Service experiences in the developing world can be frustrating. The culture of service is often not understood and, therefore, routinely ignored. While educating service providers is important, policy is needed to open up more service alternatives and establish a legal framework that holds those in violation of customer norms and expectations to pay a price.
The focus of business on acquisition of customers, maintaining strong relationships by providing value and benefits, availing to customers a range of offerings to increase revenues and profits, and finding ways to retain the most profitable segments have become increasingly important in today's competitive environment. Some businesses try very hard to care for and nourish the organisation's life-blood-its customers. Others simply do not seem to comprehend the meaning of being customer-oriented, losing droves to the competition despite having a good product or service that offers many benefits but which fails the customer in other ways, especially from a behavioural standpoint.
Failing the customer may be difficult or impossible to eliminate; but recovering from a failure is always an option. According to some experts, service failures and poor recovery strategies are the leading causes of customer defection. Failures arise from a multitude of factors: unavailable services, being unreasonably slow, behaving badly or not understanding customer needs are big contributors, leading to switching behaviour when customers decide never to return.
Service failures experienced and endured by customers in the developing countries are especially exasperating; the common response is often a shrug and a yawn by the service provider. The consequent dissatisfactions experienced by service recipients, often in the public sector, are palpable - in frustration, disappointment, impoliteness, argumentation, disrespect and rage. It is thus important to recognise that poor service provision can contribute to serious erosion of an organisation's customer base. In an era of privatisation, open markets, and globalisation, customer loyalties will be strongly challenged by new and innovative service offerings from competitors, both within and outside the country.
In an exploratory study I conducted in Bangladesh to examine the likelihood of returning to the same service provider after experiencing a service failure, an interesting picture emerged. There is no difference in the propensity to return to the service provider whether the provider is from the public or private sector. Service quality ratings for both sectors were decidedly low. This suggests that the nature of service failure in the two sectors is not very different and customers' propensity to defect is also similar for both sectors.
Business professionalism is a mind-set that takes time to acquire and embed in an organisation's DNA. While it is expected that such professionalism would be taken seriously and acquired quicker in the private sector, where it can drive an organisation's survival and success, that mind-set has apparently not taken root yet, with few exceptions. Perhaps the overwhelming demand for services in a country with a burgeoning population -- where supply shortages are chronic -- does not inspire the need to acquire such a mind-set, whether the provider is from the public or private sector.
Another finding of the study was as expected: when alternatives are available (i.e., low dependence on one supplier), people will not tolerate poor service and will be inclined to terminate the relationship. In the developed world, customers have myriad choices because regulations foster competition. Under the circumstances, customers can quickly terminate a provider's services. In Bangladesh, however, the inclination to switch was not intense, suggesting a lack of faith in alternative service providers.
Also, when a service provider was willing to resolve a complaint, customers were marginally more likely to return to the same provider. Perhaps complaint resolution may be well-intentioned, but often not delivered satisfactorily.
It is important to emphasise that poor service provision poses serious future problems for organisations in the developing world in an era of greater competition and globalisation. Instead of building relational bonds, poor service provision gives customers the opportunity to sever the link, especially when alternative providers are available. People's preference for receiving services from international banks, neighbouring country hospitals, foreign education systems, products from multinational companies, and out-of-country vacations are a few indicators of wanting service delivery of local organisations.
From a national policy perspective, it is important to create choices - many choices - for customers. Being tied to particular service providers and being unable to sever ties with them, despite receiving poor services, creates unfavourable conditions for customers while giving the service providers huge leverage to mislead and misappropriate. Privatisation in Bangladesh has shown that more choices can work to some extent, although it is not a panacea - perhaps because of a cultural drag.
Unfortunately, many customers do not complain or end a relationship even after receiving horribly poor services; often they have nowhere to turn to. Education is one sector where this situation is rampant, with a subset of teachers and administrators misbehaving with - even bullying - students and their parents, with no consequences. Such behaviours make "customers" simply miserable. Policy is indeed needed to enable and assist customers to exercise their options of finding services they deem most fit. Hopefully this will drive poor service providers to improve or go out of business.
Laws are especially needed to protect customers when things go wrong so that customer complaints are immediately acted upon or service providers made to pay a price. Most importantly, the existing service situation suggests the existence of a large opportunity space for those who understand what a customer means and the benefits of serving them. For them, the market awaits to respond with rich rewards.
Good service is the basis for sustainable and profitable business, an idea that smart organisations understand and imbue. Their brand image and financial performance says the rest. After all, the customer is king and likes to be served as a king! The sooner local service providers realise this, the better it is for their long-term sustainability and growth in a fiercely competitive market.
Dr. Syed Saad Andaleeb is Distinguished Professor Emeritus, Pennsylvania State University. He was Vice Chancellor of BRAC University. This article is adapted from an earlier article written in The Journal of World Marketing Summit.
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