Smart Care: A new customer relationship model

Company press release, December 27, 2002

New Delhi:

Godrej Appliances Ltd (GAL) will extend its branded after-sales service initiative Smart Care beyond the metros to cover more cities over the next few months. Its final target: provide extensive all-India coverage by covering cities with 10 lakh plus population by the end of 2003.

The first initiative of its kind in the consumer durables segment, Godrej Smart Care not only addresses the Godrej brand of appliances but also other competing brands. A one-stop shop for all service/maintenance and replacement needs of refrigerators, washing machines and air conditioners, Smart Care is essentially a Customer Relationship Management (CRM) initiative aimed at building a lifetime relationship with consumers by way of an ongoing dialogue and in the process building a large and profitable service business by reinforcing the consumer's faith in the brand. Smart Care has achieved a customer base of five lakh so far, since its inception in 2001.

The genesis of the idea came from Godrej's earlier joint venture partner General Electric (GE), which had pioneered the concept of annual maintenance contracts for home appliances in the US with substantial success.

In the US, almost 30 per cent of appliance owners opt for contracts and renewals are as high as 60 per cent, says the company. In contrast, in India, contract penetration is a meager two per cent and renewals are lower than 10 per cent. ''This low penetration offers a great opportunity to create a market, educate the consumer and enjoy growth. GAL has pioneered Godrej Smart Care to derive the first mover advantage and act as a key differentiator,'' says GAL vice-president marketing, sales & service SK Ghatak.

He adds, ''We have 10 franchised Smart Care Centers across the country to provide easy access and professional service to our consumers. We also have full-fledged Call Centres in all four metros, which are accessible 24 hours, seven days a week, managed by highly trained call agents. These centres act as a 'listening post' and help us to understand consumer expectations better. By going beyond just providing after-sales service in providing consumers with regular preventive maintenance of their appliances, providing valuable knowledge about maintaining and caring for their appliances, Godrej Smart Care is in effect making efforts to reach out to its consumers and therefore building a lifetime relationship with them.''

GAL is targeting the middle and upper middle-income households owning one or more appliances, where it has identified a need gap for a reliable and professional service option to repair and maintain expensive appliances. The company offers two types of products:

· Annual Maintenance Contract (AMC), which is a service plan entitling the consumer to free service through the year for their appliance for a certain fixed cost.

· A Pay Per Use Service, which provides prompt and reliable service via a toll-free access for any ad hoc service requirements that the consumer may have.

Training forms an important part of the initiative. ''For service engineers we conduct routine training and re-training in the practical aspects of product engineering and technical know-how among other things. In so far as the Smart Care Centres are concerned, we impart training in soft skills and customer-handling, besides training for making effective and productive sales calls.

Our sales canvassers are also trained on the range of products of our competitors with regard to the technical know-how and their features.''

Talking about the feasibility of providing the kind of service/spares needed by products of other brands, Mr Ghatak says, ''Some of the important spares that are required to be used in products of other competitors are both interchangeable and readily available. In fact, the spares industry is quite well developed and they come in standard specs in terms of their physical dimensions, performance parameters, etc., which therefore makes it easy to procure and use across all brands of appliances, be it refrigerators, washing machines or air conditioners.''

Commenting on the initiative, management consultancy KSA Technopak Manager, Hemendra Mathur, says as a strategy to regain customer confidence and perhaps market share, which has been plummeting across categories, this could be an effective tool. It could also act as a market intelligence tool, which could be leveraged by Godrej to innovate its products in keeping with customer needs.

The company could also extend the purview of the services to new initiatives like buy-back and replacement sales. However, proper marketing of the service to make inroads into the huge unorganised after-sales market and good quality training are prerequisites for such an initiative to show results. Bad service could actually boomerang and hurt the brand.