28 Oct 2015 17:52 IST

Where customer is not king

Why are some Web 2.0 companies still limiting customer choice?

Forcing customers to adapt to a company’s preferences is such a 1980s mindset, but some companies still stick to this ridiculous notion as a central tenet of their business models.

Rather than make their services accessible to the widest possible clientele, these organisations impose severe restrictions on their customers resulting in poor customer service and a loss of revenue.

Even the western world, otherwise renowned for preaching that the customer is always right, is not exempt from such organizations, hard though this is to imagine.

Say, you want to ride a New York City bus. You are warned that the bus fare is payable only with a MetroCard. But you are not a regular commuter – all you want to do is take a bus from Point A to B, and just once.

You are then told that you can only buy single ride-tickets at vending machines. You scratch your head wondering where to find a vending machine: on a local street and decide to board the bus anyway.

The bus pulls in and as you climb into it, the driver tells you with a smirk that you can ONLY pay with exact change. Dollar bills are not accepted. Debit cards are not accepted, nor are credit cards. You proudly display your iPhone pointing to its Apple Pay function. The driver shakes his head. “Exact change only”, he barks.

As you frantically look for change, he asks you to get off the bus because although you have money, you don’t have it in the exact form that the Metropolitan Transportation Authority (MTA, for short) wants.

The MTA will justify these restrictions as necessary because US bus drivers also oversee fare collection as passengers board the bus. Requiring passengers to comply with these rules, or so the MTA’s reasoning goes, will enable drivers to quickly usher passengers into the back before the bus pull back into traffic.

But what about the hapless passenger who either doesn’t know of these rules or for various reasons, is unable to comply?

All you will get from the MTA is a shrug.

Nothing has changed

Welcome to customer service in the year 2015. The company is always right and if Mr and Mrs Customer want to do business with it, they should do so on the company’s terms.

The penalty for non-compliance is that the company simply refuses to serve you.

What is fascinating is that you don’t have to get on a New York City bus to experience this arrogance. Some of the most sophisticated companies in India, many funded by venture capital money, are just as guilty as the MTA.

They are more concerned about internal operational efficiencies and if this means that they have to deny basic choices to the customer, they are all for doing just that.

OLA, Uber and Taxi for Sure all aggressively promote their smartphone apps as the only efficient medium through which customers can do business with them. What if a customer doesn’t have a smartphone or has one that doesn’t have sufficient memory to load these apps? A call to OLA says that taxi bookings are no longer made over the phone. Since when did a phone become a tool of yesteryear?

Overall cost to everyone

Even booking online using the web is anathema to these companies because they regard the web as old technology. Two weeks ago, I tried booking an OLA cab online for a ride an hour later. After I went through the entire process, I was greeted with a terse message that was as follows, “We cannot confirm online bookings at such short notice. Please download the Olacabs app and book your travel option in a jiffy!” Really? How come taxis are available when booking using the app but not online? Aren’t apps simply a convenient user interface that still use the internet as their backbone?

And then there are the payment mechanisms. Uber, known for its angry-young man image globally, until recently continued to refuse cash payments and insists that everyone must have a credit card or a prepaid wallet card. How in the world did Uber think it could scale its customer base to those who don’t have such payment methods handy or don't trust them? Or had Uber simply written off these customers as people who are unworthy of doing business with it? But Uber changed.

And likewise, thankfully, not all Indian companies are as haughty as these taxi majors. In fact, some companies go to extreme lengths to respect age-old traditions even if it means that they have to come up with difficult back-office processes and technologies to support such preferences. Cash on Delivery (COD), a payment method popular in India, is now standard across all the big internet companies such as Amazon, Flipkart and Snapdeal. At Lenskart, you can make payments by partial methods, an initial payment by bank NEFT and the balance by COD.

The operational headaches of COD are not trivial. Customers with cash may not be home when the courier stops by to deliver - necessitating a second attempt at delivery and raising the cost of the transaction. Or customers may refuse to pay for a product arguing that it was different from what they expected, when in reality, all they may have experienced is buyer’s remorse. Returned deliveries add significantly to the cost of operations. When cash collections are made, drivers have to be trusted not to run away with the cash. Drivers with cash are also more vulnerable to being robbed. Companies have to allow for such losses in their product pricing raising the overall cost to everyone.

Lesson learnt

The easiest way for the big internet companies would have been to walk away from cash transactions altogether but they realised correctly that in a country where cash is king, it would be silly and rude to demean cash as a method of payment. But more importantly, they saw it as a way to reach more consumers, a lesson they learned from the growth of the big mobile operators. India is after all the world’s largest market for prepaid mobile phone plans, the majority of which are re-charged, in cash, at small retail outlets through reliable SMS links established between retailer and the phone company.

As I headed to the airport last week, I went online to order a taxi from Meru Cabs. This is a company that still honours web bookings despite going the app-route. The fare was slightly higher but I could pay in cash. Most importantly, the lack of attitude, that all channels were open, was refreshing. I took this as being a good omen to my long upcoming flight.

To read more from the Worldview section, click here .

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