Customer: King or not?

In one very, mature viewpoint.  JWT VP & Strategic Planning Director Mr. JItendra Dabbas talked about the increasing demanding nature of consumer in India. He published an article “Why the consumer should not be the King in India”. Following are the excerpts of an article, which is available on one of the blogs started by JWT.

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The sudden rise of ‘bully consumers’ in India

When was the last time you heard someone warning his mobile service provider and threatening him about switching to another brand? Or when was the last time you snubbed a representative from a reputed bank/ insurance company selling you loans/investment products? Chances are, if you are in India, you would be experiencing one or more of these frequently.
About 10 years ago, it used to take 15 days to 3 months to get a telephone installed at your residence. Today it takes less than 24 hours for an active landline connection and you can have an active mobile phone connection almost instantly. There are more than 20 banks to choose from – all of them armed with latest technologies to make your life easy.
An even more intriguing aspect is consumer behavior before all this. 10 years back, the line man from the state-owned BSNL would install the telephone after months of applying, but most consumers felt very obliged to happily offer him sweets and warm hospitality.
And yet today, when we as consumers are having the best time of our life, and service brands are treating the consumer as King, we are becoming increasingly foul.
What explains the sudden emergence of this rude consumer behavior towards service brands?

Is this the REVENGE OF THE CONSUMER?

Some suggest that increased brand choice across all categories has made him a ‘spoilt child’ and hence his bully behavior. So what could explain the increasing bad-behavior or intolerance from the consumers in a culture which is seen as tolerant and polite?
A look at the social structure in Indian society would reveal a pyramidal construction with the power gradient being steep between levels/classes.

 

The Power Distance Index

A more scientific understanding of this behavior comes from the study of different cultures by Geert Hofstede on various dimensions. One of the dimensions is Power Distance, defined as "the extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally".
India has Power Distance (PDI) as the highest Hofstede Dimension (among the five dimensions), with a ranking of 77 as compared to the world average of 56.5.

 

Implication for brands 

To be respected in such a culture, brands will need to increase their distance and will have to assume power. If brands try to play a ‘subservient’ role in such cultures they will not be treated well. Hence the conclusion that in India (and similar cultures with high PDI) THE CONSUMER NEED NOT BE THE KING. Brands should not operate from “You are the king” mindset with the consumer.

What does it mean?

It simply means that brands need to be always at a higher level of hierarchy than the consumer if they need to protect the premium-ness. If the choice has to be made, then brand should be the king.
Service brands need to be careful when they’re training their staffs in soft skills. They need to be told the difference between being polite and being servile.

A good example here is the way Vijay Mallya invites you aboard his flight, it sounds like a ‘King’ inviting you to his kingdom. The equation with the consumer is therefore stated clearly in the very beginning.
The argument that by increasing the Power Distance from your consumers you will become niche is also not correct. In fact, brands with high Power Distance from their consumers will always be the bigger and more desired brands than others.

 

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The point here to talk about this article is whether the idea put forth is relevant or not? In a market of a size of India where the purchasing power of middle class is increasing, where there is huge potential, still left unexplored at the bottom of pyramid, where there is huge competition and a margin of single percent can throw your company out of the market.  It is obvious that the companies try hard to make the major stakeholders of the company happy and that is customers.

Though it is not a sudden changing nature of Indian customer, the companies in a view to capture the market have offered huge benefits to customers. Particularly in service industry where there is no tangible product, companies differentiate only in a way of their offerings. In this process, they have made consumers the KING. It is being taught to all executives in an industry that consumer is always right and in order to capture new customers companies have to spend 5 times more than to retain their old customers so why not companies follow the strategy to make them King and it is just a way how you offer your services.

Now a day’s companies spend huge on CRM software so that they could identify more profitable customers and offer them better valued services. If customers buying behaviour is known then what is wrong in making him/her King if it in turns help companies in long term.