Give your customer a comprehensive solution not just a product!

 

In 1988, I was appointed the distributor for Photophone India Ltd., the manufacturers of Hot Shot- the first cameras that were introduced in the 35mm and 110mm format. These were supposed to be a replacement to the Click III from Agfa which were old and archaic.

Image courtesy Digicam History

I was expected to distribute their Konica color films, photographic paper, chemicals and equipment in the eastern India Markets. I was asked to handle the states of West Bengal, Bihar, Orissa and Assam and all the North Eastern States of India. Yet the brand that I was supposed to promote, Konica, had little or no market share in the Eastern India Markets. Apart from that, I had never even been to Calcutta, let alone have an understanding of that market! I was both ecstatic and afraid at the thought of chartering a new territory! Folding my entrepreneurial spirit on my selves, I told myself challenge accepted and went straight ahead with the distributorship.

Back then in the erstwhile Calcutta, the photofinishing market was controlled by the Sanghvi family under the brand name Snap Fotos. Today the famous Sun Pharma belongs to the same family. The only other brand that controlled the market belonged to the Roy Choudhury family. The market there was otherwise highly localized in areas where the labs were. We called these labs “stand alone” as they were unlike the “chains” mentioned above. During those times, the two main competing brands in the photofinishing businesses were Konica and Fuji.  Although priced the same, Fuji was clearly the market leader.

Market Contenders

Beating a market leader in a market that you have very little knowledge of is a feat in itself, so instead of getting intimidated by the task at hand, I decided to use strategies that had worked well for me in the past. To break through the market, I didn’t try to break into large consumer markets in my first go. Instead, I focused on the smaller ones who were largely ignored by the major players. I also worked at becoming their solution provider and not just their product distributor.

To execute the above strategy, I created a service I called “The Konica All Clear Service”. I requested Photophone to provide me with a Ph. meter and a Densitometer, complex electronic equipments that required some training and skill to read. The Ph. meter checked the Ph. of every chemical used in the process of photofinishing, while the Densitometer checked the final results and ensured that the color balance of Red, Green and Blue  was perfectly matched, thus giving you a bright, consistent and superior quality of prints.

Now every chef knows that the proof of the pudding is in eating it, so in order to get my pitch perfect for the stand alone lab owner, I got a set of prints printed by either Snap Fotos or at Roy Chauhdhari’s “chain” of labs, depending on the area where my “stand alone” lab customer was located. Armed with this set of negatives and prints, I went to the “Stand alone Lab” and requested them to print the negatives, like any other normal customer did and paid them for these prints.

Stand alone labs

Once I had their product, I would then take out what I had previously printed at the “chain” and compared the two right in front of the owner. Quite naturally, the lab owner would get defensive about his quality and service. It was precisely at this point that I would ask him if he wanted his prints to look as good as or even better than the one I was comparing his work with. With a look of sudden surprise on their faces and a bit of suspicion in their eyes, they would cautiously say yes just out of curiosity to see what magic I could do.

I would then roll my sleeves up, and ask to be taken to their processing room. Once there, surrounded by the owner and his staff, I would then open my bag and take out my instruments one by one and display it on the table. Using these instruments I would then take my time and check the Ph. of their chemicals and  proceed to give them my diagnosis. I would always go one step ahead and make the necessary corrections in their chemicals and print the same set of negatives right then.   Lo and behold! The prints would turn out better or at least as good as the competitor “chain”.  What the stand -alone lab customer didn’t understand was that quality is 99% based on the conditions of the chemicals used in your photofinishing equipment!

After every one of these sessions, I would always be invited to the back office for a cup of hot chai and snacks! Most of these lab owners had become my friends as I had given their businesses a lease of new life! I would send my engineer every 15 days to check their chemical parameters and make corrections by adding additives, if necessary. We would then issue an “All Clear Certificate” from Konica Corp. (Japan) to the lab owner, provided he met our more exacting quality standards, and of course bought our chemicals, photographic paper, and films.

Getting the Konica machine installed at the lab.

Selling Konica Photographic Paper and Films, Machines, and Chemicals was a natural extension of our “All Clear service”. It was something that we found that needed hardly any “selling” once we had explained the advantages of maintaining the chemicals and giving their customers consistency in quality. I considered all of the above as the foundation for all my future sales strategies and didn’t charge the owners anything for the services we provided. This was a win-win situation for both parties since it also saved them huge capital investment in the purchase of the diagnostic equipment, the Ph. Meter and the Densitometer and it ensured that they were maintained on my customer list.

By the end of the year, I even persuaded Konica to make their prices at least 1% higher than Fuji, thus positioning it as a superior product based on price. The big “chains” soon followed automatically. Just under a year, the perception had changed as most customers had begun to perceive Konica as a better product. I say perceive because this is the magic of a cleverly designed and executed sales strategy. There was no difference between Konica and Fuji; in fact it was simple case of applying better quality control!

By giving my customer a comprehensive end to end solution and not just a product, I had won over customers for life. I treated them fairly and with respect. In the span of one year, I had managed to raise Konica’s market share from 2% to 24%, an unparalleled feat in the history of Konica, India. We had challenged the Goliath and had managed to slip the carpet from under their feet!

Converting from Fuji to Konica with the All Clear Service.

For all the startups out there, this is the lesson I wanted to share with you too. You have to  provide your customers a solution, not just  a product! By providing my customer a comprehensive service free of cost; ensuring that the quality of his end product was as good as it should be; by saving him huge Capital investments otherwise impossible for him to make; I had offered him a comprehensive solution. Buying my products became a natural extension to the service I provided. Konica began to replicate that model all over India and soon became market leaders in India.

No matter what business you are in, this lesson can be applied to your business. You just have to be genuine and creative enough to execute it!

To be continued…

Parag Shah

September 2012.

 

My First Customer Service Strategy

Under Promise, over Deliver. Easy to say, hard to implement.

 I don’t come from a family of entrepreneurs or businessmen. My father was a renowned and a successful doctor in a small town near Pune called Daund. He was someone I idolized as well as respected. His lessons on how being a good human being have always remained with me till date. He would always say, “Parag our traditions and customs tell us “Matru Devo Bhavo”,  to treat your mother as your first God, “Pitru Devo Bhava” , your father as the second, “Guru Devo Bhavo” , your teacher as your third and of course “Atithi Devo Bhavo”,  your Guests as your last God.” He would then say “For me, I say “Patient Devo Bhava!”

His simple explanation was that his patients are his God because they are his best teacher. He firmly believed and valued the practical knowledge he got from his patients than the bookish one that gathered dust after medical school. I think somewhere there was an internalization of this in my psyche from those days. I am however still working on whether one should really treat his customer his God or not. I feel that, that would be stretching it too far. I guess one can call customer’s your best experiential teacher.

I believe that businesses cannot be as noble as the medical profession. I would trivialize the matter by comparing them.

Trained with these noble thoughts, I started my small photo finishing lab on the third floor of nondescript building. My starry-eyed glass dreams were soon shattered as I sat in my ac office waiting for customers to just walk and hand me over their business! I had no customers for the first few months! Getting customers those days was hard as people were not experimental and fickle as they are now! Luring them with attractive offers or promotions was not an option for sustaining a loyal customer base.

I had to work very hard those days and taught myself every single aspect of my business right from how to raise an invoice, to a maintaining a sales register, a production and consumption report and even a wastage report. I also poached an expert in my industry from whom I learned the technical aspects. How I poached an expert makes an interesting story to which I shall do justice in a different blog!

After months of near bankruptcy and uncountable amount of hard, back braking work my business finally began to show signs of growth. Those days I had vowed that I would eat sweets only on the days on which I would get 100 films for processing. Back then the delivery of a processed film used to be 6 hours and it was a long laborious process. Armed with my first 100 films, on the day after the “Ganesh Chaturthi”, I decided to celebrate my victory with an ice cream party on the house for the staff.

Like most startups today, I too had popped the Champagne when the things were just about to go bad! Remember when things are going good always be on your guard! After the party, when we all got back to work we suddenly realized that we did not have the efficiency to deliver all the 100 rolls in 6 hours! I had not accounted for this as I had not done my ground work properly!

We were up the whole night processing those films. Even my front staff stayed behind the entire night to help finish the orders. At around 7 am, having worked all night, we had still not finished half our order! I and my staff simply didn’t have the physical stamina to continue. At 8 am which was our opening time, we had customers streaming in to collect their films only to be met by bleary eyed owner and staff and told that their order was not yet ready! That day we were like lambs in the slaughterhouse!

My customers looked something like this to me at the time!

Guilty and ashamed, we somehow managed to finished deliveries over the next 24 hours but we had lost our reputation in the market! The cost of over confidence can sometimes be much more than one estimates! All the hard work that I had put into building my brand in the last one year had simply been washed away in those two days! Not ready to give up and fold shop easily I wiped my slate clean and started all over again. It took us almost 6 months to win back their confidence and their business.

True that!

I had learnt my lesson by burning all my fingers following which I set proper systems in my startup. Here’s how we did it at Snap back then. I made a production chart given to the staff at my collection counter on a daily basis. The minute a film came in, the counter staff would estimate the delivery time based on the production chart and hand over receipt with the estimated delivery time to the customer.

The delivery time always had an additional hour added to it as a buffer in case of unexpected challenges like power failures etc. Whenever there was a power failure, the counter staff would then call the customer in advance, and inform the delay and apologize, and sometimes offer an extra discount or a photo frame.

Even though this added slightly to my costs, it is always better to tell your customer in advance about a failed delivery. No one likes surprises, least of all your customers, who expect nothing less than the highest standards from you even if they pay you peanuts for it.

But always remember, a happy customer is your best advocate! Customer Delight can give you more satisfaction from your business and can even bring in more business than any marketing gimmick or sales promotion.