Sunday, November 4, 2018

WHAT IS THE ACTUAL VALUE OF A CUSTOMER? - S B AMALJITH

I think this happened in the month of August. There is a hotel called MARYA'S CURRY HOUSE in Thevara. This is one such hotel where you get the worst customer service. I have had experience with both, star hotels like The Panaromic Gateway and Le Meridian, and also from those 'thattukadas' where you get a bajji for 2 Rupees. Never have I got any experience like what I got from Curry House. The waiters serve food like wardens in prison.

I will explain one incident that happened. I and one of my friends were buying lunch parceled. So we ordered together and asked them to parcel it separately. And when the order came, they put it in a single cover. Since we had to go to different places, I asked them again quiet politely to give it in seperate covers. They said that it was not possible. I thought of not making a scene there since both of us were really hungry, and also because we didn't have much time since we had classes. And what happened later was, one of us had to carry our lunch in bare hands with all those curries and all. I found it both insulting and embarrassing as a customer.

Even though I had many such experiences from them, I was a frequent customer, since that was the closest hotel from my hostel.

So now let me just put my growing 'economist' brain to use, for the first time. I just started wondering what the actual value of a customer might be. I always had only less priced foods from them(compared to things like tandoori, al faham etc.), which averages to like 70 Rs per day (yeah, I used to have my dinner everyday from there). I thought myself to be a 'not so valuable' customer.

Now let me get in to the arithmetic of this. (There are a lot of assumptions and approximations,so please bear with me).

When I was a customer, I used to spend Rs. 70  per day.

So for a month that will be like, 70 times 31, which is equal to Rs. 2.170.

I will be here in Thevara for 36 months (approx.). Or for the sake of assumptions, subtracting the year end holidays and all, let us say we have like 28 months.

So for 28 months,

2,170 times 28 is equal to Rs. 60,760.(pretty big number right? There is much more to come.)

As a prudent customer I am in no way going to keep my mouth shut about my experience. Let's say, I narrate my experiemce to 50 people. And let me assume that 10 of them on hearing my experience stopped being their customer. And let me average their expenditure to some Rs. 50. Let's also assume that they could have gone to that hotel 5 times,if they were customers. That is Rs. 250 a month. So for 10 people, it is Rs. 2,500.

Hence, for 28 months, 2,500 times 28 is Rs. 70,000 (again pretty big number. I am not done. Wait for it.)

So the total lose made by me and 10 other people who heard me was,

60,760 + 70,000 = 1,30,760.(this is big enough, but I dont want to stop here)

Here comes my last assumption. Let us just assume that the hotel lost 10 customers like me, just because of the way they treated us. Then the total lose is,

10 times 1,30,760 which is,

Rs. 10,30,760.

This is obviously a very big number. This means that, if they had treated me nicely in the first place, they could have started a new hotel by this time, in 3 years.

Let me end this with a punch dialogue.

I dont want to say that customer is 'king' and all, because one cannot survive without the other. And in a business both customer and the seller gains utility (satisfaction). But, never under-estimate the power of a customer.

Thanks for reading.

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