SSD MODEL IS NO LONGER SUSTAINABLE - Part I

SSD MODEL IS NO LONGER SUSTAINABLE:

The SSD model is no longer sustainable.

Point no. 1:

Traditionally a SSD in this field was known as Air-conditioning and Refrigeration workshop.

SSD’s used to get revenue from repairing of refrigerators, replacing compressors in them, gas

Charging, tinkering and painting. People and small shops used to buy second-hand refrigerators.

The present-day refrigerators are very good and there is no-need of service or repair to these

and also no-body wants a second-hand refrigerator!!

RESULT: Revenue lost.

Point no.2:

Air-conditioners were of the window unit type with reciprocating compressors. New units came

With one year guarantee. Providing a stand-by unit was easy as all the units of different capacities

Were of the same dimensions. Repairing of compressors (i.e. cutting open, rewinding the coils, resealing) was done by skilled technicians. This resulted in a lot of repair jobs for the company and there was a revenue stream.  Today we have only rotary high efficiency compressors which seldom fail and these are offered with a five year warranty. No repair jobs (except those under guarantee/ AMC) are available to the SSD.

RESULT: Revenue lost.

                                                                                                      To be continued….

On-line attack !!

Companies were warning the public that guarantee/warranty conditions would not
apply if goods (air-conditioners in particular) were purchased on-line.

But it seems slowly they are changing their attitude?

A leading company has put up an advertisement in the front page in a leading daily
offering upto 35% discount on some leading brands of air-conditioners. It also
seems to say that the offer is for one day....

The very same paper has a news item elsewhere which says that the on-line company
is to invest Rs.940-1,250 crores in logistics in the next one year to ensure delivery
within four hours.

A representative from an on-line company met me a few days back and said that
we could put up our stock for sale through them and mention our price. He also
went on to explain that with their "deals" they might sell the goods at a lower price
still paying our price to us!!

But what is the bottom-line?

A person in business can easily understand a lot of things by reading the above.

Anybody selling an air-conditioner will realise that he/she cannot sell a unit with
a discount of 10 to 15% on the M.R.P.  Stop.

Carrying cost

The cost of keeping a product in our godown for a given number of days is an important
and real hidden cost which many among us fail to calculate.

To make it clear with a simple example, let us assume that a person has a
godown in which he can store say 100 given items and the rent for the godown
is Rs.30,000 per month.

In this example if a given item is kept for 30 days then the cost of keeping
that item is Rs.300.

Suppose an item worth 10,000 is kept in this godown for 40 days and then
sold for Rs.11,000 it goes without saying that out of the Rs.1,000 margin
a sum of Rs.400 was spent for just keeping the item till sold.

How many among us actually try to calculate this?

Business ethics

We often hear about ethics. Rather nowadays we more often hear "no ethics".

Whether you are a small company with eight employees and a turnover of less than a crore of rupees
or a big corporation with thousands of employees and turnover running into thousands of crores does
not matter. Behaviour and attitude should be ethical.

But then what is ethical?

To put it in simple words, the behaviour by an individual or company towards its customers, suppliers, employees, government and the society at large in a rightful manner without showing partiality or trying
to avoid certain obligations falls into ethics.

Many companies have their own set of principles written down as "Code of conduct" which is
expected to be implicitly followed by all its employees.

As India progresses into the twenty first century it is better that each one of us has our own
code of conduct and follow it.

A few days back I received a phone call from a person in Kozhikode. I could have said that I operate
in Chennai and so cannot do anything much for him. I wanted to help him or guide him as much as I could so that his need is fulfilled. After talking to him I came to know that he wanted a small part for a water dispenser. I told him it is available with me and he said he could collect it when he visits Chennai. Why
make him come all the way to my shop? I told him to give his address and I can send it by courier and he pay on-line which he did.

What has this incident to do with ethics? IT IS THE IMPRESSION I HAVE CREATED IN HIS
MIND ABOUT MY COMPANY AND MY PRINCIPAL THROUGH MY BEHAVIOR!!

Happy selling for summer!!

Refusing service is also service...

A few days back I observed my car to be running bumpy. My local mechanic asked me to get
the wheel balancing and alignment done.

There is a wheel alignment centre near my office. The guy took a ride, came back and told me
that three tyres are to be replaced. I asked him not to do anything. I was not sure if his advise
was right.

I called my friend, a veteran tyre dealer for his recommendation. He told me that in radial tyres
it is difficult to see the wear and tear by sight. The tyres were more than seven years old and I was
asked to replace them. I asked them to replace all the four tyres and do the alignment. Now my car
is running smooth.

About a year back a corporate asked me to give AMC offer for their twenty and odd air-conditioners.
I went around and saw the machines. They were more than twelve years old and in poor condition but
were working....  I told them it is not worthwhile for them as well as for us to take the machines in AMC.
They may continue to use them as long as they work and then replace them with new ones. They were happy to receive this advise of mine.

Last month this very same corporate called me and said they wanted to buy ten units for their new office and asked me to come and  take their order. Yes, COME AND TAKE YOUR ORDER. We got the order after fine-tuning the price to somewhat match with other quotes.

Lunch and a lesson!

Having gone to my office yesterday, I had lunch at the V.I.P.'s  restaurant at Royapettah.

As I entered the restaurant with my friend, somebody having his lunch greeted me. At first I could
not recognize him though I too greeted him but immediately remembered that he is the owner
of restaurant.

A few years back I had asked him: Why do you call your hotel V.I.P.s restaurant?
Reply: Sir, every person who comes and has his/her lunch here is a Very Important Person to me!!

Yesterday after lunch I asked him jokingly: What Sir, owner having lunch in own hotel??
Reply: My mother is 86 years old and when I started this hotel 20 years back she had told
me, "If you can't have food in your hotel you are not fit to serve others!". That is our family philosophy.
Every day I have lunch and dinner here. Even if I go out to a function and have lunch, I will have my
dinner here. I never miss a day....

When I was in-charge of an air-conditioning firm (SSD) a big ticket customer walked into my
cabin and after chatting with me for a while, got up and went near my window air-conditioner.
He ran his finger over the front panel and showed some dust. Then he said, "If you can't take
care of your own unit, how are you going to take care of others??".

I immediately replied, "Sir, we are so busy serving others, sometimes we don't mind about our
own needs...".    It was not a very serious question and I somehow wriggled out of the situation.

BUT I HAD LEARNT MY LESSON.

SERVICE IN SALES

Some people wrongly take service to mean repairs in the context of air-conditioning and refrigeration field.

Service means not only repairs but much more. It means help. Helping the customer in arriving at a decision.

A corporate customer wanted to buy a few air-conditioners and called us over for a discussion. We immediately went to their office at the time they wanted us there and explained everything.

When the question of pricing came up they pointed out to pricing of some retailers and said our pricing was little bit above than that.

But there is a difference between the two of us, we said.

Like what?

Like you called us and we came here to your office. Our service to you has already begun even before your purchase.....

WE GOT THE ORDER WITH NO FURTHER DISCUSSIONS.

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