Iranian Market Enters Battle of After-Sales Services

Producers and distributers today are not solely attempting to attract customers over product quality, but are focusing more on what makes customers stick to a certain company over the long haul: after-sales services.

Efficient after-sales services ensure products and services surpass the expectations of customers. In Iran, the Consumers and Producers Protection Organization supervises after-sales services provided by companies.

"What distinguishes companies and makes them stand out in the market is the quality of their after-sales services. If you intend to survive in this market, you must build strong trust toward your company and its services," said Amir Haji-Mohammadi, the after-sales services manager of Maadiran Group, in an interview with Financial Tribune.

He added that the most important factor that intensifies competition in the Iranian market besides quality and price revolves around after-sales services.

Maadiran Group, established in 1963, is one of the leading producers and after-sales providers in Iran. The private company produces exclusive television and digital receiver brand 'X-Vision'. It is the official partner of the world–renowned South Korean LG Electronics in Iran. Currently, Maadiran produces LG monitors in the country under the license of the parent company with the latest technology.

The company also specializes in import, distribution and provision of after-sales services of computer parts, printers, scanners, tablets, video projectors and home appliances. It has 800 authorized after-sales centers all over the country, which operate under eight main Maadiran headquarters in cities, such as Mashhad, Tabriz, Ahvaz and Rasht.

> Three Types of Customers

Haji-Mohammadi explained that there are generally three types of customers in Iran:

The first type comprises those for whom only price is important. They belong to the poor class in terms of income and they just want to make purchases at the lowest price possible without considering quality or after-sales services.

The second type, which includes a majority of customers in Iran, are those who also value after-sales services along with the quality of products.

And finally, there are those who want to buy high quality brands without paying much attention to the company's guarantee.

The latter group, according to Haji-Mohammadi, makes up a low share of all Iranian customers.

"They enjoy a high financial status and tend to replace their appliances in case they break down or require repairs," he said.

Haji-Mohammadi noted that as per the regulations of Consumers and Producers Protection Organization, all electronic appliances, whether they are produced domestically or imported, must be provided with after-sales services.

Companies must have an after-sales infrastructure and network for all the products imported via legal channels.

The Maadiran official said Consumers and Producers Protection Organization evaluates the companies' performance vis-a-vis their after-sales services by contacting around 2,000-3,000 of their customers using a standard checklist, including items on providing accessories, installation, on-site training, before determining the level of customer satisfaction.

> "Real" Duration

According to the Consumers and Producers Protection Organization, the least acceptable period of after-sales services is 18 months after the installation.

Haji-Mohammadi said customers pay special attention to the "real" duration of guarantees, i.e. the duration following the installation of a certain device.

"Many companies claim they offer over two years of services but the thing to bear in mind is that they refer to the production date of that product and not the installation date," he explained.

"Some unauthorized companies illegally forge famous companies' names and logos, and offer fake guarantee services at very low prices to deceive customers."

He thinks big companies in the country often offer free of charge on-site installation and test operation.

> Sizing Up Customer Satisfaction

The Maadiran official also said big companies all over the world, including in Iran, have a department dealing with customer satisfaction because keeping customers happy is of incalculable value for those who intend to spread a positive word of mouth.

This department measures the level of customer satisfaction using a measure called Net Promoter Score.

NPS is a management tool used to gauge the loyalty of a firm's customer relationship. It measures the loyalty that exists between a provider and a consumer and predicts business growth.

The provider can be a company, employer or any other entity. It is the entity asking the questions on the NPS survey and the consumer is the customer, employee or respondent.

Net Promoter Score is calculated based on responses to a single question: How likely is it that you would recommend our company/product/service to a friend or colleague? The scoring for this answer is most often based on a 0 to 10 scale. Those who respond with a score of 9 to 10 are called "promoters", and are considered likely to exhibit value-creating behaviors, such as buying more, remaining customers for longer, and making more positive referrals to other potential customers.

Those who respond with a score of 0 to 6 are labeled "detractors", and they are believed to be less likely to exhibit the value-creating behaviors.

Responses of 7 and 8 are labeled "passives" and their behavior falls in the middle of promoters and detractors.

The other factor directly affecting the quality of after-sales services is the speed of offering services. It is the matter of how long it takes for customers to take back their fixed device.

"On average, it takes three and a half days throughout the country for Maadiran to offer services," Haji-Mohammadi said.

"We respond to over 600,000 customers per year and on average we receive 2,000 calls daily."

He said the guarantee duration as well as factors such as replaceability provided by a company can make the end price of a product go up or down.

> No Services for Contraband

Referring to the subject of smuggling, Haji-Mohammadi voiced concern by saying that illegal imports not only have greatly harmed different Iranian industries but also have notoriously poor after-sales services because no one takes responsibility for contraband in case of a breakdown.

All legal imports are registered in the parent company as well as in the representative company in the country, therefore they are provided with after-sales services.

"If customers purchase contraband from unauthorized centers, they shouldn't expect to receive proper services afterwards," he said.

Haji-Mohammadi noted that in case customers have complaints, they can contact the relevant union and association, such as the Home Appliances Association.