New Delhi Times

Gaurav Bhatnagar reporting from New Delhi, India

Customer service driven approach to business

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I had a brain wave couple of days back! It was one of those moments when in a flash a new idea dawns upon you. I was reading reviews on a popular Indian B2C portal (name withheld!) on mouthshut.com. The reviewers were absolutely vicious in their condemnation of the web site – especially their customer service. I don’t know much about this particular website, but it does appear that they are a marketing driven organization. They have a very recognizable brand and most certainly their marketing budget runs into 10s of crores of Rupees. While reading those customer reviews, the obvious dawned upon me (OK so it wasn’t much of a brainwave but I had never thought along these lines!). 

Allow me to elaborate. In software development, we have a concept called “test driven development”. Essentially what that means is that when a new feature is to be added to a product, the test team first figures out if it is even possible to test this new feature. If not, then the test team can veto the feature even if developing the feature is feasible. I love this approach because building a product or a feature that can’t be tested isn’t very useful. At Microsoft, we had once shelved a feature that required setting up elaborate networking infrastructure for testing it. It was just way too expensive and unreliable to test. This approach is great because it makes sure you build only something that will work well in the hands of the user. Now lets apply that analogy to any consumer focused business – say an online book retailer (the website mentioned above is not a book retailer!). Imagine they have a budget of (say) $10 million. How do they decide how much to spend on product development, how much on marketing and how  much on customer service? More often that not, this decision happens in the same order – first figure out how much money is required for building the product, then set a marketing budget and as the product starts selling ramp up on customer service. I think its a flawed approach. This is precisely the reason why customer service sucks universally.

Now consider the opposite approach – which I will call customer service driven development. In the above example, the book retailer figures out what it will take to provide top notch customer service. That might mean setting up a call center, signing up with courier service, selecting and deploying a CRM system etc. So in effect, there is some cost associated with servicing a customer. Note that there is customer service cost associated with every new feature you add in your product – this could be cost of educating the users or the cost of servicing more customers that buy as a consequence of adding those new features. From this analysis would emerge the amount of volume (in terms of users and sales) that the website’s customer service infrastructure (CSI) can handle. Say it comes to handling 300 book sales per day. Now from this should be derived product and marketing budgets. What kind of product do we need to do 300 book sales per day? And how much do we need to spend on marketing to attract enough traffic to reach 300 book sales (and NOT reach 1000 book sales)? Ideally the customer service infrastructure should be redundant so when sales and marketing is targeting 300 book sales, the customer service infrastructure can in reality handle upto (say) 500 book sales. Each time a new feature is considered for the product, the question should be asked if our  CSI can handle the consequences. Each time a additional dollar is kept aside for marketing, the question should be asked if CSI can handle the additional sales.

This is obviously the hard way to do business which is why it is rarely followed. This is also why we get to hear “your call is important to us blah blah blah” each time we are forced to call up customer service. But I really hope that we see more businesses follow this model successfully because the state of customer service is the pits today!

Written by gaurav

November 15th, 2006 at 10:29 pm

Posted in My Company

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  • Harsh Kundra

    Gaurav,
    Very insightful article. Customer Service can be leveraged in another very big way -> Product Development. These folks work most closely with the user, understand their problems the best and often know the most critical pain-points of the user. In small companies, that don’t have huge budgets for usability and user research, this can and should be very important information helping in design of new features!
    Cheers,
    Harsh

  • Harsh Kundra

    Gaurav,
    Very insightful article. Customer Service can be leveraged in another very big way -> Product Development. These folks work most closely with the user, understand their problems the best and often know the most critical pain-points of the user. In small companies, that don’t have huge budgets for usability and user research, this can and should be very important information helping in design of new features!
    Cheers,
    Harsh

  • http://blog.sukshma.net Santosh

    I agree that the first approach cited in your article is some-what flawed.
    I also agree that customer-service is almost always treated as a step-child. But a more balanced approach is important to complete the whole picture – for example, pay more attention to reducing the burden on CSI in the first place by simplifying your web site and methods.

  • http://blog.sukshma.net Santosh

    I agree that the first approach cited in your article is some-what flawed.
    I also agree that customer-service is almost always treated as a step-child. But a more balanced approach is important to complete the whole picture – for example, pay more attention to reducing the burden on CSI in the first place by simplifying your web site and methods.

  • http://thedelhiwalla.blogspot.com Mayank Austen Soofi

    Hello Gaurav,
    You have an excellent site. That it is 2 years old is more impressive. I run five blogs. One of them is on Delhi – The Delhi Walla (on blogspot.com). I wonder if you’ll agree to give me an interview about living in Delhi after a stint abroad. Please let me know. You can e-mail me at mayankaz@yahoo.com. Thanks.

  • http://thedelhiwalla.blogspot.com Mayank Austen Soofi

    Hello Gaurav,
    You have an excellent site. That it is 2 years old is more impressive. I run five blogs. One of them is on Delhi – The Delhi Walla (on blogspot.com). I wonder if you’ll agree to give me an interview about living in Delhi after a stint abroad. Please let me know. You can e-mail me at mayankaz@yahoo.com. Thanks.

  • http://www.nilkanth.com Ashutosh Nilkanth

    Hi Gaurav,
    This was a good read. Interesting concept!
    Cheers :)

  • http://www.nilkanth.com Ashutosh Nilkanth

    Hi Gaurav,
    This was a good read. Interesting concept!
    Cheers :)

  • http://www.newdelhitimes.org Gaurav

    Harsh, that is a very valid point and something I have myself observed. Nobody understands the user (and the product) as well as the customer service team. Customer service can tell you exactly how the product is getting used and where the greatest need for improvement is.
    Santosh, yes the product must be designed to reduce the burden on CSI. But the typical mindset is that if the burden on customer service is reduced, then lets cut down customer service staff as well – which just leads to same burden and same low levels of customer service!
    Hey Ashutosh, glad you liked it :)
    And thanks Mayank – i have replied to your email.

  • http://www.newdelhitimes.org Gaurav

    Harsh, that is a very valid point and something I have myself observed. Nobody understands the user (and the product) as well as the customer service team. Customer service can tell you exactly how the product is getting used and where the greatest need for improvement is.
    Santosh, yes the product must be designed to reduce the burden on CSI. But the typical mindset is that if the burden on customer service is reduced, then lets cut down customer service staff as well – which just leads to same burden and same low levels of customer service!
    Hey Ashutosh, glad you liked it :)
    And thanks Mayank – i have replied to your email.

  • http://www.wallpaper-gu.com FeeCOMSPU

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  • http://www.wallpaper-gu.com FeeCOMSPU

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    I agree that the first approach cited in your article is some-what flawed.

  • http://www.cartoon-coloring-pages.com/ coloring pages

    I agree that the first approach cited in your article is some-what flawed.

  • Ashok Pande

    You take thoughts off my mind. I encounter problems with Customer Service everytime with my Cell Operator, Stock broking House, Insurance Co. etc. I usually vent my feelings and ideas on how to get them improve on the same, but nothing happens. Many times Customer Service Dept is actually Customer Disservice Dept. Would like to read more on how could we force them to change their attitude and most importantly improve Processes, Quality Checks etc on their Service Dept.

  • Ashok Pande

    You take thoughts off my mind. I encounter problems with Customer Service everytime with my Cell Operator, Stock broking House, Insurance Co. etc. I usually vent my feelings and ideas on how to get them improve on the same, but nothing happens. Many times Customer Service Dept is actually Customer Disservice Dept. Would like to read more on how could we force them to change their attitude and most importantly improve Processes, Quality Checks etc on their Service Dept.

  • Ashok Pande

    You take thoughts off my mind. I encounter problems with Customer Service everytime with my Cell Operator, Stock broking House, Insurance Co. etc. I usually vent my feelings and ideas on how to get them improve on the same, but nothing happens. Many times Customer Service Dept is actually Customer Disservice Dept. Would like to read more on how could we force them to change their attitude and most importantly improve Processes, Quality Checks etc on their Service Dept.

  • Ashok Pande

    You take thoughts off my mind. I encounter problems with Customer Service everytime with my Cell Operator, Stock broking House, Insurance Co. etc. I usually vent my feelings and ideas on how to get them improve on the same, but nothing happens. Many times Customer Service Dept is actually Customer Disservice Dept. Would like to read more on how could we force them to change their attitude and most importantly improve Processes, Quality Checks etc on their Service Dept.

  • Ashok Pande

    You take thoughts off my mind. I encounter problems with Customer Service everytime with my Cell Operator, Stock broking House, Insurance Co. etc. I usually vent my feelings and ideas on how to get them improve on the same, but nothing happens. Many times Customer Service Dept is actually Customer Disservice Dept. Would like to read more on how could we force them to change their attitude and most importantly improve Processes, Quality Checks etc on their Service Dept.

  • Ashok Pande

    You take thoughts off my mind. I encounter problems with Customer Service everytime with my Cell Operator, Stock broking House, Insurance Co. etc. I usually vent my feelings and ideas on how to get them improve on the same, but nothing happens. Many times Customer Service Dept is actually Customer Disservice Dept. Would like to read more on how could we force them to change their attitude and most importantly improve Processes, Quality Checks etc on their Service Dept.

  • http://www.factoryfast.com.au luggage

    The truth is, that you are not really promoting anything uniquely new (although, certainly creative.)
    This is the kind of thing customer-service-orientated companies are SUPPOSED to be doing. The truth is that most of them don’t, because they’re not interested in Customer Service as much as they are interested in selling a product. Most companies, then, outsource their customer service – but those companies that they outsource to are at the disposal, or should I say they are the victim, of the original company’s bad research techniques. So, the original company may get an outside company to do their research for them, but these deals are often made under the table (in other words, a friend of the CEO gets the deal) and this is why many big companies like HP or cellular networks etc. have such bad service. To be sure, I’m generalizing, but the issues are definitely there and the solution is really a change of philosophy and focus from the original company. That, however, will mean a break from corporate attitude and thinking…

  • http://www.factoryfast.com.au luggage

    The truth is, that you are not really promoting anything uniquely new (although, certainly creative.)
    This is the kind of thing customer-service-orientated companies are SUPPOSED to be doing. The truth is that most of them don’t, because they’re not interested in Customer Service as much as they are interested in selling a product. Most companies, then, outsource their customer service – but those companies that they outsource to are at the disposal, or should I say they are the victim, of the original company’s bad research techniques. So, the original company may get an outside company to do their research for them, but these deals are often made under the table (in other words, a friend of the CEO gets the deal) and this is why many big companies like HP or cellular networks etc. have such bad service. To be sure, I’m generalizing, but the issues are definitely there and the solution is really a change of philosophy and focus from the original company. That, however, will mean a break from corporate attitude and thinking…

  • http://www.portraitkingdom.com promotional corporate gift

    Thanks for clearing things up between these approaches. It’s however obvious that you are not in favor of the customer service driven approach. Here in our place, more and more businesses are investing on this approach. That’s why even before you can hear any ad about the products or services they market; their call centers are already there strong and steady. Eventually these businesses end up concentrating most of their funds and attention on developing their call centers rather than putting up a production or related office.

  • http://www.portraitkingdom.com promotional corporate gift

    Thanks for clearing things up between these approaches. It’s however obvious that you are not in favor of the customer service driven approach. Here in our place, more and more businesses are investing on this approach. That’s why even before you can hear any ad about the products or services they market; their call centers are already there strong and steady. Eventually these businesses end up concentrating most of their funds and attention on developing their call centers rather than putting up a production or related office.

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    Very interesting, its all just marketing. Much like Microsft Vista, there needs to be proper software.

  • http://www.justfunnyquotes.com/ Famous funny love quotes

    Very interesting, its all just marketing. Much like Microsft Vista, there needs to be proper software.

  • http://www.portraitkingdom.com/original-oil-paintings.html original oil paintings

    I can’t remember how many times I was failed by various customer services. Some of them are even for a reputable company. There was one time that a customer service of a bank where most of my savings are present failed to explain why I couldn’t withdraw when it was already way past the clearing period. I had to request my boss to call them only to find out that there were errors in their machine. Despite of their mistakes, still they didn’t apologize. Also, there was one time when I wrote an email to an online book store asking them about my order. It took almost 6 months before they could respond. And the response was totally devastating as it says that my order didn’t get through.
    Most of the time, companies fail to recognize the importance of Customer Service. They also fail to know that one lousy customer service technique can lead to their total breakout. It has the power to create and to break a company profile.

  • http://www.portraitkingdom.com/original-oil-paintings.html original oil paintings

    I can’t remember how many times I was failed by various customer services. Some of them are even for a reputable company. There was one time that a customer service of a bank where most of my savings are present failed to explain why I couldn’t withdraw when it was already way past the clearing period. I had to request my boss to call them only to find out that there were errors in their machine. Despite of their mistakes, still they didn’t apologize. Also, there was one time when I wrote an email to an online book store asking them about my order. It took almost 6 months before they could respond. And the response was totally devastating as it says that my order didn’t get through.
    Most of the time, companies fail to recognize the importance of Customer Service. They also fail to know that one lousy customer service technique can lead to their total breakout. It has the power to create and to break a company profile.

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