ZENITH International Journal of Business Economics & Management Research

Vol.2 Issue 7, July 2012, ISSN 2249 8826 Online available at http://zenithresearch.org.in/

CUSTOMER LOYALTY ON TELECOM MOBILE

M.THAIYALNAYAKI*; S.PREETHI VARSHNEY*
*Assistant Professor, Head of the Department - BBA, VELS University, Pallavaram, Chennai. Research Scholar, Department of Commerce Pachaiyappas College, Chennai. **Assistant Professor, VELS University Pallavaram, Chennai.

ABSTRACT The mobile telecom market persists to grow at a hectic pace, driven particularly by the rapid penetration of mobile services with an acute increase in churn rate and disloyalty especially on the youth market. To face this operational challenge it is highly essential to exploit customer behavioural data to identify unique and actionable factors influencing the purchasing decision and customer loyalty. Thus this research mainly targets customer loyalty in Telecom Industry constructive study on the behavior of the regular repeat customers .The purpose of this paper is to find out what kinds of specific and concrete operational factors have an important impact on Indian mobile telecom customer loyalty. KEYWORDS: customer loyalty; customer satisfaction; perceived quality; customer value; switching cost; corporate image, Indian Mobile Industry, Telecom analytics, Customer value, customer lifecycle analysis, Churn management, Market Basket analysis, Customer profiling. ______________________________________________________________________________ INTRODUCTION The Indian telecommunications Industry is one of the fastest proliferating sector in the World and India is projected to bench the second largest telecom market globally by 2011.Indicators are clearly representing the increased competition and that induced the customers to hop for low cost options1. This in turn entangled with disloyalty and as the industry saturates, it become imperative for the mobile operators to shift their focus from rapid acquisition strategies to strategies which helps to maintain and enhance margins from existing customer base. IMPACT OF THE PROBLEM

http://www.destinationcrm.com/Articles/Web-Exclusives/Viewpoints/The-Secret-toSuccessful-Customer-Analytics-43814.aspx

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ZENITH International Journal of Business Economics & Management Research

Vol.2 Issue 7, July 2012, ISSN 2249 8826 Online available at http://zenithresearch.org.in/

Though many service industries are affected by the churn phenomenon the problem is extremely acute in the telecom industry, with customers joining and quitting in short periods. According to research firm Gartner, Indias churn rate is anywhere between 3.5 percent to 6 percent per month, one of the highest in the Asia-Pacific region. Considering that the cost of acquiring a new customer is as high as Rs 3,000, the losses are immense. CUSTOMER LOYALTY AND ITS SIGNIFICANCE Research is all about Customer loyalty on Indian cellular market, is a process by which data from customer behavior is aggregated and analysed to gather the purpose and factors influencing them to be loyal in their purchasing pattern. Recent statistics depicts very high churn in this Industry, is mainly rooted by the Youth segment Hence this study of customer loyalty is mainly focusing on Youth segment to lead not only to better and more productive customer relations in terms of sales and service but also to improvement in supply chain management (lower inventory and speedier delivery) and thus lower costs and more competitive pricing. It facilitates to assess the Customer profitability index and Customer lifecycle, Customer loyalty enables an operator to gain a better understanding of the variables that influence customer churn. It enables the Telco to understand which customer is likely to leave and why, which in turn can help the company take the necessary measures to counter it. SUBJECT AREA Customer loyalty can be determined through the customer profile, level of satisfaction, and their buying behavior with regard to Indian mobile telecom providers. RESEARCH METHODOLOGY RESEARCH PROBLEM Indian mobile telecommunication is facing very high churn and disloyalty 2 in the market inspite of its tremendous growth. It is highly critical to analyze the factors influencing customer loyalty and their level of satisfaction on the cellular providers. RESEARCH PURPOSE The purpose of this research is to determine customer loyalty by identifying the operational factors that are influencing customer buying behavior, level of satisfaction with regard to Indian Mobile telecommunications. RESEARCH OBJECTIVE Recent trend line shows the growth and prospects of youth marketing 3 and especially in the field of Telecommunications, they are marking tremendous development. At the same time
2 3

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http://www.mobileyouth.org/post/mobileyouth-tv-4/ http://en.wikipedia.org/wiki/Youth_marketing

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ZENITH International Journal of Business Economics & Management Research

Vol.2 Issue 7, July 2012, ISSN 2249 8826 Online available at http://zenithresearch.org.in/

indicators are highlighting very high churn rate in this segment. Hence this Research focuses on Youth segment and Research objectives are listed below. 1. To identify the factors influencing the customer loyalty with respect to Indian mobile telecommunications. 2. To determine the level of customer satisfaction with regard to their perceived product quality, services and values. RESEARCH DESIGN Research design adopted for this study is Exploratory type of research. DATA COLLECTION The research work is in need of first hand information and also secondary information so as to assess the changes happening in customer satisfaction.. So Primary and Secondary data are collected for this survey. PRIMARY DATA Survey method was adopted for collecting the primary data. As mentioned above in the research objective, youth segment4 falling under the age group of 18 to 34 are selected as the respondents for the research. Questionnaire was designed in the structured objective pattern focusing on the Research objectives. SECONDARY DATA The secondary data had been collected from the previous Research findings, scholarly reports, telecommunication reports, respective marketing departments and through the different sources of literature such as journals, articles etc. SAMPLING PLAN www.zenithresearch.org.in Simple Random sampling has been adopted by the researcher. SAMPLE SIZE For academic and effective result, the targeted customer base of 200, falling under the age group of 18 to 34 is selected for sampling. PILOT STUDY The questionnaires were distributed randomly to 30 of the samples. PROCESS OF DATA ANALYSIS
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ZENITH International Journal of Business Economics & Management Research

Vol.2 Issue 7, July 2012, ISSN 2249 8826 Online available at http://zenithresearch.org.in/

In order to analyze all the data collected, SPSS 18.0 and Excel were used for statistical analysis to find out the relationship between the customer loyalty and our data. LIST OF VARIABLES TAKEN FOR THE DATA ANALYSIS Totally 10 Dependent variables and 13 Independent variables are taken for the analysis and they are DEPENDENT VARIABLES 1. Mobile operators 2. Service quality-quality of phone calls 3. Service quality-quality of coverage 4. Service quality-quality of SMS 5. Service quality-quality of network 6. Service quality-quality of convenience & reliability 7. Service quality-quality of service center and hotline 8. Service quality-rate of pricing for given quality 9. Service quality-score accumulation plan, bonus 10. Service quality-Advertisement INDEPENDENT VARIABLES 1. Satisfactory level over performance-in general 2. Satisfactory level over performance-customer services 3. Satisfactory level over performance-billing system /RCV 4. Satisfactory level over performance-tariff rates 5. Satisfactory level over performance-call connectivity 6. Satisfactory level over performance-network coverage 7. Satisfactory level over performance-subscription easiness 8. Satisfactory level over performance-SMS, MMS, VAS 9. Satisfactory level over performance-offers, discounts10. Satisfactory level over www.zenithresearch.org.in

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Vol.2 Issue 7, July 2012, ISSN 2249 8826 Online available at http://zenithresearch.org.in/

Performance-internet services 11. Satisfactory level over performance-ringtones, caller tones 12. Satisfactory level over performance-social responsibility 13. Satisfactory level over performance-ad and other promotional activities TABLE 1 MULTIPLE REGRESSION ANALYSIS `Dependent variables 1.Mobile operators 2. Service quality of Network coverage 3. Service QualityQuality Of SMS 4. Service QualityQuality Of Network Independent Variables Satisfactory level over offers ,Discounts Satisfactory Level Over PerformanceNetwork Coverage Satisfactory Level Over PerformanceSMS,MMS a)Satisfactory Level Over PerformanceTariff Rates F value 4.538* Beta coefficients .150 t value 2.130*

8.321**

.469

5.934**

3.635**

.249

3.339**

7.913**

.218

2.806*

b) Satisfactory Level Over PerformanceInternet Services

.403

5.652**

5. Service QualityQuality Of convenience & Reliability

a)Satisfactory Level Over PerformanceInternet Services

5.991**

.170

2.313*

b)Satisfactory Level

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ZENITH International Journal of Business Economics & Management Research

Vol.2 Issue 7, July 2012, ISSN 2249 8826 Online available at http://zenithresearch.org.in/

Over PerformanceBilling System /Rcv .278 3.685**

6. Service QualityQuality Of Service Center And Hotline 7. Service Quality-Rate Of Pricing For Given Quality 8. Service Quality-Score Accumulation Plan, Bonus 9. Service Quality-Ad

Satisfactory Level Over PerformanceCustomer Services

4.249**

.260

3.166**

Satisfactory Level Over PerformanceInternet Services

3.491**

.162

2.092*

Satisfactory Level 3.958** Over PerformanceRingtones,Callertones Satisfactory Level Over PerformanceAd And Other Promotional Activities 3.098*

.208

2.674*

.166

2.238*

*at 0.05significance level ** at 0.01 significance level www.zenithresearch.org.in Step 1:-Performed correlation, by taking each one of the dependent variables with all the Independent variables and list of Independent variables extracted from the correlation matrix whose value fell below 0.5 with statistical significance. This is mainly due to avoid multicollinearity among the predictor variables, as these extracted Independent variables are subjected to Multiple Regression analysis. Step 2:-By performing Multiple Regression for each Dependent variable, the list of Independent variables are selected as per the significance. INTERPRETATION 1. For every unit of change in discounts and offers or promotions, affects 0 .15 unit of change in the mobile operators .Hence Mobile operators can increase their customer

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Vol.2 Issue 7, July 2012, ISSN 2249 8826 Online available at http://zenithresearch.org.in/

loyalty rate and implement Retention strategy based on Offers, Discounts and with other promotional tools. 2. Satisfactory level on Quality of Network coverage influences for its every one unit with 0.469 units of change in the service quality of Network. Therefore Operators should take necessary steps to focus mainly on quality of the network to increase customer loyalty, 3. Every single unit change of Satisfactory level over the performance of value added services influences 0.249 unit change in the service quality of VAS .Since the market taken for the Research is youth, Telecom companies should concentrate on Value added services by giving offers and promotional Recharge coupons with good quality. 4. Service quality of Network is highly influenced by satisfactory level on Internet services and with their tariff rates. Since for every unit of change in the satisfactory level of internet services and with their tariff rates, inducing 0.4 unit and 0.2 unit of change in the service quality of network respectively, marketers have to equip themselves to bridge up the customer mind gap. 5. From the table it is clear that for every unit change in billing service will pose the impact of 0.27 unit change in the Service quality of convenience .Hence for post-paid segment marketers should facilitate billing system for customer accessibility and precision. 6. For every unit change in the satisfactory level on Customer services and Ringtones influencing 0.2 unit change in their service quality .This indicates that customer services and product utilities should get strengthened for attaining customer loyalty 7. Each unit of satisfactory level on advertisements influences 0.16 unit of change on service quality implies Teleco should concentrate on Advertisements to create high loyalty. RECOMMENDATIONS Based on the above analysis, Telecom marketers should prioritize and concentrate on Quality of network coverage and internet services. Web oriented loyalty programs and promotional schemes to be introduced to increase customer loyalty. Marketers should give importance to enrich Customer services, value added services and adding promotional offers for SMS, MMS etc. The fact that youth, especially teens, are the biggest users of SMS and MMS services in markets is drawing increasing attention from marketers. Mobile marketing campaigns for youth audiences are to be devised for everything ranging from new product launches and mobile coupons to wireless community and mobile auctions Joint promotional campaigns can be engaged to ascertain customer loyalty. Successful marketing to youth should entertain and empower, be very responsive to their queries and needs, give them free reign in designing Web content, and engage them in quick-win SMSwww.zenithresearch.org.in

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based competitions. Marketers can add benefits with RCVs and in Advertisements to capture and sustain customer loyalty. CONCLUSION The mobile industry of India is undergoing a vibrant change and the mobile number portability is paving the pathway for the subjective Research. This study is one such attempt to enhance the exposure on customer loyalty and it is also expected to facilitate the marketers to design the essential operational parameters for designing the retention strategies and to enhance Customer Experience management. REFERENCES ACSI: Fornell, C. Johnson, M. D., 1996. The American customer satisfaction index: Nature, purpose, and findings, Journal of Marketing, 60. 7-19. Ahn, J. H., Han, S. P., Lee Y. S., 2006. Customer churn analysis: Churn determinants and mediation effects of partial defection in the Korean mobile telecommunications service industry, Telecommunications Policy, 30, 552-569.

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