After-Sales Challenges in Emerging Markets – Strategies to Help Consumer Electronics Brands Achieve Service Excellence
In our last blog post, my colleague Stefan Gyarfas shared exciting insights into the Vietnamese market. He is absolutely right! Vietnam is indeed one of the most interesting, though one of the most underestimated growth markets in Asia. Consumer electronics brands that want to sell mobile and IoT devices in emerging markets such as Vietnam or India face particularly complex challenges in the after-sales area. This blog post is about what these problems are and how to solve them.
Service excellence is a noble aim and only a few brands are able to provide a truly unique customer experience. It is especially difficult in countries where the conditions are anything but stable. The basic ingredients for service excellence can be summarized in just a few points. In principle, after-sales operations should be geared to the needs of end-consumers and how they experience service – which is why consumer satisfaction and loyalty rather than internal organizational goals should be the guiding light.
Service Excellence Works Like a Never-Ending Journey
Customer care organizations need an accurate measurement system in order to continuously monitor the quality of after-sales operations. Standard operating procedures define process standards. These procedures are necessary in order to be able to measure and benchmark processes at all. If the KPI results are transparent and are available to the entire organization, then it is possible to implement optimization measures on the basis of standardized methodologies such as Kaizen or Six Sigma to ensure continuous improvement. You can then measure their progress, which subsequently completes the service excellence cycle.
So far the theory – but how can this idea be implemented in emerging markets like India or Vietnam, where transparency and process stability are anything but mainstream? We know from our own experience how complicated it is to have an after-sales setup with much more than 100 service partners – and such a setup is still the norm for many smartphone and consumer electronics brands in emerging markets today. With such a large number of independent repair partners, it is virtually impossible to implement standard operating procedures on a large scale. In addition to a lack of adherence to quality standards, there are regular compliance problems and in the worst case, even fraud.
Decreasing Compensation and Rising Demands Overstrain Service Partners
At the same time, increasing competitive pressure among manufacturers is leading to a tense margin situation. In turn, this means added pressure on the service network and walk-in repair shops. According to the device manufacturers, fees are set to decrease, while at the same time higher quality and investment in expensive quality control processes are expected. Hardly any of the small mom and pop stores can afford this, so a number of them try to balance the financial pressure through the “creative” reporting of service transactions. In the end, this creates a vicious cycle, which can only be broken by a completely different approach to the whole after-sales setup.
From the manufacturers’ point of view, the top priorities are adhering to quality and safety standards, controlling spare parts and replacement devices, as well as ensuring transparency. Large repair centers would be able to meet these requirements in terms of know-how and financial resources. However, their repair sites are generally anything but consumer-centric – and here we are back to the first step towards service excellence: It always starts with understanding and implementing consumer requirements which large repair factories rarely do.
Service Excellence as a Compromise Between Standards and Flexibility
Consumers expect quick and uncomplicated help. In countries such as India or Vietnam, it is common practice to go to the nearest repair shop. This is convenient, quick, and is often the cheapest option, even for repairs outside the warranty period. But these shops do not have the necessary financial resources, skills and competencies to provide the best possible quality, which, as mentioned above, is one of the fundamental components of service excellence.
As B2X, we have steered a middle course by developing an approach, which acts as a layer over an existing service network. This layer provides all the control mechanisms and transparency that manufacturers would want, without sacrificing the flexibility of a dynamic network provided by smaller service shops. This approach has been successful in India for a number of years now, where we operate after-sales services for brands like Apple, Lenovo, Samsung and Xiaomi. We have also been recently using the same concept for Samsung in Vietnam, which has been very successful so far. We would be delighted to support further smartphone, IoT and consumer electronics brands on their way to service excellence in emerging markets – please contact us at any time and don’t forget to follow us on LinkedIn!
CATEGORY:Trends & Insights
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About the Author
Andrew HumphriesAndrew Humphries is Head of Global Delivery Management at B2X.