In hot pursuit of the deal-friendly customer (28 April 2003)
Theodore Levitt of the Harvard Business School famously said that the purpose of business is ‘to find and keep customers and to get existing buyers to continue doing business with you rather than your competitors’. Indeed, a large chunk of a company’s sales and marketing budget is spent on identifying and pursuing customers. One assumes that Indian companies operating in competitive market segments such as life insurance, credit cards and personal finance are forking out big sums of money to design marketing strategies to lure and retain customers.
But looking at it from the customer end and going by angry consumer complaints, I’d say, we customers aren’t quite getting the hang of it. For instance, most of us think that choosing a life insurance policy is a serious business; would a Domino’s Pizza worth Rs 500 swing customer preference in favour of a particular insurer? Or, if you don’t like pizza, would a sure-thing lottery at a large clothing store do the trick? If that doesn’t work either, maybe telemarketing will do the trick. Banks and companies hawking credit cards, hotels, personal products or car loans are all using telemarketing companies. They simply buy mailing lists from magazine subscriptions, restaurants, boutiques or banks, hand them over to tele-marketing agents and are all set to blast their way into consumer consciousness. The crudeness of the out-sourced telemarketing agent is usually inversely proportional to the sophistication of the company whose products are being hawked. Some foreign banks seem to have out-sourced the effort to the same thugs who handle their informal loan recovery. It is probably part of a well-thought strategy to familiarise the recovery agent with the customer even before he/she comes on board in order to avoid a mistaken identity problem in future.
Since the marketing agent does not separate residential numbers from office lines, it is routine to wake up retired folk and elderly parents during their afternoon siesta to run their marketing spiel. And have you ever tried to get your number off a telemarketers list? They are amenable to neither request nor persuasion and tend to turn hostile if you ask them to stop calling. I have had to approach the Executive Director of our second largest bank, and the Managing Director of a discotheque before getting my mobile phone number off their persuasion list.
Buying new products and services can lead to newer problems; and quick disbursal loans and unsolicited credit cards often come with a catch. These companies sometimes charge you for un-availed services, and despite their computerised operations are notorious for wrong billing. Although the customer-company relationship works like a dream at normal times, the minute you hit a problem the consumer is no longer king and rectification is a nightmare. Theodore Levitt may have advocated a strategy aimed at creating happy loyal customers and meeting their needs in such a way that they keep coming back for more. But our companies can’t be bothered with finesse and too busy to find out if their ham-handed approach is creating brand-revulsion instead of brand loyalty.
Credit card issuers with their dump-and-bill strategies are the worst offenders. At one time Citibank tried to dump insurance policies on unsuspecting consumers who hadn’t noticed the offer in fine print that sought permission to debit their accounts. But there are plenty of other examples too. Sunil Ghotge of Pune-based Intelligent Investments & Risk Management is an IDBI Bank customer. He was sent a free Debit-and-ATM card, and later found Rs 99 debited from his account. He objects to the fraudulent practice and ever since he received the unsolicited card over a month ago, has sent half a dozen letters to the bank seeking to reject the card and reverse the debit that was made without his concurrence and authorisation – there is no response. Yet, the bank’s slogan is ‘What can I do for you?’
Tarish Kaushik, also of Pune, writes about his mother’s experience with ICICI Bank sending unsolicited credit cards and then billing consumers although the card was neither accepted nor used. His mother, a senior citizen and a busy doctor of 71 was billed for the card despite repeated calls to ICICI Bank telling them she did not want the unsolicited card. According to Kaushik, his mother’s only mistake was that she had subscribed to two bond issues of ICICI a few years back. Why should customers be put through the bother of writing or calling a credit card company to return an unsolicited card? Most of us have now begun to react to such unsolicited deals with irrational panic and irritation because the immediate consequence of not responding is a bill or a debit to your account followed by a tiresome and aggravating reversal process. Kaushik also notes that most bank correspondence in connection with such offers is unsigned. Ashok Gopal is furious at Standard Chartered Bank’s ‘special offer’ to all subscribers of a travel magazine A wild life card. He says, the accompanying form made it clear that it was no special offer: one had to shell out Rs 2,000 to get the card activated. He is infuriated with the magazine for selling its subscriber list to Standard Chartered Bank. U.K.K. Memon of Baroda wonders if he is the only one to have problems with American Express cards after having sent back the card twice in four years and losing Rs 8,000. It is notorious for posting bills late and billing customers for its mistake. America, which pioneers such aggressive marketing strategies, also has laws in place to protect its consumers and attorneys who specialise in extracting compensation from companies for harassment to consumers. In 1988, the US Congress passed the Fair Credit and Charge Card Disclosure Act which ensures that consumer receive detailed an uniform disclosure of cost, rates and other credit card related charges. The Federal Reserve also amended its Truth In Lending regulation to help customers know the cost and terms of credit. It also requires that if there is an annual renewal fee, the customer be given the opportunity to cancel the card if he/she does not wish to pay. None of these rules apply in India. The irony is that the same banks, which operate under such strict regulatory conditions abroad, ignore them in India. Obviously, nobody thinks that good business practices give anyone a competitive advantage. Will the Reserve Bank or the National Consumer Disputes Redressal Forum create a window for dealing with complaints relating to such predatory marketing and harassment? Clearly, the marketers themselves are unconcerned unlikely to be deterred harassment by their telemarketing agents or deficient services leads to hefty monetary fines.
-- Sucheta Dalal