The Hindu Business Line : Enemy of our own making

Two-time Pulitzer prize-winning historian Barbara Tuchman starts her book The March of Folly by firing off a series of questions. Each of these questions seeks to establish the basic principle of the book – which is that civi lisations, empires, kings, religious leaders, politicians and companies almost invariably follow policies that are contrary to self-interest. And that often these policies are pursued when the entity is at the height of its power. A sampler:

Why did successive ministries of George III insist on coercing, rather than conciliating, the American colonies when repeatedly advised by many counselors that the harm done must be greater than any possible gain?

Why did Charles XVII and Napoleon and Hitler successively invade Russia in spite of the disasters incurred by each predecessor?

Why in recent times have British trade unions in a lunatic spectacle seemed periodically bent on dragging their country towards paralysis, apparently under the impression that they are separate from the whole?

Why does American business insist on ‘growth’ when it is demonstrably using up the three basics of life on our planet – land, water and unpolluted air?

My purpose is not to embark on an historical debate but to use this principle from this work to pose a question of my own:

Why do companies continue to follow policies and practices that are guaranteed to increase customer disloyalty, leading to what I call customer cynicism?

I had two experiences recently that convinced me of something that I have long suspected. Companies really do not care for me once I am a customer. They only care for me until I become a customer.

So here is the first experience. I went to a showroom to repair a particular widget (I am being kind and withholding names) a couple of weeks ago and walked into this plush showroom which opens smack on the main road with signage saying ‘XXX customer care centre’. Lovely place. Clean, well lit, beautiful displays, wonderful air-conditioning (believe me, in Chennai in summer you want to get off that street and into the air-conditioning as fast as possible).

After admiring the displays I confessed to the smart young man attending to me (resplendent in a tie) that I was not there to buy a new one but wanted to fix my old one. “Oh! You want customer care,” he says (ignoring the fact for the moment that the sign hanging outside his showroom proclaimed that exact same thing to the world). “Go out of the door (and into the searing heat again), turn right and right again at the corner of this building. Walk to the back of the building, take the stairs to the first floor, they will attend to you.”

So off I went (into the heat), found a really narrow set of stairs (so narrow that I met someone coming down and had to back down the stairs as there was not enough room for two to pass) and got to this room … no air-conditioning, plastic bucket seats, a dirty floor – and not a tie in sight! Lesson learned: Once you are my customer, go to the back of the house, the front is for prospects!

Second one – again no names. I met someone who had signed up with a service provider I have worked with for the small matter of around 10 years (probably more). We compared notes and found to my chagrin that she was being charged less for the exact same service than I was, because she as new customer fell into honoured guest category, and I, clearly as loyal old customer, did not fit in!

Shedding being facetious for the moment, why do companies behave like this? Both the companies are renowned worldwide brands. I have lots of hypotheses, but no real answers. Because it appears to me to be simple lack of application of common sense. Nobody wants to read articles about common sense. Do you? Which, of course, leads to the question of what the point of this article is in the first place. Well, being as I am in the business of business for the last 30-odd years I asked myself this question: ‘What is the single largest threat facing businesses today?’ and the answer that came to my mind is customer cynicism.

We have created a new monster, a dragon, called customer cynicism. Customers do not feel the urge to be loyal any more. Customers are selfish, formless and have less emotional connect with brands, and shift at the drop of a hat. And we hear fancy analyses about why this is so, what anti-incumbency means, why it is inevitable, how customers are insatiable and unreasonable and what have you. Completely ignoring the fact that this is learned behaviour, taught to customers by businesses themselves.

The lesson we have taught customers is: Once you are my customer I don’t value you as much as I do the new customers I am running after.

And we have done this by sending them to the ‘back of the house” consistently once we acquire them. Ask your executives (yes, I mean executives as in senior management) to track and report time spent on customer acquisition activities as against customer retention activities over a six-month period. The answer will hit you in the face!

My submission is that unless we completely reverse the relative importance of these two facets of running a business – acquisition and retention – customer cynicism will continue to grow till it becomes unmanageable. And we will have no one to blame but ourselves!

The writer is President – Corporate Strategy at Servion Global Solutions, a specialist in customer interaction management.

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