"Customer Service in Rapidly Chanding India" Amit Sood, CLAAS presentation at Aftermarket Business Platform 2014. More information www.aftermarketeurope.com

1. Customer Service
in
Rapidly Chanding
Amit Sood

2. Customer Service in Rapidly Changing India
•CLAAS an introductory overview
•India: Unique Socio-cultural and Economic aspects
•Rising Expectation from Service and Bridging the gap
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3. STRICTLY CONFIDENTIAL
Supervisory Board Chairperson Cathrina Claas-Mühlhäuser
Shareholder Committee Chairman Helmut Claas
Sales revenue 2011 3.304,2 M€
Profit before tax on income 255,3 M€
Return on sales 7,7 %
Export share of sales 73,5 %
Employees incl. apprentices ~ 9.000
Spend on R&D in 2011 4.5% of revenue
149 M €
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4. STRICTLY CONFIDENTIAL
Guinness Book Record:
LEXION 770 harvested 85.5 tons of wheat per hour.
22 percent better than the previous world record!
LEXION 770 holds the world record for harvesting
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5. STRICTLY CONFIDENTIAL
Balers W. Mkt. Sh. 10%
Combines
(W. Mkt. Sh. 17%)
Attachments
Telehandlers
Hay & Forage Equipment
Tractors
(W. & C.Eu.:6%)
Foragers
(W. Mkt Sh.: 55%)
(WMS: ~ 13%)
WMS: Estimated World Market Share Western Style W+C Eu: Western + Central Europe
CLAAS Group - Product Portfolio Agricultural Machinery (Market Shares)
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6. India:
Unique Socio-cultural
& Economic aspects
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7. Source: TELEMATICA and http://en.wikipedia.org/wiki/Fact_sheet_on_India www.articque.com/news/508/785/Linguistic-diversity-throughout-the-world-in-2010
No country has a greater „thread count‟ ! „Highly developed capacity to absorb dissimilar concepts– yet retain originality.‟
•1.2 b people, 18 official languages, 844 dialects, rich traditions and myriad ancient cultures.
•More than two thousand ethnic groups
•Largest population in the world of Hindus, Zorashtrians, Bahai and Jain faiths. Many religions were born in India . Third largest population of Muslims in the world.
„Crazy quilt of a nation‟ - One of the most diverse cultures in the world
India
Secular tolerance: “India has a lady born an Italian Christian (Sonia Gandhi) stepping aside from Prime Minister position so a Sikh (Manmohan Singh) could be sworn in
by a Muslim president (Abdul Kalam)……to lead a nation that's 80% Hindu!”
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8. A Western visitor‟s view on India, is different from an Indian‟s.
“Chaotic! catastrophe waiting to happen”
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9. Gandhi was once asked what he thought about Western Civilization. His response was: "I think it would be a good idea.” (…to civilize the west)
Mahatma Gandhi
(1869 - 1948):
…just as an Indian views west differently….
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10. As an Indian sees India As a western visitor sees it
“Diverse.
Tolerant.
Open culture, free communication.”
“Confusing. Weird!
Apathetic.
Noisy. Chaotic place.”
A Western visitor‟s view on India, might be different from an Indian‟s.
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11. Yesterday
Today
Tomorrow
An Indian would conceptualize TIME …differently
Western Concept of TIME Indian concept of Time
Linear Circular
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12. …an Indian sees „India‟ as world should be….
As an Indian sees India
“Spirituality”
India is one of the most deeply religious societies. Spirituality seeps into every aspect of life.
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13. “Superstitious. Weird.”
How would a Western visitor see India?
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14. We are ….as we are! …and we are a huge market!!
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15. Today, India believes that it is getting there
As an Indian sees India
Growing, Improving…getting there
•India is among 3 countries that have built Supercomputers (US, Japan)
•Among 6 countries that launch satellites & does so even for many developed countries
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16. Slowing Population Growth
India is ranked 102nd in population growth rate
out of 212 countries
High GDP Growth (likely to stay > 8% on average) In terms of PPP 3rd largest economy in the world 10th largest in nominal GDP GDP USD 1.84 Trillion in „11
Rising Literacy Levels
71.7% (Age 7 & above, as of 2001) [32]
81.4% (Total population, Age 15-25, as of 2006
Declining Poverty
1% crossing poverty line each year for 25 years
(all Figures in %)
One of the fastest growing economies with a slowing population growth is seeing reduction in poverty and improving literacy
Sources: 1990-2000:Census of India (2001) , 1900-1990: Angus Maddison (1995), Monitoring the World Economy, World Bank.
http://en.wikipedia.org/wiki/Demographics_of_India
Goldman Sachs and Price Waterhouse Coopers predicts that
„India would emerge as 2nd largest economy by 2050 (after China)‟
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17. Large Young population - growing fast
Source: http://en.wikipedia.org/wiki/Demographics_of_India
•Today, 54% of Indians are under 24 and 65% are under 35 years old.
•In 20 years working population will rise by 30% - among highest growth in the world.
•It is expected that, in 2020, the average age of an Indian will be 29 years, (China: 37years and Japan: 48years ).
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18. 1985
2025 Forecasts
.
Source: Consuming Class, National Council of Applied Economic Research, 2002 and Mckinsey Global Instt.
Growing Middle Class (mio)
India is seeing a very rapid growth in middle class.
But will it meet its aspirations to turn from a Pyramid to a Diamond?
Middle Class
“I get good value at reasonable price”
House hold income Rs. 0.2 – 1 Mio per annum
Low income “I pay less to get less” House hold income up to Rs. 0.2 Mio per annum
Affluent “I pay more get more”
House hold income Rs. 0.5 Mio per annum
~32% 583 Mio people
~ 58%
~ 11%(1 Mio people)
Share of consumption 20%
~ 6% 50 Mio people
~93%
1%
Share of consumption 7%
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19. o2nd largest English-speaking population (125 Mio).
oStrong Family structure - growth of nuclear family.
oStable Democracy. Regional political parties emerging.
oStrong public institutions - Courts, Election commission, Controller & Auditor General, Right to Information (3rd in RTI Index - AT Kearney „10).
oFree Press. NEW WAVE
oInformation reaching even illiterate, through television.
oGrowing impatience with Corruption – call for action.
oTime for administrative reforms, improvement in governance. INDIA as a MARKET
oWill remain predominantly rural economy, despite urbanization
o50% employment in agriculture.
oGrowing self confidence in youth – have cash. New patriotism. Love brands, gadgets, but are equally in love with Indian values and culture. Very vocal about experience.
oIncreasing participation of children & women in purchase decisions.
Understanding India – economy, market, evolution
A huge market …1.2 b people, with 100 Million Credit cards (!)
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20. Indian model is different
India
East & South-east Asia
Domestic Consumption driven market
Export driven
Services driven growth
Manufacturing
High technical capital intensive
Low technology, labour intensive industry
Success is market lead –
entrepreneur driven
East – particularly China is a
state-induced market
Developed rural & retail Banking sector
with <2% NPA (bad loans)
Huge Domestic Saving 30% of GDP
Family structure,
Largest importer of gold
Far higher bad loans, banking density far lower
Lower savings.
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21. Serving Customers in rapidly changing India INDIA
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22. •Cash starved economy
-High interest rates (12-15% p.a.) and
-High inflation (10% on consumer price index)
-High deficit
-Large population at low income end
•Price sensitive buying behavior
oIndian buyer, no matter what class or product category, goes for a „good bargain‟ or ‘Value for money’.
oClear preference for performance over features
oNo compromise in reliability (ergonomics & styling gaining as desirables)
oSimpler technology but not lower quality
….. different from the low income segment in China.
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Understanding Indian market – value, price points

23. „Large bottom‟ Market
•HUGE market for Low price– simpler technology (affordable) products*
•World‟s largest market for small low technology tractors
•World‟s largest market for small backhoes (modest market for large machines)
•World‟s largest market for smaller low cc motor-cycles (v. small for large bikes)
•Second largest market for small cars (eg. NANO $ 2000 car)
•Conversely, a smaller market for high price/ complex technology / large capacity / premium products ( …even this size of the market is only relatively small !)
•Multi tasking products also must do One bread-winning job
•Eg.. Skid-steer loaders, backhoes, tractors etc.
• Unwise to presume that India would go where developed markets did.
•Eg. 1 Top 4 players in Tractors 600,000 market are Indian manufacturers
•Eg. 2 Tata LCVs beat global players - Isuzu, Toyota, Mazda, Mitsubishi, Nissan & Canter etc.
•Emerging markets often skip stages that western world has been through.
Understanding India market – product offerings
* - Phones and Computers some consumer durables are exceptions.
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24. Rising Expectation of Indian customers from Service
•Indian customers are most likely to consider customer service as main factor for choosing a new provider - after leaving a previous one.
•79% consider Customer Service as the top main factor
•69% consider Convenience as the top factor
•67% of Indians describe their expectations higher than an year ago.
•85% describe expectations higher than 5 years ago.
•70% consumers intended to, but decided against a transaction, due to poor service.
•2/3rd of consumers lost their temper with a customer service professional in the past year.
•When dissatisfied, Indians are among the most likely to complain
•To talk to the supervisor (37%) and
•Most likely to send formal complaint (21%)
•Most dissatisfaction is with ability to resolve issues on their own
•And for having to call repeatedly.
•22% cite ‘waiting too long’ as the most likely service issue to influence them to switch brands.
Source: American Express 2012 „Global Customer service Barometer – India and
Survey by Accenture CRM (Mr. Woody Driggs, MD quoted in Fin Express March „09)
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25. •In India, service standard has improved
•65% think businesses are paying more attention to service
•69% feel waiting times reduced
•Customer experience, in India now has greater brand impact
•More Consumers are telling about their customer service experiences
•Nearly all (97%) tell „some times‟
•66% tell someone every time
•Customers are telling more people about their experience
•44 people about their good experiences (up from 32 in 2011),
•47 people about their bad experiences (up from 35 in 2011).
Source: American Express 2012 „Global Customer service Barometer – India and
Survey by Accenture CRM (Mr. Woody Driggs, MD quoted in Fin Express March „09)
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Service has a greater impact to the brand in India

26. Indian market nuances
•Customer service cant be relegated
•Ownership of result of service will always rest with the manufacturer-seller.
•Customer satisfaction will always reward or punish the parent company.
•Biggest challenge is logistics; and Parts => Service In India, logistics is the biggest bottle neck to parts availability
•Huge geography (N to S 3050 km and E to W: 2950km)
•Poor transport infrastructure and Regional barriers
•Goods transport normally takes more than twice the time it would take in US
•Like products, Indian buyer also goes for highest value in service and parts
•Neighborhood local repair shops
•Preference for simple designs (easy repairs)
•Distinction in „Commercial‟ products for business & „Own use‟ products
•Commercial products bought for operational income (eg. Truck/Backhoe/Taxi)
•Expectation of round-the-clock service. (No „9 to 5‟ day, 5 days week)
•Will pay for reliability if commercial business makes sense.
•Own use products will await service to avoid inconvenience, accept higher cost.
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Only the one who serves selflessly may have an opportunity to receive Bliss or Ananda.
The recipient of service may at best be pleased, satisfied or relived by the service.
Humans have an inherent craving for Bliss - highest joy or Ananda.
Indian philosophy of Karma rewards a good attitude of service.
Indian tradition and culture lay highest emphasis on serving well

28. My „common-sense‟ learnings from serving the Indian market
•Employee would inherently prefer to serve customers well ..we must Remove hurdles, Encourage, Allow discretion.
•On warranty decisions - Speed is as important as the Spend.
•Put the service decisions closest to the customer (eg. Tata vs JCB) „One of the surest way to ruin service – is to put all decisions at the HO.‟
•Personal relationships win customers loyalty (Regional diversity - languages, foods and cultures are typical of India) Long serving employees ensure long associations with customers
•LISTEN to customers - He knows his needs best (eg. CLAAS hirer vs farmer) - It does wonders to the culture of the organization. (eg. TEREX) - Helps in staying dynamically competitive + is good for brand - So, respect employees, who LISTEN to customers.
•Role of leadership – help make good POLICIES, plus make EXCEPTIONS.
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29. A case study- Unique Dabba walas of India
Dabba – „ lunch box‟. „Dabba wala‟ –Lunch box delivery man
•Office workers in Mumbai have a cooked meal sent from home, or a caterer, in boxes and then have the empty boxes returned same day, for a monthly fee, for about 2 pounds.
•Over 200,000 lunch boxes get moved every day by an estimated 5,000 dabbawalas.
•Each dabbawala, regardless of role, is paid about Rs. 2-4,000 per month (£25–50 or US$40– 80)
•Forbes Magazine „02 found utmost punctuality & reliability of six sigma standards.
•Less than one mistake in every 6 million deliveries, (delivery staff is illiterate).
•Trade involves no advanced technology, except for trains (and as mentioned above, SMS services for booking).
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30. BEAT THIS
Unique Dabba-walas of India – A case study
•NY Times reported in „07 that this 125-year-old industry continues to grow at 5–10% p.a.
•BBC has produced a documentary on them, and Prince Charles, visited them. He also invited them to his wedding in London on 9 April 2005.
•Dabbawalas have been invited to give lectures in some of the top business schools.
•Named in “GUINESS BOOK of World Records”.
•Registered with Ripley's “ believe it or not”.
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Thanks