Recently, I had an unpleasant experience with my electricity provider in Bangalore. I had set up automatic bill payment with my bank. Something went wrong, and the bill was not paid on time. I did not check my monthly balance to verify whether the debit took place and the utility company yanked off the electricity without warning. I had to then go and pay the bill manually to get the supply back again. We were off the grid for only a couple of hours but it was an irritating experience.

The missed payment happened once with my earlier bank too (though we didn’t get yanked off the grid then). As a result of being bitten twice (twice bitten, always shy), I have decided to dispense off with the automatic modes of payment through my banks. I can go back to paying the bills manually but the ride to the utility office every month to drop the cheque is cumbersome. After discussion with friends and neighbors, two solutions have emerged as frontrunners.

Solution A) Have someone (maid, watchman) drop off the cheque manually. Has some risks (cheque might get misplaced) but most of my neighbors swear by this solution.

Solution B) Prepay the utility. Since my average bill is of the order of Indian rupees 2000 ($50 per month), I could pay an advance sum of say Rupees 24000 at the beginning of every year and forget about electricity bills for the rest of the year. This is the option I use with my satellite TV provider (who provides a reasonable discount for doing this).

I will be trying solution A for sometime, if it doesn’t work I will switch to solution B.

You might ask: Why not switch to a more friendly electricity provider? In India, electricity distribution is still a monopoly (generation and transmission of electricity is deregulated in parts). So, switching providers is not an option. To be fair to the electricity company, they have installed kiosks that have made the bill payment process an order of magnitude easier. Also, in Indian businesses where monopolies don’t exist (banking, telephony), service is still a problem (though they don’t pull the plug abruptly like the electricity company).

Why is customer service in India such a problem? Most probably because the average revenue (ARPU) per customer is low and there are too many customers. In some services (like mobile telephony), there is huge customer churn because of the stiff competition. Also, because the economy is in growth mode, companies are more focused on acquiring customers than retaining them. Hence, incentive to provide good customer service is low.

I believe India could be a fertile ground for newer approaches to CRM. India needs cost effective CRM solutions (CRM 2.0) where the CRM cost per customer is significantly below the revenues generated per customer. This cannot be achieved by humans-in-the-loop, there are far too many customers for doing that. Hence, CRM has to happen mostly by self-service and there is a need for automated solutions that leverage mobile phones (both for information delivery and payment). Also, instead of each company trying to do its own CRM, economies of scale could be achieved by outsourcing the CRM function to a CRM service provider.