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In the Driver's Seat
By Naresh Kumar

On a typical monsoon day in Mumbai, which is reminiscent of the Great Deluge, there is a car that bears no resemblance to an ark. And a driver who has never felt less like Noah. Quite simply, his car has stalled in the heavy downpour, and now he is stranded in the middle of the road. The driver cannot go out and call for help, since the rain is too heavy for that. There seems to be no option but to wait out the rain, or desert his car – neither of which are very pleasant prospects.

And then the situation takes on a dream like quality. Out of the blue, there is a tow truck standing next to his car. Five minutes later, the tow truck has lugged his car into a Bharat Petroleum petrol pump. Another five minutes later, the driver is sitting in the office of the manager, sipping a hot cup of tea, while his car is being serviced in the petrol pump. During this time he learns that the owner of the pump had seen the stranded car way down the road where his pump was situated, and sent his tow truck to get the car in. The pump owner then gives him valuable tips on how to prevent water from entering his petrol during the monsoons, then gives him his serviced and now functional car back, and bids him godspeed. Oh! And he hasn’t charged him a penny for the whole thing. Not surprisingly, the driver of the car becomes a lifetime loyalist of the pump.

Utopian fantasy? No – true story. It is only one of many such instances of this particular pump owner going out of his way to help customers / prospective customers. It is also one of the many reasons why this particular petrol pump, Dayaram Santdas, in Mumbai, has a loyal base of customers that swears by it, in spite of many ostensibly more attractive options.

Ajit Kamlani, the owner of this pump was born in Hyderabad (now in Pakistan). His father was the owner of a bus service, plying between Hyderabad and Sind. In 1952, his father set up a filling station to cater to his own needs- a Shell petrol pump. Young Ajit got his first exposure to the fuel retailing business, and to vehicles at this pump.

In the wake of the Partition, the Kamlanis had to shift base to India. The Shell management, as a token of appreciation for the dedication and the work ethic of the senior Kamlani, helped them to shift, and rehabilitated them in Mumbai. They also gave them a Shell dealership in Mumbai. Dayaram Santdas opened on Pedder Road, Mumbai in 1963, managed by Ajit Kamlani.

It couldn’t have been long before Ajit Kamlani reached the first major crossroads of his life. The petrol pump business can tempt a person to adopt dishonest means like no other business can. To illustrate – as little as 5% of the petrol, if replaced by and adulterated with naphtha, can increase profitability by more than 5 times! A slight tampering of the meter in the pump can also add substantially to the profit margins, by indicating more fuel than has actually been dispensed. The allure of easy lucre for any new entrant in the field can be overpowering indeed. This possibly explains why more than 80% of the dealers in this business are infamous for adopting such means.
Ajit saw all this – and chose to walk in the opposite direction. Perhaps it was because his knowledge of vehicles, gained at the Shell pump in Hyderabad, made him wince at the thought of feeding slow poison like naphtha to a car’s engine. Quite likely, it was his innate sense of decency that forbade him from adopting underhand means. But one thing is sure- it made damn good long-term business sense.

Consider this – petrol is as highly commoditised a product as one can get. (In fact, recent research that we conducted indicates that many consumers would probably not even notice if the pump’s name were to be changed from, say, IBP to Indianoil). The fallout of this is that it becomes very difficult to gauge quality problems in the product before actual use. In other words, you get to know that you have bought bad petrol only when your engine begins to protest. The tendency among consumers is therefore to avoid “bad” pumps, and continue going to only those pumps where they have not faced any overt problem. But there is still a catch – naphtha, one of the most common adulterants, works insidiously. You get to know that your engine is damaged only when it is far gone.

Under these circumstances, consumers are generally cynical and suspicious of petrol pumps (unless they are COCOs- Company Owned, Company Operated pumps) and therefore the few dealers who acquire a reputation for honesty quickly get a base of loyal customers. In a commodity market, that is a major advantage indeed.

Furthermore, Ajit also realised that in selling a commodity product, which is not perceived (in its pure form) to be different between different companies selling them, the service element becomes crucial – in fact, it is the major differentiator. Ajit Kamlani instructed his staff to greet all customers pleasantly, and be courteous and efficient to them – no surly, insolent, paan chewing boors in his pump. He also made it a practice to himself stand out on the forecourt, and greet his customers as they came in. He started making small booklets / mailers and sent them to his customers, where he advised tem how best to handle the monsoon problem. He would also give them useful tips on how to maintain their cars better. An example – “Car manufacturers normally tell their customers to change the engine oil after 10,000 km. But here in Mumbai, there is so much traffic congestion, and driving in lower gears, that 10,000 km on the gauge is actually equivalent to around 25,000 to 30,000 km. That is why I ask my customers to change their oil after 3500 to 4000 km only – it helps to improve the life of the engine.”

All this soon led him to realise that there was a potential area of big business – the car servicing area. He observed that in Mumbai, most car owners either got their cars serviced at Authorised Service Stations, or by roadside mechanics. However, Authorised Service Stations were very few and far in between, making it really inconvenient for the owner to go there. Additionally, they often took 2-3 days to return the car, leaving the owner stranded during that time. In any case, most owners feel that the Authorised Service Stations were expensive. As for mechanics, they were certainly cheaper and quicker. But some owners of big expensive cars felt a trifle uneasy leaving them with roadside mechanics. There was a question mark regarding the genuineness of the parts that these mechanics used.

Sensing the opportunity, Ajit Kamlani lost no time in opening a service station at his petrol pump. His knowledge and experience gained at the Shell pump in Pakistan helped him immensely here. He trained all his mechanics himself, and made sure they were up to the mark. Ajit periodically took trips himself, as well as sent his son, abroad in order to learn the latest that was happening in the fuel and servicing business.

Ajit attaches great importance to the servicing aspect of his business. “ If I don’t have servicing, I will lose half my customers.” he says. “Because I have servicing, they remain loyal to me.” This inevitably focussed his attention on another crucial area of his business- his staff. In any service business, the staff is by far the most important communication medium regarding the business. Ajit had realised that early on- it was the reason why he had asked his staff to be courteous and polite to his customers. But what he had also realised was a basic human characteristic – it is difficult to be nice and polite to people if there is a basic discontent fermenting within. In other words, “Only happy employees make for happy customers.”

Ajit therefore set about to ensure the well being of his employees, to an extent that had no precedent in the petroleum industry. He first of all ensured them better wages then anyone else was getting in the industry. He also offered them benefits like Employee State Insurance (for medical purposes), and Provident Fund. In some cases, he has borne the entire cost of medical treatment for his staff’s family members, sometime running into lakhs. He has a scheme whereby the dependents of his staff could also be eligible for jobs at his pump. Any employee who retires while still in his service gets a handsome bonus and pension facilities. He undertakes their training at the service station himself, and passes on all the knowledge that he had acquired over the years to them. The result? The lowest turnover ratio in the business. Some of his employees have been with him for over 20 years now. This kind of job security automatically translates into a zeal and dedication towards the pump, which does more for the pump’s image than any heavy duty advertising campaign can.

What makes Ajit Kamlani different from the other petroleum retailers? Simply, a holistic perspective, which changed the way he defined his business. Ajit Kamlani does not consider himself to be merely a petroleum retailer- he considers himself to be in the larger business of servicing a customer’s vehicle needs. He literally and figuratively put himself behind the steering wheels of his clients. From here on, everything else that he did followed logically. It made his business primarily a service business, which meant:

a) Relationship with customers became very important – so he proactively gave them advice and tips. He computerised his outlet in 1995, and maintained detailed records of all his customers, their vehicular problems, any pattern emerging thereon, and so on. He himself was on the forecourt most of the time to inspire trust, and his staff was told to be polite and helpful.
b) Staff- became the key communication medium, but for them to be able to perform this role effectively, they had to be motivated and zealous. So he put in all those staff welfare measures in place.
c) Value addition became a key differentiator – so he took steps to proactively deliver to consumers over and beyond their expectations. Booklets on car maintenance during monsoons, list of frequently faced problems and their solutions, car servicing facilities, observation of a car’s maintenance problem patterns over a period of time etc. were just a few of the steps he undertook to deliver more value addition.

d) All this would never have been so effective without an inherent passion and commitment. He constantly tries to update his knowledge of the latest trends and technology. His service centre is computerised, and has the latest software for servicing all the modern cars. His foreign trips, at his own expense, are a part of his constant efforts to be the best that he could.

“Al this is fine”, one may argue, “but what is the bottom lime?”. The answer- Dayaram Santdas sells 300 kilolitres per day – very good business by any standards, but by no means a very high volume. But his true success, to our mind, lies in the diehard loyalty exhibited by his customer base. In 1988, two more pumps opened on the same road – an Indianoil pump, and an HP pump. Both were bigger and more modern pumps, with add-on facilities like a convenience stores etc. But they did not succeed in affecting his business, or luring away his customers. In fact, a few customers who did try the other pumps, soon came back to him.

Any average retailer can get some customers to spend some money at his outlet for things they need. A good retailer can succeed in making many customers want to spend some money at his outlet. But a great retailer is one who succeeds in making most of his customers feel that they do not want to spend their money anywhere else, except at his outlet. And that, in one sentence, is why Ajit Kamlani is one of the unsung heroes of Indian retailing.

Published in Business Standard