Why You Shouldn’t Care About Customer Service in the Year of the Goat?

Recently, one of my Clients running a sales department in a big company has admitted:

“You know — in fact, service focus is not a big thing here, in this country generally. We are doing good. And it’s much better than general average here. Why bother?”.

I gulped. We have already been working for a while and they were indeed — doing quite well. Resting on one’s laurels can be so tempting in such situations. Especially when you have something nice to offer.

Is there any reason to try harder then? Is there! It seems that the year of the Goat is going to be a breakthrough in terms of CS in Vietnam so you should be concerned about it more than ever before.

1. Bigger brands & bigger standards. Everywhere:

We all know that — customer satisfaction is based on expectations. When it’s mediocre everywhere, then expectations are pretty basic. Being even slightly better is good enough. However, when somebody raises the bar much higher — customers’ expectations start to grow. They become much more thoughtful, picky and sensitive about their choices. The average is not an option anymore.

Last years resulted within an increase in exposure to a more standardized, western customer service concept. Every year brings new players to the market (to mention Starbucks, McDonald), players who are able to capitalize on decades of learning and who own other tools to engineer customer focused culture. This year, saturation with new chains will increase providing many new occasions to experience new CS.

McDonalds in Vietnam present since 2014

2. Vulnerable economy:

This was a hot topic for years. However, it’s in the red now. After years of battling with high consumer prices and taking action to curb high inflation, which was weighing down the economy, for the first time Vietnam seems to be facing deflation.

Consumer prices declined 0.2 percent/month during the last five months, mostly due to cheaper oil prices. In January, inflation rate increased to a meager 0.9 percent year-on-year, compared to 6.5 percent recorded the same time last year, according to a PMI report released by HSBC in Feb.

Those risks have emerged mostly due to the weak domestic demand. Household budgets are tightening, with less disposable income. Growth of FMCG in many categories is rather unlikely, according to the most recent Kantar Wordpanel reports — and it may go even further towards decrease of daily consumption. Consumers suspend their spending on goods and services to wait for further price drops.

During TET (Vietnam’s Lunar New Year) which should open customer pockets more — this year many families had to limit their celebrations. Many sources state that extent was higher than ever before.

So, when you have less to choose from, you become more selective when it comes to spending’s on given experience. Tightened budgets rather wouldn’t end-up with different patterns of spending. People still will go to restaurants or enjoy entertainment — however the role of expected quality will increase as the frequency might plummet.

3. Digital? Finally gets momentum:

It’s hard to ignore the ubiquitous digital consumption. Vietnamese consumers become more and more tech savvy. Even the parking attendants are enjoying their social media stream during their waiting time. With 44% internet penetration, saturation with mobile devices (tablets and smartphones) grows steadily (36% growth in 2014). Mobile devices are for many users their main ones.

However, VN is still lagging behind other countries of the region. Therefore, we may expect an increase of digital penetration this year (with growing affordability & second-hand market). It becomes more & more easy to document & share experiences on-the-go.

The Gioi Di Dong (Mobile World). Leading electronics retailer in Vietnam

4. Social media? Even more social

Vietnam is a communal culture. However, just recently this everyday social experience became digital. With 28.0M social media accounts (and 50% penetration rate in key cities!) we still notice decent growth. But those impressive numbers are still smaller than in other countries of the region such as Thailand or Malaysia but

with a current growth rate Vietnam will catch-up soon.

Using the gym fan page, members today changed the schedule for a next week. A few months ago posting some comments they replaced some stuff. My favorite restaurant insists on sharing experience on tripadvisor, and actively to say thank you. And these are a just a few of many cases around. Users are becoming more engaged into their daily discussions with the services and brands of their use.

We can expect even more involvement as this becomes mainstream behavior. Social media users in Vietnam are starting to be more keen on sharing their experience stories to build up their status. This stream of photos, stories and observations will be even more rapid. This may become a threat or an advantage — customers will be more eager to share their thoughts on their experience.

Recently I have had conversation with some students and they mentioned that:

“We don’t go to places where we had a bad experience. We vote with our legs and wallets and we never come back. We wouldn’t tell this to the owner — but our facebook friends will be informed about it for sure.”

This year, it’s going to be more important for CS focused companies in Vietnam than any other before. The biggest priority for every company will be to work hard, improve and learn, to help their luck and make the year of the Goat prosperous(as it may be for your competitors). We wish you so.

References:
- Bloomberg
- HSBC Vietnam Manufacturing PMI report — Jan 2015
- Kantar Worldpanel monitor
- We are Social: World Report 2015

Sławek Wilski is the Managing Partner in Qualityo, research boutique devoted to provide cutting edge customer experience measurement solutions for Clients in Vietnam and other SEA countries. To connect with Slawek write him a message on LinkedIn or via slawek@qualityo.com. If you would like to follow Qualityo click here.

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