Last week I was in discussion with the founders of a firm providing analytical solutions for retail industry. They have, in the recent past, added predictive analytics module to the offering stack.
One of the founder was enquiring from me on how one would do cross sell for a retail. I stated that a first step would be to do a segmentation analysis.
He wanted to know how one would do segmentation and what variables would form an input to the segmentation exercise. I mentioned that a host of variables can be considered. One could consider demographics, transactions, interactions, and if available even psychographics. When we went into detailing, I stated that variables such as RFM could form inputs. So one should consider variables such as weekend visits, weekday visits, time of visit, day of visit, etc.
At this stage, we had a disagreement. This person stated that RFM cannot be an input into segmentation exercise but rather it should be used to describe a segment. I explained to him that at an initial stage we should provide all possible variables and derivations of the variables as input to the statistical model and let the model identify and select the significant variables. He was still insisting, and infact continously injecting, that RFM cannot be an input.
I explained to him again that if he takes a stance that RFM cannot be an input to modelling then it implies he is letting gut-feel or instinct override the modelling exercise. This is not a right way to do modelling. The best way is to let the model do the variable selection. At the end of this exercise, it may still happen that the RFM variables will not be a significant variable. But considering the possibility that a few of the RFM related variables are significant in identifying clusters or segments, then letting instinct take over and not providing RFM variables to the segmentation model will result in incorrect segements. And any subsequent modelling exercise will further magnify this error. Often this is what happens in reality. Trying to force instinct as an input into a statistical modelling exercse often leads to a incorrect inference or scoring. And always the blame of failure is put squarely on the modelling process.
As Malcolm Gladwell states instinct is often good but it should be validated... And validation as defined by him is instinct generated after 10,000 hours of going through the same grind. And even after this instinct, he states that it still helps doing statistical modelling as an independent activity since it can be used to validate the instinct.
The person I was discussing with obviously did not come with a 10,000 hours of retail exposure. We walked apart as not best of friends. I still hold on to my stand that it is best to provide as many variable as inputs to the modelling exericse and find the significant one rather than filtering any variable upfront.
Need to know how you can segment your customers OR more important why should you segment your customer base, contact me at michaeldsilva@gmail.com. I will be glad to discuss and assist you on the same.
Friday, November 13, 2009
Thursday, September 17, 2009
Shopping Basket based business planning...
My last post was on the creation of a "Customer Relationship Manager" position as a first step towards customer centricity. I had intended to continue on this topic. But last week the local Spencer Retail outlet shutdown in our residential locality. I was thinking over why it did not work out for the retail chain to continue with the store. So I have pushed the CRM position story to the next post.
We had moved into this locality about 7 years back. At that time, in the place where the current Spencer Retail was located, a local entrepreneur had started a supermarket format called Sunrise Supermarket. Since this was the only super market around and also it was closer to our residence, we started frequenting it for all our household purchase. In fact soon it was a Sunday ritual to drop into Sunrise on our way back from church and gorge on some puff cakes.
All our shopping trips started and ended with one trip to Sunrise. Slowly we adjusted our weekend activities to be able to visit Sunrise when the crowd was at its lowest .. which was saturday afternoons.
A couple of years back, Sunrise wound up and gave its space to Spencer Retail. A D*Mart outlet opened up about a mile further down. While Spencer tooks its own time to start operations, D*Mart was quick to setup and beat Spencer to its opening. My wife and myself started frequenting D*Mart. However, we always tended to stop at Spencers on our way back from D*Mart. D*Mart did not stock non-veg items and we always needed to pick up chicken and bacon from Spencer.
Soon wife decided to drop D*Mart and visit only Spencer. There were two primary reasons for this -- (1) She did not like the quality at D*Mart, and (2) We were spending too much time at the check out counter at D*Mart. I probably know the reason for the second one... D*Mart was cheaper than Spencer and so attracted maximum crowds in a two store locality.
But everytime we came back from Spencer we were getting more and more frustrated. The number of items on our shopping list that were not available in Spencer was increasing every week. So after our trip to Spencer, my wife still insisted on visiting the local market for stuff that we could not get at the Spencer outlet.
In fact, I remember about an year back, my wife was so frustrated that she actually called for the store manager and complained about items that were no longer available. She told this person that at this rate they will soon have to shut down. That was it.. my wife predicted the downturn of Spencer Retail outlet. Unfortunately, the store manager did not take her seriously. Today, Spencer Retail has shut down the store. My wife did not use any analytics, any forecasting, nor any predictive tool... just her experience on a weekly basis to predict the store is going downhill.
Too often I have found inventory managers trying to order stocks basis individual movement of SKUs. So items that are moving slowly get eventually moved out of the merchandise portfolio for a store. No consideration is given to the fact that this item may actually complete the shopping basket of the customer. In the endeavour to focus on the fast moving SKUs, the slow moving ones are edged off the area of attention. This often leads to an incomplete shopping basket for the customer and forces her to visit other outlets to procure the missing items. When the number of missing items increases, the customer finds it convenient to avoid the store altogether and move to her regular kirana store or to another store outlet.
The need for inventory managers is to study the shopping basket to see if the slow moving item is part of a typical set of baskets. If so, then it would make sense to forecast the number of shopping baskets and then derive the number of SKUs to order basis the items in each shopping baskets.
This is not a very complex analysis. The purchase baskets are available from the POS units. Every purchase receipt is one basket. The first step is to group the purchase transactions into clusters of similarity. This can be done using either an cluster algorithm or an association algorithm. These two algorithm are significantly different and have their own objective. Once we know the number and contents of typical baskets, the next step is to forecast the number of baskets that will need to be filled. Basically, we are predicting the number of visitors to the store for each purchase baskets. When this is done, we can sum up the individual SKUs to come at the number of SKUs to stock so that all the purchase baskets are filled.
If only Spencers had done this analysis, my wife (and many others) would have continued to shop at the store and it would still be running today.
If you are in retail and want to know how this analysis can be done... get in touch with me at michaeldsilva@gmail.com
And before I windup, a reminder on the survey on the right side of the screen.
If you have come this far, do vote your view at the end of this post.
We had moved into this locality about 7 years back. At that time, in the place where the current Spencer Retail was located, a local entrepreneur had started a supermarket format called Sunrise Supermarket. Since this was the only super market around and also it was closer to our residence, we started frequenting it for all our household purchase. In fact soon it was a Sunday ritual to drop into Sunrise on our way back from church and gorge on some puff cakes.
All our shopping trips started and ended with one trip to Sunrise. Slowly we adjusted our weekend activities to be able to visit Sunrise when the crowd was at its lowest .. which was saturday afternoons.
A couple of years back, Sunrise wound up and gave its space to Spencer Retail. A D*Mart outlet opened up about a mile further down. While Spencer tooks its own time to start operations, D*Mart was quick to setup and beat Spencer to its opening. My wife and myself started frequenting D*Mart. However, we always tended to stop at Spencers on our way back from D*Mart. D*Mart did not stock non-veg items and we always needed to pick up chicken and bacon from Spencer.
Soon wife decided to drop D*Mart and visit only Spencer. There were two primary reasons for this -- (1) She did not like the quality at D*Mart, and (2) We were spending too much time at the check out counter at D*Mart. I probably know the reason for the second one... D*Mart was cheaper than Spencer and so attracted maximum crowds in a two store locality.
But everytime we came back from Spencer we were getting more and more frustrated. The number of items on our shopping list that were not available in Spencer was increasing every week. So after our trip to Spencer, my wife still insisted on visiting the local market for stuff that we could not get at the Spencer outlet.
In fact, I remember about an year back, my wife was so frustrated that she actually called for the store manager and complained about items that were no longer available. She told this person that at this rate they will soon have to shut down. That was it.. my wife predicted the downturn of Spencer Retail outlet. Unfortunately, the store manager did not take her seriously. Today, Spencer Retail has shut down the store. My wife did not use any analytics, any forecasting, nor any predictive tool... just her experience on a weekly basis to predict the store is going downhill.
Too often I have found inventory managers trying to order stocks basis individual movement of SKUs. So items that are moving slowly get eventually moved out of the merchandise portfolio for a store. No consideration is given to the fact that this item may actually complete the shopping basket of the customer. In the endeavour to focus on the fast moving SKUs, the slow moving ones are edged off the area of attention. This often leads to an incomplete shopping basket for the customer and forces her to visit other outlets to procure the missing items. When the number of missing items increases, the customer finds it convenient to avoid the store altogether and move to her regular kirana store or to another store outlet.
The need for inventory managers is to study the shopping basket to see if the slow moving item is part of a typical set of baskets. If so, then it would make sense to forecast the number of shopping baskets and then derive the number of SKUs to order basis the items in each shopping baskets.
This is not a very complex analysis. The purchase baskets are available from the POS units. Every purchase receipt is one basket. The first step is to group the purchase transactions into clusters of similarity. This can be done using either an cluster algorithm or an association algorithm. These two algorithm are significantly different and have their own objective. Once we know the number and contents of typical baskets, the next step is to forecast the number of baskets that will need to be filled. Basically, we are predicting the number of visitors to the store for each purchase baskets. When this is done, we can sum up the individual SKUs to come at the number of SKUs to stock so that all the purchase baskets are filled.
If only Spencers had done this analysis, my wife (and many others) would have continued to shop at the store and it would still be running today.
If you are in retail and want to know how this analysis can be done... get in touch with me at michaeldsilva@gmail.com
And before I windup, a reminder on the survey on the right side of the screen.
If you have come this far, do vote your view at the end of this post.
Thursday, September 10, 2009
CRM needs a Customer Relationship Manager
The Jet Airways pilots "strike" is in its third day. I am currently at the airport for my flight back home. And I am happy I did not opt for Jet Airways flight this trip. I am in all support with Mr. Goyal. The airlines exists for taking people from one place to another, always closer to their destination. By calling for a mass sick leave, the pilots have violated the basic reason for an airlines existence. I hope the government stays out this time and let Mr. Goyal run his business. It it means shutting down the airlines, so be it. This action of the pilots have hurt Jet badly and its going to take a looong time for it to get back on the market share. (And the Jet Airways counters is diplaying a panel that reads "Jet takes you places after you have flown with us".. pooh atleast they should have covered the panel till people could actually fly with them). By the way, all flights are on time ... now what are the chances of that happening on an ordinary day.
For those who have not noticed, I have a poll running on your right side of the screen. For those who have notices, I have received queries on what the query mean.
A lot of companies talk of customer relationship management and customer centricity. However, the organization structure and business process remains untouched. At most a lovely (costly) CRM application is purchased and implemented. The implementation team is asked to map the CRM application to the business process. The implementation is done, some customizations are deployed, t-shirts get distributed, go live parties are celebrated and users are forced to use the new application.
Lets break down CRM... The first word says there has to be a customer. Well, if the company still runs then obviously it has customers. So that is addressed. It was a easy one.
The next word is Relationship. Here is where a clear cut definition of what is the relationship with a customer does not exist. There are often a lot of marketing statements and marketing vision/mission statements. Somethings on lines of providing comfort to users, providing transport to users, elimination worries of customers and so on. But what exactly is the relationship. Is the customer just an acquaintance, a person known, a friend, a good friend, a best friend, a fiance, a spouse (or an ex). Most companies don't know what relationship they want to build with their customers. They have excellent order and billing systems. Customer records get created, a customer id is allocated, sales order generated and payment booked against it. Beyond this there is no definition of how a relationship with the customer should be envisioned.
Discussion on the third and last word - Management - does not make sense. Most, infact all companies, I have interacted at has failed at the second step. They do not know what relationship they enjoy with their customer. For most a customer is a consumer of their products and a consumer of their CRM processes. So they focus mainly on improving the consumption of products and the consumption of their CRM processes.
Banks have started defining GOLD or PLATINUM segments. The high net value individuals. They have clear cut definiton of the relationship with this segment. There was lovely advertisement depicting a financial advisor on her morning jog and constantly thinking of what her clients need would be. One advisor with a american bank in India once stated to me that he is expected to be part of the customer's life in any way possible... even if it means turning up at his customer's place at 6 in the morning to walk his dog. But beyond this high value segment, there has been no attempt to define relationship with the other customers.
The reason is very simple. This is because there is no "Customer Relationship" manager. A profile whose job will be to define the relationship with each segment of customer. In the case mentioned above, the bank allocates the high value customer to a dedicated group and bars all the other departments to contact this set of customer. This dedicated group is responsible for the ownership of the customer relationship. However, in these cases also, the relationship is crudely defined as "turning up ... to walk the dog" attitude to customer service. The other customers are not owned by anyone in particular. Whenever a customer buys a product, the respective product group thinks they own the customer. Thus over time there are multiple group who each think they individually own the customer and devise their own strategy to deal with the customer. A classic case, I saw at a telco, where the landline department debarred the outgoing of a customer whereas the sales person from the mobile department was in the waiting area of the same customer with a "preferred" deal for the mobile service.
Companies on the route to CRM should first appoint a Customer Relationship Manager. This profile will be responsible for defining how a customer enters the companies records, what processes touch the customer, how the relationship should be built and also how and when should a customer be eased out. All other groups - service or product - will align themselves to the definition established by the Customer Relationship Manager. A lot of culture change is needed for this attitude to set in. Especially in cases where a product sale dominates the revenue of a company as in such cases this product group tends to muscle its way to access the customer and keep others away.
So.. go ahead and set up a "Customer Relationship Manager" profile.
Now the poll question should be clear, so what is your answer?
For those who have not noticed, I have a poll running on your right side of the screen. For those who have notices, I have received queries on what the query mean.
A lot of companies talk of customer relationship management and customer centricity. However, the organization structure and business process remains untouched. At most a lovely (costly) CRM application is purchased and implemented. The implementation team is asked to map the CRM application to the business process. The implementation is done, some customizations are deployed, t-shirts get distributed, go live parties are celebrated and users are forced to use the new application.
Lets break down CRM... The first word says there has to be a customer. Well, if the company still runs then obviously it has customers. So that is addressed. It was a easy one.
The next word is Relationship. Here is where a clear cut definition of what is the relationship with a customer does not exist. There are often a lot of marketing statements and marketing vision/mission statements. Somethings on lines of providing comfort to users, providing transport to users, elimination worries of customers and so on. But what exactly is the relationship. Is the customer just an acquaintance, a person known, a friend, a good friend, a best friend, a fiance, a spouse (or an ex). Most companies don't know what relationship they want to build with their customers. They have excellent order and billing systems. Customer records get created, a customer id is allocated, sales order generated and payment booked against it. Beyond this there is no definition of how a relationship with the customer should be envisioned.
Discussion on the third and last word - Management - does not make sense. Most, infact all companies, I have interacted at has failed at the second step. They do not know what relationship they enjoy with their customer. For most a customer is a consumer of their products and a consumer of their CRM processes. So they focus mainly on improving the consumption of products and the consumption of their CRM processes.
Banks have started defining GOLD or PLATINUM segments. The high net value individuals. They have clear cut definiton of the relationship with this segment. There was lovely advertisement depicting a financial advisor on her morning jog and constantly thinking of what her clients need would be. One advisor with a american bank in India once stated to me that he is expected to be part of the customer's life in any way possible... even if it means turning up at his customer's place at 6 in the morning to walk his dog. But beyond this high value segment, there has been no attempt to define relationship with the other customers.
The reason is very simple. This is because there is no "Customer Relationship" manager. A profile whose job will be to define the relationship with each segment of customer. In the case mentioned above, the bank allocates the high value customer to a dedicated group and bars all the other departments to contact this set of customer. This dedicated group is responsible for the ownership of the customer relationship. However, in these cases also, the relationship is crudely defined as "turning up ... to walk the dog" attitude to customer service. The other customers are not owned by anyone in particular. Whenever a customer buys a product, the respective product group thinks they own the customer. Thus over time there are multiple group who each think they individually own the customer and devise their own strategy to deal with the customer. A classic case, I saw at a telco, where the landline department debarred the outgoing of a customer whereas the sales person from the mobile department was in the waiting area of the same customer with a "preferred" deal for the mobile service.
Companies on the route to CRM should first appoint a Customer Relationship Manager. This profile will be responsible for defining how a customer enters the companies records, what processes touch the customer, how the relationship should be built and also how and when should a customer be eased out. All other groups - service or product - will align themselves to the definition established by the Customer Relationship Manager. A lot of culture change is needed for this attitude to set in. Especially in cases where a product sale dominates the revenue of a company as in such cases this product group tends to muscle its way to access the customer and keep others away.
So.. go ahead and set up a "Customer Relationship Manager" profile.
Now the poll question should be clear, so what is your answer?
Thursday, September 03, 2009
Loyal customers are dying....
Last week I happen to walk by past an old book store. I had some nostalgic memories of travelling all the way to town to visit this store to purchase cassettes and books (yup, it was that old memory). It was during my college days. During the interim, a lot of things changed... I started my globetrotting and the modern retailing format and mega malls percolated into the Indian market place.
Re-establishing my base back in the city after about 5 years, I had been moulded into the browse and kill-time-with-coffee culture. I had always been a book lover and preferred having music playing in the background and going about my reading than plonking myself in front of the TV. I loved browsing in the new book store format, pick up a couple of books, settle myself in the in-house cafe and while away couple of hours with a single coffee. Hence, I always avoided this book store in the recent past.
But last week, as I walked past, my colleague insisted we enter just for the heck of it. I did pick up a couple of CDs. At the checkout, my friend wanted to reserve a CD while he did some background check on the score. The person manning the counter (who apparently happens to be one of the owners) was very rude and hardly ever smiled. It sounded very odd in this "customer friendly" era.
I remembered reading a press article highlighting how such "nostalgic" outlets catered to die-hard book lovers (or music lovers) and preferred them as customers. Thus, me and my colleague were not fitting the discriptiion of a "customer" to this book store. I feel sorry for this attitude. These "nostalgic" outlets seem to be living in a cocoon of their own make. They dont realise that their die-hard customers are getting old and dying. The new customers, myself and those of my ilk, have different preferences and attitudes for purchase. We want customized service for mass products. We want to be left alone while browsing. We want to scan the books before purchasing (and dont mind spending even around 30% of the book cost on coffee that cost a few rupees while we do it).
These "nostalgic" outlets are an endangered species. And will soon die out along with their die-hard customers. They need to soon adapt themselves to the new generation. True, they may lose their existing customers ... but this base is anyways shrinking.
Yesterday while travelling in train towards office, I was intrigued by a person in his mid-40s who was constantly making phone calls. From his discussion, I could gather that he was following up with different person within the same customer company on his payments. It turned out that he was the account manager for an agency providing security services. This customer had not paid him for over 7 months for the services of security guards which were still being provided. The dues totaled over 1.6 million rupees.
Since the guy looked very stressed, I did not initiate any communication with him. But I wonder why did this agency still provide services to an apparently bad customer. This customer was not paying them for over 7 months and still the services were being provided. The dues had climbed to 1.6 million rupees and still mounting. The agency should have stopped providing services to this customer long back.
It is true that a customer - vendor relationship is a partnership. But this should be a symbiotic partnership where both parties benefit. Partnership where one party suffers is an Antibiosis. Or in common parlance - parasitic. And nature always tries to get rid of parasites. So also, this security agency should have terminated its services long back instead of waiting for the receivables to mount to such high figure. And bad as it is, the agency was still providing services in good faith.
The world of finance has beautiful advice on this:
"One should take ones profit slowly and cut ones losses faster".
Re-establishing my base back in the city after about 5 years, I had been moulded into the browse and kill-time-with-coffee culture. I had always been a book lover and preferred having music playing in the background and going about my reading than plonking myself in front of the TV. I loved browsing in the new book store format, pick up a couple of books, settle myself in the in-house cafe and while away couple of hours with a single coffee. Hence, I always avoided this book store in the recent past.
But last week, as I walked past, my colleague insisted we enter just for the heck of it. I did pick up a couple of CDs. At the checkout, my friend wanted to reserve a CD while he did some background check on the score. The person manning the counter (who apparently happens to be one of the owners) was very rude and hardly ever smiled. It sounded very odd in this "customer friendly" era.
I remembered reading a press article highlighting how such "nostalgic" outlets catered to die-hard book lovers (or music lovers) and preferred them as customers. Thus, me and my colleague were not fitting the discriptiion of a "customer" to this book store. I feel sorry for this attitude. These "nostalgic" outlets seem to be living in a cocoon of their own make. They dont realise that their die-hard customers are getting old and dying. The new customers, myself and those of my ilk, have different preferences and attitudes for purchase. We want customized service for mass products. We want to be left alone while browsing. We want to scan the books before purchasing (and dont mind spending even around 30% of the book cost on coffee that cost a few rupees while we do it).
These "nostalgic" outlets are an endangered species. And will soon die out along with their die-hard customers. They need to soon adapt themselves to the new generation. True, they may lose their existing customers ... but this base is anyways shrinking.
Yesterday while travelling in train towards office, I was intrigued by a person in his mid-40s who was constantly making phone calls. From his discussion, I could gather that he was following up with different person within the same customer company on his payments. It turned out that he was the account manager for an agency providing security services. This customer had not paid him for over 7 months for the services of security guards which were still being provided. The dues totaled over 1.6 million rupees.
Since the guy looked very stressed, I did not initiate any communication with him. But I wonder why did this agency still provide services to an apparently bad customer. This customer was not paying them for over 7 months and still the services were being provided. The dues had climbed to 1.6 million rupees and still mounting. The agency should have stopped providing services to this customer long back.
It is true that a customer - vendor relationship is a partnership. But this should be a symbiotic partnership where both parties benefit. Partnership where one party suffers is an Antibiosis. Or in common parlance - parasitic. And nature always tries to get rid of parasites. So also, this security agency should have terminated its services long back instead of waiting for the receivables to mount to such high figure. And bad as it is, the agency was still providing services in good faith.
The world of finance has beautiful advice on this:
"One should take ones profit slowly and cut ones losses faster".
Wednesday, August 26, 2009
Too eager to serve... frightens the customer
My colleague has put up his experience with customer service at his bank. Check out Customer Oriented Banking. This reminds of a very funny albeit frustrating episode with my banker. Refer to the post on the Power of Gold since this happens to be linked with the same bank.
As mentioned, this bank had accorded to me a gold status which meant among other things that I get priority treatment at the branch. The bank's branches have a token machine at the entrance. A customer has to select the type of transaction and type of customer. So whenever I went to the local branch to say drop a cheque, I selected the "Cheque Deposit" transaction and "Gold Customer". The moment I got my token, the security guard at the entrance used to holler "Gold, Gold" within the branch. This used to happen at every visit.
It was getting very frustrating. Every time I took a token, the guard shouted his "Gold, Gold" chant and all persons in the waiting area turned around to look at the guard and me. I asked the guard why he is shouting so. He said he has been instructed by the branch manager. I asked the branch manager why this was so. He said that gold customers are accorded priority treatment and his tellers need to know a gold customer has walked in so they can quickly service his needs. I still failed to understand why the guard was shouting. The branch manager stated that I should not worry since the guard shouting is not troubling me.
I explained to him that the guard shouting is exactly what worries me. Everytime the guard shouts, the people in the branch turn around and take a good look at me. I told him that I did not want to be conspicious and would prefer to be within the crowd and quietly move to the head of the queue and move out without having come to the notice of all the people in the branch. But for some reason the branch manager failed to appreciate this concern and continued with the practice of the guard shouting "Gold, Gold".
Slowly, I started dreading going into the branch. I preferred travelling another kilo meter to the branch of another bank where I had an account and doing my money transactions from this bank. Over time I moved all my new transactions to this new bank. The old instruments at the earlier bank matured and was transferred to the new bank. Today, I only have an auto loan at the first bank.
And all along the bank has neither realized nor discussed with me as to why my transactions have dropped with the bank.
I still continue to drive one additional kilo meter for my banking needs.
If only the bank understood that I enjoy being a gold customer but hate having everyone know that I am a gold customer.
As mentioned, this bank had accorded to me a gold status which meant among other things that I get priority treatment at the branch. The bank's branches have a token machine at the entrance. A customer has to select the type of transaction and type of customer. So whenever I went to the local branch to say drop a cheque, I selected the "Cheque Deposit" transaction and "Gold Customer". The moment I got my token, the security guard at the entrance used to holler "Gold, Gold" within the branch. This used to happen at every visit.
It was getting very frustrating. Every time I took a token, the guard shouted his "Gold, Gold" chant and all persons in the waiting area turned around to look at the guard and me. I asked the guard why he is shouting so. He said he has been instructed by the branch manager. I asked the branch manager why this was so. He said that gold customers are accorded priority treatment and his tellers need to know a gold customer has walked in so they can quickly service his needs. I still failed to understand why the guard was shouting. The branch manager stated that I should not worry since the guard shouting is not troubling me.
I explained to him that the guard shouting is exactly what worries me. Everytime the guard shouts, the people in the branch turn around and take a good look at me. I told him that I did not want to be conspicious and would prefer to be within the crowd and quietly move to the head of the queue and move out without having come to the notice of all the people in the branch. But for some reason the branch manager failed to appreciate this concern and continued with the practice of the guard shouting "Gold, Gold".
Slowly, I started dreading going into the branch. I preferred travelling another kilo meter to the branch of another bank where I had an account and doing my money transactions from this bank. Over time I moved all my new transactions to this new bank. The old instruments at the earlier bank matured and was transferred to the new bank. Today, I only have an auto loan at the first bank.
And all along the bank has neither realized nor discussed with me as to why my transactions have dropped with the bank.
I still continue to drive one additional kilo meter for my banking needs.
If only the bank understood that I enjoy being a gold customer but hate having everyone know that I am a gold customer.
Tuesday, August 18, 2009
The stress continues !!!
My last post was on my experience with renewal of my health insurance policy. I thought the saga ended there. But apparently I have a sequel to it now.
After the episode in the first installment, I got a mail from the company giving details of the renewal and a renewal policy contract. I noticed that my address, name and insured person name was mis-spelt. I replied to the email with this information and listed the correct data.
The next day I received a call from "apparently a different" department stating that my policy is renewed and couriered. I share the information of error to this person. He takes my information and raises a service request for the same. He said the corrected policy card will be sent to me.
When I get my policy document via courier next day, I notice the error in name still exists. I get in touch with the call center on this and end up being rewarded with one more service request number.
In the next two days, I get one policy document package and three courier letter with my policy card in each. The last one had my name and address mentioned correctly.
The entire renewal process had costed the company two courier packets and three couriered letters with the policy card. I wonder what was the cost of renewal of the policy for this company. OR was it my mail to the Director Retail business which made my case a high priority item to be resolved at all costs. I just wonder.
After the episode in the first installment, I got a mail from the company giving details of the renewal and a renewal policy contract. I noticed that my address, name and insured person name was mis-spelt. I replied to the email with this information and listed the correct data.
The next day I received a call from "apparently a different" department stating that my policy is renewed and couriered. I share the information of error to this person. He takes my information and raises a service request for the same. He said the corrected policy card will be sent to me.
When I get my policy document via courier next day, I notice the error in name still exists. I get in touch with the call center on this and end up being rewarded with one more service request number.
In the next two days, I get one policy document package and three courier letter with my policy card in each. The last one had my name and address mentioned correctly.
The entire renewal process had costed the company two courier packets and three couriered letters with the policy card. I wonder what was the cost of renewal of the policy for this company. OR was it my mail to the Director Retail business which made my case a high priority item to be resolved at all costs. I just wonder.
Wednesday, July 29, 2009
Stressing health insurance renewal!!!
I have a Family Floater health insurance policy active for 4 years now. This policy is up for renewal in August 2009. This is a plan for 2 Adults & 1 Kid for sum of Rs. x amount. On receipt of the renewal form, I contacted the call center to inform of a new addition in my family, a lovely daughter and my wish to add her to the Family Floater plan. I was told that this cannot be done online and that I need to get in touch with the branch to get the amendment done.
I contacted the company’s representative at the local branch from where I had bought the policy. I informed him of the amendment I need to make and the subsequent premium that I need to pay. He came back with a premium amount for a sum assured of Rs. x+y amount. I told him that I wish to keep the sum assured the same, ie Rs. x. He stated that since there is an addition of a member to the plan, the sum assured has to be increased. He stated that the company does not provide a Rs. x amount coverage to 2 Adults & 2 Kids plan. I had earlier checked up the premium on the website. There is clear process to renew or purchase a Family Floater plan for 2 Adults & 2 Kids for a sum assured of Rs. x amount. When I informed the representative of this, he changed his stance stating that he is mandated to not sell a Rs. x amount coverage for Family of 4 persons.
Now, I seem at a crossroad. The call center stated I need to contact branch for the amendment. The branch representative states he needs to increase the sum assured to Rs. x+y amount. The online web site permits me to purchase a policy for sum assured of Rs. x amount.
At this moment, I pulled up the annual report of the insurance company. Something told me I will get no help from the corporate office. I found the name of the Director for Retail business and shot off a mail to him on this background. I was hoping the email id typed was right and the mail does not bounce off. When I got a reply from the director stating he will look into the matter, I knew the email id was a right guess.
That day evening, the branch representative called me and stated that he has "special approval from his ASM" for my case and he can give me the renewal with the amendment and no increase in the sum assured. The next day I get a call from the sales team from the corporate office. The person says he has to close the issue since the mail has been sent to him. He takes all my details and renews my policy.
So finally I get my health insurance policy renewed (and hopefully without too much stress to spoil my health).
And in all this melee, If only some words of congrats or best wishes been uttered on the news of my new daughter.
I contacted the company’s representative at the local branch from where I had bought the policy. I informed him of the amendment I need to make and the subsequent premium that I need to pay. He came back with a premium amount for a sum assured of Rs. x+y amount. I told him that I wish to keep the sum assured the same, ie Rs. x. He stated that since there is an addition of a member to the plan, the sum assured has to be increased. He stated that the company does not provide a Rs. x amount coverage to 2 Adults & 2 Kids plan. I had earlier checked up the premium on the website. There is clear process to renew or purchase a Family Floater plan for 2 Adults & 2 Kids for a sum assured of Rs. x amount. When I informed the representative of this, he changed his stance stating that he is mandated to not sell a Rs. x amount coverage for Family of 4 persons.
Now, I seem at a crossroad. The call center stated I need to contact branch for the amendment. The branch representative states he needs to increase the sum assured to Rs. x+y amount. The online web site permits me to purchase a policy for sum assured of Rs. x amount.
At this moment, I pulled up the annual report of the insurance company. Something told me I will get no help from the corporate office. I found the name of the Director for Retail business and shot off a mail to him on this background. I was hoping the email id typed was right and the mail does not bounce off. When I got a reply from the director stating he will look into the matter, I knew the email id was a right guess.
That day evening, the branch representative called me and stated that he has "special approval from his ASM" for my case and he can give me the renewal with the amendment and no increase in the sum assured. The next day I get a call from the sales team from the corporate office. The person says he has to close the issue since the mail has been sent to him. He takes all my details and renews my policy.
So finally I get my health insurance policy renewed (and hopefully without too much stress to spoil my health).
And in all this melee, If only some words of congrats or best wishes been uttered on the news of my new daughter.
Monday, July 20, 2009
Customer loyalty <> Loyalty cards
Time and again whenever I ask marketing personnel on their customer loyalty programmes, I get the same answer -- "Yes, we have loyalty cards". Somehow, there is this accepted practice that a loyalty programme is all about loyalty cards. There is an understanding that the more points a customer has, the more loyal he is.
Unfortunately, this is not true. Every marketer today has sponsored a loyalty card. Every credit card gives spender points. Every airlines gives mileage point. Every debit card gives cash back. So when everyone gives the same offer, there is no differentiation in your position in the customer mind.
About 15 years back I was considering getting my first credit card. The card provider I selected was the only one giving spender points. And that was the reason I selected this credit card. Today, I carry 4 credit card, and the last credit card I opted for was because it provided me access to the lounge of the airlines I use frequently. The fact that it provides spender points never entered my domain of evaluation.
Now comes the question... so if spender points is not important, can it be taken off. There is a cost to maintain the spender points accumulation and redemption. Companies can save this cost and effort. So back to the same question... can it be taken off?
My answer is "YES, it can be taken off".
The biggest challenge is to move away from the common practice of spender points. This is one ritual that often marketers dread to break away from. And more important, there is no justification statement for continuing with this ritual.
Let us consider the previous case. Do I track the number of points garnered on my credit card? No. My only expectation is to get a private location where I can work undisturbed while waiting at the airport.
So can the loyalty points be taken off? Yes, it can. But it needs to be replaced by something more relevant. To a credit card, it could be access to some facilities -- airport lounge in my case. To an airline, it could be option of booking a preferred seat. To a bank, it could be automatic addition of an appliance to the household insurance.
This will get the customer prefer your service over the competitor because he is getting some additional service that will make life easier for him.
Unfortunately, this is not true. Every marketer today has sponsored a loyalty card. Every credit card gives spender points. Every airlines gives mileage point. Every debit card gives cash back. So when everyone gives the same offer, there is no differentiation in your position in the customer mind.
About 15 years back I was considering getting my first credit card. The card provider I selected was the only one giving spender points. And that was the reason I selected this credit card. Today, I carry 4 credit card, and the last credit card I opted for was because it provided me access to the lounge of the airlines I use frequently. The fact that it provides spender points never entered my domain of evaluation.
Now comes the question... so if spender points is not important, can it be taken off. There is a cost to maintain the spender points accumulation and redemption. Companies can save this cost and effort. So back to the same question... can it be taken off?
My answer is "YES, it can be taken off".
The biggest challenge is to move away from the common practice of spender points. This is one ritual that often marketers dread to break away from. And more important, there is no justification statement for continuing with this ritual.
Let us consider the previous case. Do I track the number of points garnered on my credit card? No. My only expectation is to get a private location where I can work undisturbed while waiting at the airport.
So can the loyalty points be taken off? Yes, it can. But it needs to be replaced by something more relevant. To a credit card, it could be access to some facilities -- airport lounge in my case. To an airline, it could be option of booking a preferred seat. To a bank, it could be automatic addition of an appliance to the household insurance.
This will get the customer prefer your service over the competitor because he is getting some additional service that will make life easier for him.
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