Are you loyal to your customer?

Of all terms in the management lexicon, I find the term 'Customer Loyalty' the most oxymoronish.

Let us first examine what 'customer loyalty' means. A random search in google would give you many definition. I will use the most common one, extracted from wiseGEEK (this just happens to be on the top; I have nothing against or for it):

The term Customer Loyalty is used to describe the behavior of repeat customers, as well as those that offer good ratings, reviews, or testimonials. Some customers do a particular company a great service by offering favorable word of mouth publicity regarding a product, telling friends and family, thus adding them to the number of loyal customers. However, customer loyalty includes much more. It is a process, a program, or a group of programs geared toward keeping a client happy so he or she will provide more business.

Why do I find Customer Loyalty an oxymoron? Because I always see 'loyalty' as flowing from bottom to top. The subjects are (or used to be) loyal to their kings not vice-versa. I have heard of 'loyal servants'; never heard of 'loyal masters'. So far with me?

And if customer is the king why should customers by loyal to a company or a brand? The company or brand should be loyal to the customer. Suddenly the whole perspective changes, doesn't it? What this means is that the companies should go all out to prove that they are more-loyal-than-others.

Actually this happens in smaller companies. For a small company, customer is not a king; s/he is god. The company goes out of its way to serve god. As the company grows bigger, this philosophy is sadly kept aside. The focus then switches to how to make the customer loyal to the company and not the other way round. How to keep the customer happy.

So I wish to rephrase the definition of loyalty:

The term Customer Loyalty is used to describe the behavior of company's effort to serve customers in order to generate repeat purchase, good ratings, reviews, or testimonials. Some customers do a particular company a great service by offering favorable word of mouth publicity regarding a product, telling friends and family, thus adding them to the number of customers. However, customer loyalty includes much more. It is a process, a program, or a group of programs geared toward serving a client so he or she will provide more business.

There is a world of difference between keeping a client happy and serving a client to the best of your ability. You should be loyal to the customer; not the other way round.

Picture courtesy: Shannon Pifko

The Three Wise Men of Satyam

The three wise men AKA Government-appointed Board of Directors for Satyam, have painstakingly interviewed around 50 candidates and after much delay finally landed up with a new CEO of Satyam Computers, Mr. A. S. Murthy (ASM). I do not wish to go into ASM's capability or discuss at length the implication of having a CEO who dumped his shares just before the Maytas episode.

No.
Instead let us investigate something more terrible.

What is greatest threat that Satyam faces today? It is not paucity of funds; they are not exactly bankrupt, are they? The employees are more or less still with Satyam - by choice or otherwise. The threat is from the customers. Some of them have cut off relationship with Satyam; while others are on a watch mode. So the prudent decision would have been to take on board someone who could instill confidence in the customer. Someone who could signal a fresh start - a clean break from the past.

ASM is not a clean break from the past. He is a Raju man. He may have worked with Satyam for the last 15 years and he may know all the customers; but that does not qualify him to become a CEO.

Satyam may survive. It may prosper once again. But only if the customers do not desert Satyam. A dynamic, known outsider would have been a much better choice. ASM may be capable, but he is not the man of the hour. If Satyam regains its lost glory, it would be in spite of and not because of ASM.

A thought pops up: Is this a political appointment designed to control damage?
I hope it is.
The alternative is even more distressing. If this is not a political appointment, then it shows a deeper problem that perhaps pervades the whole of corporate India.

Companies exist only for customer (Yeah! Yeah! I am aware of a certain CEO who thinks employees come before customer. He is wrong - I will explain this some other day, why he is wrong. The same CEO also goes around using "Blue Ocean" for every strategic(??) move. The only Blue Ocean created by an Indian, that I know of, is by Sabir Bhatia, creator of Hotmail.) Each and every action taken by the company should be focused only at the customer. This is something that no one needs to learn from a humble blogger. By not thinking about the customer while choosing the new Satyam CEO, the three wise-men have clearly signaled that corporate India thinks otherwise.

It is impossible to judge now the impact of this appointment. The implications lie in the future and is not visible to us. The best I can hope that it turns out inconsequential. At stake is the future of 40,000+ Satyam employees.

Picture courtesy: enimal