Sunday, October 08, 2006

Customer is Queen

The Customer is the Queen. Two decades after the globalization of emerging economies began, the marketplace has, suddenly, become frighteningly competitive in each of the emerging markets, be it, India, China, Brazil, Russia or any other emerging market. Not only have new players, including a host of powerful multi-nationals, stormed into these countries, there are more brands available than ever before in every segment of every market for the consumers. Moreover, with the first flush of euphoric post-liberalization, growth rates are tumbling. Virtually every home grown business finds itself struggling for survival today.

Befittingly, for the first time in the history, delivering the final verdict will be the customer. A customer who is already finicky about what she wants. A customer who will buy, in future, only that which meets her every desire. Smart companies across the world are no longer talking about product or service quality; that is only the basic foundation on which they must stand and fight. What they are trying to do is to diligently build relationships with - and delight - their customers.

To every company in the market place changing customer expectations are really posing a major challenge. That's because expectations are wondrous creatures: They grow, they shrink, they change shape, and they change direction. They shift constantly, and they shift easily. And how satisfied (or dissatisfied) your customers are is determined by these expectations and your performance in meeting them. And the real challenge in measuring the satisfaction (or dissatisfaction) is that it just can’t be measured by taking into consideration performance and expectation. The whole measurement is a very complex process.

Because how company perceives its performance may differ from how its customers perceive it. In fact, discrepancies between company’s perceptions and customers would not be at all unusual; a company routinely encounters such discrepancies when interviewing its service staff as well as its customers. So, even if the company is working itself to the proverbial bone, if customers view it as unresponsive, then it is unresponsive — in their eyes.

The reverse is also true: If the company is really unresponsive, but customers perceive it to be delivering superior service, then the company will do (in their eyes). This view is not advocating bumble headed service, of course, but merely emphasizing that customer satisfaction is driven by customer perceptions, not companies. The customer perceptions are their reality, and any overlap between their view of the world and company’s own may be simply one of those delightful coincidences.

The companies in emerging markets will have to learn the language of customer perceptions and expectations and that too faster than their western counterparts. Because, on the chessboard of the marketplace, customer is the queen. There is a dire need to invest in understanding and managing customer expectations because that is what matters.

Next month I will discuss the issue of how to ‘manage the expectations of the customers’.

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