So, after my two year stint at IIM Calcutta, am back in Mumbai. While it has been only a week since I came home for good, I’ve already shaken up the incumbent service providers…
When we shifted to the new place, the MTNL landline took a bit more time than anticipated to shift – involved changing exchanges, and no one knew which telephone exchange served the new building. And, as one may imagine, living without a telephone connection is rather difficult – plus, not everyone at home had cell phones then. So we got the just launched Reliance FWP connection – now called Reliance Hello.
Only, now the situation has changed – everyone has cell phones. Despite reducing the rental to the lowest (officially) possible, we don’t end up consuming all the “free” calls; essentially, we are paying an amount to Reliance to just retain the number – which everyone uses to call us, even if we don’t use it to call them. So terminating the connection, while an option, is not the preferred one. Instead, I researched on the Reliance website and discovered it is possible to go the “prepaid” way.
So, I first called their call center, explaining what I wanted done. They wanted to know why I wanted to convert. Told them. As expected, they tried selling me “special plans” reducing rentals – a strategy that I’m too aware of; after all, I did study Services Marketing, Consumer Behaviour and the like! So I tell them, nothing doing, I want to go prepaid. So they ask me to submit necessary docs and request to their center, which I did – repeating the entire conversation once more to the customer service agent at the counter there.
Finally today they called me, and after the same conversation being repeated – “Sirji, Reliance ke liye aapka yeh number bahut important hai…” Yeah, right! So they ended up offering me zero rental for three months with 60p calling. I demand – what after three months? We’ll then offer you the best plan available then. Hmmm, unless you can guarantee me a lifetime zero rental scheme, no thanks! But sir, she rambles on. Time to go in the firm mode: Look, either convert this line to prepaid right now, no questions asked, or I apply for disconnection! Now, I’m talking – and they are listening. She finally relents.
The other incumbent that got thrown out was Hathway – my ISP of about six years. They are fairly decent, only they have forgotten to keep up with the times – or so it seems. I got a very sweet deal from MTNL Triband – unlimited 1mbps connection – four times the speed of my previous connection at a marginally higher cost.
Here’s a verbatim conversation I had with Hathway:
“Sir, your account is due for renewal…” “Yes, I know. But we don’t want to continue. We’d like to disconnect.” Panic! “Disconnect? Why sir?” “Because your prices are too high!” “Sir, it is only Rs.XXXX”. “Yes, but have you seen the competition? They are giving me Y at price Z.” Background discussion with his supervisor. “Well sir, in that case, we would like to offer you the same plan at reduced price of Rs.XXXX/2.” “No thanks. I already have subscribed to your competition. Now, let me know your termination policy…” Gulp! This customer is now a lost case! How will I achieve my targets now! “Alright sir, you need to return the cable modem to our office, and send us an email for termination.”
I almost feel sorry for them – they have been generally decent with their service, and have served me well. And I have some loyalty – I’d even have negotiated with them for a better deal. But what irked me, is that they did not offer me that discount upfront. They were completely alright ripping me off only moments ago. There! I quit! I will go to your competition AND you will not be able to do anything about it! I’m the devil! And if I am in an especially foul mood, I will completely ruin your day by blogging, tweeting and crapping the daylight out of your reputation.
The point is, service providers will go through a lot of trouble to try and retain postpaid customers – a constant revenue stream, generally uncomplaining cash cows that can be milked forever. And, they will only offer the wicked dirt-cheap plans when you threaten to leave. This creates bad incentives – similar to what happens in any job – pay me more, else I’m off. The flip side is the providers point of view – they are probably at their wits end trying to retain customers. The churn, that is, the number of customers discontinuing, is a big worry. Competition does not make it any easier. They try to pacify customers by offering one time discounts and the like, but obviously, only if you “threaten” them to leave. And many stay – making it a self-fulfilling prophecy. The only real deal is the tact and technique that the touch point has – the experience to figure out if the customer is bluffing – asking for a discount for getting the discount, or really wants to quit.
The other thing with these changes is that it increases transaction costs for everyone – the provider side is obvious, they have to recommission everything. But even for the customer, it could mean downtime, changes, training etc. This represents significant productivity loss for the society as a whole. Rather unfortunate then, that there is no solution to this issue. At least, I didn’t find one. If you have one, do comment below.