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Apr 2012

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Features

Taxi Driver & SME's : Business Strategist

Jagat Shah
May 2011

When I first arrived back in India from China in 1996, I was advised to find a regular driver. The reliability of taxi service, I was told, was low. I was, therefore, surprised when my first ride from the airport proved to be excellent. My surprise grew when I realized that my experience was no aberration: cabs from the airport are controlled by a regulated system that provides clean, reliable transportation at a set price.

Not half bad. Until I discovered that this service is priced at a considerable premium to market rates. Inwardly I applauded the taxis' ability to identify a customer segment willing to pay a premium. Outwardly I felt I needed to find a way to give my expense account a break. I began to search for a regular ride.

My first driver was among the friendliest people around. My family and I relied on him for a solid week until he forgot to pick me up for a crack of dawn airport run.

Our second driver was less friendly, but had a better on-time ratio. His prices were not rock bottom, but we were willing to pay for reliability. After two weeks, though, we noticed that our daily rides had increased in price…daily.

And then we met Bharat

Arriving precisely on time, he sat at the helm of a nondescript car with no air conditioning. On the ride home we hit every shortcut and arrived in half the normal time. Despite our obvious pleasure, Bharat charged us precisely the market rate. It wasn't luxurious, but the ride was just what we had been looking for.

The next morning my wife walked out her door to find Bharat - already waiting. “Three minutes late”, my wife was informed. Not a man of many words, our driver was always on time. We were surprised that when he was unable to respond to a call immediately, he asked us whether we wanted him to send one of his peers. In time we found that he always used the same backup drivers.

One day we realized that we were overdue on our payments. We apologized, and were told: “so it goes. All in the game.”

We were soon using Bharat 's services all week, including weekends. Not yet having our own transportation, we began to make regular stops: for the newspaper in the morning, or to the grocery store at night. One morning we got in the car and were handed our morning paper. That night Bharat asked whether we would be making a stop to pick up something to eat.

Over time we began to realize that our driver was also the driver of several other regular customers. In fact, Bharat 's clientele is entirely made up of call-in customers. He does not pick up customers on the road, and I have often seen him turn down business from new customers that come through without a referral. But when one of his regular clients calls, he makes sure they are taken care of - any time of the day or night.

This may not sound impressive to some. But to a professional like me, it is astonishing. For my taxi driver has mastered five rules of business strategy that many of my corporate / SME clients ever truly grasp.

Choose your customers. The best businesses understand that not every service fits with every market. Successful businesses are those that proactively seek customers whose needs they can fill better than anyone else.
Deliver an experience of consistent quality. The most loyal customers do not necessarily demand the best products, but they do demand certainty in their purchasing.
Competition is not about being the best: it is about being the best available. Bharat need not compete with a corporate limousine service; he simply has to outdo the other local taxi drivers.
Build a network of trusted partners. No business is an island. Even in the taxi game, a significant part of an enterprise's value is its network & supply chain. Choose partners carefully, but do choose them.
Meet your customers' needs, but do not be over-responsive to them. By buying us a newspaper, our driver was responding to our needs. But when our tardiness causes us to be stuck in morning traffic, Bharat is right to admonish us. Rather than smile a “customer is always right” smile, he educates his customers to help him deliver a higher quality experience to them.

When you want an Indian business success story, you can certainly look to us. Or you can simply call Bharat , our driver. If you're lucky, he may accept you as a customer !

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