Taken for granted: Compliance is a cheaper substitute for Customer Concern

Last week saw the unseemly defence by SIAM (Society of Indian Automobile Manufacturers) of two of their member organizations against the adverse crash test results pronounced by the NCAP. They wasted no time retorting that both the vehicles in question did meet Indian safety standards.

I'm not the expert on automobile safety and therefore what an Indian Safety standard (as distinct from the standard applied for the NCAP crash tests) implies for the protection of the Indian passenger. But the alacrity of the defence by SIAM seemed to suggest that compliance is a cheaper substitute for concern.

But this isn't about motor cars or crash test standards. The central issue is the prevailing apathy towards customers in India. I find it ironical, because at some level all of us are interchangeably customers and sellers. Most of us (and very often) find ourselves at the receiving end of callous customer attitudes. The Director General of SIAM is reported to have said " Global NCAP can do what they want. We have our own safety standards road map which we are going to follow..."

Sample this: I have been trying for close to a year to get my airtime company ( the biggest we have) to install a booster in our office. Because all of us on this particular network have to literally to hang out of the balcony to get any signal. After several rounds of following up and pleading, their final stand was there weren't enough users of their network to justify a booster. I think they must know how difficult it is to shift to a new network.

But why is this important to anyone? Is there really a business case for much better customer empathy?

Sometime last year I had spoken about  Return On Customer Experience as the more relevant expansion of the term ROCE.

Return on Capital Employed was an accounting ratio conceived for the Industrial Age. Today with the ever increasing share of services in GDP, capital employed as a denominator hardly offers an insight into the health of a business. The IT business makes a mockery of that ratio. They need very little capital employed. Businesses like hospitality no longer needs to own real estate. There must be a new denominator.

If we consider the NPS ( net promoter score) logic or the new book Absolute Value ( Profs Simonson and Rosen of Stanford), there is mounting global evidence of customer experience as the underlying basis for the long term financial health of any business.

This not strange for two reasons. Firstly, in a wired world, customer experience is the new brand equity and therefore your demand driver. (read some of the online reactions that the SIAM defence generated). Secondly, we know that most of the intrinsic value ( over three fourths) of a 21st century business lies outside the balance sheet. And the significant chunk of that is in customer equity or what we call brand value.