Pay as you perceive

January 28, 2013

I was known to be a good negotiator (with vendors), when I was at my previous company (my boss thought so  but my wife disagrees).  The key was my patience – I was prepared to wait, for longer than most others, till the vendors brought down their price within our budget. A willingness to explore alternatives and compromise on the peripheral items also helped. Despite my so-called negotiation skills, I always had the grudge that we were paying our vendors a lot more than the value that we got. There is a huge premium paid for the brand name, most often, defying rational thinking.

When I started my own venture, offering leadership training based on Thirukkural, I decided to do away with this endless cycle of negotiation. I did not want to put a price tag on myself. I did not want to get paid only for my brand and pedigree – my college; my past experience; the positions that I held earlier.  Of course, the brand and pedigree help to establish my credibility with strangers; but I did not want those to dictate how much I was worth NOW. I felt that the only thing that mattered was what I was offering now and what value is seen by the customer.

I decided to go with a ‘pay as you perceive’ model of pricing. I asked my customers, to pay me based on their affordability and the value that they perceived. I, naively, thought that customers will feel most comfortable with such an approach. On the contrary, most of them felt uneasy at the beginning; some of them doubted if it was yet another fake sales ploy, similar to that of a friendly neighborhood plumber or an electrician who initially leaves the amount to our choice, and later, scratches his head expecting more; some of them insisted on a quote from me; a sympathetic customer even said he will help me find some smart MBA who will work out a pricing model for me.  I gave in the first time and submitted a quote but accepted the price offered without a debate;  started giving a benchmark later on; and nowadays, mostly, avoid giving any price.

It is not an entirely original thought. While there are numerous precedents in the ancient world and is in line with the thoughts of Thirukkural, there are those who have done it in the modern business environment too. I had been to Hotel Annalakshmi at Coimbatore, 10 years ago. They had done away with standard pricing and gave a blank book without a bill at the end of the meal. I paid the market price plus tips. There is also a wonderful short story in Tamil by Jeyamohan (சோற்றுக்கணக்கு), which narrates the tale of Kethel Saheb, and his restaurant at Trivandrum, where the hospitality remained the same irrespective of whether the customer paid nothing or a stash of money.

My early lessons, from my limited experience so far : people will not pay a premium but are always looking to pay a fair price (in their view). This approach has removed the price equation from the negotiations. Now it is all about whether they see value in the training that I am offering, whether they have the bandwidth to run a training program at that point of time, how much value they perceive and how much they can afford.

I do not view this as a smart marketing strategy. It does not open doors for me that would otherwise have been shut. I have to work as hard as other business ventures to get opportunities to train. But I know for sure that I will never lose a customer because they can’t afford me.

 

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Sweat, stink and some management gyan

April 20, 2012

A 50+ year old man sat next to me on the Volvo bus. The first thing that struck me was the stink. It was a hot afternoon in Bangalore and it showed in his sweat. The driver had not yet started the bus and had not switched on the AC. I am sure he must have felt the same about me.

“What a pain it is to sit in an AC bus without the AC on…with all these sealed glass windows!”.

Both of us didn’t have confirmed tickets yet, and so didn’t venture out.

I told him there was also a private Volvo bus outside the bus stand, with tickets costing Rs.50 less. He exclaimed, ” Oh, had I known, I would have taken that bus! I could have asked them to boost the price on the ticket by Rs.200 and claimed it.”

Ah, finally, the driver had come and the AC sprang to life.

I asked him, if he was working for the government.

“No, no, I have worked in private companies for the last 25 years.”.

He is now in a company that is primarily into manufacturing transformers.

“I am travelling to Chennai, and have to take a train to Delhi early in the morning. From there, a bus to some place in Haryana.”

He then talked about various other places he has visited in Rajasthan, Maharashtra, Punjab and Gujarat.

He didn’t have the polish of a Sales guy. Are you in Sales?

“No, I  travel to attend to service calls. To fix our machines that have broken down”.

But he wasn’t a full-time service person. When he was not on the road, he was working on the shop floor, in production.

“If I work for a full day at my company, I bring in Rs.13 lakhs of revenue. Look at what I am doing now – travelling to an obscure place in Haryana and then to Gujarat, spending most of my time on the road. All this is because our middle management doesn’t care about process and quality.”

He also feared that they would soon need a full-time service team.

“Some of the problems that I am fixing at customer sites are very basic. There are new machines that have broken down because there is no oil. The seal is intact, there is no way the customer could have tampered with it – it is a clearly our fault. This is absurd. I have no idea how these machines were cleared to exit our factory. Our managers, with their fancy engineering degrees care only for the revenues.”

But before we jump to the conclusion that this is typical anti-management mumbo-jumbo, expected from any factory worker and even IT professionals, he is in awe of his MD.

“Our MD is a good man. He is young and wants to build a top-class company. He is willing to listen. He gave us Rs.30000 hike at one shot after one of our discussions. He is always willing to be convinced. But that works to his disadvantage too. He is easily convinced by the managers. He is open and I have personally hinted about the attitude of managers to him. But I can not talk more than throwing some hints.”

He thinks money is the root-cause of all problems.

“Including me, I think we are being paid too much. It kills the desire to work hard.”

I didn’t ask him, why was he then ruing the missed chance to claim Rs.200 more, wrongly.

Despite everything, he believes the workforce is motivated and loves his organization.

“We have a very good workforce. Even a person, about to retire, works at 120% productivity on the last day. If only we had good managers…”


Dumbing down of customer service

February 20, 2008

I am going to post a sequence of emails, which clearly demonstrate the dumbing down of customer service due to the mass-market approach to service. As a customer, I dont have a face to talk to and the responses that I receive from the faceless customer service agents are mind-numbing.

This post is after a series of ‘mental harassment by inefficiency’ by ICICI Lombard, India Today Book Club, HDFC Bank, Fidelity Mutual funds and Big Bazaar in the last month alone for me.

Mail 1 (to CitiBank, dated 6-Feb-08):

Hi

I have an auto loan with HDFC Bank and have opted to pay EMI through ECS on my Citibank Account (A/c No xyz). The ECS has been happenning smoothly since August-07 till Jan-08.

On 2-Feb-08, ECS for Rs. 16275 has been done and then reversed on the same day. There is an entry in my Citibank account statement stating “ECS BOUNCE : MANDATE NOT RECEIVED “. When I contacted Citiphone Banking,  I have been asked your executive to contact HDFC Bank regarding this – I have been told that ECS instruction for this month has not been submitted by HDFC Bank to Citibank.

I am not too clear who is at fault here. Request you to confirm if I have been given the right explanation and whether I have to pursue this matter further with HDFC Bank.

— 

This mail, as is obvious, is written after I g0t a thoroughly incompetent and inconclusive answer over phone from Citibank Customer Service. 

There was not even an automated response to this mail till 14-Feb-08 and I had to send a reminder.

Mail 2 (dated 14-Feb-08):

Hi I have not received any revert on my previous mail.  The communication that I have been receiving so far from HDFC Bank is that there is nothing wrong from their end and the ECS needs to have happened. Please revert on what needs to be done. — 

Finally I get an auto-response on 15-Feb-08.

Dear Customer,  

Thanks for writing to Citibank. We have received your Query.  The reference number for your query is abcd.  We shall get back to you in 3 working days.   Please reply to this mail for any future communication on this query.   

 Sincerely ,

 

Then I do get a real response on 16-Feb-08.

Dear Mr. Kannan,  

This is with reference to your email dated February 07, 2008.  We confirm that due to operational error the ECS Debit Instruction received for Rs.16,275.00 from the Service Provider ” HDFC Bank Limited ” has been erroneously returned on February 02, 2008.  We aplogise for the inconvenience caused. We assure you of our best attention at all times. 

Sincerely, 

Officer – Customer Care

 

After this mail, I am no more knowledgeable on what to do next than I was on 6th Feb. Here goes one more mail from me on 18-Feb-08:

 

Hi 

The next step to be taken is still not clear to me. Will you be correcting the error and completing the ECS Debit for Rs.16,275? Please confirm when this will be done. I should not be penalized by HDFC Bank for this error. 

Thanks.

—–

By now, HDFC Bank insisted on making me pay by cheque, which I have done, after having to unnecessarily visit their branch. A threat of late payment charge, for no fault of mine, from HDFC Bank is still looming over me.

I am at the peak of my impatience. This is sheer harassment by inefficiency and negligence.

Then comes an email from Citibank that pushes me off from my peak.

Dear Mr. Kannan, 

This is with reference to your email dated February 14, 2008. We have already responded your query vide email reference number xyz. The response is stated below for your reference. 

We confirm that due to operational error the ECS Debit Instruction received for Rs.16,275.00 from the Service Provider ” HDFC Bank Limited ” has been erroneously returned on February 02, 2008.  We aplogise for the inconvenience caused. We assure you of our best attention at all times. 

Sincerely,  Officer – Customer Care

Oh, yes, I am getting the best attention possible in this world. 

I can do nothing more. How do I explain to this faceless customer service machine that I deserve an answer with more clarity. Will the ECS happen or not happen? Having already given a cheque to HDFC am I going to be debited twice this month? Will the ECS happen smoothly next month?

I can only do this post now and hope that next month this doesnt recur.  I am shooting off one more mail seeking assurance that next month I will be spared of this torment.  

P.S. 

Am  posting this update a day after my original post.

Finally I got a sensible answer that I deserved long back.

Dear Mr. Kannan,

This is with reference to your email dated February 18, 2008. We inform you that ECS instructions are maintained with the service provider by the customer, to repay for the service enjoyed. The specific amount will be transferred from the customer’s bank account on a specific date of every month.   These ECS instructions are routed through RBI with specific Utility Code number, to the customer’s bank account for execution. Hence, on receipt of the ECS Debit Advice through RBI, your account will be debited with the respective amount.  Henceforth, on receiving ECS Debit Advice from the Service Provider(HDFC Bank Limited ) under the Utility Code number 5609124 the respective amount will be successfully debited from your account. Any inconvenience caused to you in this regard is regretted. 

We assure you of our best attention at all times.

Sincerely,

Officer – Customer Care

This reply, had it been sent in the first place or even better given to me during my first phone call, would have saved a lot of time, heartburn and tension for me. Modern institutions, even as they are adopting newer business models and technology to cater to the mass market, have to learn to get it right the first time and more importantly, retain the human touch in customer service.


In search of satisfaction

January 21, 2008

Satisfaction has become the most elusive commodity for most people employed in high-paid white collar jobs. Companies have been spending millions of dollars on initiatives focused on retaining its employees or improving employee satisfaction scores, all to no avail.

What is the core of the issue? Is it because employees are underpaid? No, technology, sales and finance jobs were never more rewarding than now. Is it because employees are not given responsibilities? No, people take on massive responsibilities very early in their careers. Is it because there are overworked? Absolutely no, people are addicted to work and are willing to work non-stop when the need arises. On the contrary, most dissatisfaction stems up when they are underworked. Are bad bosses driving people crazy? No, many people are dissatisfied in spite of excellent rapport with their bosses.

Why then, these endless waves of exasperation? Why then, all this blogging and online community networking, while at work? Why then, the continuous monitoring of the clock, which seems to be ever so slow?

What is it that the modern day educated smart workers want? Did not our parents do the same monotonous jobs for ages without complaining (even if they did complain, without ever thinking of quiting at all)? My mother has been a cashier for 35 years and if she had earned a percent of what she has counted in all her life, I would never have had to work. Can’t we still see so many other people, not privileged to be so educated, toiling in their jobs without ever bothering to complain – like the traffic policeman, lift operator, cab driver, bus conductor and all others involved in hard physical labour? What makes our young educated generation so special that we are perpetualy dissatisfied?

If you were looking for well researched answers at the end of all my questions, I dont have any. If I believe in fate, I would have simply concluded that this generation of educated youth is doomed to be dissatisfied. I dont believe and I can only speculate about the answers.

One glaring aspect in modern corporate culture, is the complete lack of emotional attachment with the company. Companies which have managed to instill a sense of purpose, pride and emotional bonding have succeeded in creating a conducive environment for people to enjoy their work. Once I visited Taj Lake Palace at Udaipur and everyone there, from the receptionist to the sweeper, was wishing me and greeting me, with a broad natural smile, even when no supervisor was in sight.

Very few have managed to do this and most companies do not even attempt to create an emotionally charged workplace. They try to appease their employees by offering more money, better infrastructure, overseas trips and friendly policies without ever touching that emotional chord. I believe that this emotional vacuum is what sucks employees into the endless cycle of discontent. They quit and move to another place which offers them even more money, still better infrastructure or posts them abroad. The result is the same. The same vicious waves of dissatisfaction.

The next challenge to the capitalist society is not going to come from the proleteriat-bourgeoisie class divide (it is difficult to tell the difference between the two now) but from the inherent, seemingly purposeless discontent simmering among the educated youth.