July 27, 2008

Taking Care Of Customers - By Sanjay Anandaram

The CEO of a leading online bus reservations company arrived late for our early morning meeting. I was upset for having been made to wait for what was our weekly meeting. He apologized profusely upon arrival and I could see that he was upset. He looked tired as well. I asked him if all was well. His story took my breath away.

Apparently, a customer had booked tickets through the company’s web-site for the last bus that departed late at night for Mumbai from Bangalore. Upon reaching the departure point, the customer was shocked to learn that the bus had been cancelled (the bus industry is not unknown for springing such surprises periodically) and that there was no other bus available.

The desperate customer, who had to urgently reach Mumbai the following morning, called the CEO’s company. The call-centre was just about to close after the last buses for the day had departed and were not at their responsive best. He was naturally livid. The CEO and his head of bus operations were hurriedly informed about the plight of the hapless customer by the call-centre. The two of them rushed to the bus-stand on their bikes where the customer was waiting – anxious and furious. They then arranged for a taxi to take the customer to the airport, booked the customer on company expense on a 2 am international flight that touched Mumbai and finally saw him off. The customer reached Mumbai in time for his meeting the next day.

The CEO returned home and sent an mail to the customer apologizing for the experience, promising to put in place systems to prevent such incidents from occurring in future, and hoping that the customer would give the company a second chance. Needless to say, the customer he was delighted with the high-touch customer care that he had experienced and wrote a long mail full of praise to the company soon thereafter. What could have become an extremely unhappy customer was converted into a customer for life!

The company incurred a big loss on the transaction but earned the lifelong trust of a customer that would hopefully translate into more satisfied customers. The CEO then set about putting in place systems and processes as promised to the customer. These ranged from enhanced call-centre operations and training to better communication with bus operators, including sensitizing them to the importance of customer satisfaction as a win-win situation for all, to putting in place economic incentives for employees and operators. These were then communicated to employees so that every employee understood the importance of customer care. Customers were also informed about the kind of service they could experience. That every customer would be happy with their experience became the implicit operating mantra inside the company. This fanatical adherence to customer care has seen the company acquire a loyal following not just with direct customers but also with bus operators and partners who too are treated with the same kind of attention and care.

All too often, the focus is on sales and more sales. And all too often, there’s not enough focus on meeting let alone exceeding customer expectations. This is all the more true in countries such as ours where customer service is more often experienced by its absence. There’s a belief that the customer really has nowhere to go once sales are achieved. The knowledge that one unhappy customer usually spreads the bad experience more diligently than a happy one is little understood. That catering to a returning customer is more profitable than trying to acquire a new customer. That in the long run, the life-time value of a customer through repeat purchases is what matters rather than a narrow focus on short-term profits. That apologizing for mistakes and working to rectify these mistakes is a sign of strength and honesty.

Treating people with respect and acknowledging one’s shortcomings are what this kind of behaviour therefore naturally abstracts into.

And who wouldn’t like to deal with another if this is the basis of a contract? What do you think?

Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings close to two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. He’s involved with Nasscom, TiE, IIM-Bangalore, and INSEAD business school in driving entrepreneurship. He can be reached at sanjay@jumpstartup.net. The views expressed here are his own.

July 15, 2008

'Leading by Example" - Article by Sanjay Anandaram

Example 1: “I’m catching an overnight train to Hubli. My regional manager has set up a meeting with retail and corporate investors late tomorrow afternoon”, my friend told me. I asked why didn’t he just drive down in the morning rather than spend a night away from home. He replied, “It will give me time to spend with my branch colleagues there and I also plan on having lunch with them. There’s a nice masala dosa place near our office there and it’s been a while since I’ve caught up with all of them.” My friend is the founder and CEO of a leading financial services company. He tries his best to accept invitations to various events involving birthdays and weddings of his colleagues. He’s takes a genuine and personal interest in their well-being. He’s as comfortable in a road-side dhaba as in a high end 5-star restaurant.

My friend’s job requires him to travel extensively not just to metros but also to smaller towns around India. When travelling by air, he routinely takes the air-conditioned Volvo bus service bus to and from the new Bengaluru International airport – a journey that takes him about 90 minutes and costs him about Rs 150. Its convenient, takes the same time as a car or taxi would and much cheaper. He usually catches a train or takes a taxi (a Tata Indica no high end luxury vehicle for him) for intra-state travel. Though entitled to fancy hotels, he prefers moderately priced ones. He’s conscious of how his lifestyle and behaviour impacts people around him. He’s very successful in his job and has built a very committed and driven team.

Example 2: The CEO of a just VC funded (and therefore flush with the warm glow of capital) startup called me to say that he was moving the following day to a brand new office. As a boot-strapped angel backed startup, he had been managing literally on a month by month basis. And naturally, he was excited to be moving to a new fancy office with all fitments in place. He also told me that the move to the office would save the company at least Rs 2L per month relative to other places they had looked at. “We spent over 6 months looking for an office space and managed till things were well past breaking point!” Incidentally, the “new” office was in fact being sub-let by a once well funded startup that had spent a lot in finding the “right” office and then doing it up in style.

Example 3: “This guy is a very heavy-duty guy. He’s asking for Rs 35L plus stock in my company. The highest salary in our company now is Rs 10L. Should I take this person?” asked the CEO of yet another startup. The candidate was experienced and qualified. His company is well funded and is the fastest growing company in its segment and needed top class talent to grow to the next level. The CEO was concerned not because of concerns about affordability but about what impact the high salary would have on his company culture. He had prided himself on building the company on a step by step basis where every senior hire shared the vision and the risk. Finally, he decided against hiring the person.

Example 4: I met an entrepreneur the other day at a coffee shop in a five star hotel. He arrived a few minutes late in a chauffer driven high end sedan. After apologizing for being late, I ordered a hot lemon tea while he ordered a frappe. He was clearly passionate and driven. He was wearing well-known brands for his fashionable shirt and trousers. He had on designer sun-glasses and carried the latest cell phone. He was articulate and focused. He also happened to be the single largest shareholder (the other shareholder was his wife) in his company, was trying to raise VC money, and was having a problem in attracting and retaining talent. His attitude was “I don’t have good people now. But once I raise the money, I’ll just hire the best.” He was clearly able to spend company money on himself but was unwilling to spend money on paying employees more! Clearly, sharing of equity with others was something that hadn’t even entered his consciousness. In addition, he was looking to use the VC funds to pay for the hires.

What do you think? What kind of a example do you wish to set?

Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings close to two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. He’s involved with Nasscom, TiE, IIM-Bangalore, and INSEAD business school in driving entrepreneurship. He can be reached at sanjay@jumpstartup.net. The views expressed here are his own.

July 11, 2008

Profile of National Entrepreneurship Network

Business Today has article on the pioneering efforts of NEN, which has been promoted by NRI entrepreneur Romesh Wadhwani, to promote entrepreneurship in India.
NEN began with six colleges (winners of a competition in 2002 called Lock Stock and Trade) in Mumbai and spent the next few years building its own team, bank of students’ cells and entrepreneur-advisors as it sought to effect a change in the mindsets of students. “Five years ago, when we launched NEN, there was a clear need to accelerate entrepreneurship in India, especially at the college and university levels,” says Romesh Wadhwani, serial entrepreneur, whose eponymous foundation runs this network. The original goal for NEN was to launch thousands of first-generation entrepreneurs over 10 years, creating 100,000 high quality jobs and accelerating economic development in India. “Five years on, we have come a long way and made a big difference. Today, there are nearly 400 colleges and universities with entrepreneurship programmes and over 50,000 college students are now actively engaged with us. Then, there is a network of resources that can be accessed and used by any NEN member at no cost,” he adds.

In February this year, some 250,000 students across 360 educational institutes took part in NEN EWeek (entrepreneurship week). And over the course of the event, they took part in group discussions and met investors and successful entrepreneurs. They also spent three days on a “Rs 50” game, where they had to devise out-of-the-box businesses (with an investment of Rs 50) in three days and prove their viability. These businesses ranged from dog washing to salsa classes, printed T-shirts and costume jewellery.

At Bangalore’s Mount Carmel College, students baked a cake for Rs 50 and sold one slice of that cake for Rs 20 and used the surplus to bake more products and make a handsome profit—all this to eventually learn being well-rounded entrepreneurs.

Besides nurturing first-time entrepreneurs, the next step for NEN is to play a broader role in building an entrepreneurship ecosystem in the country. “We need to encourage college students to consider a future in start-ups—not just in founding companies, but working in these start-ups and understanding the nuances of working with them,” says Biocon founder and CMD Kiran Mazumdar-Shaw, a strong votary of NEN’s activities and an advisor to the network.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports.

July 04, 2008

"My Lips are Sealed Mr. VC"

Rick Segal provides a list of 3 VC Questions You Should Not Answer and, if you can't seal your lips, some sample bogus answers.

1. Who else are you speaking to? [Answer: The usual suspects.]

2. What pre-money value did you have in mind? [We are looking for a deal that provides great returns for all of us.]

3. Can we speak to a few of your customers so we can better understand the value proposition? [No. Customer calls are post term sheet due diligence]

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the Private Equity and Venture Capital ecosystem in India. View sample issues of Venture Intelligence India newsletters and reports.