The so-called customer care service of one of India ?s largest mobile phone operators regularly calls me, and then asks, ?What?s your name, sir?? Their intention to perhaps offer additional services may be good, but their insensitivity is appalling. Having been their subscriber for the last ten years, obviously I?m in no mood to reciprocate enthusiastically to reveal my identity.
This clearly demonstrates the tactlessness of companies who ignore per capita growth because market penetration possibilities is high in populous India. Running after new customers in new geographies is the quick-fix business expansion route. Do companies glance back to seal the existing customers? emotional bond to the brand? Business houses relegate that job of acquiring emotional connect to television ads. Understanding of who the customer is not on their priority agenda. Failure to connect to existing customers may shut the door of what business sustainability thrives on?the customer?s decisive, regular repeat purchase.
Your brand?s regular, repeat purchase can be extremely volatile as it is dependent on the customer?s capricious decision. Unless the brand knows how to lock her in, she can move away at whim.
The character of different products and services demands relevant purchase cycles ranging from daily to short, mid, long and extended terms. ?Milk, bread and petrol may be purchased daily, FMCG products weekly and apparel every two months. Flamboyant, gizmo lover or novelty seeking customers may buy mobile phone handsets every six months, others every 24-30 months. TV set or AC purchase is long term, every four to five years, while automobiles are changed in five to seven years, aircraft purchase falls into extended term of 20-25 years. In services, you could do fortnightly business of air tickets, courier or bank transactions; leisure travel, hotel bookings once or twice a year, or for business every other day.
Per capita consumption of your product or service gives stability to your business. If your brand does not figure in the customer?s decisive, regular repeat purchase cycle, you have not read her subconscious mind. Korean refrigerators successfully occupied the customer?s mindshare to make a durable product into a consumable. From buying one every 20 years, people now change their refrigerators within six to seven years.
Irrespective of any buying cycle, your brand?s biggest danger is the infrequent buyer, lapser or those who swing at the last moment of purchase. This happens because industries pay scant attention to their customer eco-system. Businesses spend time in backend management, acquiring assets, but leave customer centricity to hypothetical presumption. Have they compulsively enquired, ?Who is my customer? Why is she my customer? What is her social standing, family, health, education, earning and living condition?? Do businesses have pictures of their customer profile pasted on company walls to invite employees to become sensitive to them? Instead I?ve often seen paintings, company policies or HR initiatives on office walls. Poor infrastructure in India makes industries dependent on wholesalers who generate 40 to 60% sales. Traceability of this buyer is totally unknown.
Customer loyalty programmes have become prevalent but transactional, gently bulldozing members to buy, not understand their psychological make-up. Going back to the mobile operator, the biggest ambition is to bundle offerings for winning the price war. On querying subscribers, I only hear of the best promotions, they never talk about service quality.
B2B businesses like India?s $60 billion IT services exports mistakenly consider that understanding the end-customer?s ecosystem comprises the B2C domain. They don?t seem to realise that at the end, the end-customer is delivered a product. Not knowing the end-customer?s purchase cycle prevents them from understanding their client?s business. Their clients are under regular pressure to sweep up their end-customer?s decisive regular repeat purchase as per industry norm, and get per capita, priority to penetration growth.
Most Indian IT companies struggle to upgrade from technical cost cutting vendors to strategic business partners. They want repeat business in healthcare, energy, utilities, banking and insurance financial services, manufacturing, telecom, automobiles, aviation, retailing, consumer good, electronics among others, become sticky partners, increase customer wallet share. But it?s doubtful if they pay attention to their client?s only business prerogative, their end-customer?s decisive, regular repeat purchase cycle.
So I return to basics. Modern industry should take a cue from the Indian mom&pop (kirana) retailer?s immense customer knowledge, minus his poor hygienic sense. Prioritise your brand?s activity and investment in understanding the customer?s intangible areas first. To get your target customer?s endorsement of ?I believe in it, it works well for me, it looks good? your brand has to excel over competitors in quality and functionality. Once these two factors are satisfied, it?s easy to make the product look good to induce repurchase.
Everybody cannot be your customer. Define your core customer who contributes to 70% of your business. Capture her psychological, social, family, health, economic aspects and cater to her predictably. She shouldn?t become a lapser, or your business will get peripheral and satellite buyers only; they are ad hoc, infrequent, swing or take trials only.
Global fashion brand Zara from Spain has completely understood the consumer?s hedonistic mindframe to have a differentiated fashionable wardrobe. Accelerating industry rules to satisfy her desire state, they change the entire stock in the store every 15 days. With complete control over creativity of their 200 designers, manufacturing, distribution and retailing, they increase per capita purchase through strong spread of word-of-mouth. Instead of buying different brands, their customers indulge in decisive, regular repeat purchase.
It?s important for industries dependent on mid, long and extra long purchase cycles to penetrate to new customers for everyday business. If these industries have defined their core customers, and they are satisfied, they will become the brand?s strong ambassador to spread word-of-mouth. Internet social media can then be activated for real penetration. Such customers are more powerful in attracting new customer profile than advertising. Ads only create awareness, satisfied customers create the pull factor. So give second priority to assets. Instead invest time, money and effort to understand the customer?s physical and intangible aspects to get your brand?s decisive regular repeat purchase.
Shombit Sengupta is an international creative business strategy consultant to top managements. Reach him at http://www.shiningconsulting.com
