Last month, I went to an organized retailer, Spencer's Express to buy my weekly groceries. It was four in afternoon and temperature outside was 45 degrees which seemed like way more than 50 degrees. I entered inside the store thinking that there will be some respite from this simmering heat. But I was wrong.
AC inside the store was not working and I felt as if I am standing in a furnace. I inquired from staff about non-functioning of AC. "We switch-off AC during non-peak hours" came the reply. I asked "What are your non-peak hours". "11 to 5 during the day are our non-peak hours" replied the staff.
"Great" I told to myself. When the temperature is highest and AC is required most, retailer has switched-off the AC and saved some cost but killed the customer experience.
Cost cutting or managing costs is the order of the day. Every service organizations has taken certain steps - some harsh, some comical and some genuine to control their costs. Some Indian organizations have saved some important bucks by cutting their travelling cost and shifting to video conferencing.
Some software and real estate companies have saved money by cutting on toiletries, saving on AC costs by increasing temperatures, cutting back on tea bags and tea cups, newspapers and magazines and by not giving increments to their staff.
Hotels have also cut their costs. But they have done it in a way that is not noticeable to customers. They have reduced number of towels from bathrooms, reduced the number of flowers, reduced the number of pages in notepads and are making wiping cloths from discarded sheets. Hotels have not touched the amenities which directly impacts customer experience.
Hotels have not cut their staff strength as this will mean impacting customer service directly. Virgin Airlines have also not laid off as much staff (in proportion to other airlines) as it will help them in maintaining higher service levels and standards.
Managing costs is good for the business but it should not be visible to customers. Kill expenses where you can but without killing customer experience.


