Business services Jun, 23 2014

Sought-after success in after sales services business

Are you technically expert, have know-how of service-oriented business and believe in rendering high quality services at a quick turnaround time? If you have all these above-mentioned skills, then you surely can turn those assets into a booming business o

By Amanpreet Kaur, TFW Bureau
Chief Sub Editor
Sought-after success in after sales services business

You will see plethora of retail brands spread across every nook and cranny of the country but the irony of all the best brands – is mainly about providing an effective after sales service to consumers. It is nowadays used as the cutting edge marketing tactic in pushing the products’ sale across a broad category of a consumer durables industry.

So, what actually occurs when one of your newly purchased gadgets, gizmos, white goods or automobile accessories just stop working? It’s now not that complicated as it was before. Nowadays, you can get your product’s problem resolved from its authorised service centre which offers repair related services to its target customers and corporate clientele as well.  The key to generate maximum footfalls is surely the good after sale customer service. From wrist watches to cell phones, imaging products to printers or white goods (such as refrigerators, washing machines, air conditioners) and automobiles, there is a huge demand by customers for after sale services which needs to be targeted by the various organised brands and franchisors so as to trigger more profits and create brand’s value in customer’s mindset. This in turn is also offering ample business opportunities to wannabe franchisees.

The fate of a consumer durable brand relies mainly on product portfolio and an after sale service it offers to the target customers. When it comes to a consumer durables sector, after sales service plays a significant role in propelling more customer footfalls so as to target more profits simultaneously. Looking at the statistics, after sales services market is evolving inch by inch and most of the share of market lies in the unorganised market as lot of local dealers and neighborhood players are providing services of multiple brands at affordable prices.  Also, the use of non-branded spare parts is on the constant increase, which is somehow creating a big challenge for organised brands to keep their brand’s loyalty intact. So as to offer best of opportunities to customers, brands are setting up their authorised service centres in every corner of country so as to offer best of services. This involves a 24X7 support through e-portals and customers can also visit the certified company’s service centre so as to avail in warranty and out of warranty related services.

Franchise for more returns

Franchising in the after sales service sector has been able to present a feasible business choice to prospective franchisees. The brands that have charted maximum share of market by doubling their store count via franchising are – Canon India, Whirlpool of India, Kent Ro Systems Pvt Ltd, Eureka Forbes, Titan Watches, Mahindra First Choice Services, the multi-brand car service division of Mahindra Group, CEAT Ltd, the first tyre manufacturer in India to introduce a franchise model for tyre retail and service and Club Laptop, the first-of-its kind brand in laptop repair. After sales services industry is not only offering business opportunities to many entrepreneurs or franchisees who are interested in services sector but, it is simultaneously offering employment opportunities to like-minded individuals as well. Talking about the prospects they have in the offing for franchisees, Shantanu Das Gupta, Vice President- Corporate Affairs and Strategy, Asia South, Whirlpool of India, says: “Franchisees have the opportunity to earn from warranty costs that are borne by the company for attending calls for products under warranty. Income from repairing stocks with dealers, usually small repairs due to transit damages, is another source of income. They also earn through servicing out-of-warranty products through chargeable calls and sale of spare parts and annual maintenance contracts. Our company has a wide range of unique consumables and accessories that are sold exclusively through the service channel provide a unique revenue opportunity for our franchisees.”

On the other side, Dr. Alok Bharadwaj, Executive Vice-President, Canon India, confirms that after sale market is roughly pegged at Rs 100 crore. As far retail of lenses and accessories is concerned, franchisees are able to sell but not as per the industry size.  He further adds: “In our stores, 20 per cent sales are coming from franchisees. We also allow our franchisees to sell third party accessories so that they can make more money. We have service centres where we offer after sale services to consumers. Canon basically has four franchise service agents for cameras and 32 printer franchisees.  So in total, Canon has 36 franchisees spread across 32 towns. Canon has put up a very robust infrastructure for sales and service training programmes for its franchisees and their sale service people.”  On an expansion front, Canon looks ahead to add more cities in its portfolio for expansion of its service centre franchisee.

Training at its best

For running a service centre franchise, hands-on training related to product portfolio of a brand plays a significant role in bringing more customer footfalls and preserving a brand’s value in the end consumers’ mindset.  So it’s important that a service centre of franchise brand offerd an extensive training and support to franchisee’s staff so that they are able to fix up every customers’ query. So far, Whirlpool of India offers technical training to its service engineers at two levels. Informing about the same, Shantanu Das Gupta, informs: “We have regional trainers located in four regions of the country that impart one level of training. In addition, Whirlpool training academy, a modern training facility established solely to augment technical, communication and relationship skills, is a venue where a higher level training is imparted and which is operational throughout the year. All training costs are borne by the company.” 

Canon India franchisee’s service engineers are regularly trained and are given certification at technical centre which is located in Noida.  In case of Kent Ro, A-Z solutions are offered to franchisees with agents to repair and providing the best of the services.

Making a way from roadblocks

In every business segment, challenges vary from brand to brand and sector to sector. Related to services sector, the major hurdles have been about finding the ideal partner for business who share the same vision, have capability to invest and zest to quickly innovate and exploring a right location that assures quick benefits. For Whirlpool of India, the major hurdles  have been  about dearth of entrepreneurs willing to invest in service business, exclusivity especially in tier 3-4 markets, availability of trained technical workforce, professional people with right behaviours and right value system, financial expectations of service franchisees, desire for early returns on investment and integrity issues with some franchisees. To ensure that business runs smoothly, Whirlpool believes in developing talent and creating opportunities for exceptional talent. The brand encourages experienced service personnel to become entrepreneurs by setting them up as service franchisees. Talking more in detail, Shantanu adds: “They are educated on the service as well as the revenue side of the franchisee business, linking the adage that good service can actually create great opportunity for revenue. Whirlpool Training Academy provides the right platform for service engineers to get trained and understand Whirlpool values. In case of a breach of ethics, Whirlpool’s central audit team imposes heavy penalties on defaulters.”

While, Mahesh Gupta, Chairman and Managing Director, KENT RO SYSTEMS LTD, says: “One of the toughest challenges for any new player is to educate and convince people about the importance of an RO purifiers and technology. We spend 15 per cent of our revenues in marketing. Another challenge for any new player is the after sales service so a quick turnaround time is a key factor. We have a skilled manpower which is available 24x7 for the customers.”

On enlightening about the challenges that a service franchisee faces, Alok Bharadwaj adds: “For after sale service franchisee, the biggest challenge is the quantum of business coming to them. Most of the times, the customer does not come for after warranty repair. During warranty, all customers will come to service centres. So, we ask franchisee to provide a large number of service staff related to service, warranty or repair. The main margin comes from out of warranty repair so not all customers go to the company’s centre. So we continue to write to customers and encourage them to come to company’s centre for repair. Sometimes, we offer service through our free service camps so that customers can come and avail repair for free or at discounted rates. For overcoming day-to-day hiccups, Canon ensures to fight with challenge of profits by providing its franchisees some subsidy of service expense during warranty so that their normal expense is covered and ensure that they do not make loss. The company helps in managing the inventory of spare parts by providing its franchisees a complete analysis of spare part consumption around the country and suggests them to keep estimated number of spare parts.

Who is the right franchisee?

Whirlpool prefers to partner with persons from technical background, minimum field experience of eight years, must have a passion for rendering service and an ambition to make financial success of the venture.  On the other side,CEAT looks for individuals with high service orientation for setting up of CEAT Shoppes. It helps if the prospects have had some prior experience in the automobile industry. Canon India looks forward to associate with the ones who are from service background, who are technically expert or have worked as a service engineer.

Franchise facts:

Brand

Investment

Area

RoI

Whirlpool

Rs 5 lakh-Rs 10 lakh

500 sq.ft

30%

Canon India

Rs 12 lakh

Min 300-800 sq.ft

NA

Kent Ro

Rs 5 lakh-Rs 10 lakh

200-500 sq.ft

20%

Related: Low on cost and high on returns

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