The Hindu Business Line : Customers must be made to `feel wanted'

When Mahindra & Mahindra invited its Scorpio customers to visit its plant at Nashik - on condition that they drive to the venue in their Scorpios - a large number of customers actually drove in from places like Punjab, Chennai and Hyderabad.

The response to this experiment in customer relationship marketing was so positive, that there have been requests for more such visits, according to Mr Nalin Mehta, General Manager - Marketing (Automotive), Mahindra & Mahindra. Indeed, across product categories and markets, customers are ready for greater interaction and involvement with the company if the company can provide it.

"The old way to sell a product was to dump it on the dealer, offer schemes, and spend on marketing and advertising," Mr Mehta said, speaking at a seminar on `Business opportunities and challenges in the new millennium.' "But today, we also have the technology to support CRM, and to `wow' the customer: so CRM is the big opportunity of the new millennium." Increasingly, it is getting harder to manage the trade channel, and the cost of acquiring a new customer is also rising. Therefore, it is important to manage customers, as the profit from an existing customer increases as the length of the company's relationship with him increases, Mr Mehta said. Even a 5 per cent increase in retention leads to a 40 per cent increase in profit in some categories.

A customer spends 10 per cent more when happy with the service, but 68 per cent of customers who leave a brand do so because they feel that the company is indifferent toward them or doesn't care, Mr Mehta said. In the US wireless industry, about 17-18 per cent of sales turnover goes toward getting new clients; in India, the cost of acquiring a new customer for a credit card is estimated to be Rs 3,000. At the same time, car major Toyota estimates that a high-end customer will spend over half a million dollars on the car, accessories, and replacements with the same company if he is satisfied.

Relationship marketing is about enhancing the customer's experience with the product, maximising long-term value from the customer, and creating brand advocates. So the company needs to be responsive, make the customer feel wanted, and create a bond with the customer, Mr Mehta said. Successful CRM needs a good database, and investments in systems to enable the company to manage its marketing campaigns, its call centre, and market analytics. Attitude training is also essential.

The keys to successful implementation of CRM are setting a clear goal - whether it is to increase customers, decrease churn rate, or lower the cost to sell - and selecting the most influential lever to achieve the goal, and then mapping the initiatives that will activate the lever.

For the Scorpio, Mahindra launched the Top Gear Club, a dedicated Web site, direct access to the Director and a toll-free number. Customers who signed on to the Top Gear Club get a card for a fee, which entails them to special offers, discounts and deals; Mahindra has had 70 per cent enrolment on the card, Mr Mehta said.

Going forward, the company will identify more touch points and increase the frequency of contact with the customer, and examine more media options with which to reach the customer, Mr Mehta said. "The customer's mindset has changed: he doesn't mind paying a price if he can get some value in return," he said. "Even the rural customer wants attention, and to feel wanted."

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Customers must be made to `feel wanted'