HDFC Life: A Consumer’s Quest for Justice

CASE SYNOPSIS

This case, ‘HDFC Life: A Consumer’s Quest for Justice’, documents the struggles faced by Vivek, a long-standing customer of HDFC Life, after his term insurance policy suddenly lapsed in the summer of 2020 due to a technical error on the part of the insurance company. Surprisingly, no communication about this policy lapse was initiated by the company at the time. Vivek became aware of the issue only three months later when he received a premium payment reminder phone call (despite having paid the premium for the year well before the due date). Over the following weeks, he has a series of back-and-forth communications with the company for a fair revival of his policy. These communications between Vivek and the HDFC Life team form the crux of this case.

INTERESTING POINTS RAISED BY THE CASE

How do people make buying decisions for an insurance policy? How is customer satisfaction determined when the financial benefits of such a policy purchase are not received in the immediate future? Are these buying decisions and/or satisfaction criteria different for insurance only versus other services? What actions do customers take (or can they take) when dissatisfied with the service they are receiving? What do they do when they feel their complaints are not being appropriately addressed by their service provider? What emotions do they experience, when despite being dissatisfied, switching service providers is not an option due to contractual commitments? These are some very important questions from the customers’ perspective that a class discussion on this case can provide insights into.

From a service management perspective, the two most significant questions posed by this case are: (1) What processes, policies and people management skills should service firms employ to minimize the chances of service failures? (2) What is the right approach to handle customer complaints after a service failure occurs? Customer satisfaction and delight are given the most importance in the service industry, but the irony is that many customers still remain quite dissatisfied (due to frequent service failure episodes) and are also typically frustrated with the customer service representatives of service firms (due to a poor complaint management system).

The ultimate goal of all the processes and policies put in place by the management of service firms is customer satisfaction. However, ironically, customer dissatisfaction often results from employees strictly adhering to these processes and policies (failing to recognize their true purpose). Frontline employee empowerment is, thus, the need of the hour in all service firms. Employees in customer-facing roles should be made to understand that the processes and policies they are being made to follow are for the customer’s convenience and well-being, and they should be given the freedom to make an exception for particular cases when the standard processes/policies do not serve this desired purpose. Of course, proper documentation should be maintained for such exceptions to ensure fairness and parity across customers.

While doing their job, most service employees remain stuck on the means (processes and policies of the firm)—completely forgetting about the end goal of a service business (customer satisfaction/delight). This ignorance needs to be strategically eliminated by service firms such as HDFC Life by frontline employee training and empowering them to make exceptions on a case-to-case basis for a quick and effective resolution of customer complaints. Only then will Vivek’s vision (of firms learning from such incidents) become a reality!

CONCLUSION: CASE UTILITY IN THE MBA CLASSROOM

While most cases are written from a firm’s perspective, often ending with a protagonist contemplating a decision to be taken for the firm, this case takes the relatively uncommon approach to present a business situation from a customer’s perspective. That is why this case should be very relatable for the students because most of them would have also experienced something similar as customers of services like telecom, insurance, etc. Many of them are likely to have gone through similar experiences as Vivek while interacting with customer care teams of various service firms. The main appeal of this case, thus, lies in its relatability (at least for an Indian audience) while still having the potential to deliver learnings from a managerial perspective.

This case can be effectively used as a teaching aid in several marketing courses, including services marketing and management, customer relationship management, consumer behaviour and marketing management. The case can help illustrate various marketing concepts such as customer centricity (Shah et al., 2006), customer satisfaction (Churchill & Surprenant, 1982), dimensions of service quality (Parasuraman et al., 1985), services marketing triangle (Zeithaml et al., 2010), service failures (Tax & Brown, 1998) and relationship repair strategies (Jones et al., 2011), customers’ justice perceptions (Blodgett et al., 1997), and of course, consumer complaining behaviour (Istanbulluoglu et al., 2017). This case is also a good example of how seemingly polite language used by frontline employees (in e-mail communications) could actually be frustrating for the customers when it is not accompanied by meaningful problem resolution (Marinova et al., 2018).

However, the length of the case could possibly limit its use given the short attention span of the students today. Even the somewhat philosophical ending of the case may not resonate much with application-oriented MBA students. The resolution of Vivek to make a detailed presentation to HDFC Life after his issue has already been fixed does not seem very motivating but feels rather forced. After going through such an unpleasant experience with HDFC Life for weeks, why would he still want to interact further with them when he does not really need to? When he has no direct stakes in the company, why is he concerned about what other HDFC Life customers might go through due to the incompetence of the insurance company’s internal team? The case’s conclusion could improve substantially if Vivek’s demand for monetary compensation at the end of the case is integrated more organically into the story being told throughout the case.

I would like to conclude this case analysis by saying that the relatable story being told in the case (from the perspective of an aggravated customer) and its teaching potential, both, are strong enough to overlook the small negatives highlighted in the previous paragraph. Therefore, despite the length and the slightly philosophical/unrealistic ending, I believe the case should be widely adopted by B-school faculty in their curricula—especially in India.