Month: October 2014

In almost every business, the regular customers and their loyalty is a major motivational factor in longer terms. In India during 1990s, I have noticed some of the small amateur street vendors followed some management tactics unknowingly to run their businesses successfully which are modern management theories.

Particularly Indian small towns today and 20 years back, the local street shop businessmen always made me wonder for their ” earning enough ” street shop businesses.They were doing good 10-20 years back in cut-throat competition.

Now I could analyse the few common tactics and business policies they were using to keep their customer loyal and happy.

1. Attitude of  “Customer is God “: I have seen motto or attitude in small shops ” Grahak Bhagvan Hain/Chhe ” literally means “Customer is God” which resembles current day sales management theory of “Customer is Always Right”. This attitude always lead to best customer service and providing what customer wants not what you want to sell. In the shops all customers felt special and satisfied one-on-one customer service. The kids were given a seat and sometimes free chocolates while mother was shopping so kids wont get irritated and mother can take a bit longer time to shop.
2. Close and longer term relationship with customers : The grocery or vegetables were used to be home delivered by the vendors if you couldn’t go to the shop during monsoon season or any other reason.As a regular customer the vendors also remembered you and in case you didn’t have money to pay him starightaway the vendors still let you go with the stuff you wanted with the condition of pay them back in month or two time.This approach is similar to the today’s supermarkets who runs customer credit cards and loyalti programs if regular customer won’t be able to pay on the spot in some cases.
3. Thin profit margin with high turn over : This is one of the main businesss tactics common in southeast Asia and Indian subcontinents. Due to lower profit margin and wholesale buying overall price were low and everybody could afford it. It was noticed that who were well above average in affordability would have bought more because it was cheaper so turn over went up due to high consumption.This approach is analogous to today’s supermarket’s sales tactics….lower the price higher the turn over.
4. Local advertisements : Local events and festivals were sponsored by these vendors to promote their products especially food industry. The “opening of the shop” ceremony used to be completely free food event so all invited guests could come and have a feel of their food. Some of the successful businessmen who had a food chain in the town used to keep side dishes free upon buying a main dish to pull out the crowd to promote their new venture for a year or so.In other product shops upon “opening ceremony” free food event was used to be there but people would buy their other products as a curtesy on the day of opening. Current days I find many bakeries and other companies keep product promotions but not entirely free though.

There may many more points to be discussed about these business tactics.

I still wonder how businessmen were using modern era management theories in their businesses in 10-20 years back. I believe this is just a complete cycle of knowledge transfer  .The old theories get researched and polished to suite new era demands and they are generally showcased as modern theories.

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