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".