CRM: Ingenious Rishtey

Dr Pawan Goenka, President (Automotive Sector), Mahindra & Mahindra Ltd

Edited Text of the Presentation made by Dr Pawan Goenka, President (Automotive Sector), Mahindra & Mahindra Ltd, at Business Session I : 'Relationship Management' of 4th Auto Summit on 14th January 2006.

Dealers are our customer touch points and how the customer sees manufacturers depends largely on them. It is an honour for me to be talking to automobile dealer fraternity about customer relationship. I am sure, most of the dealers know a lot more about it than I do.

I have been an R&D person and it is only recently that I have started thinking about the importance of customer relationship and how to build it.

As I scan the scenario from my childhood days to date, as a customer, I see a sea change; in those days, we were just happy to get the goods we wanted. To expect any kind of customer service or customer relationship building was unthinkable. Just reflect for a moment where we are today. As a customer, you and I have become very demanding, no matter what it is that we are buying. What has changed? Clearly, we have moved from supplier's market to a buyer's market and therefore the customer has really become very demanding. What we need to reflect is that all of us - providers of product and services also change the same way as the receiver of product and services. The classic example of this change is the banking system where we have gone from ETM or 'Every Time Misery' to ATM, i.e. 'Any Time Money'.

 

Dr Pawan Goenka Pawan Goenka had earned his BS in Mechanical Engineering from IIT Kanpur and then went on to complete his PhD (ME) from Cornell University, Ithaca, USA. A Graduate of Advanced Management Programme from HBS, he worked for General Motors R&D Centre at Warren, MI, USA from 1979 to 1993. Thereafter, he joined Mahindra & Mahindra Ltd, as General Manager (R&D). He was appointed COO (Automotive Sector) in April 2003, and appointed President (Automotive Sector) in September 2005. Dr Goenka received the Outstanding International Advisor Award from SAE in 1997, Charles L McCuen Achievement Award for the years 1991 & 1995 from General Motors, Burt L Newkirk Award for the year 1987, Extraordinary Accomplishment Award from General Motors in 1986 and Distinguished Alumni Award from IIT Kanpur in 2004. He has been Fellow of SAE and of Indian National Academy of Engineers. He has served as the Chairman of Emissions Committee of Society of Indian Automobile Manufacturers (SIAM) from 1999 to 2001; Chairman, Task Force on Alternative Energy Driven Vehicles of SIAM from 2001 to August 2003; Chairman, Task Force on Auto Oil Programme from September 2003 to August 2005; Chairman, Frontier Technologies, Styling & Design since September 2005. Dr Goenka is the Chairman of Western India Section of SAE; Sr Vice President of SAE India and Vice President of ARAI Governing Council.

 
Reflecting on the changes in the airlines industry, we have moved away from Q-check to e-check. In fact, today, one can do almost everything about airlines on the Internet and even get paid for using the Internet.

The same way, shopping has moved from the 'Kirana Dukan' to 'Super Mall Makaan', not just in big metros but even in smaller towns. In India, not long ago, one had to go from pillar to post for anything from a telephone to a train ticket or even a passport. But today, telephones, mobiles and, for that matter, tatkal tickets and even tatkal passports are available on the spot.

As in the case of other products and services, radical changes are sweeping the automotive business too.

The waiting list and 'take it or leave it' attitude has given way to never before aggression for customer acquisition. Cars and finance are available in plenty, and manufacturers as well as dealers are all striving to get what they call 'LTV' or 'Life Time Value' of customer. In a fast changing scenario abuzz with fierce competition and rising customer expectations, everyone seems to be obsessed with understanding and implementing the magic mantra 'CRM'. However, as an R&D man, I am accustomed to always going deeper into the subject. After a careful study, I have developed somewhat a contrary view of CRM as it is often practised.

The fact that about 35 to 75 per cent of CRM programmes fail, does not surprise me. Such failed programmes, in turn, damage the organisation's long-term relationship with the customers. I did a lot of my own study to understand 'why'. I have looked at how hotels do it, retailers do it, airlines do it, and I am not surprised that we have such a high percentage of failures in spite of the so called sophisticated CRM software and CRM programmes. Let me tell you my analysis of 'why'?

 
I think, the CRM as it is being practiced today is not about customer - but sales force, not about relationships - but data mining, and not about management - but promotion marketing. CRM should help bring products to customers and not just customers to products. Sometimes, we forget about relationships, as we get obsessed with data. How irritating are those phone calls that we get in the middle of a meeting from some banks, from some great car companies or from some mobile phone companies trying to sell something! I am sure that these calls do not build relationships. It is not about management of customers, it has become more of promotional marketing. So, rather than waste our time buying all those books on instant CRM, let me take you through some home grown recipes and to the Indian ethos related to CRM. I am not against CRM, I am against the way we are trying to practice it today. In my opinion the essence of CRM is not about software and hardware, it really is about 'heartware'. How to win over the customers with your heart? I do not know if Mahatma Gandhi ever really made the quote appearing hereinbelow, but this really is attributed to him often. It is really something that is coming from somebody who never tried to sell anything and is very revealing. "A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us an opportunity to do so,"

 
 
 
We all know it but often forget it, when we are in front of the customer.

One of the things that I have noticed is that we often look to the West to tell us how to take care of the customer and how to build customer relationship. But I wish to submit to this knowledgeable audience that CRM is, in fact, ingrained in our Indian genes. It is the notion of "Atithi Devo Bhava" that all of us are familiar with, that makes it so natural for us to build those relationships. I often have arguments with my American friends who complain about service levels in India. In fact, I think that the Indians in many ways are far ahead, when it comes to customer relationship building. One of the best examples of Indians' flair for customer relationships is our corner panwallah. I remember an instance, which aptly sums up his innate CRM acumen. About 2-3 years ago, when I went to a pan shop, which I had not visited for more than two years, the panwallah greeted me and said, "Sahib, bahut din baad aye". Obviously, he couldn't have remembered me but he knew that I was not a regular customer. So, he took a chance that I had been to his shop before and created a relationship with me instantaneously. As the pan was ready, I reached for it, he said not like this! He gave the pan to his assistant who took me to a special pan delivery area. Believe me or not, he actually had a special pan delivery area for something that he was selling for five rupees; and we have just started doing it for something that sells for five lakhs. The assistant then gave me the pan. As soon as I put it in my mouth, he offered me water to wash my hands and a napkin to wipe my hands dry. I gave the panwallah ten rupees expecting to get five rupees back, he looked at me, smiled and said, "Thank you Sir." This man never went to Harvard or IIM but he knows customer relationship management a lot better than we do.

 
The Kirana dukaan that I talked about earlier. The perception is that they are getting wiped off by the super markets. In fact, they have converted customer relationship as their competitive weapon. My wife never goes to a super market and why should she? She gets what she wants from a Kirana shop without leaving home. Her Kirana shop is a super market for her because, if the kirana merchant does not have an item in his shop, he will go out, buy for her and bring it to her. If ever she goes to the shop personally, she gets greeted with enthusiasm that will never happen in a super market. Therefore, super markets cannot really compete with kirana shops because of the customer relationship that they have built. Or, look at our own airlines; in a fifty-five minutes flight, even in economy class, you get a hot meal. And, that is what I call customer service and customer relationship building. What you get in India is genuine, genuine desire to serve the customer.

These real examples should convince us that there is nothing about customer relationship building that we Indians do not know or that we Indians cannot do. It is in our genes. So what we need to reflect on is, are we, in the Indian auto industry, ahead of other industries and other countries in the world in building customer relationship? I don't think so, yet. There is lot of work to be done. A lot is happening in M&M and, I am sure, a lot is happening in other companies as well.

We, in M&M, started thinking about CRM not really as customer relationship management, but as CRMM - as 'Customer Rishtedari from M&M'. Just changing the word from Relationship to Rishtedari really makes a big difference. Relation is nothing but rishtedari; and relative, rishtedar. Take care of the customer, as you will do for any guest who comes to your house. And, once you come to that realisation, you need no training in CRM.

 
 
Let me get into little bit detail of how M&M is trying to transform itself into a truly customer centric organisation. One of the first difficulties that we faced was this age-old concept of internal customers - R&D considered manufacturing as the customer, manufacturing considered sales & marketing as the customer, and it was left to the Sales and Marketing to take care of the end customer. I am sorry, but I do not believe in this concept of internal customers. All these departments are part of the chain who should have only one goal- to serve the only customer that finally matters; the customer has to be the person who is paying his or her hard earned money to buy the products and the services. It sounds simple but changing this mindset was a major task. A guy on the shop floor will say, "I never meet Mr Customer, how can I think of him as my customer." Surely, we have managed to change this mindset. I hope, the Mahindra dealers who are present here have begun to sense that change. In fact, the other day a man from our plant saw a Mahindra vehicle stranded on the road. He stopped and gave his own vehicle to the customer to proceed where he was going, and said, "I will send your vehicle to the workshop and call you when the fault is fixed." This is not written in any of our CRM handbooks, but it is a perfect example of how CRM is about heartware.

Another change that we have made is to align our goal for all M&M (Auto Sector) employees with customer as the focus. 30 per cent of M&M's performance bonus depends on how employees do in terms of customer satisfaction; and for all M&M dealers, 60 per cent of their 'MDEP's score, depends on how they perform in our customer focus processes. (MDEP is Mahindra Dealer Excellence Programme). Yet another change is in the form of well-defined process for taking care of the customer from the time he enters the showroom or the workshop till the time he leaves the showroom/workshop. But, I repeat that while the processes are important, they will not deliver customer relationship unless it comes from mindset change, unless it comes from a desire from your heart. This kind of change in the approach of M&M and its dealerships to customer relationship building has not been easy, but has been worth it.

Let me walk through a few very effective but simple things that M&M has done in this direction in the last couple of years. For example, the way M&M dealers are now delivering vehicles is really becoming an emotional experience for the customer. Various dealers have come up with different ways of making it an auspicious occasion for the customer. They are performing puja to match the faith of the customer. There are a few dealers who actually have full-time Pujari in their showrooms and have different kinds of puja ingredients to perform the puja. Once I was present at one of the dealerships when the puja was being performed and I could see it as an occasion full of emotions for the customer.

 
Yet another thing M&M has done in customer relation building is the adoption of the concept of happy horn that has been borrowed from Pizza Hut. As a result of these customer relation measures, M&M's performance in 2005 JD Power Sales Satisfaction Index and other customer satisfaction surveys has seen a marked improvement. Mahindra and Mahindra was the most improved brand in 2004 JD Power Sales Satisfaction Index, showing an improvement of over forty points compared to the industry average of six points. In the CSI too, M&M once again was the most improved brand, mustering thirty points in the improvement score as against the industry average of three points. Similarly, M&M did remarkably well in Total Customer Satisfaction (TCS) survey also.

I am sure that all of you, no matter which OEM you represent, have similar programmes. I do hope that there is something in M&M's approach that may be different and helpful for you to build a stronger customer relationship. I do not see it as giving away a competitive edge. I do not see it as 'you win, I lose' or 'I win, you lose' situation. I see it as a situation where we all win, because I would like to see the Indian automobile industry to be seen as one of the most customer friendly and one of the most customer focussed industries, not only in India but globally.