GreyMatter

Moments of Truth

In 1981, at the ripe old age of 39, Jan Carlzon became the CEO of Scandinavian Airlines. After 17 consecutive years of profitability, the airline was facing losses of $20 million. Yet within his first year as CEO, he had returned the airline to profitability. By 1984, SAS had been voted Air Transport World’s "Airline of the Year". What did he do, and how?

In 1986, Carlzon wrote a book called ‘Moments of Truth’ that answers that question:

 

"Anytime a customer comes into contact with any aspect of a business, however remote, is an opportunity to form an impression."

 

As he puts it,

 

"Last year, each of our 10 million customers came in contact with approximately five SAS employees…Thus, SAS is "created" 50 million times a year…These 50 million ‘moments of truth’ are the moments that ultimately determine whether SAS will succeed or fail as a company. They are the moments when we must prove to our customers that SAS is their best alternative."

 

From this simple concept, Jan Carlzon took an airline that was failing, and turned it around to be one of the most respected airlines in the industry. I remember coming across that book, back when I was in business school. Now, in my role as a marketeer and a customer, I see a bunch of opportunities for companies to shape their ‘moments of truth’… and they’re blowing it.

Recently, I found myself in the market for an air conditioner. Now, you must remember that here, in India, buying any thing is infinitely more complex than else where in the developed world. Very few companies have websites worth a mention. Of the ones that do, very few carry product details of any relevance. The availability of products in the market is also quite unorganized, mainly through small local stores, with just a handful of really large-scale multibrand outlets to choose from.

I tried to ‘google’ the brand names I could think of, but not much dope could be gathered online. Then, I thought of trying out a few small stores in the area – each one was limited by a ‘favourite’ brand or two which it was interested in ‘pushing’, irrespective of my needs. As a last recourse, I approached bigger multibrand outlets to try and get a better understanding of the options.

Salesman after salesman, I was facing people who basically said "there’s no difference between the various brands on offer"… When asked about the price differentials, the average response was "different companies price their products differently"… When enquiring about the tonnage required, all I could elicit was an approximation of "100 square foot area needs 1 ton" !

Exasperated from this experience (not to mention the prevalent heat), I breathed a sigh of relief only when I found a sales rep that made some sense, and was willing to help me cut through all the bullshit… And that’s the guy I bought my AC from.

The frontline sales staff of the organization / store plays such a significant role in making that sale. And the various players in this space (Brands like LG, Samsung, Voltas, etc. as well as stores and multibrand outlets) all had an equal shot at making that sale. But they blew it (all except one, of course).

This story is repeated hundreds of times, each day, no matter what you’re in the market for… moments of truth, just wasted away.

If I were working for any one of these organizations, I’d be worried.