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How to Make Money on Service During the Crisis

In December 2016 year Georgian national currency has set an anti-record demonstrating the maximum drop.With regard to the United States dollar, lari dropped nearly in 50%. The biggest problem for the businesses and ordinary people has become the economy’s dependence on the U.S. dollar, which leads to a continuous rise in prices. Devaluation, of course, hits the hardest the poorest population and the owners of dollar loans.

Georgia is a country-consumer, “food” basket is almost fully formed by means of the imported products, the prices of which are linked to the U.S. currency. The government offers various options to end the crisis and bring the national currency in feeling, but at the time being the businesses have to tighten the belt and save money.

Georgian companies are starting to cut back the most inconsequential, in their view, expenditure lines. They start saving on the service, where they did not really spent money in good times. But in fact, according to the international statistics, the companies lose more than 20% of the income, if they are not able to provide quality service. And 68% of people that were poorly served, tell that to the friends and acquaintances providing a negative “word-of-mouth”. The service is directly correlated with the sales growth because 53% of clients are willing to pay more for the goods if they receive a quality service. 76% believe that the service is a measuring factor of how the company values them.

Forgotten service 

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Expert, Director of Development at Georgia international research company 4Service Group George Tsintsadze said that nobody in the country is aware until the end, that the service can boost the sales or improve the state of the business.

“Business owners believe that the service is a luxury, a way to show how cool is the company. But nobody considers the quality of service as a tool to increase sales. We have only a few companies with a good service, but mostly there are no service at all”.

George associates this with the fact that the local companies often have a lot of processes that are not established, but not just the system service building. A vivid illustration is the situation with banks in Georgia. In general, the banking sector (as well as the other) has only a few of the largest and most successful players – market leaders who are really doing something, introduce new products, and all the other companies simply copy them.

“People choose by the offered products. We have several banks that have good Internet banking, most favorable price range, and many locations. If all banks offer the same product and all our banks would have the same number of locations, then maybe people would have started to choose them for the service. The same in other areas: people choose, where cheaper, where closer only because all banks can do the same thing,” Tsintsadze said.

The situation is a little bit better with the service, according to him, in the restaurant business because there is a strong competition. A large choice of restaurants with excellent cuisine makes owners pay more attention to the service.

See the future in the service

 Georgian business owners themselves suggest that attention to the service is rather the exception than the rule. Only a few strictly follow the standards of high-quality service and understand that in the end it will bring them a lot of advantages.

The main goal of our company is to provide highly standardized customer service.  Georgia is a developing country and the retail market is under development. Many companies really want to care about their customers, but can not understand and take the benefits. Elit Electronics is a leading electronics company in the retail business in Georgia and one of the main part of our success is the success in the communicating with our customers. As a rule, we have two basic steps in communication with customers: data exchange during the sales process and communication after the sales process. We measure our success through the success and quality of our services with these two steps,” says Marketing Director of Elit Electronics Salome Gozalishvili.

In the company within the framework of the service improving we create a comfortable space for the customers in stores. In addition, the launch of new technologies to simplify the sales process was conducted.

According to Salome, another important part of a decent service standard providing is the holding of the regular training sessions with follow-up exams  for trade staff. Moreover, they are able to track and analyze service quality through the research of customer service quality. 

Crisis is not an obstacle for the customer care

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 Deputy Director for Management and Development of a chain of petrol stations Wissol Shalva Baghaturia as well as the expert of 4Service George Tsintsadze believes that Georgian mentality does not accept service as an additional business opportunity to earn. And we have a big problem in that and the uncovered potential.

“Our company believes that the service is very important, but not to compete in the market. It is important to emphasize the quality of the product and to show that we care about our customers.”

Shalva says that in the fuel sector in Georgia there is very big competition. The petrol stations strictly compete amongst themselves in the matters of prices, servicing and all other aspects including. Therefore, their company does not forget about the proven way to keep the customer loyalty systems.

“Wissol has its own system of loyalty: bonus cards and discounts. System that is common for the entire group of Wissol Group companies, which includes not only petrol stations. Our group includes several different companies of the different fields. There is a chain of supermarkets. Basically our loyalty programs are applied to all companies. For example, buying from us a gasoline the clients receive a gift: the services of our other companies and receive either bonus at card or the gifts. We try to make loyalty programs within our company. But the discount system is not very widespread in Georgian business. We have our own card, which you can use to fill the petrol, there is a card on which the bonus points are credited and later you can receive the gifts for them.”

Shalva, in spite of the economic situation in Georgia, is sure that the country continues to move forward and live, and that means that the business also continues to work. And while especially Wissol Group tries not to pay special attention to the crisis per se, but in general many companies save money on service.

“We think that during the crisis generally it is unacceptable to reduce the costs of service. The crisis relates not only to the company; the crisis concerns each person. It concerns our employees. Of course, in times of the crisis it is difficult to maintain the desired level of service because the people themselves are a bit in the depressed position. You need to make great efforts to withdraw the staff from this psychological state. We started to work more actively with the employees, over their motivation, mood. You need to move forward when it is hard times, but not when everything is good. Every crisis is a new opportunity for us that we try to use.

When hiring the company pay attention to the emotion of the employee, how they get along with the customers and how they can provide a good service.

How to evaluate and improve the service 

If the companies want to compete seriously in the market and meet generally accepted European and international model of the customer-oriented company, then they should make the improvement of the service with its usual practice and take care of service quality control. Timely service assessment allows you to see the gaps in the service and subsequently remove them.

Tegeta Motors, one of the leading companies on the sale of auto parts, also seriously comes up to the evaluation of the service quality. To do this, they use different tools to measure the quality of service. The company has firmly decided with one of the most “common” and efficient, that is ” Mystery Shopping”. Training coordinator Alex Chibarashvili tells us that the company conducts its once a year during 3-4 months. Mystery shoppers check service standards. This control method is quite effective in Georgian realities and, subsequently, service quality has been improving every year.

Wissol also conducts the service control. The company did not use only “Mystery shopping” or customer surveys.

“On the one hand, this is mystery shopper, who checks the work of all staff and prepares the information, on the other hand, we conduct customer surveys on how they are satisfied with our service. The quality of being represented is verified by the patrol station managers, as well as by the regional managers. But we have this control not like a punitive mechanism. We try to present it as a motivation for our employees. We have no fines. We try to encourage those who interact with customers. We give bonuses. Our approach to the staff providing quality service became interesting, important and profitable, “said Shalva Bagaturia.

One of the company’s investment are the trainings and staff study. When Wissol has new promotions or new system implemented, then the staff is retrained. The courses of re-qualification for the refuellers are conducted, who later can become managers, for example.

Country Director of 4Service Georgi Tsintsadze said that one of the development zones for the Georgian business is that something only a few control service, and most companies let this process take its course. And according to him, the volume of “mystery shopping” by companies is insufficient.

“Management of the Georgia companies knows about the evaluation and service improving through the technology” Mystery Shopping “, but they do not allocate budget to implement it, or often they do not want it. Mainly it occurs as follows: they have problems, they are trying to hide them, because they still do not receive money to fix them. This happens in many companies. Many managers simply do not want to show their managers the existence of the problem, so that to look good before them”.

In Georgia, there are virtually no middle class, about 80% are low-income people, 15% have the average income and 5% have big income. For those 80% the price solves a lot, so the user selects the product, primarily, by its price. The company, in their turn, are fighting for the availability of the same products and low price. So some of those who use “mystery shopping” are willing to sacrifice the quality of evaluations, only for cheaper price.

“Often the company management does not explain their employees why and for what they do Mystery shopping program, their opinion is not asked. Therefore, employees resist. They are given only the final, not worked out result. In addition, some still even impose a system of fines. It turns out that the staff motivation comes from “fear” and their customer orientation is doomed to failure,” explains George.

International experience: Service overcomes the crisis or where you need to be careful! 

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4Service Director for Southern and Eastern Europe/Central Asia Sergey Pashkovsky based on the experience with various countries, stresses that during the crisis the companies should be particularly attentive to the staff and the service.

“The crisis is not a one-time phenomenon but it is always like a wave; it occurs every 4 years. If we compare the major crises of 2008 and 2012 in Ukraine, we see different behavior of the companies. In 2008 it was the first crisis after the prosperity which the Ukrainian companies faced and most of them have chosen a policy of budget cuts at all. This included “all”: marketing, advertising budgets and budget for the staff. But the staff is the main value of the company, which unlike the advertising cannot be bought for money. So that the staff became of a high quality, the one that loves and appreciates the customers, informs these customers about the company values and be able to sell, retain the customers, then the years must pass. The companies mistakenly think that will reduce the costs, the crisis will pass and they get out of it completely updated. But while firing valuable people after getting out of the crisis, there is an acute shortage of the skilled personnel. This is a missed opportunity, which the market provides “, says the expert.

You should save on staff very competently in a crisis. In any case, there should not be a slogan like “we don’t care how you serve the customers, and how many you sell, we just want to survive.” According to Sergey Pashkovsky, this will lead to the demotivation, drop in morale, confusion of the objectives. When a company cancels the program on control training and motivation, then it gives a clear signal that “all is lost”. And when the crisis ends, some companies find themselves with a good staff, and some with the bad one and receive the profits of those who were able to retain staff.

“It is necessary to retain “good” people in crisis and to say goodbye to” bad” one. It also can be determined using the monitoring tools. But this is a conditional division. If you are a service company, one of the criteria of your employees should be the concept of the customer orientation. You should appreciate the customer-oriented employees”, Pashkovsky is convinced.