After Sales Service INDRANIL BHADURI firstname.lastname@example.org
Why After Sales Service ?• Economic Times :07-07-2010 India77 per cent of Indian consumers asserting that they will NOT make a repeat purchase or continue with a companys services in case of a bad experience
Economic Times :07-07-2010 India"Customers want and expect high-quality service, especially as they focus on getting good value for their money in a difficult economic environment, and are willing to spend more with those that deliver excellent service -- suggesting substantial growth opportunities for businesses that get customer service right," American Express VP & GM ( World Service India) Pradeep Kapur
Economic Times :07-07-2010 India• As per the findings of the American Express Customer Service Barometer, 76 per cent of Indian consumers are ready to shell out 11 per cent more for excellent customer service. In fact, 67 per cent of consumers have paid more for a product or a service of a company with a good history of customer service.
Economic Times :07-07-2010 India86 per cent of the consumers are READY TO GIVE A SECOND CHANCE to companies with a good track record EVEN AFTER A POOR EXPERIENCE
Economic Times :07-07-2010 IndiaWhile the buying decisions of 89 per cent of Indian consumersare influenced by convenience and 90 per cent of them attachimportance to value-for-money propositions, the majority ofconsumers (90 per cent) make their purchases based on thequality of customer service
Economic Times :07-07-2010• If the company is successful in satisfying its customers in terms of service, it gets the benefit of word-of-mouth publicity. About 95 per cent of consumers give positive reviews about companies in case of good service in contrast to 77 per cent who speak negatively after a poor experience
Aim and ObjectivesAfter the session is over ,you should be able to• Explain the difference between Customer Service &After Sales Service• Describe how After Sales Service works• Describe the role and functions of Marketing,Logistics ,Finance and Retail• Outline Reporting Technique and Escalation Matrix• Understand Steps for Process improvement
Customer Service Vs After Sales Service• CUSTOMER SERVICE : Customer service is the provision of Service to Customers before, during and after a purchase.• AFTER SALES SERVICE : Periodic or as required MAINTENANCE or REPAIR of EQUIPMENT by its MANUFACTURER or SUPPLIER ,during or after a WARRANTY PERIOD
Facts• After sales issues are very expensive unless carefully controlled• The cost of an exchanged product is ALMOST ALWAYS SUBSTANTIALLY MORE THAN THE SELLING PRICE OF THE GOODS
Chinese Cartoon Who said there is no "after-sales service"? Some developers
the battery did not charge even after I inserted it into the laptop
General PrinciplesThe most common issue for customers is the LENGTH OF TIME that it takes to resolve their problems
Legal Aspects I KNOW MY RIGHTS• What rights do customers actually have?• What is the significance of a retailer or manufacturer guarantee?• Who is responsible for refunds, repairs and replacements?
Sale Of Good act 1930In this Act, unless there is anything repugnant in the subject of content1. „buyer" means a person who buys or agrees to buy goods2."delivery" means voluntary transfer of possession from one person to another.
Sale Of Good act 1930• Sales Contract? A contract of sale is made by an offer to buy or sell goods for a price and the acceptance of such offer. The contract may provide for the immediate delivery of the goods or immediate payment of the price or both, or for the delivery or payment by installments, or that the delivery or payment or both shall be postponed
Sale Of Good act 1930:PriceThe price in a contract of sale may be fixed by the contract ormay be left to be fixed in manner thereby agreed or may bedetermined by the course of dealing between the partiesWhere the price is not determined in accordance with theforegoing provisions, the buyer shall pay the seller a reasonableprice. What is a reasonable price is a question of factdependent on the circumstances of each particular case.
Sale Of Good act 1930 Condition and WarrantyA stipulation in a contract of sale with reference to goods which are the subject thereof may be a condition or a warrantyA warranty is a stipulation collateral to the main purpose of the contract, the breach of which gives rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated.
Sale Of Good act 1930 damage for non delivery• Where the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer may sue the seller for damages for non-delivery.
Sale Of Good act 1930 damage for non acceptance• Where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may sue him for damages for non- acceptance
Reasonable time a question of fact• Where in this Act any reference is made to a reasonable time, the question what is a reasonable time is a question of fact.
Sale Of Good act 1930 remedy for breach of warrantyWhere there is a breach of warranty by the SELLER, or wherethe BUYER elects or is compelled to treat any breach of acondition on the part of the seller as a breach of warranty, thebuyer is not by reason only of such breach of warranty entitledto reject the goods
Sale Of Good act 1930 remedy for breach of warrantyBuyer may Sue the seller for damages for breach of warranty
Sale Of Good act 1930 damages for non delivery• Where the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer may sue the seller for damages for non-delivery
Sale Of Good act 1930 Buyer not bound to return rejected goods Unless otherwise agreed, where goods are delivered to the buyer and he refuses to accept them, having the right so to do, he is not bound to return them to the seller, but it is sufficient it he intimates to the seller that he refuses to accept them
How stoppage in transit is effected• Whether notice of stoppage in transit is given by the seller to the carrier or other bailee in possession of the goods, he shall re-deliver the goods to, or according to the directions of, the seller. The expenses of such re-delivery shall be borne by the seller
INTEREST BY WAY OF DAMAGES AND SPECIAL DAMAGES• Nothing in this Act shall affect the right of the seller or the buyer to recover interest or special damages in any case whereby law interest or special damages may be recoverable, or to recover the money paid where the consideration for the payment of it has failed
In the absence of a contract to the contrary, the Court may award interest at such rate a it think fit one the amount of the price• to the seller in a suit by him for the amount of the price.- from the date of the tender of the goods or from the date on which the price was payable.• to the buyer in a suit by him for the refund of the price in a case of a breach of the contract on the part of the seller- from the date on which the payment was made
Exchange„Dead on arrival‟ (DOA)almost all retailers will allow an exchange if the goods are damaged or not working when they are delivered.
Suppliers:3 typesBig Brands :Tell the retailers what to do and will not generally deviateMedium Sized Companies will try to accommodate the retailers and try to retain enough margins to enable a fairly flexible policy on returnsOriginal Equipment Manufacturer(OEM):Operate on Bought Out Guarantee retailer not worried about “a few exchanges”
RepairWhat this means in practice ?A customer can demand a replacement rather than a repair orrefund during the first six months after purchase unless theretailer can prove that the goods did indeed conform tocontract, or unless the retailer can prove that a repair can becarried out quickly and at substantially less cost
RefundRetailers will normally resist giving refunds for two reasons:Lost saleLost Value
GUARANTEE• AGREE to be responsible for anothers debt or contractual performance if that other person does not pay or perform.• Usually, the party receiving the guarantee will first try to collect or obtain performance from the DEBTOR before trying to collect from the one making the guarantee (GUARANTOR)• The promise to pay anothers debt or fulfill contract obligations if that party fails to pay or perform• A Promise To Make A Product Good If It Has Some Defect
Consumers Rights in IndiaITS HOT……CONSUMERS RIGHTS IN INDIA
What do Customers Want?Almost everyone in Business is trying to figure out What do Customers Want?The answer is generally very simple a good-quality product, and to be treated fairly if there is a problem with the product. That‟s easy, then, so why does it go so wrong?
so why does it go so wrong? …• Ironically, if the various consumer protection acts were a little clearer and more definitive then customers would probably be less demanding• Some of the biggest reasons are• 1.Fear :What if our competitor knows it and apply the same ?• 2.Lack of understanding :marketing department hardly knows how the after sales work and vice versa• 3.A belief or understanding that their capabilities are perhaps less than perfect
Back Bone of After Sales service• Fast response to problem resolution• Dependability• Flexibility• Diagnostics and first-time fix rate: simple to use self-help procedures• Compromise An ability and a willingness to meet customers halfway is a very powerful asset in after sales care
Back Bone of After Sales serviceInformation Resolution timescalesTo generate real credibility, companies must publish and stick to set timescales for time to complete
What do Sales People Want?Essentially, sales staff want the same things that customers want
PROCESS DESIGN5 keysONE check basic functionalityTWO collect all accessoriesTHREE make sure that the customer has contacted the service deskFOUR check guarantee validityFIVE Check for misuse
PROCESS DESIGN contd..Data recordingEscalation processes
Escalation Process• Most important tool• Route to reach the suppliers and manufacturers
Problem Resolution Timeline• REASONABLE TIMESCALES• TIME TO RESPOND –ensure a prompt response(Call Centre)• FIRST-TIME FIX: realistically it is usually not possible for a repairer to visit immediately(Electrical :20-60%,Furniture :80-90%)
REAL SCENARIO : CUSTOMER SCALE OF TOLERANCE• Day 1 :Customer Frustrated but understanding• Day 2 to 7:mildly agitated• Day 8 to 14:geninely frustrated ..regular calls• Day 15 to 21:Losing patience• Day 22 to 30:Agry Customer and calling everyday• Day 29 and Over :Furious and threats of legal action
Supplier ManagementThis is the area that most retailers get wrong:„It‟s all your fault‟ „It‟s not our fault‟
Questions Retailers ask….customer name customer address customer telephone number brand model numberproduct groupdate of purchasedate of delivery (if major difference)date of exchange fault historymost recent fault descriptionreason for exchange
Questions Retailers ask…. delivery number (if appropriate) consignment number (if available) store or outlet name/number name of person requesting exchange store authority number In Home or In Store date of collectionreplace or refundrepairer name (if appropriate)Supplier Management and Reverse Logistics age when exchanged (days)supplier exchange reference number.
Questions supplier ask….• How old it is?• What went wrong?• Why it was replaced?• What was the background to this and why was it not simply repaired?• Under what authority the retailer is expecting to return it to the supplier?
Work It out• Exchange costs – non-bought out guarantee• Exchange costs – with bought out guarantees• Repairs costs – non-bought out guarantee• Repairs costs – with bought out guarantees• Combined costs• Exchange costs – potential savings• Repair costs – potential savings• Net projected savings
Beyond Economic Repair(BER)State of a repairable item where its estimated repaircost significantly exceeds a certain percentage (typically80 percent ) of its replacement value
Dead on Arrival (DOA) (Medical) Dead on arrival or D.O.A. (also dead in the field) is a term used to indicate that a patient was found to be already clinically dead upon the arrival of professional medical assistance, often in the form of first responders such as emergency medical technician. paramedics or policeD.O.A. is also frequently used as slang to indicate a new item that was received broken, or that an idea or concept is a nonstarter
Original Equipment Manufacturer(OEM)Bought Out Guarantee (BOG)Goods direct from the factory gateORThrough a handling agentOR distributor for their ENTRY PRICE POINT and BUDGET SALES LINES guarantee is sacrificed in exchange for higher margins (ie the buying-in price is reduced)
Supplier Specification• Dimensions• General properties• Colors• Transport conditions including packing within containers• Boxes and protection• Consignment size and make-up• Parts and accessories
EXTENDED Warranty3 key drivers of extended warranty costs1.Frequency of claim2.Average labor costs3.Frequency of parts replacement and net cost of parts