay, he made himself believe that everything is alright and that he’d also get to that stage of life soon, his mind would not let him accept that.

They were friends, that changed into a mild relationship that fizzled out soon primarily because he was not ready, and she felt left high and dry. They came together again, only to decide that this time, it would not be emotional. Fair enough; they went from friends to friends with benefits. But it would be unfair to say that their relationship was purely physical, because they spend a fair bit of time just talking to each other, about life, principles and perspectives.

So when she declared that she had finally found the person of her dreams, of her choice, someone with whom she was willling to spend her life with, he went through a range of emotions, including disbelief, reluctant acceptance, self deprecation, and finally fact finding.

What was it exactly that bothered him more? The fact that she was getting married, or the fact that he wasn’t? He’d agree to the later – simply because he didn’t particularly care about her, or for that matter any other person. Then what aspect of him not being married bothered him? Ah, now this would be a tough one to answer, because he wasn’t too sure; in some senses, he was too afraid of what would the answer turn out to be!

But he knew it all too well – the physical is but just a perk. It was the emotional, and the ego. Someone to call his own, someone to start a family with, someone to show off, someone to talk to when the going gets tough, and someone to share the good things in life with!

The natural and logical progression of thought would be – if he cared so deeply about these things, and if he was capable of thought, why was he denying himself a proper relationship, something he could have had any time he wanted, with some exceptional partners, if not anyone of his liking. And this he wanted answers to, but didn’t have. At least not yet.

He had a lot of thinking to do.