CUSTOMER RETENTION STRATEGY AT AIRTEL, BANGALORE.

A DISSERTATION SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF MBA DEGREE OF BANGALORE UNIVERSITY.

Submitted By SARALA AGARWAL Reg.No-02XQCM6050 UNDER THE GUIDENCE OF DR.K.V.PRABHAKAR (ADJUNCT PROFESSOR/INTERNAL GUIDE) MR.NEELKANTH (ASSISTANT SALES MANAGER, AIRTEL/EXTERNAL GUIDE)

M.P.BIRLA INSTITUTE OF MANAGEMENT ASSOCIATE BHARTIYA VIDYA BHAVAN. BANGALORE-560001

2002-2004

DECLARATION

I hereby declare that the research work embodied in the dissertation entitled Customer Retention Strategy at AIRTEL, Bangalore, has been carried out by me under the guidance and supervision of Dr.K.V.Prabhakar, Adjunct Professor, M.P.Birla Institute of Management, Bangalore. I also declare that this dissertation has not been submitted to any University/Institution for the award of any Degree/Diploma.

Place: Bangalore Date:7th September 2004 (SARALA AGARWAL)

CERTIFICATE

I hereby certify that the research work embodied in this dissertation entitled Customer retention strategy at AIRTEL, Bangalore, has been undertaken and completed by Ms Sarala Agarwal under my guidance and supervision. I also certify that she has fulfilled all the requirements under the covenant governing the submission of dissertation to the Bangalore University for the award of MBA degree.

Place: Bangalore Date: 7th September 2004 (Dr.K.V.Prabhakar) Adjunct Professor MPBIM, Bangalore

CERTIFICATE

I hereby certify that this dissertation is an offshoot of the research work undertaken and completed by Ms Sarala Agarwal under the guidance of Dr. K V Prabhakar, Adjunct Professor, M.P.Birla Institute of Management, Bangalore (Internal Guide) and Shri Neelkanth, Assistant Sales Manager, Airtel, Bangalore (External Guide).

Place: Bangalore Date: 7th September 2004 (Dr.Nagesh.Malavalli) Principal, M.P.Birla Institute Mgmt

ACKNOWLEDGEMENT
I am happy to express my deep sense of gratitude to Dr. Nagesh Mallavali, (Principal, M.P.Birla Institute of Management), and Mr.Neelkanth (Assistant Sales Manager, Airtel) for their encouragement, guidance and many valuable ideas imparted to me for my project. I extend my sincere thanks to Dr.K.V.Prabhakar (Adjunct professor/ Internal Guide) for providing me all the information required and the guidance through out the project without which this project would not have been possible. I have gained a lot of knowledge, both theoretical and practical, throughout the course of carrying out this project, I also learnt a lot about the intricacies of the actual business world. With special regards I would also like to sincerely thank all my lecturers and friends for their help in completing my project successfully.

(Ms. SARALA AGARWAL)

CONTENTS Page.No
EXECUTIVE SUMMARY 1

Chapters
PART A (THEORITICAL SETTING)

1.
1.1. 1.2. 1.3. 1.4.

INTRODUCTION Background of the study. Statement of the problem. Need and significance of the study. Objectives of the study. REVIEW OF LITERATURE Purpose of review. Methodology. Conclusion. 14 22 22 23 3 13 13 13

2.
2.1 2.2 2.3

3. COMPANY PROFILE 4. RESEARCH METHODOLOGY

4.1 Type of Research. 4.2 Sampling Technique. 4.3 Sampling size. 4.4 Sampling Description. 4.5 Instrumentation Techniques. 4.6 Actual collection of data. 4.7 Limitation of the study.

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PART B (SURVEY FINDINGS) 5. DATA ANALYSIS AND INFERENCES.

PART C (CONCLUSIONS AND RECOMMENDATIONS) 6. 6.1 6.3 SUMMARY AND CONCLUSIONS. Conclusions from the study. Direction for further Research.

6.2 Implications of the study.

ANNEXURE:
Questionnaire Select Bibliography including websites used.

LIST OF TABLES Table. No. Table depicting Page.No.

1. Table showing data based on age. 2. Table showing data based on rating of call quality. 3. Table showing data based on rating of the network coverage. 4. Table showing data based on concern of call dropping. 5. Table showing data based on ability to call at the first attempt. 6. Table showing data based on the calls made to the customer care help line in the last one-month. 7. Table showing data based on finding the Interactive Voice Response System (IVRS) user friendly. 8. Table showing data based on finding the executives friendly with a helpful attitude. 9. Table showing data based on rating the ability to give information about various rate/plans/schemes/offers. 10. Table showing data based on rating the ability to give information about various value added services. 11. Table showing data based on the registration of query/complaint in the last one month 12. Table showing data based on the rating the ability to listen and understand the query/concern. 13. Table showing data based on answering mode of the query/concern satisfactorily. 14. Table showing data based on getting a follow up call to resolve the query/concerns. 15. Table showing data based on communication about the launch of new rate plans/schemes/offers in time. 16. Table showing data based on communication about the procedure/mode to upgrade the rate plans/schemes/offers. 17. Table showing data based on finding the AIRTEL advertisement relevant and easy to understand. 18. Table showing data based on receiving the monthly bills well in advance before the due date.

19. Table showing data based on finding the payment reminder through SMS/calls useful. 20. Table showing data based on finding the bills error free. 21. Table showing data based on rating of the AIRTEL services. 22. Table showing data based on rating of the AIRTEL overall services. 23. Table showing data based on the activation/cancellation of offers/services like roaming STD/ISD etc taking place within the time committed. 24. Table showing data based on the plan changes taking place within the time committed. 25. Table showing data based on rating the time taken for service restoration in case of barring/suspension. 26. Table showing data based on preference between prepaid and postpaid cellular service of AIRTEL.

LIST OF CHART Chart. No. Chart depicting Page.No. 1. Chart showing Airtel user based on age group. 2. Chart showing Rating of call quality. 3. Chart showing Rating of the network coverage. 4. Chart showing concern of call dropping. 5. Chart showing Ability to call at the first attempt. 6. Chart showing call made to customer care in the last one month. 7. Chart showing user friendliness of the Interactive Voice Response
System (IVRS).

8. Chart showing helpfulness of the Customer Care Executive s. 9. Chart showing ability to information about various plans. 10.Chart showing ability to information about various value added services. 11.Chart showing registration of query/concern in the last one month. 12.Chart showing ability to listen and resolve the query. 13.Chart showing answering the query/concern satisfactorily. 14.Chart showing follow up of call to resolve the query/concern. 15.Chart showing communication about the launch of new plans /schemes. 16.Chart showing communication about the procedure to upgrade the new plans 17.Chart showing finding the AIRTEL advertisement relevant. 18.Chart showing receiving the bill on time. 19.Chart showing finding the payment reminder through SMS/calls useful. 20.Chart showing finding the bills error free. 21.Chart showing rating of the AIRTEL Services. 22.Chart showing rating of the overall AIRTEL Services. 23.Chart showing Activation/Cancellation of services. 24.Chart showing plan changes taking place within the time committed. 25.Chart showing rating of the time taken for service restoration. 26.Chart showing preference between Prepaid and Postpaid.

EXECUTIVE SUMMARY

EXECUTIVE SUMMARY

Topic: Customer retention strategy at Airtel

Customer retention is the key business issue. Effective churn management allows the company to stay ahead of its competitors, increases profitability and improves investor confidence. There are no simple solutions; must adopt aggressive strategies which cut across the customer lifecycle and underpin all business processes. Customer Retention is not given the attention due to it, by most firms. It has been found that customer retention has more impact on profits than market share, economies of scale and other variables that are considered to provide competitive to a firm. In fact, it has been found that companies, which reduce customer defections by 5 per cent, could boost profits from 25 per cent to 85 per cent. The whole gamut of Customer Relation Management strategies center around the basic idea of RETENTION so as to get the mass out of their existing or potential customers. Problem statement: 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. The problem we are addressing here is How can a service firm evaluate when retention is likely to pay-off? Objective of the study: Objective of the study was to understand the importance of Component of Life Time Value of Customer, examine the current customer retention strategies being deployed by AIRTEL. And to understand the intricacies of Customer Relationship Management, Managerial implication of Customer Relationship Management. Also to identify the fault deficiencies in the existing Customer Retention Strategies of Airtel

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Research technique used: The data for the study are collected both from the primary source and the secondary source. The project employs systematic, objective and quantitative Research techniques using a wellstructured questionnaire, which form the primary information collected. The secondary data sources are magazines, management journals and websites. Using the primary data separate tables were furnished under specific headings, these were analyzed with the help of descriptive analysis and percentage, and the data was analyzed and interpreted. Detailed charts are developed showing the data obtained from the respondents, the data collected from the respondents were organized, processed and tabulated to depict the results. The sample size comprises of 100 respondents. This study was restricted to the city of existing customers of AIRTEL in Bangalore Metropolitan Area only. Findings: Maximum number of Airtel service user are in the age group of 22-27 and majority of them uses prepaid service, they found the call quality and the network coverage to be good. And most of them liked the value added services, and are happy with the communication procedure they use. The postpaid customers found the bill error free. The overall rating given to Airtel was Very Good Suggestions and Recommendation: With effective implementation of customer databases, companies will be able to reestablish contact with customers, and will be able to work successfully towards increasing customer retention, repeat sales, and customer referrals. Reach out to the customers with special offers, or as they discounts, or preferential surveys. Event oriented treatment. After sales satisfaction and communications in which call it, high touch opportunities. Membership cards and programs that entitle your customers to special offers, complaint inquiries and interested. the customer is genuinely

Enhanced and empowered customer, after sales, and technical support. Integrated Customer Relationship Management (ICRM) is the latest marketing strategies that have to be developed to meet the challenges raised from the daily marketing consulting services.

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PART A
(THEORETICAL SETTING)

CHAPTER-1
INTRODUCTION

1.1 Background of the study.

Customer Relationship Marketing is a practice that encompasses all marketing activities directed toward establishing, developing, and maintaining successful customer relationships. The focus of relationship marketing is on developing long-term relationships and improving corporate performance through customer loyalty and customer retention. Customer Retention marketing is a tactically driven approach based on customer behavior. It's the core activity going on behind the scenes inRelationship Marketing, Loyalty Marketing, Database Marketing, Permission Marketing, and so forth. The whole gamut of Customer Relation Management strategies center around the basic idea of RETENTION so as to get the mass out of their existing or potential customers. Retention rate is a very good indicator of repeat buying behavior and is a fairly good indicator of future behavior. Retention rate is a good indicator - not of loyalty but of the lack of it; in other words, a low retention rate can signal that the customers are not loyal, but a high retention rate does not necessarily indicate a strong loyalty. Improving customer retention rate leads to significant increase in profits; profitability is determined by three factors: Industry retention rate: First an assessment of average industry retention rate is required; the lower the industry retention rates, the lower the leverage effect on profits. Current industry retention rates have a direct impact on long-term customer value. When retention rates are 50% or below, the average customer stays with the firm for two years or less. If a firm improves its retention rates from 50% to 55%, the average retention increases to 2.2 years from 2.0 years. In contrast, if average retention rates in an industry are relatively high, in the order of 75% or greater, then an increase of 5% in customer retention has a far greater impact. The key to estimating average retention rates is to examine switching cost in the industry. It is recognized that in industries with low average retention rates individual firms may, through inventive strategies and service excellence programs, improve their retention rates to significantly higher levels than the industry average. Segmentation issues: Basic segmentation issues need to be addressed to determine if viable segment exist and can be identified; otherwise there may be more profitable avenues for the firm to Page 6

pursue. Attracting and keeping the highest-value customers is the corner stone of a successful marketing program. Underlying this statement is the necessary condition that the market can be segmented and that identifiable segments vary in customer value. The direct way to test this necessary condition is to apply volume segmentation to the market. When high, medium, low and non-user segment exists and can be identified; the potential rewards from focusing customer retention programs on the high users can be substantial. Retention improvement for this segment could lead to significant increase in profits .An insightful approach is one that combines volume segmentation and margins by customer group. Benefit segmentation is another approach, which may assist in determining the viability of retention strategies. In particular, the firm is seeking to identify and measure segments that value benefits beyond economy (i.e., the price sensitive segment). Benefits such as reliability, responsiveness, confidence, and security offer the firm the opportunity to establish a relationship with a particular segment. Customer seeking economies do not. Components of life time value of customer: The firm needs to assess its ability to calculate the long-term value of a customer or segments; in many case the necessary information may not available. Long-term customer value (LTV) is based on the concept of customers as sources or streams of profitable revenue, resulting from both their own increasingly knowledgeable usage and the patronage of others whom they recommend their service supplier. The revenue curve is determined by the degree to which each of the components-customer acquisition cost, base profit, profits from increased purchases and higher balances, reduced operating cost, profit from referrals, and profit from prices premium-contribute to profits over time. LTV is likely to be significant when the following characteristics are present: 1. High marketing expenses to obtain a new customer. 2. High administration cost to enter the customer into the firms system. 3. Relatively low servicing costs. 4. Reasonable margins on sales 5. High sales volume per customer. 6. High word of mouth. The presence of the above factors will enhance the LTV of customers. The individual firms needs to assess the degree to which these factors are present in determining the potential of increasing profits through customer retention. Page 7

Customers of today are becoming smarter, more price conscious more demanding, that led the customer to churn*. We can categories the customers based on churn-frequency: The habitual churner: who likes to change suppliers frequently. The possible churner: who might move if they are given the right offer at the right time. The sluggish churner: which comprises of old and affluent customers who are cynical about the benefits of change.

Exploring the Value of Customer Retention

Customer retention is not only a cost effective and profitable strategy, but in today's business world it is necessary. This is especially true when we remember that 80% of our sales come from 20% of your customer and clients. With these statistics we need to address the question: why most marketing and sales campaigns are designed for the new customers. Perhaps we need to rethink our marketing and sales strategies, after all many experts will tell us that it is five times more profitable to spend marketing and advertising money on retaining current customers than it is to acquire new customers. In years past the importance of focusing on customer retention was not as important; stickiness came naturally. We shopped in our neighborhood shops and our corner grocery stores. We had a personal connection with our service providers and the thought of shopping at another store would have never crossed our minds. Sophisticated technology and database equipment have made it possible for specialized firms to make attempts towards customer retention through database marketing programs. Establishing a detailed client database will allow these companies to keep track of personal information and individual preferences of all their customers. This enables them to provide better service and value. Just like the corner grocery store owner keeps information on 200 customers in his head, the large superstore can now keep track of 20,000 customers through its customer database. With effective implementation of customer databases, companies will be able to reestablish contact with customers, and will be able to work successfully towards increasing customer retention, repeat sales, and customer referrals.

*Churn: the loss of customers and the resulting loss in revenue for service providers
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To achieve the objectives of the database and customer retention programs, the entire campaign should be designed and carried out with the customer in mind. The exercise will only be effective if the customer recognizes and associates some value with being part of our database.

When Do Prospects Become Customers?

As the focus of our program shifts from acquisition to retention, the goals become those of establishing loyalty, advancing the relationship and building a sense of community, participation and affinity. As with prospecting, however, the data strategy should also help determine whether customers do or do not meet the companys criteria for retention. We need to look for factors that will feed back into the acquisition cycle to reduce marketing costs, increase success rates or both. We also need to look for trends in the length of customer relationships and determine if steps can be taken to avert the loss of customers at critical points along the way. Even a small improvement in retention can result in a significant rise in profitability and our overall ROI. Since all organizations continually update customer data, reviewing and analyzing the data will identify opportunities where up selling, cross- selling and service sales can be increased. The development of the data strategy as it relates to retention issues should address such questions as:

What characterizes our best customers, and what keeps them loyal? How do the information and service needs of new customers differ from those of established customers? Is it necessary to keep all prospect information once a customer relationship is established? What changes does the organization need to make as the relationship goes along? How many service calls did customers place? How were they resolved? What was the time to the resolution on those calls? What is the potential for developing other customers such as these? Why does one group or class of customers respond to opportunities when another does not?

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Choice of a CRM Platform

A companys choice of a CRM solution will affect its ability to collect, ana lyze and use the data. A balanced CRM solution should offer the functionality the organization needs and provide the agility to help users address changing demands in the marketplace. The ideal CRM solution should be timely in that it is quick to install and deploy, and it should be cost-effective from its initial deployment through its long- term use. All information about a particular customer should be in one database (not separate databases for marketing, sales or support), and everyone in the organization should be looking at the same data. Universal access to information by all departments makes it possible to present a unified face to each customer. In addition, the CRM solution should be customizable to reflect the unique business outlook and preferences of the organization using it. It should be readily reconfigurable to record new types of information or to discontinue collecting information that is no longer relevant or is not useful. In short, it should be adaptable to new requirements as the needs of the organization evolve. Todays Internet technology enables companies to use customized relationship management services hosted by application service providers (ASPs). An Internet-based solution can make it easy for prospects and customers to use self-service tools and information request forms via the Web. The CRM solutions offered by the best ASPs include management and administrative tools to monitor application usage and provide expected levels of service. Developing an effective data strategy for the CRM process is a way to develop the information you need to better run your company. Ultimately, it comes down to deciding whom we intend to pursue as prospects and retain as customers. The CRM solution should provide us with the tools and flexibility to support that quest on an ongoing basis. Intelligent analysis of data can indicate whether a companys activities are in line with its goals for customer acquisition and retention. It can be crucial to both the speed and the quality of the companys re sponse, and it can influence the future direction of the product and service offerings. Page 10

Most importantly, a well-developed data strategy and its effective use in concert with the CRM system will allow us to be selective in the types of customers with whom we choose to deal.

Integrated Customer Relationship Management

The development of the Customer Relationship Management (CRM) marketing practice has made more and more people realize the importance of strong customer relationship in building sustainable competitive advantages in their market competitions and in generating sustainable profits in the long run. However, the currently popular CRM marketing practice often produces disappointing outcomes. Surveys after surveys, a surprisingly high rate of failure has been reported for CRM practices. The failure rate of CRM systems ranges from 50% to over 80%. The major CRM system developers received much lower customer satisfaction scores than companies in other industries did. The more popular this marketing practice gets, the more people realize that the current CRM practice hardly manages customer relationship. Integrated Customer Relationship Management (ICRM) is the latest marketing strategy developed to meet the challenges raised from daily marketing consulting services, as the existing marketing theories and practices fail to solve the problems companies have in their efforts to build strong customer relationship. Integrated Customer Relationship Management (ICRM) provides a theoretical framework to define and to construct customer relationship under market competitions. ICRM also provides a practical guideline for the practice of effective Competitive Customer Relationship Management. The business philosophy behind ICRM is to put customer needs in the center of marketing practices and integrates all major marketing functions (including database marketing) into the Customer Relationship Management process. The ultimate goal of the ICRM practice is to help companies achieve sustainable competitive advantages through strong customer relationship.

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Current scenario of customer retention.

In the cellular sector, churn rates in the region of 30% are not unusual, but a few companies have managed to achieve rates of around 15%. Churn management products are profiled and a model shows the typical cost reductions available from a churn management programme. No single measure will effectively combat churn. An approach is required which focuses effort on each business area, most valuable customers, and maximizing return on investment is required. Key strategies include:

Incentives and tariff bundles which target the most profitable customers Loyalty schemes which are appropriate to the value of the business saved Acquisition strategies which attract the right type of customer, reducing fraud and bad debt Proactive customer service

Customer retention solutions combine award-winning data warehousing and analytics, consulting services, and industry-specific data architectures to offer:

Accurate reporting on who is leaving your company. Insights into the major factors influencing the decision to leave. Industry-leading accuracy for predicting which customers are likely to churn in the near future. Proactive, rules-based analysis of account behavior. An accurate early-warning alert system. Flexible and scalable technology that can keep up with the company's growth.

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BENEFITS OF CUSTOMER RETENTION

Customer retention affects both revenues and costs in the equation of profitability: Profit =Revenue Cost Revenues are enhanced due to increased sales and costs are lowered due to lesser generation and marketing costs of such revenues. Scholars have outlined six economic benefits of customer retention: a) Saving on customer acquisition or replacement costs, b) A guarantee of base profits as existing customers are likely to a minimum spend per period, c) Growth in per customer revenue over time, d) A reduction in relative operating costs as firms can spread the cost over many more customers and over a longer period, e) Free of charge referrals of new customers from existing customers, and f) Price premiums as current customers usually do not wait for promotions or price reduction before they make their purchases Certain non-economic benefits from customer retention are: increased customer trust, commitment and cooperation.

STRATEGIES FOR RETAINING CUSTOMERS In service marketing, customer retention has been conceptualized as resulting from customer perceptions of services quality and customer satisfaction. Scholars have advocated four steps as essential to retain customers: a) Define the market structure, b) Segment the customer base and determine segment value, c) Identify the segments service needs, and d) Implement a segmented service strategy.

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Seven Tips to CRM Success

1. Define your business objectives and goals against which results can be measured 2. Given each CRM product, focus on three dimensions: People, processes and technology. 3. Establish systematic approach to product management including team development, IT, marketing, services, sales management as well as software. 4. Clearly identify corporate and customer needs. Research the requirements and behaviour of customers and guideposts to an effective delivery of services. 5. Manage organizational change effectively. The human factor is imperative to a projects success. 6. Invest in training-more essential than any piece of software. 7. Focus on proactive selling, relationship building so as to effectively up sell and cross-sell.

Goals of CRM
To provide better customer service. To make call centers more efficient. To cross sell products more effectively. To help sales staff close deals faster. To simplify marketing and sales processes. To discover new customers. To increase customer revenues.

What are the keys to successful CRM implementation? Break CRM project down into manageable pieces by setting up pilot programs and shortterm milestones. Pilot project should incorporate all the necessary departments and groups that get projects rolling quickly and should be small and flexible enough to allow make changes during implementation. CRM plans should include a scalable architecture framework. The system should be flexible and expandable according to data it might collect in future.

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What data is collected and stored should be measured carefully. The impulse will be to grab and then store EVERY piece of data, but there is often no reason to store data. Storing useless data is waste of time and money.

Recognize the individuality of customers and respond appropriately. A CRM system should, for example, have built-in pricing flexibility.

What causes CRM projects to fail? Lack of an interactive communication among everyone in the customer relationship chain can lead to technology being implemented without proper support or buy-in from users. For example, if the sales force is not completely sold on the systems benefits, they may not input the kind of demographic data that is essential to the programs success. One Fortune 500 company is on its fourth try at CRM implementation, primarily because its sale force resisted all the previous efforts to share customer data. ... A Few Thoughts Worth Remembering About Customer Retention : "A customer service program must hold everyone in the organization accountable." "The way we treat our employees is directly related to how they in turn treat customers." --(Joe Sperry, Consultant to the telecommunications industry) "In cellular, 1% churn can be translated into roughly $500,000 in revenue." "...96% of customer churn is lost with no feedback to provider." "...A company has to determine its customer's definition of quality service and then measure its performance against those expectations." "One bad-mouthing customer can cost you 10 new customers." (Larry Harris, President, Crico Communications paging company)

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1.2 Statement of the problem.

How can a service firm evaluate when retention strategies pay-off? the new customers? Which is more expensive as the saying goes that that "It is five times more profitable to spend your marketing dollars to retain the customers that you have than to use the dollars to beat the bushes for new customers." Most people would agree with this statement.

How does a service firm identify right strategies to retain customers rather than acquiring

1.3 Need and significance of the study

For many firms improving customer retention rates can lead to significant increase in profitability; a 5% increase in retention can increase profitability from 25% to over 85%. The more customers the firm can retain over time, the more likely the firm will achieve greater profitability and growth. Recognizing the benefits of customer retention, many firms are investing substantial resources in relationship management programs to improve profitability. Customer retention is not only a cost effective and profitable strategy, but in today's business world it is indispensable. This is especially true when we remember that 80% of our sales come from 20% of our customer and clients.

1.4 Objectives of the study.

 examine the current customer retention strategies being deployed by AIRTEL. To  identify the faults/deficiencies in the existing Customer Retention Strategies. To  modify the Customer Retention Strategies. To

 understand the importance of the components of Life Time Value of Customers. To  understand the intricacies of Customer Relationship Management. To  Customer Relationship Management in action in the service sector.  Managerial implication of Customer Relationship Management

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CHAPTER-2
Review of literature.

2.1 Purpose of review.

The purpose of literature review is to explore the historical and current scenarios of the customer retention rate in the mobile service industry and general industry as a whole to retain customer. Over and above, the purpose of the literature review is to understand in totality the foundation of the research problem. The abstracts in the following pages are some of the key literature reviewed in this project:

SAS POWERS CHURN MANAGEMENT AT BHARTI CELLULAR

Using Enterprise Miner software and OLAP technologies, Bharti built models that predict the customer propensity to churn and provide information to drive product strategy. Every time a customer calls to complain about network congestion, Anil Nayar knows that he/she's only a drop Anil call away from switching over to a rival cellular services provider. That's a big reason why Nayar, President (Mobility), Bharti Tele-Ventures doesn't wait for complaints before starting to troubleshoot. Instead, Nayar and his team pick up the truck load of data that they maintain on their 7.37 lakh subscribers, crunch it to find out who's most likely to dump Bharti's AirTel in favor of a rival operator. That done, the next step is to figure out how to keep these potential 'c hurners' from leaving. But does churn management work? Sure, says Nayar, pointing out that prior to its implementation, the churn ratio at Bharti touched a peak of 3 percent, but now it's a little over 2 percent. Still, that's not really the point Nayar wants to make. Says he: If we hadn't done anything about it, the rate could have gone beyond 3 percent. Considering that the average cost of customer acquisition in the mobile business is as high as INR 3000, retention directly impacts the bottom line. Bharti cottoned on to churn management way back in November 1999, when in one of its quality meetings it was noticed that the single-biggest factor in opportunity cost (or nonconformance in telecom-speak) was churn. Immediately, the company set about pulling in all the data it had on it's customers. The idea was to meld discreet bits of data into an intelligent whole, why customer retention is important and its benefits of to the company something that would betray the churner. Was it poor service, network congestion, or ill suited tariff plans that the Page 18

customer was most complaining about? If the probability of churn could be predicted accurately, then not only could glitches in service be fixed, but the bottom line could be improved. As Bharti started dialoguing and looking for ways and means to make sense of customer data, it led to American data mining major SAS' churn management solution It's software tools . allow the user to sift through enormous quantities of data that the business generates to find hidden trends and patterns that will help in customer retention. Explains Gourish Hosangady, CEO & Managing Director, SAS India, The online application enables a company to build a 360 -degree view of its customers, and create customer specific strategies for greater loyalty. Customer retention, however, is only one part of churn management. It also makes the overall organization much more effective by identifying potential problems and opportunities. Bharti was able to optimize its coverage by studying customer complaints and usage behavior. In another busy commercial market, it was prompted to set up extra powerful transmitters because an analysis of the complaints revealed that there were more users operating out of basement offices. The end result of such analysis is that it allows Bharti to manage its network investment much more effectively. So how do the churns tools work? It starts with a search database, where information is stored in a structured manner. Data mining software pulls together all the raw data in whatever forms it is held into one system and combs through it using artificial intelligence techniques or complex mathematical models. The SAS data mining techniques predict a customer's likelihood of cancellation or switchover by scoring them on a scale of 0 to 1. If a customer scores 0.73 it means there's a 73 percent chance of his/her churning. Ergo, the lower the score, the more contented the customer. Once you know the scores, it is easy to figure out which customers (like defaulters) to let go. Bharti did not stop at churner identification. It went a step ahead and used the datawarehousing tool to launch new products. For example, when statistics showed that a number of pre-paid subscribers in Delhi were not locals, but business visitors who subscribed to AirTel back in their hometowns, Bharti launched regional roaming for pre-paid subscribers. Says Nayar, Data is a powerful resource, and it is up to you to find business insights in it.

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'TELCOS HAVE TO MINI ISE CUSTOMER CHURN' M

It's a fiercely competitive market, and for mature entrants in any sector whether it is telecom, banking, insurance or retailing retaining profitable customers is now the number one business plan. SAS, a leader in business intelligence tools, provides operational and analytical CRM (customer relationship management) solutions for companies such as Citibank, StanChart, Orange, Goodlass Nerolac and BPL. These help in gathering data at the various multi-channel customer contact points and in planning, targeting, acting and learning from the data generated. Recently, SAS implemented its customer retention solutions at AirTel to reduce a big problem telecom carriers are facing today churn. That means losing customers to another carrier. Gourish Hosangady, managing director and CEO, SAS India, explains how IT solutions can help tackle churn, the common denominator in the worlds liberalised telecommunications industry, which is now hitting India too. How bad is the problem of churn, and why is the telecom industry more vulnerable than  the other sectors? Customer acquisition and retention has been a concern for all industries, but more so for the highly liberalised telecom sector. The entry of the fourth cellular operator has fiercely increased competition in this industry and so it is imperative to understand the reasons for churn and to contain them. In India, the month on month churn is estimated at 3.5%. Churn costs European and US telcos close to $4 billion each year. The annual churn rates globally of 25% to 30%. Carriers at the upper end of this spectrum get no return on investment on new subscribers because it takes typically three years to pay back the cost of replacing each lost customer with a new one. In  your experience, what are the commonest reasons for customers to switch from one service provider to another? Some of the common driving factors for churn are poor performance, poor customer care, rate plans and handset issues. Weve for instance found that contact centers can drive awa y customers Page 20

to a rival service provider if a customer has to wait long before his problem is looked into. Globally, handset issues have made a difference too for instance, a Telco not being able to provide GSM or CDMA service. Regarding churn, something interesting thats been noticed is that its much higher in the case of pre -paid services, with a churn rate of 8:1, than in post-paid service where the rate is 3:1. The idea of pre-paid cards is that the customer will mature to become a post-paid one and so it pays to retain him too. After all, its five times more expensive to acquire a new customer than to retain an existing one.  What are the best ways to prevent these high rates of customer churn? Effective customer service could be a deterrent to churn. Branding and service differentiators also help in taking customers away from competitors. All this wouldnt be difficult if you have proper operational and analytical CRM tools in place that would help segment and analyses customer behaviour and predict their propensity to churn. In a rapidly changing telecom market, it is necessary to proactively strategize and service customers so as to retain the high value ones. Analytical customer retention solutions would help identify the high-, mid- and low-value customers and the valuable ones who are most likely to cancel services, and their reasons for doing so. They would also help in better campaign targeting and a more focused strategy.

 the case of a client such as Sprint, what kind of demands would a company thats a In global leader in the telecom industry have and how would CRM solutions help? Our solutions give Sprint a central repository that makes things easy for its marketers. The multidimensional data base (MDDB) that Sprint has, let internal sales and marketing groups research customer information from their desktops via the Sprint intranet.

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CELLULAR OPERATORS TURN TO SOFTWARE TO CHECK CHURN *

  Indians may not change their mobile handsets too often, but when it comes to cellular service providers, churn rates here are one of the highest in the world --- 5-6 per cent per month, which largely occurs in the pre-paid segment. With the going slated to get tougher as fourth operators swing into action, existing players have started harnessing software tools to enable better churn predictions. The reasons for churn differ with each market. Airtel, the Bharti groups cellular service, found dropped calls and wrong tariff plans to be the chief culprits in Delhi. BPL Mobile in Mumbai makes a distinction between voluntary churn, for reasons like change of city or loss of handsets, and involuntary churn, prompted by issues like large unsettled bills where the customer becomes untraceable. India being an emerging market has higher churn rates as compared to developed markets like Australia and Hong Kong, according to research firm Gartner. Says Gartner analyst Kobita Desai, Developed markets like Australia and Hong Kong have a monthly churn rate of 3 per cent, which usually occurs in the post-paid segment. India, being an emerging market, is driven by the pre-paid segment. Airtel has been one of the earliest adopters of software to control churn in the Indian market. The company implemented SAS Institutes customer rete ntion solution a year ago in Delhi and plans to do the same for Mumbai, when it launches services. BPL Mobile (Mumbai) president and COO Deepak Verma said the company is in talks with both SAS and Computer Associates to adopt a similar solution. Its rival Orange is also expected to follow suit. While software solutions predicting churn are suddenly popular with Indian companies now, they have been in use for about five years in Europe and the US, said SAS India CEO and managing director Gourish Hosangady. BPL currently uses an in-house software package to predict churn. With volumes increasing, we need a more specialised package which will build in more parameters to monitor customer behaviour. It will also help us to target the right customers when we acquire subscribers, since this would have an impact on long-term retention. Retention costs are at least five time lower than new acquisitions, says BPLs Verma

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BPL puts the annual industry churn rate at 48 per cent in the pre-paid segment and 30 per cent in the post-paid segment. BPLs case for getting focused on churn solutions seems logical in the light of Airtels imminent entry in the Mumbai market. In Delhi, Airtel has implemented the SAS solution only in the post-paid segment, but plans to extend it to the pre-paid segment as well, according to Mohit Deora, chief marketing officer, Airtel (Delhi).An example of how the solution helps is with respect to tariffs plans. We were able to realign tariff plans best suited to customers

and rationalize their billing cycles, said Deora

* Times news network [Thursday, July 18, 2002 7:58:43 am]

CUSTOMER RETENTION: INTEGRATING LIFETIME VALUE INTO MARKETING STRATEGIES. *

Everyone wants to retain their existing customers. Few companies, however, are implementing positive strategies aimed at retention. Most companies are organized for acquisition. Their advertising and sales programs are designed to find and promote their products and services to new customers. The companies are organized on a product or brand basis, not on a customer segment basis. While they all have customer service departments, and most have a customer service toll free number, they lack an integrated marketing strategy that is directed at retention, and that defines retention as the measurement of success. In this article, we will explore the meaning of a retention strategy, showing how it can be set up, and how lifetime value can be used to measure it. You have often heard it said that "It is five times more profitable to spend your marketing dollars to retain the customers that you have than to use the dollars to beat the bushes for new customers." Most people would agree with this statement, even though they have no way of proving it. Indeed, the majority of large American and Canadian firms today are experimenting with database marketing programs aimed, in large part, at retention. Most of these companies are not yet sure whether their experiments will be successful. A significant number of the programs will fail and ultimately be scrapped. How do such programs work? Lets look at the theory. I like to go back to the old corner grocer. Prior to 1950, most groceries in the US and Canada were sold in small grocery stores. The proprietor would meet you at the door. He knew you by name. He knew your preferences. He would put things aside for you. He built his business through Page 23

recognizing his customers and doing favors for them. Customers were loyal to these stores because of the recognition and personal attention they received. These small stores have been virtually wiped out through the advent of supermarkets. Supermarkets have a much wider variety of goods. The average grocery store had 800 SKUs on their shelves. Supermarkets today have 30,000 SKUs. Mass marketing took over. Prices came down. Variety increased. Food purchases fell from 31% of the average family budget in 1950 to about 10% today; yet the food we buy with that 10% is better in quality and quantity to what we bought with 31% in 1950. We have all gained. At the same time, we have lost something valuable. Companies today have tens of thousands in some cases millions-- of customers. We do not know who they are. We cannot recognize them and talk to them as the old corner grocers did. Loyalty has disappeared. Customers are loyal until tomorrows newspaper, when they see a coupon for something at another store and woosh, they are gone. What is true of grocery stores is also true of department stores, drug stores, hardware stores, office supply stores, banks, movie theatres virtually every sales organization today. What has begun to change this picture has been the advent of computers. In the past 15 years, computers have become so sophisticated and powerful, and their prices have become so inexpensive, that it is possible to keep in a computer today the kind of information that the old corner grocer kept in his head, and to use that information to recognize and do favors for our customers. By setting up a customer database, and using it to start a dialog with their customers, some companies have been able to reestablish contact with their customers designed to build loyalty, referrals and repeat sales. Retention building is possible. There is one key principle at work here, however. Database marketing only works to build retention if the customer benefits from the retention strategies. It works if the customer says to herself, "Im glad that Im on that database, because" The company running the database has to complete the sentence by designing and running programs that capture the loyalty of their customers. If the customer does not see some value to herself in the database activities, she will chuck out your newsletters unread. She will ignore your communications. She will leave your gold cards in her top bureau drawer. For the database program to be successful, the marketer must design the program from the customers point of view. If you can come up with a strategy that makes customers happy, then they will reward you with something that you want, but which costs them next to nothing: loyalty. What are these strategies? Page 24

Membership cards and membership programs Welcome and thank you communications Satisfaction surveys, followed up by phone calls and letters Beefed up customer service, empowered to solve problems Enhanced technical support with follow up satisfaction calls Frequent buyer programs which permit customers to build up equity Event driven communications that are meaningful to the customers lives Databases that keep track of customers purchases, preferences, co mplements and complaints, which are used to carry out loyalty building services and dialogs.

Integrated marketing programs where the advertising, direct communications, customer service, database marketing and sales programs are all orchestrated together and designed to build loyalty.

Segmentation of the customer base by lifetime value groups, and different marketing programs designed for each segment. * Article by: Arthur Middleton Hughes

Lets look at this last strategy, to illustrate wha t we mean. Here we have divided our customers into five groups (quintiles), from the most profitable to the least profitable. We may then design varying marketing strategies for each group:

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The gold customers should not be bombarded with marketing programs. On the contrary, they should be rewarded with super services. These are 80% (or some other large percentage) of our revenue. We must retain these loyal folks. We spend our marketing dollars on the middle three quintiles: encouraging them to move up, to get in to Gold Heaven. On the other hand, the bottom quintile may be costing you more than they are worth. Dont waste marketing dollars here. We dont want to retain them. How can the success of these programs be measured? The answer is lifetime value.

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2.2 Methodology of literature review.

Methodology of literature review encompasses different facets of information sources concerning customer retention. It started with search in the Management Magazines, Text Books, and lots of other Marketing Text and Journals. Information on customer retention strategies were mostly available on the web sites, lots of articles and presentation on the web sites were analyzed and used in the research for better understanding of the topic. (A list of website has been provided in the Annexure)

2.3. Conclusions from literature review.

After an extensive literature review, the study has revealed the following conclusions:

 Everyone wants to retain their existing customers; it is five times more profitable to spend the marketing dollars to retain the customers than to use the dollars to beat the bushes for new SAS' churn management solution It is software tools that allow the user to shift through  . enormous quantities of data that the business generates to find hidden trends and patterns that  online application enables a company to build a 360-degree view of its customers, and The  SAS data mining techniques predict a customer's likelihood of cancellation or switchover The  is necessary to proactively strategize and service customers so as to retain the high value It ones. by scoring them on a scale of 0 to 1. create customer specific strategies for greater loyalty. will help in customer retention. customers.

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CHAPTER-3
COMPANY PROFILE

BHARTI TELE-VENTURES LTD. (BTVL)

The premise of the telecommunications business is simple- there is no billing, no revenue and hence, no profit, with the usual threat of survival. In the highly competitive and growing Indian market, Bharti Tele-Ventures Limited Group Company is the leading wireless access, data solutions, and long distance services provider. It has well understood that the only way it can sustain and grow is by being price competitive, with services that meet customer expectations for quality and continuous availability. Bharti Tele-Ventures Ltd (BVTL) was incorporated on July 7, 1995 as a public limited company. BTVL is a leading private sector provider of telecommunications services. By the end of April 2004, it had an aggregate of 7.6 million customers, out of which over 7 million were mobile customers. Among the 23 circles in India, the company offers mobile services in sixteen, it also provides fixed line services in 5 circles. The company complements its mobile and fixed-line services with national and international long distance service. It has a submarine cable landing station at Chennai, which connects the submarine cables between Chennai and Singapore. By leveraging its nation-wide fibre optic backbone, last mile connectivity in fixed line and mobile circles, VSATs, ISP and international bandwidth access through the gateways and landing stations, the company provides reliable end to end data and enterprise services including VSAT and internet services to the corporate customers. Business is conducted through its subsidiaries. The company holds 99.7% in Bharti Cellular Limited mobile circles except the circles of Punjab, AP, Karnataka, where it holds 100%. It even holds 100% in Bharti Infotel Limited which operates in fixed line, long distance and group data services. Finally, Bharti Aquanet Ltd. holds 51% and also owns landing station in Chennai. Business Divisions Mobile: According to COAI reports by the end of March 31,2004, approximately 90% of Indias total number of GSM mobile customers resided within the Bhartis mobile customer base which accounts for approximately 25% of the total all India GSM mobile base. This has made Bharti the largest GSM mobile service provider in the country. Page 29

Fixed-Line: Bharti was the first private sector operator to provide fixed-line services in India. Currently they provide fixed-line services in the circles of Madhya Pradesh, Chattisgarh, Haryana, Delhi, Karnataka, and Tamil Nadu. The circles have high telecommunications revenue potential especially for carrying data traffic.

Long-distance, group data and enterprise services: Long distance and enterprise services gets enormous support from the submarine cable landing station at Chennai. This also facilitates the company to offer best value to the customers. The company matches the mobile and fixed-line services with national and international long distance services and provides these services across India.

Mobile footprint The company believes that the demand for mobile services in India will continue to grow rapidly as a result of the following factors: Lower tariffs and handset prices over time. Constant growth in the category of Pre-paid customers Continued development of Indias economy leading to greater economic growth. Greater variety and usage of value added services.

Strategies of the Company Capture maximum telecommunications revenue potential with minimum geographical coverage. Position itself to tap Data transmission opportunities and offer advanced mobile Data services. Focus on satisfying and retaining customers by ensuring high level of customer satisfaction. Leverage strengths of its strategic and financial partners Emphasizes on Human Resource Development to achieve operational efficiencies. Focus on Telecommunication to enable the company to better anticipate industry trends and capitalize on new telecommunications related business opportunities. Page 30

Human Resources
It has been ranked as the 14th best employer amongst the top 25 companies in India. It is also the only company whose HR Department has received a special award for aligning People Systems to business need. Their strong beliefs that people are the key differentiators and make the biggest difference for a successful business has encouraged and made them to create an organization powered by unique structure, systems and leadership style. The company nurtures an environment where people are respected and their uniqueness is valued. This has resulted in a vibrant, productive, people oriented and progressive workplace. Their business and people philosophy is guided with a framework of strong values and has resulted in differentiating them as an employer of choice in todays market p lace. Formal job description documents are issued to all the employees clearly mentioning key results area. They believe that an individual can be effective only when he/she knows what is expected of him/her. This has helped the company in setting goals, communicating to each of the employees about the expectations from them and also in establishing role clarity.

Key Strengths
Bharti Tele-Ventures have created strong brand name recognition and a reputation for offering high quality services to its customers. Not only does it have a quality management team with a vision and proven execution skills, it also has strong relationships with international strategic and financial investors. Some of them are: Sins Tel, Warburg Pincus, International Finance Corporation, Asian Infrastructure Fund Group and New York Life Insurance.

Future Plans
The company is considering the proposal of pumping in Rs.2,000 cr in the current fiscal, out of which around 65% of the investment is expected in the mobility business and the balance in fixed-line services. The company has also plans to list on the NASDAQ in 2005-5, which is likely Page 31

to be another trigger. In terms of top line revenue, mobile telephony services are expected to fetch about 60% and the rest is expected to come from fixed-line services. The company is also planning to acquire companies in East Asia, West Asia and Africa. It also intends to raise Rs.3,000 cr through a planned overseas listing. Following its recent acquisition of Hexacom in Rajasthan, the Bharti Group firm is considering the acquisition of one more company in the country by the end of this financial year.

COMPANY- AIRTEL
Airtel comes to us from Bharti Cellular Limited - a part of the biggest private integrated telecom conglomerate, Bharti Enterprises. Bharti provides a range of telecom services, which include Cellular, Basic, Internet and recently introduced National Long Distance. Bharti also manufactures and exports telephone terminals and cordless phones. Apart from being the largest manufacturer of telephone instruments in India, it is also the first company to export its products to the USA. Bharti Enterprises has been at the forefront of technology and has revolutionized telecommunications with its world class products and services. Established in 1976, Bharti has been a pioneering force in the telecom sector with many firsts and innovations to its credit. Bharti has many joint ventures with world leaders like Singtel (Singapore Telecom); Warburg Pincus, USA; Telia, Sweden; Asian infrastructure find, Mauritius; International Finance Corporation, USA and New York Life International, USA. Bharti is the leading cellular service provider, with a footprint in 15 states covering all four metros and more than 7 million satisfied customers. Airtel's leading mobile service provider is now present across 135 towns in Karnataka and the is available over 58 showrooms and 13000 outlets .To help serve the customer better Airtel Karnataka has three offices, one each in Bangalore (Bangalore Zone), Hubli (North Karnataka) & Mangalore (South Karnataka).


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9,6,21
T o make mobile communications a way of life and be the customers' first choice.

0,66,21
To meet the mobile communication needs of customers through: Error- free service delivery Innovative products and services Cost efficiency Unified Messaging Solutions

BHARTI VALUES Innoventuring

Generate and implement entrepreneurial and innovative ideas, which will continuously create new growth engines.

Customer First
Committed to delivering service beyond the expectations of the customer. The quality of customer responsiveness clearly differentiates us from others.

Performance Culture
Benchmark the processes and performance against world-class standards. Distinguishing between performers and non-performers and by valuing achievement at the individual as well as the team level. A culture of inclusiveness where feedback, learning and ideas are actively encouraged, sought and acted upon.

Valuing Partnership
Committed to building exemplary relationship with the partners, which stand on the principles of mutual trust and mutual growth. Page 33

Valuing People
Nurture an environment where people are respected and their uniqueness is valued. Belief that people are the key differentiators.

Responsible Corporate Citizenship

Committed to making a positive and proact ive contribution to the community. As a responsible corporate citizen the company will contribute to and abide by environmental and legal norms.

Ethical Practices
Uphold the highest ethical standards in all internal and external relationship. The compan y will not allow misuse or misrepresentation of any kind.

AWARDS:
Consecutively for four years 1997,1998, 1999 and 2000, AirTel has been voted as the Best Cellular Service in the country and won the coveted Techies award. The Asia Pacific Award for the Most Innovative HR practices-2000 The Golden Peacock National Training Award for excellence in Training practices-2000 The Golden Peacock National Quality Award-2001

Airtel & Visual Identity

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For a brand to be successful, it must build enduring relationships with its different audiences. Integral to this relationship is the visual image of the brand the consumer carries in his/her mind. The Airtel brand image is created through the consistent application of a carefully developed visual identity, which helps Airtel distinguish itself in a cluttered market. Airtel's visual identity helps create instant brand recall and strengthens the relationships that its audiences have with it. The Airtel visual identity has different elements that work together to create a strong and consistent identity for the brand. The most important of these are:

The Airtel Logo

The Airtel logo is a strong, contemporary and confident symbol for a brand that is always ahead of the rest. It is a specially drawn woodmark.

The Airtel Image style

It incorporates two solid, red rectangular forms whose counterform creates an open doorway.

The Airtel Typographical style

The title case lettering with its capital 'A' was deliberately chosen to reinforce the brand's leadership position. The red dot on the letterform 'I' cues Airtel's focus on innovation. The words 'Express Yourself' are writt in Humanist 777 BT typeface, very much part of the brand identity. en

The Airtel Colour Palette

The lettering is grey so that the pure black of Airtel is visually unharmed.

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Airtel Advertising
The relationship between advertising and visual identity is a complex one and must be understood clearly. Campaigns are born in response to market trends, to competitor activity, to new product launches. Unlike visual identity, advertising must be constantly reinvented to engage target audiences and garner mind share. Yet, applications in this area entail large budgets and are surely the most visible of all brand identity channels. They present extremely powerful opportunities to reinforce Airtels visual identity and therefore can be equally dangerous if they misuse or dilute it. Remember that the way an ad looks does not constitute Airtels visual identity. The brand's visual identity is made up of the logo, the typographical style, the colour palette and the image style.

SERVICES Airtel Prepaid

Airtel Prepaid, the Ready Cellular Card from Airtel comes from Bharti Enterprises, India's leading integrated telecom service provider. Going mobile with Airtel Prepaid is a new way of life. With a host of great features, also simple to use, Airtel Prepaid makes everything that are dreamt and believed, possible

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Aisi azadi aur kahaan?

Airtel Prepaid, the Ready Cellular Card from Airtel comes to you from Bharti Enterprises, India's leading integrated telecom service provider.

FREEDOM OF SPEECH REDEFINED... Going mobile with Airtel Prepaid is a new way of life.

Some of the many advantages that a customer will enjoy with Airtel Pre-paid
Total Cost Control Enjoy the liberty of total cost control with Airtel Pre-paid! Re-charge as much as the customer feels the need to! This is called a complete freedom! No Rentals Buy an Airtel prepaid card without having to pay any rentals! No deposits The Airtel prepaid card comes without having to pay heafty deposits! STD/ISD facility till the last rupee Now experience complete freedom like never before with Airtel! The STD/ISD facility allows the customer to make long distance calls in India and Overseas from the cellular phone! Instant Balance Inquiry Check the talk-time instantly by calling the toll-free number!

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60-second pulse Airtel provides the customer with a 60-second pulse rate! Freedom for the customer to experience like never before!

Instant Recharge The customer can avail themselves of instant recharge on the pre-paid card with just a few simple steps!

24-hour recharge facility With the round-the-clock recharge facility, the customer recharge Airtel prepaid card anytime, anywhere!

Caller Line Identification Call Line Identification gives the customer the power to know the phone number of the calling party even before they answer the call, thus giving them the choice to either reject or take the call. It provides the added advantage of saving the incoming number directly in the Handset Phone Book, so that the next time the customer want to call the same person, they do not need to retype his/her number, simply they can use the phone book.

Call Divert, Call Hold and Call Wait The customer can avail themselves of special services like call waiting, call hold and call divert all with their Airtel prepaid card!

Short Messaging Service (SMS) With Airtels Short Messaging Service (SMS), the customer can send messages and jokes to their friends and colleagues, anytime anywhere!

SMS based Information Services With Airtel's SMS based information services, the customer can get upto -the-minute cricket scores, order flowers as well as send couriers or check their daily horoscope!

Voice Mail service Voice Mail lets the customer receive messages even when their handset is switched off or when they are outside the coverage area. They can listen to their messages whenever they

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feel like, from anywhere in the world. Voice Mail can store up to 75 messages, with each message of two-minute duration.

Airtel Postpaid
Airtel welcomes the customers to a vibrant world of unlimited opportunities. More exciting, innovative yet simple new ways to communicate, just when they want to, not just through words but ideas, emotions and feelings; to give them the unlimited freedom to reach out their special people in your special way.

Experience complete freedom

The Airtel Post-paid customer can enjoy the following facilities Easy Billing The luxury of viewing details of their last 3 billing cycles and the convenience of paying their Airtel bill online! Call Divert, Call Hold and Call Wait Special services like call waiting, call hold and call divert all with the Airtel Postpaid connection! Short Messaging Service (SMS) With Airtel's Short Messaging Se rvice (SMS), the customer send unlimited messages and jokes to their friends and colleagues, anytime anywhere! Caller Identification Call Identification gives the customer the power to know the phone number of the calling party even before they answer the call, thus giving them the choice to either reject or take the call. It provides the added advantage of saving the incoming number directly in the Handset Phone Book.

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Voice Mail Voice Mail lets the customer receive messages even when their handset is switched off or when they are outside the coverage area. They can listen to their messages whenever they feel like, from anywhere in the world. Voice Mail can store up to 75 messages, with each message of two-minute duration.

STD/ISD Facility The STD/ISD facility allows the customer to make long distance calls in India and Overseas from their cellular phone!

Roaming (National and International)

Airtel's Roaming service allows you to use your mobile phone to make or receive calls from almost anywhere in India and abroad! Enjoy roaming within the country as well as across international destinations!

Airtel MTV Card

The best offers and the coolest of bargains on the hippest stuff on the market, download the hippest tunes from the hottest new tracks and dress up your phone with the latest wallpapers, ringtones, picture messages, screensavers and backgrounds! All this and loads more! Only with the MTV Airtel SIM!

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Airtel Roaming gives the customer two great options:

Airtel National The customers can enjoy roaming in India across 42 partners networks and over 750 cities. Airtel International The customer can roam across international destinations, in nearly 119 countries including USA, Canada, UK etc. with 284 partner networks.

Long Distance The National Long-Distance facility allows the customers to make long distance calls in India and Overseas from their cellular phone. This service is applicable to both Postpaid and Prepaid customers Specials: EasyCharge Recharge as and when customers like! New Airtel Prepaid brings to the nation a never before 'Azadi'. Giving every Indian the right to be unconditionally, completely free! Free to never run out of words, explore every opportunity, reach out to anyone, anywhere and express themselves. The customers can discover the world of New Airtel Prepaid; discover freedom like never before!

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Other Value added services with Airtel

To subscribe for this service the customers can simply fill in the online AirTel form. Once the form has been processed they will be contacted at the earliest to complete the remaining formalities. If the customer wish they could walk up to any of the AirTel showrooms across their city to apply for a connection and get activated instantly by paying in cash/ credit card.

AIRTEL POSITIONING-REPOSITIONING. From Touch Tomorrow top Live Every Moment

In late 2002, Bharti Cellular Ltd. (Bharti), Indias largest cellular telephone company released a television Commercial (TVC), which despite using the oft-repeated celebrity endorsement route was unusual in terms of its celebrity selection. Instead of using the usual movie stars/sports celebrities, it chose one of the countrys most successful music composers, A R Rahman to promote its brand. The campaign attracted considerable media attention because this was the first time Rahman had agreed to do a television commercial and also because, Rahman had been paid Rs. 10 mn for the campaign, a sum usually unheard of, for celebrity endorsers in India. The campaign received brickbats as well as bouquets in the media, both for the selection of Rahman and the TVCs execution. However, Bharti claimed to have scored an ace in terms of getting Rahman to compose five exclusive Symphonies downloadable as rind tones for Airtel users.

The TVC was a part of the brand repositioning and restructuring efforts for Airtel, as part of which, Bharti changed the brands tagline in early -2002 from Touch Tomorrow to Live Every Moment. Thee company also decided to undertake a compressive brand-building program and choose the slogan Unlimited Freedom for the same. Commenting on these changes, company source said, Airtels brand identity and campaign will now have a new younger and int ernational look and feel that builds on the earlier positioning.

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Bhartis massive media expenditure plans were no surprise, considering the fact that it was the largest cellular telecom company in the country reaching over 600million people in 16(out of 29) states in India. The company posted revenue of Rs.8.48 billion and a net loss of Rs.1 billion in the financial year 2000-01. The Airtel brand (and the prepaid card services brand, Magic) and topof the-mind recall amongst cellular phone users and enjoyed a leadership position in most markets. Industry observers attributed it to Bhartis strong brand and positioning strategies.

Repositioning Airtel Once again!

Owing to consistent marketing efforts, the Airtel and Touch Tomorrow Campaign became very popular. Therefore Bhartis decision to withdraw this campaign (Touch Tomorrow) in 2002 came as a surprise to many. The new campaign was accompanied by a change in the logo as well. The data behind the new logo was to give Airtel a younger look. The logo symbolizes innovation, energy and friendliness. As a part of its restructuring and repositioning exercise, Bharti unveiled new brand architecture. The proposed two-tiered architecture has categories under two head wired and wireless. All the wireless products were placed under the Airtel brand, which also included Tango, Freenet and Magic. According to company sources, the objective of this new architecture was to establish Bharti as a global telecom company. The company reportedly allocated Rs.1 bn for media coverage and other brand building activities. Commenting on the new brand identity of Airtel, a Bharti spokesperson said, Airtels brand identity and campaign will now have a new younger and international look and feel that builds on the earlier position of Touch Tomorrow injected with renewed energy and heightened optimism.

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CHAPTER-4
RESEARCH METHODOLOGY

4.1 Type of Research:

The project employs systematic, objective and quantitative Research techniques using a well-structured questionnaire. Customer Retention Strategies have been studied extensively in the mobile service industry. The research investigation is restricted to the existing/potential customers of AIRTEL in the Bangalore Metropolitan Area. The primary data was collected using a wellstructured questionnaire. The descriptions also involve cross analysis of respondents from different consumer segments entailing age, preference, and usage as variable parameters. Separate tables were furnished under specific headings, these were analyzed with the help of descriptive analysis and percentage, and the data was analyzed and interpreted. Detailed charts are developed showing the data obtained from the respondents; the data collected from the respondents were organized, processed and tabulated to depict the results. Since our research investigation is highly qualitative in nature, the research data has not been subjected to rigorous quantitative treatment. It is our belief and conviction that the qualitative analysis is as useful as quantitative analysis in drawing significant inferences and making projections.

4.2 Sampling Technique.

Since the population for the study is quite large and since the study is limited by the constraints of resources and time, complete enumeration of the population by census method was not possible. Hence, the project used random sampling technique. Respondents were mostly selected from the youth segments, who were the major respondents of the survey. The advantage of this technique is that it is both economical and reasonably reliable.

4.3 Sample size.

The sample size comprises 100 respondents. The sample size of 100 respondents is considered by us to make reasonable projection in the study of this kind.

4.4 Sample description.

The sample description includes customers of Airtel in both prepaid and postpaid sections. The youth segment was taken as the respondents because they are more prone to switch to different service providers and usually they are the trendsetters. Hence it is our strong belief if we could develop strategies to retain them, its easier to retain the other segments too.

4.5 Instrumentation technique.

Structured questionnaire. Observation technique. Tables/charts.

4.6 Actual collection of data.

Data has been collected from various sources, there is a combination of both primary and secondary data that has been used in this research. A well-administered questionnaire has formed the main profitable source of the primary data collection. This enabled us to capture a first hand insight into the actual findings of the research. Published articles relating to customer retention in the mobile service industry and also papers submitted by renowned people have formed the source of secondary data. Articles have been sourced from magazines and journals dealing with current issues in mobile service industry. Internet has been a major secondary source for the extraction of the experts opinion.

5.2 Limitation of the study.

9 This study was restricted to the city of existing customers of AIRTEL in Bangalore 9 Due to the time constrain, an extensive research could not be undertaken, therefore the 9 Analysis of the data obtained from the questionnaire was done on the assumption that 9 Preferences and responses of customers could change over a period of time necessitating periodical surveys. the respondents gave the correct information to the best of their knowledge. sample size was restricted to 100 respondents only. Metropolitan Area and therefore the results of this study can not be generalized.

PART B
RESEARCH FINDINGS

CHAPTER-5
DATA ANALYSIS AND INFERENCES.

5.1 QUANTITATIVE DATA WITH INFERENCES AND OBSERVATIONS

The quantitative data have been reinforced with our observations through personal enquiry notes and inferences have been derived accordingly.

Table.No.1
Classification of data based on age: Age 18-22 22-27 28-35 Total Prepaid 24 26 5 55 Postpaid 15 24 6 45 Total 39 50 11 100 Percentage 39% 50% 11% 100%

Source: Field Investigation

Graph.No.1

Airtel users based age group

No. of respondents

20 10 0 18-22 Prepaid 22-27 Age group Postpaid 28-35 Percentage

40% 20% 0%

Source: Field Investigation Inference: Maximum no. of AIRTEL service user are in the age group of 22-27 and majority of them uses prepaid services. Also retention rare is high in this age group. Page 49

Percentage

30

60%

Table.No.2
Classification of data based on rating of the call quality: No. of Respondents Prepaid Postpaid 18 15 11 13 20 14 5 1 55 2 1 45

Category Excellent Very Good Good Average Poor Total

Total 33 24 34 7 2 100

Percentage 33% 24% 34% 7% 2% 100%

Source: Field Investigation

Graph.No.2

Rating of call quality

25 20 No. of respondents 15 10 5 0 Excellent Very Good Good Average Poor Category Prepaid Postpaid Percentage 40% Percentage 30% 20% 10% 0%

Source: Field Investigation Inference: 34% of the respondent found the call quality good, and 33% of the respondent found it excellent (both the prepaid and the postpaid service users).

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Table.No.3 Classification based on rating of the network coverage: No. of Respondents Prepaid Postpaid 15 14 17 17 17 14 6 0 0 55 0 45

Category Excellent Very Good Good Average Poor Total

Total 29 34 31 6 0 100

Percentage 29% 34% 31% 6% 0% 100%

Source: Field Investigation

Graph.No.3

Rating of the network coverage

20 16 No of respondent 12 8 4 0 Excellent Very Good Good Category postpaid Average Poor 40% Percentage 30% 20% 10% 0%

prepaid Source: Field Investigation

"percentage"

Inference: 34% of the respondent found the network coverage very good, (both prepaid and postpaid). Airtel has a plus point of good network coverage.

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Table.No.4
Classification of data based on concern of call dropping:

No. of Respondents Category Yes No Total Prepaid 26 29 55 Postpaid 18 27 45 Total 44 56 100 Percentage 44% 56% 100%

Source: Field Investigation

Graph.No.4

Concern of call dropping

35 30 25 20 15 10 5 0 Yes Prepaid Source: Field Investigation Inference: 44% of the respondent faced the concern of call dropping and most of them are prepaid. The customers using postpaid services rarely encounter the concern for call dropping Page 52 Category Postpaid No Percentage 60% 50% 40% 30% 20% 10% 0%

No. of respondents

Percentage

Table.No.5
Classification of data based on ability to call at the first attempt:

No. of Respondents Category Yes No Total Prepaid 40 15 55 Postpaid 28 17 45 Total 68 32 100 Percentage 68% 32% 100%

Source: Field Investigation

Graph No.5

Ability to call at the first attempt

50 40 30 20 10 0 Yes Caregory Prepaid Source: Field Investigation Inference: 68% of the respondents are able to make calls at the first attempt and 32% of the respondents not able to make calls at the first attempt. Postpaid Percentage No No. of respondent 60% 40% 20% 0% Percentage 80%

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Table.No.6
Classification of data based on the calls made to the customer care help line in the last one month:

No. of Respondents Category Yes No Total Prepaid 42 13 55 Postpaid 29 16 45 Total 71 29 100 Percentage 71% 29% 100%

Source: Field Investigation

Graph.No.6

Calls made to customer care in the last one month

50 40 30 20 10 0 Yes Prepaid Source: Field Investigation Inference: 71% of the respondents called up the customer care in the last one month. The customers do not often call the customer care for complaints as the response rate is also very low. Caregory Postpaid No Percentage No. of respondent Percentage 80% 60% 40% 20% 0%

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Table.No.7
Classification of data based on finding the Interactive Voice Response System (IVRS) user friendly:

No. of Respondents Category Yes No Total Prepaid 32 10 42 Postpaid 28 1 29 Total 60 11 71

Percentage

85% 15% 100%

Source: Field Investigation

Graph.No.7

User friedlyness of Interactive Voice Response System(IVRS) 35 30 25 20 15 10 5 0 Yes Prepaid Source: Field Investigation Inference: 85% of the respondents found the IRVS user-friendly. (Out of which 32 respondents were pre-paid and 28 respondents were post-paid). Caregory Postpaid No Percentage 100% Percentage 80% 60% 40% 20% 0%

No. of respondent

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Table.No.8
Classification of data based on finding the executives friendly with a helpful attitude:

No. of Respondents Category Yes No Total Prepaid 29 13 42 Postpaid 25 4 29 Total 54 17 71 Percentage 76% 24% 100%

Source: Field Investigation

Graph.No.8

Helpfulness of the Customer care executives

35 30 25 20 15 10 5 0 Yes Prepaid Category Postpaid No Percentage 80% Percentage 60% 40% 20% 0% No. of respondent

Source: Field Investigation Inference: 76% of the respondents found the executives customer friendly. 24% of the respondents stated that executives were not customer friendly.

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Table.No.9
Classification of data based on rating the ability to give information about various rate plans/schemes/offers:

No. of Respondents Category Excellent Very Good Good Average Poor Total Prepaid 11 8 14 9 0 42 Postpaid 9 4 11 3 2 29 Total 20 12 25 12 2 71 Percentage 29% 17% 35% 17% 2% 100%

Source: Field Investigation

Graph.No.9

Ability to give information about various plans

No. of respondents 10 5 0 Excellent Very Good Good Average Poor Percentage 15 40% 30% 20% 10% 0%

Category Postpaid Percentage

Prepaid Source: Field Investigation

Inference: Majority of the respondent (i.e. 35%) found the ability to give information about various plans to be good enough to benefit the customers. Page 57

Table.No.10
Classification of data based on rating the ability to give information about various value added services:

No. of Respondents Category Excellent Very Good Good Average Poor Total Prepaid 10 10 12 8 2 42 Postpaid 4 6 11 6 2 29 Total 14 16 23 14 4 71 Percentage 20% 23% 32% 20% 5% 100%

Source: Field Investigation

Graph.No.10

Ability to give information on various value added services.

16 12 8 4 0
Excellent Very Good Good Average Poor Category No.of respondent

40%
Percentage

30% 20% 10% 0%

Prepaid Source: Field Investigation

Postpaid

Percentage

Inference: 32% of the respondents rated the ability to give information about various value added services to be good.(majority of them belong prepaid segment) Page 58

Table.No.11
Classification of data based on the registration of query/complaint in the last one month:

No. of Respondents Category Yes No Total Prepaid 25 30 55 Postpaid 23 22 45 Total 48 52 100 Percentage 48% 52% 100%

Source: Field Investigation

Graph.No.11

Registration of query/complaint in the last one month

32 24 16 8 0 Yes Category Prepaid Postpaid Percentage No 80% 60% 40% 20% 0% No. of Respondent Percentage

Source: Field Investigation Inference: 52% of the respondents did not register any query/complaint in the last one month. Since the complaints or query are not given responses, the customers desist complaints. Perhaps the complaints handling process is cumbersome and not fast enough.

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Table.No.12
Classification of data based on the rating the ability to listen and understand the query/concern:

No. of Respondents Category Excellent Very Good Good Average Poor Total Prepaid 10 4 6 4 1 25 Postpaid 9 4 4 6 0 23 Total 19 8 10 10 1 48 Percentage 39% 17% 21% 21% 2% 100%

Source: Field Investigation

Graph.No.12

Ability to listen and resolve the query

14 12 10 8 6 4 2 0 Excellent Very Good Good Category
Postpaid

No. of respondents

30% 20% 10% 0% Average Poor

Prepaid

Percentage

Source: Field Investigation Inference: 39% of the respondents rated the ability of listen and understand the query/concern to be excellent. (i.e. both pre-paid and post-paid). Page 60

Percentage

50% 40%

Table.No.13
Classification of data based on answering mode of the query/concern satisfactorily:

No. of Respondents Category Yes No Total Prepaid 14 11 25 Postpaid 13 10 23 Total 27 21 48 Percentage 56% 44% 100%

Source: Field Investigation

Graph.No.13

Answering the query/concern satisfactorily

50 40 30 20 10 0 Yes Prepaid Category Postpaid No Percentage No.of Respondent 60% 40% 20% 0% Percentage

Source: Field Investigation Inference: 56% of the respondents who lodged complaints in the last one month, are satisfied with the answering mode of the query/concern by the customer care executives. (i.e. percentage of both pre-paid and post-paid respondents)

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Table.No.14
Classification of the data based on getting a follow up call to resolve the query/concerns:

No. of Respondents Category Yes No Total Prepaid 13 12 25 Postpaid 9 14 23 Total 22 26 48 Percentage 46% 54% 100%

Source: Field Investigation

Graph.No.14

Follow up of call to resolve the query/concern

20 No. of Respondent 15 10 5 0 Yes Category Prepaid Postpaid Percentage No 60% 45% 30% 15% 0% Percentage

Source: Field Investigation Inference: 54% of the respondents did not get follow up call to resolve their query/concerns in spite of lodging complaints. (12 respondents were pre-paid service users and 14 respondents were post-paid service users).

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Table.No.15
Classification of the data based on communication about the launch of new rate plans/schemes/offers in time:

No. of Respondents Category Yes No Total Prepaid 35 20 55 Postpaid 25 20 45 Total 60 40 100 Percentage 60% 40% 100%

Source: Field Investigation

Graph.No.15

Communication about the launch of new rates/plans

40 30 20 10 0 Yes Prepaid Category Postpaid No Percentage 80% 60% 40% 20% 0% No. of Respondent Percentage

Source: Field Investigation Inference: 60% of the respondents are communicated about the launch of new rate plans/ schemes/offers in time. (Out of 55 prepaid respondent 35 of them were communi-cated and out of 45 postpaid respondents 25 of them were communicated). Page 63

Table.No.16
Classification of data based on communication about the procedure/mode to upgrade the rate plans/schemes/offers:

No. of Respondents Category Yes No Total Prepaid 30 25 55 Postpaid 27 18 45 Total 57 43 100 Percentage 57% 43% 100%

Source: Field Investigation

Graph.No.16

Communication about the procedure to upgrade the rates/plans

No. of Respondents 30 20 10 0 Yes Prepaid Category Postpaid No Percentage 60% 40% 20% 0% Percentage 40 80%

Source: Field Investigation Inference: 57% of the respondents are communicated about the procedure/ mode to upgrade the rate plans/schemes/offers, of which 30 respondents are using pre-paid service and 27 respondents are using post-paid.

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Table.No.17
Classification of data based on finding the AIRTEL advertisement relevant and easy to understand:

No. of Respondents Category Yes No Total Prepaid 43 12 55 Postpaid 33 12 45 Total 76 24 100 Percentage 76% 24% 100%

Source: Field Investigation

Graph.No.17

Finding the AIRTEL advertisement relevant

50 No.of respondent 40 30 20 10 0 Yes Category Prepaid Postpaid Percentage No 80% Percentage 60% 40% 20% 0%

Source: Field Investigation Inference: 76% of the respondents found the AIRTEL advertisements relevant, informative and easy to understand. The prepaid customers mostly found the advertisements relevant and informative. Page 65

Table.No.18
Classification of data based on receiving the monthly bills well in advance before the due date:

No. of Respondents Category Yes No Total Post paid 37 8 45 Total 37 8 45 Percentage 82% 18% 100%

Source: Field Investigation

Graph.No.18

Receiving the bill on time Yes Yes 82% No 18% No

Source: Field Investigation. Inference: 82% of the respondents receive the monthly bills well in advance before the due date. (This is applicable only to postpaid service users).

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Table.No.19
Classification of the data based on finding the payment reminder through SMS/calls useful:

No. of Respondents Category Yes No Total Post paid 37 8 45 Total 37 8 45 Percentage 82% 18% 100%

Source: Field Investigation.

Graph.No.19

Finding the payment reminder through SMS/calls useful

Yes 82% No 18%

Yes No

Source: Field Investigation Inference: 82% of the respondents found the payment reminder through SMS/calls useful for the monthly bills.

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Table.No.20
Classification of the data based on finding the bills error free:

No. of Respondents Category Yes No Total Post paid 30 15 45 Total 30 15 45 Percentage 78% 22% 100%

Source: Field Investigation

Graph.No.20

Finding the bills error free

Yes No Yes 78% No 22%

Source: Field Investigation Inference: 78% of the postpaid respondents found the bills error free i.e. 30 respondent out of 45 respondent using post-paid services.( As bills are given only to post-paid customers).

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Table.No.21
Classification of the data based on rating of the AIRTEL services:

SERVICES Category Excellent Very Good Good Average Poor Total SMS 42 32 18 5 3 100 % 42% 32% 18% 5% 3% 100% MMS 17 24 19 7 10 77 % 22% 31% 25% 9% 13% 100% GPRS 20 16 25 11 9 81 % 25% 20% 31% 13% 11% 100% RM/VM 11 15 31 16 7 80 % 14% 18% 39% 20% 9% 100%

Source: Field Investigation

Graph.No.21

Rating of the Airtel services

50% 40% 30% 20% 10% 0% Excellent Very Good Good Average Poor Category Percentage

SMS Source: Field Investigation

MMS

GPRS

RM/VM

Inference: The respondents found the SMS services was excellent i.e. 42%, RM/VM was found good i.e. 39% and MMS and GPRS to be average which were 25% and 31% respectively.

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Table.No.22
Classification of the data based on rating of the AIRTEL overall services:

No. of Respondents Category Excellent Very Good Good Average Poor Total Prepaid 14 16 20 4 1 55 Postpaid 12 19 9 5 0 45 Total 26 35 29 9 1 100 Percentage 26% 35% 29% 9% 1% 100%

Source: Field Investigation

Graph.No.22

Rating of the AIRTEL overall services.

25 20 15 10 5 0

50% 40% 30% 20% 10% 0% Excellent Very Good Good Category
Prepaid Postpaid Percentage

No. of respondents

Average

Poor

Source: Field Investigation Inference: Overall the service is considered to be very good by the respondents both the prepaid and postpaid Airtel service user.(i.e. 35% of the respondent).

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Percentage

Table.No.23
Classification of the data based on the activation/cancellation of offers/services like roaming STD/ISD etc taking place within the time committed:

No. of Respondents Category Yes No Total Prepaid 35 20 55 Postpaid 26 19 45 Total 61 39 100 Percentage 61% 39% 100%

Source: Field Investigation

Graph.No.23

Activation/Cancellation of services
No. of Resoondent 40 30 20 10 0 Yes Prepaid Category Postpaid No Percentage 80% 60% 40% 20% 0% Percentage

Source: Field Investigation Inference: 61% of the respondents found the activation/cancellation of offers/ services like roaming STD/ISD etc takes place within the time committed to them.

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Table.No.24
Classification of the data based on the plan changes taking place within the time committed:

No. of Respondents Category Yes No Total Prepaid 35 20 55 Postpaid 28 17 45 Total 63 37 100 Percentage 63% 37% 100%

Source: Field Investigation

Graph.No.24

Plan changes taking place within the time committed

40 30 20 10 0 Yes Prepaid Category Postpaid No No. of Respondents

80% 60% 40% 20% 0% Percentage

Percentage

Source: Field Investigation Inference: 63% of the respondents found that the plan change takes place within the time committed.

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Table.No.25
Classification of the data based on rating the time taken for service restoration in case of barring/suspension:

No. of Respondents Category Excellent Very Good Good Average Poor Total Prepaid 13 10 15 12 5 55 Postpaid 9 5 20 5 6 45 Total 22 15 35 17 11 100 Percentage 22% 15% 35% 17% 11% 100%

Source: Field Investigation

Graph.No.25

Rating of the time taken to restore services in case of barring/suspension.

25 20 15 10 5 0 40% 30% 20% 10% 0%
Excellent Very Good Good Average Category Poor
No.of Respondent s

Prepaid

Postpaid

Percentage

Source: Field Investigation Inference: 35% of the respondents rated the time taken for service restoration case of barring/suspension to be good of which 15 respondents were pre-paid and 20 respondents were post-paid service users.

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Percentag e

Table.No.26
Classification of the data based on preference between prepaid and postpaid cellular service of AIRTEL.

Category Pre paid Post paid Total

No. of Respondents 55 45 100

Percentage 55% 45% 100%

Source: Field Investigation

Graph.No.26

Preference between Prepaid and Postpaid 45%

Pre paid Post paid

55%

Source: Field Investigation Inference: 55% of the respondents preferred prepaid cellular service to postpaid. Most of the customer in the youth segment prefer prepaid, as they can switch over to different rate plans easily.

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PART C
CONCLUSIONS AND RECOMMENDATIONS

CHAPTER-6
SUMMARY OF CONCLUSIONS AND A SCHEME OF RECOMMENDATIONS

6.1 Conclusions from the study.

The respondents using Airtel services are more in the age group of 22-27 (from the survey conducted on 100 respondent of the youth segment), they prefer prepaid for the ease of use and to limit their bills. Most of the customers found the call quality and network coverage to be good. 44% of the respondents encounter the problem of calls dropping. Both the prepaid and postpaid customers found the customer care executives customer friendly. The postpaid customers are not many in the youth segment because they prefer to keep switching to different schemes and prefer to enjoy the value added services. The customer does not complaint, thinking that doing so is of no use. But our personal enquiry has shown that those customers who have lodged/raised complaints/queries got instant response. The communication system of using SMS/calls to remind the customer about their due date for the validity of their account is found to be very useful; the company also update the customers regarding new plans /schemes through SMS/Calls. The overall rating of Airtel service is found to be very good. Their wide network coverage is an added advantage to the company. Many subscribers shift to another vendor due to brand image. Beyond the brand image, higher churn is generally attributed to the numerous tariff options available to customers. A customer may also churn due to billing disputes with a particular vendor billing fraud also comes into play. The tariff plans is the quality of customer service that prompts a customer to churn or remain loyal. In the current market scenario there is hardly any difference in offerings, prices and quality of service offered by different operators. Virulent competition has ensured that there is not much difference between the tariffs plans offered by different vendors. This is where customer service and value-added services come into play. If an operator does not anticipate market needs or does not provide value-added services offered by the competitor, then the customer is likely to churn. Other than this, some of the key factors that encourage churn are inadequate network coverage, which includes dropped calls that occur in places where network coverage is thin and blocked calls that occur when the demand for network services exceeds capacity.

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The churn problem is more prevalent in the prepaid segment, which today accounts for the vast majority of Indian cellular users. The prepaid customer is more price-sensitive than the post-paid one. With rentals as low as Rs 300, customers with low usage prefer prepaid cards. Also, students and those who like to experiment with different networks prefer the prepaid offering.

6.2 A SCHEME OF RECOMMENDATIONS: MICRO-LEVEL RECOMMENDATIONS:

 Reach out to the customers with special offers, or as can be called, high touch opportunities.  Membership cards and programs that entitle the customers to special offers,  Welcome, acknowledgement, sales recognition, and thank you statements. discounts, or preferential treatment.

 Periodical survey pertaining to after sales satisfaction and complaint/inquiries. CRM package is not a substitute for either dedicated teams or customer satisfaction  Event oriented communications in which the customers are genuinely interested.  Enhanced and empowered customer, after sales, and technical support  Integrated Customer Relationship Management (ICRM) is the latest marketing strategies that have to be developed to meet the challenges raised from the daily marketing consulting services. CRM is not just a software package, it is a doing business powerfully. More specifically, it is a state of mind. It delivers, only when it  company should effectively use the software package to track customer needs. The A customer needs survey should be undertaken to reinforce the software package. Such a survey will bring to light several opportunities not only for customer  Effective implementation of customer databases, with which the company will be able to re-establish contact with customers, and will be able to work successfully towards increasing customer retention, repeat sales, and customer referrals. When the company develops a CRM package, care should be taken to see that such a Page 78 retention but also business expansion. is rooted strongly in the companys culture. surveys.

CRM package captures the insights on the customer that the company could leverage to improve its service quality, mere generating huge units of customer data  Customer retention through database marketing programs like usage- and destination patterns is not enough.

 commitment to quality in all aspects of the customer service. A customers.

 Implement SASs churn management system to reduce churn and retain valuable  Treat each customer differently as per needs. Since the customer needs keep on  The customer attributes typically considered in a churn analysis can be broadly categorized into customer demographics, contractual data, technical quality data,  in place relationship teams to look after corporate and platinum customers. Put customer stickiness. billing and usage data and events-type data. changing, the product offerings have to be regularly changed too.

 The company must introduce a plethora of value-added services to increase  Devise more attractive incentives, tariff bundles, loyalty schemes and proactive customer service along with acquisition strategies to attract the right type of  Since the company has relatively a large base of customers and is operating in a high- volume scenario, the key to survival in terms of customer retention is standardization of services through computers. At the same time, the key to competitive advantage is differentiation. This is where the customization of service  customer service department can be streamlined with performance rating of the The staff on the basis of such parameters as: 9 Responsiveness (Is the staff quick to attend to the customers). 9 Reliability (Does the staff do it right the first time). comes in. customer, thus reducing fraud and bad debt.

9 Assurance (Does the staff inspire trust, comfort and confidence). 9 Empathy (Does the staff come across as caring about the customers).

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 complaints handling process needs: The 9 quickly: If the complaint is made during service delivery, time is of the Act essences to achieve a full recovery. When complaints are made after the fact, many companies have established policies of responding within 24 hours or sooner. Even when full resolution is likely to take longer, fast 9 Admit mistakes, but do not be defensive: Acting defensively may suggest that the organization has something to hide or is reluctant to fully explore 9 Show that you understand the problem from each customers point of view: Seeing situations through the customers eye s is the only way to understand what they think has gone wrong and why they are upset. Service personnel 9 Dont argue with customers: The goal should be to gather facts to reach a mutually acceptable solution, not to win a debate or prove that the customer 9 Acknowledge the customers feelings, either tacitly or explicitly (for example, I can understand why you are u pset). This action helps to build 9 Give customers the benefit of the doubt: Not all customers are truthful, and not all complaints are justified. But customers should be treated as though they have a valid complaint until clear evidence to the contrary emerges. It is a good idea to check records to see whether there is a past history of 9 Clarify the steps needed to solve the complaint: When instant solutions are not possible, telling customers how the organization plans to proceed shows that corrective action is being taken. It also sets expectations about the time 9 Keep customers informed of progress: Nobody likes being left in the dark. Uncertainty breeds anxiety and stress. People tend to be more accepting of disruptions if they know what is going on and receive periodic progress reports. Page 80 involved. So firms should be careful not to over promise! dubious complaints by the same customer. rapport, the first step in rebuilding a bruised relationship. is an idiot. Arguing gets in the way of listening and seldom diffuses anger. should avoid jumping to conclusions with their own interpretations. the situation. acknowledgment remains very important.

9 Consider compensation: When customers do not receive the service outcomes they have paid for or have suffered serious inconvenience and/or loss of time and money because the service failed, either a monetary payment or an offer of equivalent service in kind is appropriate. This type of recovery strategy may also reduce the risk of legal action by an angry customer. Service guarantees often lay out in advance what such compensation will be, and the firm should ensure that all guarantees are 9 Persevere to regain customer goodwill: When customers have been disappointed, one of the biggest challenges is to restore their confidence and preserve the relationship in the future. Perseverance may be required to defuse customers anger and to convince them that actions are being taken to avoid a recurrence of the problem. Truly exceptional recovery efforts can be extremely effective in building loyalty and referrals.  is also imperative for the company to take a comprehensive view of the retention It strategies of its leading competitors so that some of these strategies can be  company has two options in the matter of customer retention: The 9 The company can work to retain all of its customers. companys growth vision. The company can trade-off between these two options with the help of rate of attrition of customers  should be reiterated that customer retention is not enough; it should be augmented It with customer loyalty programs that reward the customer for their loyalty. This will enable the company to retain customer even during a price war. Today customers expect rewards for their loyalty when choosing a loyalty program, the company needs to take into account the different types of motivators like reward, philanthropy and customer intimacy and match them to the target customers. There Page 81 benchmarked for the benefits of the company. met.

9 The company can focus only on those customers who fits with the

are many options for inventing loyalty; the company can offer discounts, provide points redeemable for free stuff, offer improved services or priority treatment. As the company looks at its loyalty program, it can determine which rewards appeal most to its customers and then match the reward to their desires.  The company should take a fresh look at all those business processes that have a bearing on its basic business objective of providing quality offering to its customer  While it is imperative to ensure friendly, unified interaction with the customer at the front end, the real diffentiator is the attitude of the company towards the customer. The company could well have service quality levels of 99%, the customer may have only a clinical perception of its efficiency. This happens when the productivity parameter at the individual level are not synchronize with the business needs of the company. If the intangible warmth is missing there is every likelihood that the  Since there is very little difference among the services provided by mobile phone firms, it is imperative for the company to offer unique value proposition to the customers. In our view, this UVP is an effective differentiator. The company can forge this UVP with the help of the following dimensions of service mindedness: 9 Empathetic customer orientation: Ability to understand the customers needs and require from their perspective and realistically applicable whether or not 9 Commitment to excellence: Commitment of meeting the customers goals 9 Responsiveness: Taking responsibility for creating delightful experience for 9 Reliability and trustworthiness: Ability to generate and win confidence of 9 Creative problem solving: Ability to come up with innovative solutions to 9 Timeliness: Ability to accomplish things within the time constraints and deadlines. Page 82 customer problems. customers. the customers. within the given resources. something is do-able. customer will switch at the earliest opportunity. at the lowest cost and in the least amount of time.

9 Tolerance for pressure: Ability to maintain control and poise in the fame of 9 Service recovery mindset: Ability to undo the bad service experience of a customer by taking the corrective action there and then itself. adversity and pressures.

MACRO-LEVEL RECOMMENDATION:

 personality of Airtel company is reflected in its positioning. The company may reThe position its service product (as necessitated by the market- forces); in such an event, we recommend that the companys repositioning strategy be based on the brand identity prism. A typical adaptable BIP is given below:

EXTERNALIZATION
LIBERATION REFLECTION RELATIONSHIP

PICTURE OF THE CUSTOMER

PHYSIQUE

PICTURE OF THE COMPANY

SELF-IMAGE

CULTURE

PERSONALITY

INDIVIDUALISM SELF-INDULGENCE

INTERNALIZATION

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 The company should base its current customer-driven philosophy on the Concept of Customer Intimacy. Which tells us that we should not only sell the service product to the customer but at the same time we should see that it is used in the best way. After all, the customers pay us not for the service but for the solution. In the absence of the application of this concept, customers either do not get what they need or they get what  company is currently in the paradigm of new genre customers, it therefore, should The address the following questions:  the companys customer -centric marketing relatively adequate. Is  it designed to give customer delight? Is  What switching barrier have it created? they do not need.

 the companys CRM program enough to give maximum pay -offs. Is  customers defect from competitors and join the company? Will  What is companys CRM strategies for future customers?

 a corollary to the above, we recommend that the company practise the concept of As Service Heart which is emotion -laden team. What is the anatomy of service heart and what the company can do to attract and keep customers for life? We see the following basic attitudes and actions:  Include me: Inclusion of customers in the marketing program not only to capture the creativity of the customers but their commitment and allegiance rise  Connect me: Service is more than a process of meeting needs. It is an  Teach me: Customers now expect the service provider to educate them and they  Show me the trust: Reliability is important to customers. Reliability is what the  Help me be strong: Customers desire power in their lives. They are attracted to  Delight me: It goes by many handles --- delight, dazzle, and knock the socks off! Services with surprises tugs at the heart strings of most customers. the service provider intent on helping them gain that power. company do to convince the customer, the company can be trusted. expect that service education process to be hassle-free. experience that resonate with the heart. as well.

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 patient with me: Customers do not expect the company to be perfect. They The  generous: The wisdom of generosity lies in its being laced with authenticity. Be Customers will be benefitted greatly from the initiatives of satisfaction, retention and customization.  We also recommend the company to adopt/adapt the Acquisition-RetentionProfitability Model (ARPRO) developed by Reinartz, Thomas and Kumar. The model is given below: do expect the company to care.

Acquisition versus Retention

Customers are highly loyal but also expensive to attract.

Ideal Customers

Retention Potential

Customers are highly loyal but also expensive to attract.

Low Value Customers

Responsive customers but rarely repurchase

Responsiveness to Acquisition Programs

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In the sum, our analysis calls for meticulous planning, analyzing and implementation the superior CRM strategies to retain key customers: Planning involves: Identifying key customers and calculate their life time value. Identifying profit opportunities. Analysis involves: Analyzing the key customer segment and find out its revenue potential. Analyzing the defection rates of customers and the implication of it is in the ultimate revenue. Implementation involves: Developing a right a right kind of image, organizational culture and ethos. In our view, the service company that manages to attract, nurture and preserve the customers love will win, and win big. The guided missile is to create oasis of service excellence in the deserts of service mediocrity.

6.3 Directions for further research.

9 Sample size can be increased to include more customers and reduce chances of 9 The sample segment can be extended to include other segment of customers, to test the retention rate in the industry beyond the youth segment, and add more 9 Further study can cover more areas inside and outside Bangalore Metropolitan Area to exclude the chances of geographical differentiation. parameter to calculate the life time value of customer. error of limitation.

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ANNEXURE

QUESTIONNAIRE
A Study on Customer Retention at AIRTEL
PERSONAL DETAILS: Name: Age: Profession/occupation: Address: NETWORK RELATED 1. How do you rate our networks call quality? Excellent [ ] Very good [ ] Good [ ] 2. How do you rate our network coverage? Excellent [ ] Very good [ ] Good [ ] 3. Do you face concern of call dropping? Yes [ ] No [ ] 4. Are you able to make calls at the first attempt? Yes [ ] No [ ] CUSTOMER CARE HELPLINE 5. Have you call the customer care helpline in the last one month? Yes [ ] No [ ] (If Yes continue, if No go to Q.no-10) 6. Do you find our Interactive voice response system (IVRS) user friendly? Yes [ ] No [ ] 7. Do you find our executives friendly, with a helpful attitude? Yes [ ] No [ ] 8. How do you rate our ability to give information about various rate plans/schemes/offers? Excellent [ ] Very good [ ] Good [ ] Average [ ] Poor [ ] 9. How do you rate our ability to give information about various value added services? Excellent [ ] Very good [ ] Good [ ] Average [ ] Poor [ ] 10. Have you registered a query /complaint in the last one month? Yes [ ] No [ ] ( If Yes continue, if NO go to Q.no-14) 11. How do you rate our ability to listen , understand and resolve your query / concern ? Excellent [ ] Very good [ ] Good [ ] Average [ ] Poor [ ] 12. Were your query /concern satisfactorily answered ? Yes [ ] No [ ] 13. Did you get a follow up call to resolve your query/concern ? Yes [ ] No [ ]

Average [ ] Average [ ]

Poor [ ] Poor [ ]

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COMMUNICATION 14. Is the launch of new rate plans/schemes/offers communicated to you in time ? Yes [ ] No [ ] 15. Is the procedure/mode to upgrade the rate plans/schemes/offers communicated to you ? Yes [ ] No [ ] 16. Do you find our advertisement relevant and easy to understand ? Yes [ ] No [ ] BILLING 17. Do you receive your monthly bills well in advance before the due date ? Yes [ ] No [ ] 18. Do you find the payment reminders through SMS/Calls helpful ? Yes [ ] No [ ] 19. Do you find the bills error free ? Yes [ ] No [ ] VALUE ADDED SERVICES 20. How do you rate our services on the following ? a) SMS b) MMS c) GPRS d) Reach Me / Voice Me Excellent Very good Good Average Poor

21. How do you rate our overall services ? Excellent [ ] Very good [ ] Good [ ]

Average [ ]

Poor [ ]

SYSTEMS 22. Do activations/cancellations of offers/services like roaming, STD, ISD etc takes place within the time committed to you ? Yes [ ] No [ ] 23. Do Rate plan changes take place within the time committed to you ? Yes [ ] No [ ] 24. How do you rate the time taken for service restoration in case of barring/suspension ? Excellent [ ] Very good [ ] Good [ ] Average [ ] Poor [ ] 25. Which cellular service do you prefer ? a) Post-paid [ ] b) Pre-paid [ ] Give reason________________________________ Thank You

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SELECT BIBLIOGRAPHY Online Research

www.google.com www.indiainfoline.com www.airtelworld.com www.businessstansard.com www.expressindia.com

www.bhartiteleventure.com www.dbmarketing.com

Magazines and Journals

Marketing Mastermind Advertising express Services marketing quarterly. Strategic Management. Effective Executive. Marketing White book 03-04

Books
 Strategic Marketing  Customer Relationship Management.

 Marketing Management Philip Kotler

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