Customer Engagement Acquisition Delight Organizations are need of hour

Idea ReviewBy Mukul Bhartiya / September-11


I am writing this blog drawing inspiration from one book and few incidents of my life. Around a decade back I bought a path breaking book “New Age of Innovation: Driving Co-created Value through global network” written by eminent Management Experts Late C. K. Prahalad and M. S. Krishnan. This book was published in year 2008 and for me then it was another book from the world renowned experts which I must have in my shelf. Until last year, the theory of “N=1 and R=G” was another management jargon for me to make me look like updated management professional in the meetings. But before proceeding further, this piece does not represent the exact management philosophy conceptualized and propagated by both the experts. I am using it to only drive across my point.


I don’t remember but sometime in April or May last year, I bought a 500 ml copper water bottle to carry during morning jogging schedules from one of the two leading online retailers of the country. Next time when I visited the site after making the purchase, I saw a notification with the communication, “people who bought ___, also bought ___”. First space was carrying the image of water bottle I had purchased and second space was carrying the image of three water bottles made of copper in different designs. Now, if at all they apply simply their head and not the much talked about analytics probably based AI, I wouldn’t have been recommended what they had recommended me. My purchase history with them was mostly books, few clothing for myself and dry fruits. Seeing that, anyone can make an assumption about me being a bachelor with very limited needs. And let me tell you, this is not just an isolated case.  


There is another experience which is around twelve years old and I assume things might have changed now. There were couple of grocery stores in Gultekdi Market Yard, Pune, which used to do more business than any of the store of modern retail. I am sure they must be doing more business than what they were doing then. If you had visited the store, you would have found a format mentioning all the items in their store, along with column for quantity, price and total price. There was also a board hanging outside the store indicating the current price of items whose prices were volatile. Now what you were supposed to fill the details of quantity against each item, handover that sheet to a staff in the store and sit on the chair lying outside. Store staff packs your merchandize, raise the bill and call your name to pay the bill. Since our store was nearby and these stores were competition, I used to benchmark these stores regularly. 


Around five-six years ago, I was talking to one gentleman who was heading sales and business operation of a retail company engaged in selling premium furniture in Delhi. He told me that he doesn’t ask his sales team member about his/her sales numbers for first six-seven months of joining. Instead, he sends them to foreign tours to understand the taste of rich and famous, because his clients are rich and they demand exclusivity. For his clients, money comes last in order of concern; they first look for exclusivity of design and material. Moreover, these clients can’t be found buying their toothpaste in the nearby grocery store and they don’t allow everyone to get into their circle. So, for him and his team to sell furniture to these set of clientele, it is very important to understand their need and get into their proximity. 


Having been connected to retail industry for so long through either work experience or colleagues working at different senior positions in different retail organizations, I never had experience of either asking my customers about their monthly basket and their other shopping needs as above stores I mentioned or being myself asked by any retailer. We let incoming data to do the talking. Asking about the family profile of the customer seems out of bounds for any retail organization. They again depend upon the incoming data to do the talking. 


It is important to note that “Data leads but incomplete data misleads” and that’s why a multinational retail company with billions of dollar suggests a consumer with no dependent family member to buy four copper water bottles of 500 ml each. That’s why all these sound around AI based retail analytics will be helpful only when incoming data is complete. Why retailers don’t ask about the monthly basket and family profile of their customers may best be known to them. I assume they may be finding these questions as intrusive or another tedious task supposedly not core to the business, but asking AADHAR details for Payment banks are more intrusive.


Now let me bring back the reference of “N=1 and R=G”. Central thesis of the book is exhorting companies to customize their products for each customer by gaining access to assemblage of suppliers. “N=1” requires companies to focus on the importance of individual customer experience and tailor their product accordingly. It requires companies to be resilient, dynamic and flexible in their business processes and approach to reach the level of customer delight. They also advise companies to be very strong at analytics to allow management to discover opportunities and unique trends and enable companies in product co-creation. 


Though theory focuses on one experience or one problem at a time, but I am talking about the all the challenges of one customer at one place. Deployment of this idea will definitely have area and location challenge and scaling up will again lead to automation, standardization and templatization of solution reducing the human connect, but if this idea is deployed in smaller geographical area, it will bring in immense result. 


“R=G” requires companies to take horizontal approach to supply rather than vertical integration. The focus should on obtaining the access, rather than ownership, to the resource from assemblage of suppliers from outside as well as inside of the company. 


In today’s time, probably a marketer has every tool to connect and engage with the customers. If anything is missing, that can also be developed without much hiccup.


If you look at all the marketplace companies like Ola, Uber, airbnb, Amazon, Flipkart etc., you will find the examples of idea pioneered by great management thinkers. While Ola, Uber, airbnb are solving one challenge of a customer while Amazon and Flipkart are trying to solve many. Just look at the business opportunity and look at valuations; they are humongous.  


But in order to scale up at exponential speed and capture the global market, their customer engagement and delight exercise seems limited to quiz contests on app or sending promotional emails. Though primary challenge gets resolved but even entire exercise doesn’t push the market imperfections surrounding primary challenge much away from where they were. That’s why, one can find consumers having multiple apps for same services in their smart phones and browsing for best price and availability. Price and availability becomes front face of conversation between retailer and consumer. Service providers are deliberately anchoring their customers in this direction, knowingly deviating from the fact that customers buy a service or a product to solve their problem in hand and not to get the discount; discount is extra advantage. If someone is booking hotel room using either OYO or Goibibo or Makemytrip, he or she is booking the hotel room; that is the primary challenge. First priority of the customer goes to place to stay and relax, next priority goes to safety and cleanliness, third to food and of course if all of it comes at a good price, then it is considered the best deal. That’s why customers look for fellow customer’s rating of facilities, images of hotel and facilities etc. before booking the room. But in many, service providers jump directly to pricing. While writing this blog, I opened the website of a prominent travel and ticketing portal. I selected the location, but didn’t do any other activity for couple of minutes. Immediately a page dropped down anchoring me to take the bite of 25%-50% discount or straightaway Rs.1350/- discount at certain level of booking amount. Further, if you look at the event of recent acrimony between Zomato and Restaurant Association of India, the bone of contention was deep discounts offered by Zomato to its customers for Gold membership. If a food aggregator like Zomato in India thinks of discount as the first and foremost incentive to its premium customers, then nothing remains premium and exclusive in that offer. This is the not just the case with Zomato; almost all the service providers have reduced their customer engagement and delight activity limited to offers, extra money and savings. It leads market imperfections to remain not far away from where they were before these companies started their services.  


With this attitude, companies will keep burning money. Someone with better connect with deep pocketed investors will stay afloat for bit longer, but they will also have to make money and for that they will have to anchor their customers not towards discount they offering but how they are helping them in solving their primary challenge. According to Hubspot, leading inbound marketing and ERP company of the world, chances of converting a satisfied customer for a new purchase is 58% against 20% chance of acquiring a new customer for a new purchase. It makes all the sense to look beyond loyalty points getting converted in extra monetary benefits. 


It gives the rise to the idea of Consumer Engagement, Acquisition and Delight organizations or a department separate from traditional sales and marketing, because both the departments often suffer from traditional definition mindset. While one keeps trying to increase the adrenaline rush in its team members, other remains busy in writing slogans and jargons. More appropriate will be to bring sales and marketing under a separate CEAD department to bring synergy.  


A separate organization can also be very apt option in this entire gamut of sales and marketing, because then companies involved in buying and selling or creating marketplace can remain engaged in their core business. The challenge of data ownership and security can’t rule out the necessity of this set up. Challenge of data ownership and security will be of utmost importance without negating the importance of customer engagement and delight. This will require very strong analytics and lead to best Artificial Intelligence driven results. 


Customers need attention and solution of their problems and companies need reduction in the customer acquisition and retention cost, increase in revenue and margin, which only this vertical can guarantee.

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