What the oil companies can learn from flipkart.com

It’s been literally ages since I stepped into a bookstore…No, I haven’t given up reading, it’s the entry into my life of that phenomenon called flipkart.com. Tom Sellers talks in his book “Liberation Management” of the WOW experience. We in India experienced that feeling with the introduction of ATMs and the railway online reservation. But one of the most recent enthralling experiences has been the online purchase of books, which, in the Flipkart case covers the purchase in addition of a wide variety of products, ranging from books to mobiles, computers, etc. Right from the point where one selects a book (or any of the other products marketed by Flipkart), a series of clicks and some minimal typing completes the entire purchase process. Enter your mailing address and the product is in most cases ready for shipping. The “Cash On Delivery” (COD) system enables the customer to pay the courier on delivery of the product; where this facility is not available, online credit card payment facility is provided. An SMS/e-mail from Flipkart informs the customer of the number of days within which the product will reach her. What is more interesting is that in the event of any delay in the shipment by the courier, a representative of Flipkart contacts the customer on mobile phone to ascertain whether the shipment has reached. If it has not, Flipkart pursues the delivery with the courier company (I can personally vouch for this in the case of one delayed delivery by the courier).
But this article is not intended to be a eulogy to Flipkart, though I humbly doff my (non-existent) hat to them for their fantastic marketing strategy. It is rather aimed at oil marketing companies which sell cooking gas to the vast Indian market. Rare is the location where the public does not have grievances against the irregular and unpredictable supply of gas. The oil companies, IOC, HP & BP, need to take not a leaf but the whole book from the Flipkart method of marketing their products. They have a spread of retailers over numerous locations in India, each with their set of customers, each of whom has their unique voucher numbers. Why not visualise a future scenario like this? The customer phones, sends a sms message from a pre-approved mobile or landline number or goes online to register for a gas refill from an email address registered with the company. The order goes to the concerned company, which then passes on the order to any one of the dealers within easy proximity of the customer. The order will go to that dealer who has the most comfortable stock position at that point of time. Based on the delivery schedule of that dealer, a sms message/e-mail will be sent to the customer giving a identification number and intimating the likely date of delivery. In the case of an order placed on phone, a token number will be given to the customer: enquiries regarding the delivery date can be done on phone or through interactive voice response systems. The Cash on Delivery system will provide for payment by the customer at the time of delivery of the gas cylinder. Once the cylinder has been delivered, the delivery person will record the fact of delivery and credit the amount realised from the customer once he returns to the dealer.
What are the likely attempts to tamper with this system and how are these to be tackled? The obvious one is the practice of a gas agency to sell gas cylinders at a premium to either non-gas owning household customers or to industrial consumers, while showing the sale as having been made to a bona-fide household customer. The linkage of the supply with a unique token number should reduce the chances of a bogus delivery. A random daily verification of a certain proportion of deliveries by a third-party agency (to which the company outsources this function) should act as a further check on underhand dealings. The company can also monitor the frequency of refills being ordered by a particular household to check any unusual pattern of repeated refills at periods more frequent than would normally be expected and carry out actual on-site investigation where there are grounds for suspicion. Most importantly, the gas agency will not be able to exercise any discretion regarding when it will supply the cylinder since its delivery schedule in relation to its stock will be subject to online monitoring by the company. Agencies which show tendencies to cheat the customer should have their licences cancelled.
Of course, the above measure is being suggested in a scenario where there is still no genuine competition in retail gas supply. Should the winds of change sweep through the oil and gas marketing sector, as they have through the aviation and telecom sectors, the customer will find that it is the companies supplying the gas which are chasing him for their custom rather than the other way around. Till that happy day arrives, I commend the above solution to the oil companies for easing the woes of the ordinary housewife. She will even be willing to pay more for a cylinder (though that may change in an environment of greater competition).

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