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Part - II

Managers need to make a greater effort in understanding the needs of the customer and servicing those needs promptly or else in a fiercely competitive market place risk losing out to competition. Some managers may argue that they often receive unreasonable requests from customers and they possibly cannot satisfy them all. This is where a manager needs to use his business acumen along with his analytical skills to determine the opportunity cost of losing a customer, the replacement costs in finding another customer and the business cost of a dissatisfied customer. Bringing all this factors in perspective, managers will be able to effectively take business decisions that will grow the business.

Balancing the risks associated with different types of customers with the potential revenues that could be earned through them will give managers a clearer picture. Developing a risk-service matrix to determine the service levels that could be provided to customers will help managers gain business insights and avoid service glitches. In any such modelling exercise, care needs to be taken to link the present situation to the future possibilities where a positive change in customer circumstances will benefit the company. For example, the needs of an entrepreneurial consultant would be different from the needs of a salaried accounts-clerk in a manufacturing organisation. If you can identify and differentiate these needs, you can offer mass-customisation. Of course, but credit card firms do offer Silver, Gold and Platinum cards. Within these broad categorisation as well, there will be ample opportunity to customise the service offer. For example, in my case, the service officer should have asked me at the time of application of the card whether I would want an electronic transfer facility. That was a lost service opportunity. Such lapses in identifying service opportunities could prove costly to the firm in the long run.

Companies have to learn not to penalise Poonam for Pallavi's mistakes. Just because there is one bad apple in a basket, you do not throw away the entire basket. That is foolishness and wasteful. Managers have to combine analytical skills with commercial acumen and common sense to understand the different customer profiles, segmenting them by the needs as well as risk profiles. This will enable companies to gain a higher market share in a fiercely competitive market place.

Concluded.

* Contributed by: -
Hanif Kanjer,
MBA (London Business School),
Director - Rustomjee International School, Mumbai.