Topic: Flipkart – 7P`s of Services
SLIDE 1 – Flipkart 7p in services
- Flipkart.com, India‟s largest e-commerce brand for physical goods, started with books in 2007, and entered the consumer electronics category with the launch of mobile phones, in September 2010.
- The co-founders of flipkart are SachinBansal and BinnyBansal.
- Since then it has grown rapidly, today the portfolio is spread across 14 categories – from books to music, mobiles, computers, cameras, home & kitchen appliances, TV & home theatre systems etc.
- Ranks in the top 20 websites in India.
- Book titles available– 11.5 million.
- Registered users – 3 million
- Current manpower – Approx. 4800
- Items shipped per day – 30000
- Own delivery network – 37 cities
- Product – Today, they present various categories of products such as: movies, music, games, mobiles, cameras, computers, healthcare and personal products, home appliances and electronics, stationery, perfumes, toys – and still counting!
- Price – The products are offered various prices catering to all the classes of buyers. Flipkart also offers discounts and special deals on books and other products.
- Place – This is where flipkart saves money as it does not need to incur cost on setting up stores as it is online based. – Flipkart operates these cities: Bangalore, Chennai, Delhi, Kolkata, Mumbai, Noida
- Physical Evidence – Website – Delivery
- People – Reviewers – Customers
- Flipkart has been mostly markets by word of mouth advertising. Customer satisfaction has been their best marketing medium
- Flipkart also uses SEO and Google Ad-words as marketing tools to have a far reach on the online world.
- Flipkart recently launched a series of 3 ads with the tag line – “No Kidding No worries”. Kids were used to create the adverts to send out the message – if a kid can do it, you can also do it.
- The message is very clear to make people more comfortable with Flipkart, to generate a great customer relationship and loyalty on the basis of great product prices and excellent customer service. All in all to create a great customer experience.
SUPPORT PROCES S CONTACT PERSON
Analyzing Rater Model
Particulars Expectation of Flipkart
Perception of customers
Need to improve Reliability 7 5.5 1.5
Assurance 7 5 2
Tangibility 7 6.33 .67
Empathy 7 4.85 2.15
Responsiveness 7 4 3
Fishbone diagram: A cause-andeffect diagram to identify potential causes of problems
Company Perceptions of Customer Expectations
- Flipkart was among the few E-commerce sites and people expected it to be selling the E-books and PDF of books too.
- Indian consumers expected the payment mode to be Debit/Credit cards and not Cash on Delivery.
- Initially Flipkart did not have a 30Days Guarantee which customers expected in case of Electronics.
- Lack of communication between Courier Delivery company (Employees) and Flipkart managers.
Customer-Driven Service Designs and Standards
Management Perceptions of Customer Expectations
- Flipkart has developed Flyte – Music Store , this service has been a very Vague and out of line Development from it.
- The Service Standards were not upto the need of the Customers when it came to quality of Original Books and also Electronics like Laptops,etc.
- Flipkart was inadequate in updating its Inventories and dealing its products returned with Defects by customers.
- There was a lack of Tangiblity because of its Online presence in its Electronic products which Customers needed.
Customer-Driven Service Designs and Standards
- Flipkart being a start up initially Human resource policies were deficient as most of employees left in a year or two of their recruitment
- There was a problem of Customer not fulfilling their roles i.e. many customers made orders and upon Delivezzzry returned them or denied the purchase.
- Flipkart had Problems with its service intermediaries which was the Courier Delivery Company because of logistical problems.
- Flipkart had overreliance on price which was giving too much discounts to smooth demand which led to low margins. Delivery Gap
- Flipkart had absence of strong internal marketing program which led to High Employee Turnover and many Employee lacking complete knowledge of product .
- Flipkart could not effectively manage the expectations of its Electronics segment Customers and could not keep up with kow prices and latest products in its Inventory.
- There was little overpromising in its Books store segment which initially boasted as being the biggest online Book Store but it lacked many good Foreign Publishers Books with whom it did not have tie – ups.
- Flipkart faced many Operational problems and there was a lack of Communication between Sales and Operations Departments because the Operations business was not streamlined.
External Communications to Customers
- The Customers expected that Flipkart should give 30 days Refund Guarantee for all of its product while what could be perceived was that only 30 days replacement guarantee was being offered.
- The Customers expect that all the products are delivered in 3 to 4 days but the Employees perceive that the Customers would expect in 3 to 4 Business days which many a times is point of conflict for Flipkart Employees
CUSTOMER RELATIONSHIP MANAGEMEMT
- Number of online users has increased 100 times in the past 12 years
- The number of e-commerce companies has also gone up tremendously.
- It is said that by 2014 at least 8 out of 10 Indians would have made an online purchase
WHY IS CUSTOMER RETENTION IMPORTANT TO FLIPKART
- Easy to Search
- Very few switching barriers
- High Competition
- Quick Comparison
- Even a slightly bad experience can lead to permanent customer loss
- Joe Girard said that one customer is a gateway to more than 200 other customers.
CRM IN E-COMMERCE IN INDIA
- The E-Commerce industry has not taken CRM too seriously.
- They have been playing the “ We have cheaper prices game”
- Flipkart had the responsibility to create awareness about ECommerce.
- Currently companies are spending on converting offline customers to online customers than retaining.
CORE SERVICE PROVISION
- 1st step in the Relationship building process.
- Flipkart has been successful in fulfilling the criteria in this department.
- The perceived quality is quite high because of their new ads
- The actual customer experience have fallen because: – Financial Distress – Technical Glitches – Critical feedback from users and experts • Eg: Forbes
- Customer Inertia: – If a customer wants to leave you, he would. – Customers have accounts with multiple websites. – There is no loyalty whatsoever in the E-Commerce Industry.
- Switching Barriers: – Psychological cost and time cost are two switching barriers – Very few switching barriers. – Takes hardly 2 minutes to create a new account. – Customer is spoilt for choice.
- Hence, it can be a positive as well as negative factor for Flipkart.
- Volume and Frequency Rewards
- Stable Pricing
- Bundling and cross selling
Social Bonds • Continuous Relationships
- Personal relationship
- Social Bonds among Customers
Customization Bonds • Customer Intimacy
- Mass Customization
Structural Bonds • Integrated Information System
- Joint Investments
- Shared Processes and Equipment
WHAT FLIPKART DOES?
- Notifies if a product of your choice is „now available‟.
- Customizes mails according to selected likes.
- Provides an online customer service.
- Special website for complaint registration.
- Lets you keep a check on past purchases and current orders.
- Sends mails on dispatching items.
- Feedback forms after every purchase.
- Simple and easy to use website.
- Prepaid wallet service.
FACTORS WORKING AGAINST FLIPKART
- Accused of „Overpricing and then giving a higher discount‟
- Strict Review Moderation system.
- Trust deficit.
- Financial constraints are stopping Flipkart from taking up CRM.
WHAT FLIPKART NEEDS TO DO?
- Segregate Customers according to: – Volume Sales – Amount of Sales – Frequency of Sales – Category in which sales have been made by a customer
- Send specific e-mails to customers.
- Start a point system.
- Give special calls to chosen customers and give them special communication officers
Customer Service, Complaint Management and Service Recovery Strategy.
- Flipkart has a 24/7 customer service.
- It has an online customer service.
- It has a Customer Care helpline.
- Considered to be the best in business.
- It gives the customers an option to review the product but not the service.
- It responds quickly to problems addressed to them on various social media platforms.
COMPLAINTS AND COMPLAINANTS
- Most of the complaints are not reported unless the price of the item is very high.
- The complainants are also in extremes: – Some might complain and not follow up (Passives) – Some take up the issue on a public platform • There are pages dedicated to Flipkart on the Consumer Protection Web Forum
HOW FLIPKART TACKLES COMPLAINTS?
- It is easy to find information about the various media that can be used to complain.
- It is very easy to lodge a complaint.
- They have made sure that the customer care staff : – Is not impolite – Understand the customer‟s problem
- They have been known to respond to open letters by the customers.
- Mr. Sachin Bansal openly replied to the article given in Forbes India.
- On the spot redressal is not possible as various aspects of the service delivery process have to be checked.
- The only drawback is that continuous improvement has not been achieved.
- The following strategies have been used by Flipkart:
– Welcome and Encourage complaints.
– Act Quickly.
– Treat customers fairly.
- It is difficult to actually understand if a customer is lost or not.
- There is no pressure from the company to buy the product.
- They post about their resolved complaints on their blogs.
- What they have not done is:
– Fail-safe the service
– Learn from lost customers
Matching Demand And Supply
- Customer base increasing by 25% per month
- Daily Servicing orders increased from 24000 to 45000
- Current Fiscal Sales amount to Rs.2000 Crore
- Selling 20 products per minute
- Demand pattern – Demand exceed the optimum capacity level
Shifting Demand to Match Capacity
Introduced Cash On Delivery Online assistance to place orders Bought Letsbuy.com to increase range of electronics items TV Commercials
Products at discounted price
Increased minimum COD from Rs.200 to Rs.300
ADJUSTING CAPACITY TO MATCH DEMAND
- When Demand too high – Employee base increased from 2500 to 5000 delivery men. – Introduced Flipkart Logistics. – Increasing Flipkart Logistics coverage from 13 to 25 cities.
GUARANTEES GIVEN BY FLIPKART
In stock : 3-4 business days
- Non prime areas 1-2 Weeks
Imported goods : 10 days or more
Pre launch goods : Shipped on release date
30 DAY Replacement Guarantee
Delivery Time Period
SUGGESTIONS FOR FLIPKART
- Up keeping the cost of 7 warehouses that it owns should be transferred to Flipkart Logistics.
- Cash on Delivery Option creating cash flow problems and so make it only online payment so Cash flow problems are solved.
- Flipkart should concentrate more on retaining the customers first rather than expanding into new segments.
- Maintain price differential from its new competitors like Junglee.com which is owned by Amazon.com .