Customer service focus key to gain competitive advantage in Asia

Study shows Asian customers are willing to pay more for better service.

DHL, the world’s leading logistics company, on Wednesday revealed the findings of a study on consumer behaviour and customer service commissioned by DHL and undertaken by the Economist Intelligence Unit (EIU). The report, entitled “Greater expectations: Keeping pace with customer service demands in Asia Pacific,” uncovers the gaps between what companies believe consumers want and what consumers actually say, using findings from two surveys – one of over 300 senior executives and another of over 700 consumers – conducted in 10 markets across Asia, according to a DHL report.

Roger Crook, incoming CEO of DHL Express Asia Pacific, Eastern Europe, Middle East and Africa said: “Asia’s consumers are expected to increase their spending from US$4.3 trillion in 2008 to US$32 trillion annually by 2030 – equal to some 43% of global consumer spending by then.

With an established presence in 42 countries and territories in Asia Pacific, it is critical that DHL remains at the forefront of customer insights. Findings from the report provide valuable region-wide perspectives and enhance DHL’s customer service approach, upping the ante for service in Asia’s logistics industry.”

Forming the centrepiece of DHL’s Leadership Dialog Series held in conjunction with the ASEAN 100 Leadership Forum 2010 in Kuala Lumpur, the study confirmed that along with its economies, the region’s customer service standards as well as customers’ perceptions and demands of service have changed dramatically in recent years, and not necessarily evenly. In fact, service, like products, should be tailored to individual markets as consumers in different parts of Asia have quite different service expectations.

“These rising expectations amongst Asia’s consumers are driven by information and competition, not income,” said Yasmin Aladad Khan, Senior Vice President, Southeast Asia, DHL Express. “As the leading logistics company, we must be conscious of what our customers are aware of in order to provide the best service and differentiate ourselves from the competition. And this study is just the beginning.”

Highlights of the study’s report include the finding that in today’s Asia, price is no longer the only factor in purchasing decisions. In parts of Asia, companies are still focussed on price, but many consumers are willing to pay for better service. For instance, half of the Indonesian firms surveyed feel that their customers are concerned only about price, not service. However, less than one-quarter of the Indonesian consumers surveyed agree. This suggests that firms which start competing on service will be more successful.

Sudhir Vadaketh, senior editor at The Economist Intelligence Unit, said: "The gap between what companies are providing and what consumers say they want is an opportunity. As competition in the region intensifies those companies who put more emphasis on customer service should gain an edge.