Value Addition in Customer Servicing
What has been the strategy behind Diversey’s success in reaching out to several industry segments and in retaining its stand?
Diversey essentially believes in value selling. While offering solution to customers, the focus is on providing them benefits which are higher than the cost incurred on buying the product.
A leading dairy is still using the Diversey solution offered eight years back for washing the road tankers. Even though the change over from using caustic solution at as low as
र25 to using Diversey chemicals which were five to six times higher, the transition took place, as the value addition was much higher to the total cost of operations made by the customer. The total cost of cleaning works not just around chemicals but also labour, water, energy and time. While the cost of investment in chemicals increased per se, the total cost of cleaning decreased considerably. It is important to understand industry needs to make a difference. Our team of experts constantly identifies the pain points of industries where we can make an intervention and provide suitable solutions. This strategic approach to selling has been rewarded by IFC Mint through their “IFC – MINT award for Strategy acumen”.
How has Diversey impressed upon the Indian conservative consumer on the cost effectiveness of adopting professional solutions?
Cost is just one element while evaluating the solution offered. The total cost of operation is calculated assuming that the end quality is acceptable.
But there have been exceptions where the end quality has not been acceptable and the focus has been to resolve an issue. To cite an example, one of our clients in Philippines was faced with a 1.5% rejection of the final product. The cost of the rejected product was 25 to 30 times the cost of the chemicals proposed by us apart from the risk around brand image. This is more of a risk mitigation by moving to a superior solution assuring of results at all times.
In most industries, when cleaning is seen more as a chore, they face variations and difficulties in implementing cleaning uniformly. We propose solutions in various stages through automation / SOPs / training to make it less dependent on human involvement followed by monitoring to deliver consistent results.
To ensure that the performance delivery is consistent our team does regular audits on a weekly/monthly basis. This helps us find out the results of the approach in core areas including the laundry, kitchen, housekeeping, etc., and also the impact on the brand image of the customer plus the cost involved in it. Taking the standard target cost of 100, if the actual cost is 80 or 120, it is a cause of worry. The former indicates underuse which exposes the facility to a risk and the latter indicates incorrect use of the product leading to money down the drain. Through auditing we try and correct the situation.
To raise the bar and ensure highly standardised output, we are in the process of introducing our mobile audit platform, IMAP. In the first phase of implementation, IMAP will generate a standardised report and enable web based reporting. The second phase will provide comprehensive analysis and identify hotspots and areas of concern.
A retail company with 300+ stores across the country can identify the particular store with hygiene issues at any given point of time. As a quality auditor or operations head, it would be possible to identify instantly the food safety risk areas at any of its branches across the country. While IMAP will be implemented to monitor Diversey cleaning solutions, it can be customised for any other operation including food safety and others.
Diversey has always led the market with innovations, strategies and tools and with the introduction of IMAP in the Indian market, we continue to remain ahead.
What will be the strategy where SealedAir-Diversey products are concerned?
We are looking at continuously working on synergies with all customers. If a customer is buying SealedAir packaging, he can always buy cleaning machines, tools, equipment or vice versa. But, we will also ensure that there is value addition in every sale we make to a customer, be it a one off sale or long term synergy. A catering company using Diversey products can be offered SealedAir food packaging solutions. SealedAir’s CRYOVAC packaging for food can increase the shelf life of the product like Indian cottage cheese (paneer) or the use of barrier bags to store potatoes can prevent discolouration.
What has been the progress where the Laundry segment is concerned?
A major concern in the healthcare segment is the hygienic delivery of the linen laundered at a commercial laundry. With nosocomial diseases growing, we have been able to offer hygienic packaging solutions at the same or lower costs than the present. Trials have revealed that the cost of packing linen in paper actually comes down with SealedAir Shrink packaging. It also ensures that the linen remains hygienic to a large extent and is minimally handled or touched before it reaches the hospital for storage or use. The patients’ confidence in the hospital increases when they see barrier bags being used for its linen.
We are working with more organised laundries to begin with and the education process will continue down the line once we are established. Hotels and industries too have shown interest in SealedAir solutions.
The biggest cost today incurred by the customer is on the fabric and not in washing. The more the washes, the more the alkaline the cleaning solution, the more will be the damage to the linen. Hence, our focus is to minimise the cost and damage to the linen with consistent performance through cutting edge technologies. The solutions offered are customised effectively to meet specific needs of the customer. Depending on the case, alkaline or bleach though a necessary evil, is used with minimal damage. We educate the customer about the pros and cons and then customise the product accordingly. If you look at the changing needs, at one point of time, high level of whiteness was much appreciated in paper, today unbleached paper is preferred because it is eco-friendly. Hence, to us, it is the customer need that is important; it does not matter whether it is high bleach or low bleach.
Have you observed the changing scenario in the consumer patterns?
Unfortunately, we get treated the reverse way most of times. In an encouraging trend the industry is showing a high level of willingness to spend more to get right level of hygiene for their business. A couple of trends that is emerging in the new segment is outsourcing of cleaning services which is more entrepreneurial with varying standards. In most cases it is outsourcing of labour initially, then it becomes a process, then an efficacy & efficiency tool.
With the advent of Food Safety Act and the FSSI occurrence and its implementation in the long run, we see a positive trend of increased awareness, some by legislation and some by consumer awareness.
Customers are getting conscious of usage of water and energy in their operations especially in the food & beverage side. In order to take them to the next level of water efficiency, we have formalised our tie-up with GE Water for state-of-the-art water solutions.
We are on the right path but our challenge continues to be in developing the market – the speed at which we develop and educate the market.
What are the innovations being offered or customised to meet customer needs?
Some of the initiatives being taken at our end includes moving into concentrates/super concentrates across the housekeeping and kitchen range; we have rolled out the laundry concentrate; trying to ship less; reduce carbon footprint of our products by taking them to the customer with minimal packaging (level of dilution is about 1:2000 and even more in some cases)… This would mean that instead of tonnes, we would be shipping small pouches of the product to the market thereby reducing fuel use and packaging costs, making it cost effective to the customer. The key challenge in this area was our ability to compete because of high import content and we plan to manufacture locally in India.
Are you looking at newer markets in two and three tier cities?
There is a huge demand for cleaning products in these segments. We made a small effort in reaching out to street eatouts, small restaurants and small offices and people are lapping up the solutions offered. This is the single fastest growing sector in our business today and the annual addition is much more in absolute terms compared to our normal traditional segments. It will not be too long before it grows into a larger segment.
What has Diversey’s contribution been towards increasing consumer awareness?
So far we have been focusing on upgrading our customers and have not gone directly to the consumers. But this is definitely in consideration. We are trying to address the industry issues beyond our immediate influence areas including skilled manpower for cleaning.
Do not look at cleaning and sanitation as a nice to-do-thing but an essential to-do-thing as a competitive edge. It is one of the highest return categories. If you look at it as an expense, you will minimise it, if you look at it as an investment in your process, it will be the highest return category.
We have observed that the cleaning and sanitation chemicals we sell to the biggest of our customers, rarely go beyond 0.5% of their sales turnover. For example, if a customer can increase his sales by using hygiene as a competitive edge, it may increase his C&S spend by 10, the 0.5% on chemicals will go up to 0.55%. The 0.05% increase in his expense will give him 5% extra revenue or a return of 100 times. The moment the customer sees it in this light, things will change. Customers have started thinking and realising it, which is very encouraging.