After-sales service forms the backbone of consumer durables market, which is all set to witness a boom. A consumer-seller relationship, which is born out of the sale –purchase transaction, can get strengthened only with a strong after-sales back-up. And t
Always remember that the relationship between a customer and a brand is very sensitive and prone to damage at the slightest indifference.
The job of the pre-sales department is over when the customer buys the product and, subsequently, it becomes the responsibility of the post-sales department to ensure efficient after-sales services to keep the customer brand-loyal.
Huge market potential
Industry sources reveal that 58 per cent of the Indian GDP comes from the services sector and a large FDI has started flowing into this sector. These service sectors include IT, healthcare, call centres and after-sales services. However, no specific data is available on what share is held by after-sales services exclusively, but undoubtedly the sector holds immense potential, say sources.
There was a time when after-sales service used to be a tough task, involving engineers from manufacturer`s site travelling to the customer`s sites for attending all sorts of operational complaints. Over-busy lifestyle of the modern consumers has made it almost impossible for him to keep waiting for the service engineers to come and rectify the problems. Companies though, on the other hand, can`t afford to leave the production and retailing aside to attend to the service needs of the customers.
At such a critical moment, by outsourcing the services the chaotic situation can be dealt with easily.
Adding value through franchising
Franchising in after-sales services is no novel concept. Singer Sewing Machine Company, the creator of the first-ever legal contractual franchise in the US in 1851, found no difficulty in selling the product. However, the geographical distance between the owners of these machines and the Singer outlets made it difficult to provide the after-sales services. The management devised a mid-way by outsourcing its after-sales services to the prospective franchisees that could now both sell and service the Singer machines. This turned out to be a win-win situation for both the franchisor and the franchisees, as the franchisees being localised were able to penetrate the hitherto unattainable markets performing selling and servicing tasks. Realising the importance of after-sales services in consumer durables sector, today all the consumer durable companies provide after-sale services and most of them such as LG, Godrej, Nikon, Canon, Videocon, Eureka Forbes, ViewSonic, Panasonic etc have taken up the franchise route to render these services. Some of them have been talked about below:
LG Electronics India
LG Electronics India Pvt. Ltd (LGEIL), a wholly-owned subsidiary of LG Electronics, South Korea, was established in January 1997. It is one of the most formidable brands in consumer electronics, home appliances, IT hardware and mobile communications space with a turnover of Rs 9,500 crore in 2007.
The company has 1,200 franchise service centres to carry the after- sales services. In 22 cities, these service centres remain open all seven days of the week, keeping in mind busy schedules of working couples. Talking of after-sale services, Santosh Das, Head Customer Service, LGEIL, says, “We aim at providing not only the best technology and the product, but also effective customer service round-the-clock. In order to support and implement this vision, we have launched a new initiative `211` campaign, which emphasises on `service when you want`.”
The programme has kickstarted in 53 cities. The campaign includes LG`s response to customers` complaints within two hours. The customer`s meeting with an expert would get fixed within one hour, who would attend to the complaint within a day.
Godrej & Boyce Mfg. Co. Ltd – Appliance Division, set up in 1958 is in the business of manufacturing and marketing refrigerators, washing machines, air conditioners, DVD players and microwave ovens. Apart from catering to the domestic consumers, Godrej has launched its refrigerators and washing machines in Sri Lanka. It also exports its products to Singapore, Afghanistan, the Middle East, Egypt, Kenya, Rwanda, Bahrain and Oman.
Highlighting the importance of franchising in after-sales service sector, Ravi Bhat, National Head, Appliances Service, Godrej, says, “Considering the geographical constrains, it`s not possible for the company to open the service centres at every location, whereas the service needs make it mandatory to open them. Therefore, franchising comes as the best solution.” The company provides servicing of all its appliances through franchised service centres, which are backed by 20 company-owned branch service centres. Emphasising on the importance of service centres, Bhat says, “Even though you provide the best product, the back-up has to be there, even if it is not to be used.”
Canon India Pvt. Ltd, a 100 per cent subsidiary of Canon Singapore Pte. Ltd, was set up in India in 1997. Canon India markets 145 comprehensive ranges of sophisticated contemporary digital imaging products. The company has offices in seven cities across India and employs over 600 people. Canon has 281 primary channel partners, 3,000 secondary retail points and 50 Canon flagship stores. Overall, Canon`s presence is expected to increase to 6,000 outlets by December 2008.
Canon India provides after-sales services for all products sold by Canon in India like digital copiers, printers MFDs, high-speed scanners, laser beam printers, faxes, projectors and also the complete range of image communication products, i.e., cameras, primarily through its 33 franchised Canon Care Centres. The company also has three own level-four camera repair and service centres designed as per international standards in Mumbai, Kolkota and Gurgaon and the one in Banglore is to open by December 2008. The company also has 275 centres, which are both sale and service points and 265 of them are franchised.
Nikon India Pvt. Ltd is the 100 per cent subsidiary of Nikon Corporation Tokyo, which started its operation in India in 2007. Within a year, it has started seven service centres across India, five of which are franchised. Hidehiko Tanaka, MD, Nikon India, says, “We prefer to work with local partners, as it is easy for them to understand the customer`s psyche and also leads to easy and smooth expansion of service network.”
The company plans to open 10 more service centres before October this year. The prospective franchisee of a Nikon after-sale service centre should have a minimum of three years experience in the services field, preferably photographic equipments.
Starting with a joint-venture between the Forbes Group and Electrolux of Sweden in 1982, Eureka Forbes (EFL) today is a part of Shapoorji Pallonji Group. EFL pioneered the concepts like ultimate vacuum cleaning (Euroclean), electronic water purification (Aquaguard), air purification (Euroair) and electronic security solutions (Eurovigil) in India. Eureka Forbes is ranked among India`s Most Admired Consumer Durable Companies and Best Employer. It has expanded its operations beyond India, to cover markets in south-east Asia, middle-East, Europe and its products are exported to over 25 countries across the globe.
Eureka Forbes` franchise service centres are supported by call centres, customer care representatives and mobile service vans to render the services. Eureka Forbes is planning to consolidate 200 of its existing franchised service centres, besides opening new ones on the old format. This consolidation would lead to the increase in the size of the outlets to almost double and taking the count of technicians to 20 to strengthen its technical base.
ViewSonic Corporation, a leading global provider of display solutions, retails a broad range of innovative display products in the world, including LCD monitors, LCD TVs, projectors, digital commercial signages, digital photo frames and other display products. In India ViewSonic distributes its products across cities through its authorised distributors, namely Redington India and Roop Technologies. ViewSonic remains a leading display brand in the United States and has garnered over 2,000 awards the world over from independent global publications and organisations.
Gautam Ghosh, Country Manager, ViewSonic Technologies India Pvt. Ltd, explains why the company chose to outsource the after-sales services to other companies like Accel Frontline and RT Outsourcing, instead of giving it to individual franchise or providing it themselves through company-owned centres. He says, “While we concentrate on what we are best at, i.e., sales and marketing of our products, we let them take care of our products, something that they are best at, i.e. after-sales service.”
Accel Frontline has 120 service centres, in which products of different companies such as ViewSonic, Sony Ericsson, Brother, Xerox etc. are being serviced. The company has plans to open more service centres depending upon the increase in call rate of the complaints. RT Outsourcing has opened 50 service centres for ViewSonic.
Commenting on the role of after-sale services, Vivek Seigell, Country Head - Retail, Etail and Consumer Finance, HCL Infosystems Ltd, says, “I see services broadly divided into two – pre-sales and after-sales. For a brand to succeed, retaining old customers is equally, if not more, important than acquiring new customers. It is the after-sales service, which builds and retains the faith on a product and hence, comes the brand loyalty, which leads to a successful brand.”
The exclusive service centres are devised to ensure faster response, enhanced personalised services and provide access to build knowledge base. The centres are equipped with trained service engineers to handle repair and queries, besides the spare parts of various products marketed by the company.
Shamim Qadri, Assistant Director, Market Engineering Canon India, says, “At Canon, we provide all kinds of services to a customer depending on the product in use and keeping in mind the requirement of the end-user. For some products, we provide onsite service and for other products, we ask the customer to send the product to our centre.”
These service centres provide quality service during warranty and post-warranty periods and being backed by the companies concerned, provide us an edge over local guys doing similar tasks with no technical support.
Almost all the companies provide training and support to the franchisees quarterly or after every six months. Training is also provided whenever a new product is launched by the companies, besides soft skill training that is provided to teach the staff as to how to deal with the customers.
LGEIL has set up four regional training academies to train a team of 8,000 service engineers on both technical and behavioural skills for their franchised centres across the country.
Nikon, too, provides specialised technical training to bring all technicians at their franchised centres up to Nikon standards. It makes sure that the look and feel of all service centres is the same. Besides this, the company promotes the service centre in the best possible way to have a healthy RoI for its partners.
Godrej provides complete technical know-how to its franchisees to run the service centre through the technology-based set up in its branch centres. The company takes initiatives like sending a technical team to the franchisees` site to identify their needs. The franchisees are also taken to manufacturing sites to make them understand the product in a better way.
Viewsonic and Canon also provide technical training and support to the franchisees to keep them updated with the latest technologies incorporated by the company.
Understanding customer`s needs
In today`s globally competitive environment, companies are under relentless pressure to provide innovative products in shorter time cycles with reduced costs and improved quality. Therefore, one obviously can`t survive without tracking consumer behaviour, expectations and preferences. This information is used to formulate the products, pricing and promotion strategy to remain ahead in competition.
“To gain consumer insight, LGEIL has a wide service network across the country and the internal focus is given on research and product planning activities. LGEIL proactively conducts free service camps on certain occasions to understand unstated customer requirements,” says Das.
In the past few years, after-sales sector has gained prominence with high competition and lower products differentials. Customer interface and the quality of after-sales service have a huge and lasting impact on the mind of a customer. Therefore, companies have to ensure that the quality of after-sale service is as good as their products.
“Globally, Nikon has set high standards as far as the services is concerned. For the past two years, we have been number one in the after-sales service in the Japanese market. Nikon in India has already taken steps to expand the service network and will continue to do so in times to come. Our philosophy is `meeting needs, exceeding expectations` and we would continue to do so,” says Tanaka.
Catalyst for business growth
Consumer durables market is expected to grow at 10-15 per cent in 2007-2008. It is growing fast because of the rise in the living standards, easy access to consumer finance and a wide range of choice, as many foreign players are entering the Indian market. With this, after-sales service is also making big strides. Qadri says, “In today`s world, after-sales service acts as a catalyst for business growth and has also emerged as a full-fledged business by itself. More and more organisations are shifting their business practices to ensure that after-sale services become a profit centre in its own way.”
“After-sales service industry in consumer durables has a great future in India, as a strong service back-up can only take a brand forward in today`s competitive world,” says Ghosh.
In a market like India, where there is a frequent fall in the prices of consumer durables, so many brands making way every year and low product differentials, after-sales services has become a major factor that allures and retains customers and, therefore, strengthens the customer base.