Tuesday, February 20, 2018

Does Loyalty still exist?

I was speaking on a Panel Discussion last week at a conference hosted by Asia Retail Congress at Mumbai with some fantastic speakers from the Indian Retail Ecosystem, where the topic for us was to discuss Customer Loyalty. While preparing the points to ponder, I was wondering whether Loyalty still exists in today’s context. Well, yes – it sounds crazy if I say there is no Loyalty in the consumer business today. Don’t believe me? Take a look.

The toothpaste and toothbrush – look how consumers get swayed by newer options and attractive advertisements? There was a joke that a dentist/compounder who would appear in such an ad for toothpaste was once seen wearing a stethoscope! The body wash/soap – the options we see at supermarkets. The clothes we wear – this one’s interesting. Let me ask you, is the dress you are wearing right now – was it the same brand that you purchased most recently? If yes, you are part of a small minority of consumers who are still brand loyal. The so-called disruption by new-age startups who thundered the e-commerce world a decade back and continue to bleed in billions – do consumers have any loyalty still left over? Again, consumers prefer to buy from trusted websites (is Trust=Loyalty? Later, on that) where they could probably have the option of returning faulty goods sold by unscrupulous vendors on whom the Amazons & the Flipkarts don’t have much command. A Big Billion Day or an interesting Sale period – and consumers swing their loyalty there.

Let’s look at a few touchy, personal products. Let me start with Gillette which I have personally been using for the past 2 decades. I started with a Presto plastic shaving razor worth Rs. 10 twenty years back. I am now using the “Mach 3 Advanced” which is some Rs. 350+ per razor! And while the Advertisement claims a 30-day use, it still warrants “Conditions Apply” such as the skin tone, number of times repeating the shave and hard water. For me, this is one classic case of Customer Loyalty where consumers have continued to stick on with the Brand and its extensions such as Shaving Gel, After Shave, Body Wash & so on. Let’s look at Sanitary Napkins. Women I know (and I don’t discuss this with many!) use a particular brand/model – purely because of operational comfort. Interestingly, Brands which come in with alternatives offer sample packs or ones with fewer pads, so consumers can perhaps try and decide. Still, the loyalty is extreme. Women continue to stick to their favourites.

Look at Café Coffee Day. With 1,500 cafes across India over 2 decades, the brand continues to drive at least one lakh consumers every day and sells over 50,000 cappuccinos daily! Cut to competition – the nearest café chain Starbucks has just over 100 cafes pan-India although the argument is that their daily turnover per café is 3x of CCD. Indeed, their food prices are 3x of that of what we get at CCD and their beverages, at least 2x. So, that explains.

Royal Enfield was an underdog seven years back, selling 1 lakh vehicles per annum. Now, they sell almost 1 lakh units per month. Today, RE sells more motorcycles worldwide than all other premium brands put together – some feat this.

So, does Loyalty exist? I have a hung verdict here t least for now. The house is definitely split over this issue. For certain products and categories, consumers show extreme loyalty while for some, there hardly exists any loyalty. Travel, Food, even Luxury – take your pick. Look through the lens and you’ll see how fragmented the so-called Customer Loyalty is. And Loyalty Cards – well, I shall write a follow-up column on this shortly.

Monday, February 5, 2018

Waiter, Please Wait.

You walk in to a restaurant and search for a place to get seated yourself. While you are still contemplating to wash your hands (yes, few of us still do) before eating, the Waiter or the Captain ask you for your Order (A Waiter manages usually 3 tables and a Captain manages 3 Waiters). The Waiter narrates the standard Menu, usually the top selling ones and at times the slowest selling ones as advised by the Kitchen King. You ask for the Menu and the Waiter sulks. You see that he Menu has atleast 200 items and start discussing with the Waiter asking for details about a few interesting names. The sulking and discomfort of the Waiter increases with an indifferent attitude as well and you decide to order something. If you are a bigger group, say 4 plus, things get a bit complicated.

Assuming you order a quick snack, even before you start digging on it, the Waiter again prods you for the next item order. And this repeats till you ask for the Bill. Worse still, the bill arrives even as you are about to start eating the last item you’ve ordered. The Waiter stands till you pay up and if it’s a plastic card you plan to pay, then he gets even more moody for the tip amount then is suspicious. Only till you have left a decent tip on the folder which usually looks dirtiest and appears to be a charity by some Bank, the Waiter leaves you in freedom to enjoy your meal. His sulking continues if he’s unhappy with the tip. And you feel miserable.

Does this sound familiar? Has it happened to you or someone you know?

This is the state of affairs at most restaurants in India, especially in South India where I spend most of my time. When the above scenario occurs, I tell the Waiters and Captains that that they are running a restaurant, especially a dine-in where patience is key. I try to explain one waiter at a time, one hotel at a time, the difference between fast-food and dine-in. Most fast-food joints in India have a pay-up/self-service model where the Guest first pays for the food and drink and then settles down at a table, standing or sitting. While in a dine-in restaurant, you expect someone to actually come to you and serve you. I take the effort to educate the Waiters the difference between the two and that the Guest has preferred their outlet over others. Some get the drift, some pass me on as a complaining customer.

The above has happened to me so many restaurants including some marquee names. Sadly, the fault is not of the Waiter, rather it is the of the Management, which hardly takes the effort and time to train the staff on etiquette and behavior. Most restaurants have this ego that he Guests are flocking to their outlets only for the food they provide. And believe the food taste, quality and price will compensate for any otherwise unacceptable behavior. There are a few at least in Chennai who provide special prices or “Combos” during popular hours and the Waiters believe they are doing charity for Guests who are short on budgets or cash.

In my last 21 years, I have said this every day to my staff – “Remember, our families are able to eat three meals a day because the Customers decided us over the others in the Market. Be grateful for that and treat them as Guests and not as paying machines”. Sadly, somewhere Business owners lack empathy and this drizzles down to the lowest guy in the rank. With his or her educational and cultural background, I do not expect the Waiters to pick up patience and empathy all by themselves. But how many company Chiefs actually walk the floor every day and see what the Guest is going through? At least, I have seen very few of them.