The Value of the Invisible

Hat tip to Bipin for his blog post on the cost of customer service.

Indeed, when customers march in droves towards lower prices like so many dodos marching off a cliff, what's going to happen to quality? What indeed.

I'll add that it's not (only) that customer service costs money. Sunil Mittal did not become one of the richest men on the planet by charging me marginal cost. I'd reckon he's got enough margins, even at current ARPUs, to give me better customer service. I'm sure he would give me better service at the same price if he had a way of knowing that I, the average consumer, care for better service. At the moment, I the average consumer am sending him the opposite signal by hopping to lower cost providers at the first opportunity.

This reminds me of the airline industry. People make comparative decisions based only on the information they have in front of them. Before online comparison shopping, people had "favourite" airlines on the basis of experience, and tended to always fly them when possible. It was too much work calling up all airlines and comparing prices. Once it became easy to go to a website and buy the cheapest possible ticket, that commoditized air travel - to the point where you often don't remember which airline you're supposed to be flying today till you get to the airport and have to find the checkin counter. Since "service" is not a visible commodity at the point you book tickets, that goes for a toss - there is not enough incentive to invest in making service incrementally better. Unless, it's so horrendously bad that you never want to go back, as with me and Delta Airlines.

Interestingly, airlines in the US have learnt that customers make buying decisions based on what's visible at booking time, so they've started playing tricks to nickel and dime travellers at airports - lower baggage allowances, charges for "expedited" checkin, et cetera. The only way around that seems to be stricter regulation.

Where things are quantifiable, like on-time performance, it'd be easier to make consumers pay. IndiGo has an ad campaign promoting their on-time status. I for one would definitely like to see an on-time statistic for the airline and flight while booking (are you listening, cleartrip and makemytrip?). I normally go to flightstats.com and try finding out for myself, but not too many people might have heard of that site. And I will (and have) paid more money to get on a flight with a substantially better on-time record.

So, quantification may be a way out.

How do we quantify mobile "service"? Network congestion statistics may be an easy option. "Quality" of the voice connection is rather harder to quantify. Calls on my Airtel phone sound a lot clearer than on my Tata Indicom. Is that because of the phone, the network, the particular tower? How about coverage?

Until number portability, I personally am unlikely to switch carriers or go prepaid, but if I did, this is what I'd want to know, in addition to call and data rates

• Does my carrier have "good" coverage near where I live and work? How about cities and regions that I travel in?
• What is the subjective measure of call quality as measured by independent third party tests (I presume there's nothing like that right now, but that doesn't stop me from wanting to know)
• What's the reliability and effective bandwidth of the data connection I get?
  
• How good is the dispute redressal mechanism? How do I trust the metric, how do I know it's not gamed by the provider themselves?

Someone might make a good business model around finding ways to quantify these and ways of gaining consumer trust on those metrics. :)