Why the consumer should not be the king in India

The dilemma for service providers in countries with defined hierarchical norms is fascinating. Jitender Dabas argues that the increasingly rude behaviour of Indian consumers towards service providers comes from following the Western ‘customer is king’ model. Companies need to be more commanding and less sichophantic.

THE CHANCES ARE that if you are in India you would be likely to reach the conclusion that the rudeness you observe towards service providers – mobile phones, banks, credit card providers etc – comes from consumers experiencing poor standards of service and/or that the quality of service is fast deteriorating. In fact, the reality is quite the opposite.

About ten years ago it used to took 15 days to three months to get a telephone installed. Today it takes less than 24 hours for an active landline connection and you can have an active mobile phone connection almost instantly. The approval time for a home loan has come down from months and weeks to five to seven days. You can apply and get a credit card almost instantly. The time required to get cash from a bank has almost come to nil thanks to technologies like ATMs, compared to the half day that it took a while back.

Now, consider the brand choice equation. As recently as ten years ago, there was one telecom service provider, one life insurance company and not more than four or five big banks to choose from.

Today there are more than five telecom service brands, more than 10–12 insurance brands, almost all of them partnered by the world leaders.

There are more than 20 banks to choose from – all of them armed with the latest technologies. More than half a dozen airlines are ready to fly you through the day between different cities.

In light of this, the often highly aggressive behaviour by consumers clearly defies logic. Even more intriguing, is the typical consumer behaviour before all this. Ten years ago, the line man from the stateowned BSNL would come and install the telephone after a month and a half of applying for it, and most consumers felt very obliged and happy to offer him sweets and warm hospitality. Now the same time has been cut down to 12–24 hours, but agitated consumers are chiding the hapless new service providers for taking so long. In short consumers are having the best time of their lives as service brands are treating them as kings.

So while brands in all service sectors are stretching themselves to ‘delight’ middleclass consumers, an almost inverse relation is developing between the efforts that service brands are putting in to pleasing the consumer and the respect that the consumer shows towards them. The harder companies try, the worse they are treated.

Today, even some of the international brands in areas like financial services have started to lose the global ‘halo’ that used to fetch them a premium. Therefore the brands need to worry. Not just because the consumer is getting irritated or behaving badly, but because their brand premium has begun to erode.

Why the sudden rudeness towards service brands?

Is this the revenge of the consumer? One theory says that after years of being treated shabbily consumers finally have choice and are venting built-up frustrations. But logic says why should they be unhappy about getting what they wanted and more?

The second hypothesis is about the intensity of competition in the market raising consumer expectations to a level where they become insatiable and unhappy. Some also suggest that the increased brand choice across all categories has turned consumers into spoiled children, hence the bully behaviour. But, strangely, even in low-choice categories the rude behaviour is already prevalent.

But none of this explains the increasingly rude and intolerant behaviour from the culture of middle-class Indians which is essentially tolerant and polite.

 

The new power equation

What has changed in the last few years is that consumers have become more powerful because of the choices resulting from the opening up of service sectors to private players. But why would this necessarily lead to a change in people’s value systems?

The answer lies in an understanding of Indian social structure and the abilities of its sub-parts to handle power.

A look at the social structure in Indian society would reveal a pyramidal construction with the power gradient being steep between levels and classes – a structure, it should be emphasised, in which Indians are very comfortable. And the truth about such a structure is that you either look up or down at other people; there cannot be a third way. A relationship of equality cannot exist in such a structure. Therefore the only relationships which Indians have experienced comfortably are of either superior or subordinate.

Added to it is the historical inexperience of the mainstream of society in handling power. Whenever a section of the middle class has acquired power, its behaviour suddenly becomes rude and arrogant. (The neo-rich class has at times tried to assert its dominance in a particularly aggressive and ugly way).

Mainstream Indians (the middle class) are bad masters in that they don’t know how to handle authority. The ‘caste’ nature of Indian society reveals this fact. Compared to middle-class people in many Western societies, who are polite and friendly to bar tenders or waiters or car valets, Indians have never been particularly courteous to people who perform menial tasks.

 

Power distance theory

A more scientific understanding of this behaviour comes from the study of different cultures by the anthropologist, Geert Hofstede (2006). The Hofstede model of five dimensions of national cultures analyses and differentiates societies from 50 countries on the basis of five dimensions – power distance, uncertainty avoidance, individualism, masculinity and long-term orientation.

Of relevance here is the power distance dimension, defined as the extent to which the less powerful members of organisations and institutions (like the family) accept and expect that power is distributed unequally. The most important aspect of the theory is that, in many societies, the level of inequality is endorsed by the followers as much as by the leaders. All societies are unequal, but some are more unequal than others. How people willingly accept or reject these inequalities is the basis for Hofstede’s distinction between small and large power distance societies.

The key characteristic of a large power distance society, is that power is a basic fact of society antedating good or evil: its legitimacy is irrelevant. This is supported by parental emphasis on obedience, the dominance of teacher-centred education, unquestioned acceptance of hierarchy and a highly uneven income distribution.

India has a power distance index (PDI) of 77 as compared to the world average of 56.5. (Other countries with similar scores are Russia, Mexico, Rumania and some of the Arab countries). This power distance score for India indicates a high level of inequality of power and wealth within the society.

But what it is important to understand is that this condition is not tolerated resentfully, but rather accepted by the population as a cultural norm. To some extent this explains the legitimised and comfortable existence of the caste system and other hierarchical behaviours that would be unacceptable in Western societies. The fact that this inequality is endorsed as much by the followers as by the rulers explains why, in spite of being a democracy, Indians are still obsessed with one family rule, they revere our cricketers and worship their movie stars as gods.

This is where India differs from many Western cultures like Sweden, the UK, the US and Australia which have very low PDI scores (less than 40) and where relationships between classes are more equal and less hierarchical.

How is this relevant to brands?

What this means is that in low power distance societies it is possible for brands to have a relationship of equality with the consumer. The brands can ascribe the status of ‘king’ to the consumer and yet retain the status of equal in the hierarchy. This is difficult in high power distance societies like India and others. And herein lies the reason for the problems service brands are facing in controlling their relationship with consumers.

The development of service sectors in the economy happened first in the industrialised West. So the theories of service marketing and models of service brands have taken shape in societies with lower power distance. Putting the consumer at the centre of everything and treating them as ‘king’ came naturally since the inequality between different social levels was never too high and egalitarianism is a recognised social value.

But in cultures that support strict hierarchical relationships, the servile nature of the service brand is a major handicap if they follow the ‘consumer is king’ model. It means they become subservient to the consumer in the equation and hence consumers begin to treat them with the same disdain with which they treat anyone in a subservient position in their culture.

This explains why as service brands are falling over each other to please the consumer, he is treating them with more and more contempt. Not that consumers like being given importance. It’s simply that rudeness is the only behaviour they know. This also explains why consumers were more respectful ten years ago when they weren’t treated particularly well by the state-owned brands. In those times, intentionally or otherwise, service providers kept power to themselves and the consumer who was comfortable with being on the lower rung of the power equation gave the brands the status of ruler and was happy to be ruled.

But as service brands are giving all power to consumers, it is perhaps not surprising that consumers have started to behave like tyrants.

 

A challenge to premium service brands

To be respected in such a culture, brands will need to increase their distance in order to assume power. If brands try to play a ‘subservient’ role in such cultures they will be treated badly.

What this translates to is that premium brands always need to be at a higher level of the hierarchy than consumers if they want to protect their premium-ness. The brand should be the king.

In a competitive market the brands that display a servile demeanour in order to win consumer preference will eventually end up being exploited and bullied.

So are there examples of brands that seem to be doing it right? The most interesting case in point is Kingfisher Airlines, which seems to be climbing fast in terms of brand preference among fliers in India.

The whole experience is intended to feel like an invitation from the king to his private kingdom to enjoy the luxury. It offers great service but keeps itself on a higher pedestal and doesn’t compromise its position in the whole equation. Therefore it is possible to keep the consumer at the centre but still remain in control.

 

Some principles for service branding in India

This is not about treating the consumer disdainfully. It is about the power equation between the brand and its consumers. It is about the demeanour the brand exhibits when it deals with consumers.

The brand needs to provide good service, but what it needs to avoid is becoming too eager to please. For example, the more servile and submissive telephone calls I receive from customer service representatives, asking if I’m happy, the more I will start asserting my ruler status over the brand and the more likely I am to become rude and insulting.

Service brands needs to be careful when they’re training their staffs in the softer skills. They need to understand the difference between being polite and being servile.

The CEOs of the companies should be careful not to appear too servile even if they’re handling a delicate PR issue. The way Vijay Malaya (CEO of Kingfisher) invites you aboard his flight looks like a king issuing invitations to his kingdom. The relationship with the consumer is therefore stated clearly from the very beginning.

The argument that by increasing the power distance from your consumers you will become niche is also not correct. In fact, the brands with high power distance from their consumers will always be the bigger and more desired brands than others.

After the telecoms and financial services, the next wave of service brands to hit Indian consumers is going to be in the area of retail, entertainment and food services.

As global brands like Wal-Mart, Carrefour Tesco and Indian giants like Reliance enter the retail sector and go about creating the next set of service brands, they will need to decide the nature of their relationship with the Indian consumer. Essential to their positioning in the marketplace is a clear view of who will rule the relationship.

 

References

Hofstede, G., (2006) Dimensionalizing Cul tures: The Hofstede Model in Context (2006) Universities of Maastricht and Tilburg, the Netherlands, www.ac.wwu.edu/~culture/hofstede.htm

 

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What has changed in the last few years is that consumers have become more powerful because of the choices resulting from the opening up of service sectors to private players. But why would this necessarily lead to a change in people’s value systems?

 

In low power distance societies it is possible for brands to have a relationship of equality with the consumer. The brands can ascribe the status of ‘king’ to the consumer and yet retain the status of equal in the hierarchy