Connecting to the “Voice of Customers”
Authors :
Jyoti Singh
Sr. Vice President
& Country Manger
CSMM
Atul Jhamb
Vice President,
Marketing
Bharti Cellular Ltd.
Nimai Swain
Sr. Project Director
CSMM
1. Background
For Bharti Cellular, the battle is at its fiercest, since it started operations in Delhi, in 1995. MTNL,
the government owned telephone giant, has just entered the fray and is wooing the customer with a
low tariff offer. The battlefield has widened further with the Basic Service Operators providing a
tough front with WiLL, the limited mobility option. At the technology front, the latest value
proposition before the customer is convergence of Voice, Data and Internet, through WAP. With
all these rapid changes in the technology and market environment, the techno-savvy customer now
increasingly wants top-notch quality and value for money. In short, he wants service that is better,
faster and cheaper.
AirTel has partnered with CSMM to conduct a Customer Satisfaction Measurement programme
on a regular basis, in order to keep pace with the changing customer needs and implement
improvement priorities based on “Customer Voice”. The programme has been highly actionable
and is aligned to AirTel’s internal quality management practices that finally benefit the customer.
The case focuses on the crucial role Customer Satisfaction Measurement (CSM) plays as a
comprehensive system to drive AirTel’s business strategies and guide overall business goals.
2. Objective of the paper
•
To study the evolution of AirTel as a dominant cellular player over the years, with the rapidly
changing market environment and customer expectations
•
To demonstrate how AirTel has used the “Voice of Customer” for driving its various
business processes – including marketing, operations and services.
•
To show how AirTel has successfully used the CSM system as a Strategic Performance
Measurement Tool for achieving its overall business goals.
3. Methodology
The programme is based on a proprietary Customer Satisfaction Measurement model that
measures customer perceived performance quality of various business processes and identifies
those that impact customer loyalty most.
All businesses, in delivering its products and services to the customer, engage in a series of
processes and administrative functions. The company’s “total offering” then, is really the sum of
the tangible and intangible outputs created by the separate processes of the overall system. The
customer attitudes towards a service provider depend on how they evaluate its key business
processes and products. These attitudes impact Customer Loyalty towards the company and finally
drive loyalty behaviour of buying, recommending and increasing usage. A comprehensive
customer satisfaction measurement model not only captures these essential metrics, but more
importantly, structures the interrelationship of this metrics and identifies the key drivers that
impact customer loyalty.
3.1. Programme Design
•
This measurement programme is designed to be a quarterly process providing ample scope to
capture changing customer expectations in a highly dynamic market environment.
•
The programme covers two segments: Postpaid and Prepaid and sub-segments under each.
The sample design is based on a confidence interval of 95%±5.
•
Quotas for each segment are fixed for various levels of usage and for customers with different
durations of experience with the service.
•
The respondents are selected from the database provided by the client. The appointments are
fixed telephonically and interviews conducted face-to-face.
•
The baseline questionnaire was developed on the basis of depth interviews with the customers
and discussions with AirTel executives. The subsequent tracks were based on the first
questionnaire with minor modifications. Once a year, a fresh qualitative study is undertaken to
reassess the new market conditions and customer needs and expectations and modify the
questionnaire and delieverables accordingly.
4. The Overall Trend
The Early Days
When cellular operations started in India, in 1995, the category fulfilled the ‘esteem’ needs of
subscribers. Mobile communication was not yet a part of the contemporary business culture – it
was perceived more as a status symbol. The early adopters were the corporate users and the highend customers. The service was expensive; there was a price barrier for the lower-end customer
segments. The communication from the cellular companies also harped on the hi-tech, premium
image of the category. This created the expectation of an international class of service.
The Consolidation Phase
Over the next couple of years, the hype around the category abated, though the service continued
to be highly coveted by the have-nots. For the user, however, the focus shifted from satisfying
aspirational desires to the more tangible needs of good service quality and value for money.
Billing
Market Environment
-
Activation
Evolving
category
-
Market
beginning to
open up
-
High price
regime
-
Less
Competitive
Perceived
Value
Customer
Satisfaction
Perceived
Quality
Communication
Customer
Oriented image
Attitudinal
drivers
Network
Image
Network
Service
Customer Care/
Hotline
Experiential
drivers
Determinants of Customer Satisfaction: 1997-98
In early 1997, when the first customer satisfaction findings were reported, they corroborated the
above notion. The novelty of the category was over and the customer demanded Value for Money.
Customer ratings were low on key attitudinal measures like – Quality, Value and Images, as well
as on the experiential process measures, perhaps due to unduly high expectations from the
industry, AirTel was not fully established as a brand, and had a weak “Service” and “Leader”
image. The service level was low and undifferentiated from competition. Customer Loyalty was
strongly driven by the quality of process performance, particularly in the areas of Network
Service and Customer Care.
In spite of low image perceptions and weak service quality, the customers showed positive loyalty
behaviour, with the hope that things would improve. The cellular category was in a booming phase
and this was the time to garner market share by giving that extra bit on service to create a
competitive edge.
Market Environment
-
Prepaid services
launched
- AirTel gained
larger market
share
Communication
Customer
Oriented
Image
Activation
Customer
Satisfaction
Purchase
Experience
- Innovations in
Schemes &
Promotions
Attitudinal
drivers
Leader
Image
- Scheme led
communications
Network
Service
Customer Care/
Hotline
Experiential
drivers
Determinants of Customer Satisfaction: 1999
AirTel took large initiatives based on the recommendations of the CSM programme. AirTel
invested in network expansion and customer care. The results of these actions showed up in the
CSM programme of 1999. There was significant improvement on the overall perceptions of
customers. The scores on Process parameters also jumped up. This also drove business success
with a 10% market share lead over competition.
This was a period when the category needed volume to sustain itself. Both the players came out
with a number of new schemes to attract new customers. All communication was scheme led and
highlighted the attractiveness of the scheme and its features. There was increased competitive
activity between the two players in bringing out innovative and attractive schemes.
Post Regulatory Period
In the mean time, the New Telecom Policy (NTP) 99 inducted major regulations on pricing of
cellular services. The maximum rental and airtime rates were slashed considerably. This gave an
immediate boost to the category. AirTel acquired 50,000 new subscribers within a period of 3
months.
Network Service
Market Environment
-Price regulations by
New Telecom policy
‘99
-Customer boom
-Market more
competitive
Customer
Oriented
Image
Sales
Experience
Activation
Customer
Satisfaction
Leader
Image
Customer Care
Attitudinal
drivers
Experiential
drivers
Determinants of Customer Satisfaction: 2000
The areas that were immediately affected by this sudden spurt in customer base were Network
and Customer Care. The network was congested with more number of calls. The network being
jammed up, the logical outcome was the stress on Customer Care department. The call centre was
loaded with customer queries to sort out their connectivity problems and also new subscriber
queries on various issues.
Despite active dissatisfaction on certain process areas, the rating on Overall Quality was retained
at the previous year level. This only meant that customer’s overall perception of quality is a more
stable variable than the ‘experiential’ moments of truth, but a prolonged poor experience would
potentially destroy the accumulated equity.
Beginning of a new era – License Raj to Free Market Regime
In early 2001, the market was open for more number of players as per the government’s new
licensing policy. MTNL entered the market as the third cellular operator with its Dolphin brand. It
started a price war, forcing the other players to follow. Despite ‘suspect quality’, it lured the
subscribers with a possible “incoming free” offer, hence, making them ‘Wait and Watch’. At a
time when the market was stabilizing, the recent changes have resulted in a shift in the market
dynamics and customer expectations.
Market Environment
Network
- Entry of MTNL
- Price war started
by MTNL and
others follow suit
- Low end market
open up
Perceived
Value
Customer
Oriented
Purchase Image
Activation
Customer
Satisfaction
Network
Image
Experience
Perceived
Quality
Customer Care/
Hotline
Attitudinal
drivers
Experiential
drivers
Determinants of Customer Satisfaction: 2001
It was now a Value seeking market, which not only asked for excellent service quality but also at a
competitive price. Customers welcomed the price relief and a large number of new customers
went cellular. But AirTel had a few hiccups with its Network and Billing Services while catering
to a three-lakh subscriber base. While the customer was happy to get the price benefits, he did not
want to trade off service quality in these areas.
AirTel, as the market leader has a stiffer challenge today - to deliver a uniformly superlative
service level and at the same time match the price benefits offered by competition.
By frequently tracking Customer Satisfaction AirTel has managed to stay abreast of changing
customer expectations and mounded their service strategy and delivery to sustain a competitive
advantage.
5. How AirTel uses the information
As a strategic business tool, AirTel uses CSM information in more ways than one.
Strategic
planning
Process
Improvements
Employee
Motivation
Customer
Loyalty
Information
Balanced
Scorecard
Training and
Development
5.1. Marketing Strategy
The CSM programme played a pivotal role in supporting many strategic decisions in the company
that had a bearing on the customer. Some of these are given below.
5.1.1.
Market Segmentation
‘Caring Touch’ for the heavy user
The results across several tracks showed that the Heavy user segment gave a lower rating as
compared to other segments. They were more discerning and had higher levels of expectations and
were craving for that ‘extra touch’ which they felt they deserved because of their higher usage.
The light users were relatively more satisfied but were also more price-sensitive. The findings
reinforced the need for a differentiated service plan for the high-end customers. AirTel had already
started a different service plan called ‘Care Touch’ for the heavy users. The findings reinforced
the need for such a plan.
Heavy vs. Light Users
Satisfied %
30
10
Sales
Activation
Network
Customer Care
Heavy Users
Billing
Communication
Light Users
The differentiated services included - Reward programme, special hotline number for easy access
and problem solving, bill pick-up facility, special schemes like offering WAP enabled handsets on
easy installments, information updates and special gifts and gift vouchers etc.
Prepaid Segment – providing the ‘magic’ formula
In end 1998, AirTel launched ‘Magic’, its prepaid services targeted at the young, light user, who
wanted a hassle free connection with a low entry and exit barrier. AirTel tracked customer
satisfaction separately for the prepaid segment . The prepaid service offered on features like ‘no
rentals’, ‘instant activation’, and ‘convenience’.
The study showed that the prepaid customers were more sensitive to price than the postpaid
customers. They expected an efficient network and responsive customer care like their postpaid
counterparts. But additionally they expected the recharging process to be fast and simple. This
segment had lower expectations than the postpaid users, was easier to satisfy, but was less
predictable vis-à-vis loyalty behaviour. The only way to hold them was by immensely simplifying
the usage and recharging process and equally making the product easily available. At the same
time, it was necessary to create a strong brand association through communications campaign. The
CSM findings were in sink with AirTel’s strategy of positioning Magic as a ‘hassle-free, no-rental,
ready to use’ service, targeted at the young, light-user and price sensitive segment.
In the CSM tracks, ‘Value for Money’ scores were consistently low for light users in the postpaid
category even if they were relatively more satisfied on service parameters. This explained a higher
level of churn in this segment. AirTel came out with a policy of easily converting existing low
postpaid users to ‘Magic’, a successful example of customer migration.
5.1.2.
Advertising and Communication
One key finding from the programme was that customer loyalty was largely driven by image
perceptions. ‘Customer Oriented’ or the service image was consistently dominant as a driver of
customer loyalty. AirTel used this information to fine-tune its advertising and communication
strategy. Communication at a personal level was enhanced through newsletters, information
updates and through SMS. The communications rather than being just scheme-led highlighted the
‘Relationship’ aspect to the customers. The new campaigns “Touch tomorrow” and “Good life”
repositioned AirTel as a company that offered communications technology of the future with care
towards the customers.
5.2. Process Improvement
AirTel records, tracks and monitors its internal metrics, across various operations and functions
and has set up stringent Conformance Standards within the organisation as a part of its Quality
Management initiatives. But unless these metrics are formally tied or aligned with customer
perceptions, it becomes a ‘inwardly focused’ exercise that does not necessarily meet customer
expectations. AirTel has regularly aligned its Conformance norms with Performance measures as
provided by the CSM programme.
Conformance
Quality
Company
Specifications
Internal Focus
Performance
Quality
Customer
Expectations
External Focus
AirTel believes that the internal quality improvement would defeat its own purpose if it were not
linked to customer perceptions. AirTel has linked, co-interpreted and co-managed the internal
metrics and customer measurement information through a common deployment process. The
various actions taken for different processes based on the CSM recommendations are described
below.
5.2.1.
Activation Process
Findings
- Activation time for a cellular connection varied and was a key area of customer
dissatisfaction. With technical up-gradation and process improvements it was brought down
to less than 10 minutes. But the survey results showed that on an average the activation time
took two days.
- Also it was observed that activation time around one day led to customer delight and beyond
48 hours customer ratings declined sharply.
- It was found out that the delay was primarily caused due to late submission of customer
application forms by channel partners, who waited till a minimum number of sales were
made.
6
4.6
4
2.1
2
1.1
1.7
1.1
1.6
1.2
1.1
1.1
1
0
Poor
Fair
Actual time taken
Good
Very Good
Excellent
Acceptable time taken
Actions taken
The cycle time was considerably reduced by incentivising or penalising dealers for early or late
delivery of forms. The recent tracks show considerable improvement on activation rating by the
new subscribers and from a key improvement priority this area is now a competitive strength.
5.2.2.
Network
Finding
−
Network service, in the cellular category, is synonymous with Quality of Service. Customer’s
overall perceptions are highly synchronous with his network experience. “Extent of
geographic coverage” - this particular attribute was a key driver and rated low in all the three
main programmes. The problem was perceived to be two-fold:
•
The customers actually faced problems of connectivity at certain geographic locations.
•
The customers only perceived that AirTel’s coverage was poor. In fact the competition
had aggressively campaigned in the past about the number of cell sites it had. It was also
recommended to communicate the network strength to reinforce positive perceptions of
the customers
Actions taken
−
Increase of cell sites, use of modern testing equipments
−
Strengthening customer perceptions on network coverage through communication
5.2.3.
Customer Care / hotline
Finding
- Average number of calls per customer per month was on a rise
-
Call abandoned rates were higher. Even Average Tolerance Time of customer before
abandoning the call had increased from 30 seconds to 1 minute. It only suggested that the
customer had a growing need to solve his problems through customer care and non-fulfillment
would leave him actively dissatisfied.
-
“Ease of getting through / Length of time kept on hold to reach operator”- These two
problems were aggravated by the network congestion, as most of the customer queries were
about network related problems. But there were large number of queries on billing, debarring
due to non-payment, information about schemes and also on basic help on how to use, etc.
-
The customer care scores were relatively higher for Prepaid customers followed by the low to
medium users in post-paid segment and lowest for the high end users.
Actions taken
- Introduction of IVR (Interactive Voice Response) system. This would scan the queries to the
call centre and route only the more complex problems to the executives
-
Providing different service channels to different segments of customers. Prepaid call centre
service was outsourced to increase focus on postpaid segment.
-
The high end users were serviced through a special customer care number. The call bypassed
the IVR and directly connected the customer to a highly trained and experienced customer
care executive.
Usage of Ordinary Customer Care Line Vs. Special Line – (CSM Mar ’01)
40
Dissatisfied %
20
0
Sales
Activation
Ordinary Line
Network
Customer Care
Billing
Communication
Special line
Interestingly, majority of the high-end customers were not aware of the special customer care line
and continued to use the ordinary hotline number. The rating given on Customer Care and Billing
for the customers who called the special number was significantly higher than customers who
used the normal line. It was evident that the special service rendered made the difference in
perception. A decision was taken to popularise the special number among high-end customers.
5.3. Employee Motivation Tool
Linking to employee incentives
Whenever there is a transaction between customers and a service provider, it is intuitive that the
customer experiences will be influenced by the quality of output of the employees, directly or
indirectly involved in the service chain. It is also intuitive that the way employees have been
treated by the company will affect the way they represent the company and treat the customers.
Thus there exists a ‘virtuous cycle’ between employees and customers. AirTel uses the CSM
process effectively as a motivational tool by linking the Customer Satisfaction Indices to
employee incentives. At present the incentives are broken up into two parts:
1) At a Company Level: the percentage change in Customer Satisfaction index is a determinant
of the bonus for all employees. This is aimed at sensitising all employees to customer
satisfaction and creating a service culture.
2) At a Functional Level: the percentage change in the scores of customer impinging processes
would proportionately determine the incentives for the employees responsible for the process.
This is aimed at creating ownership at a functional level.
This is a bold step on the part of AirTel and is in the right direction of creating a customer driven
culture.
Deriving training inputs
Each of the CSM measures at the process level can be attributed to the employees who provide a
‘face’ to the transaction on behalf of the organsiation. For example, customer feedback on
customer care can be directly attributed to the call centre executives. The improvement areas for
Customer Care processes viz., knowledge & competence, courtesy and politeness, willingness to
listen, ability to solve problems etc. then become inputs for the training and development of call
centre executives.
5.4. Vital piece in the Balanced Scorecard
Customer measurement is increasingly seen as providing a vital piece of executive measurement
systems (i.e., balanced scorecard information). It is proven that companies that focus on customers
and employees have greater increases in revenue, work force, stock price and net income.
Financial Metrics
Revenue
Profit
Shareholder Value
Stakeholder Metrics
Customer Loyalty
Employee Commitment
Brand Equity
Market Share
AirTel uses the Balanced Scorecard approach as an overall strategic management framework,
wherein Customer Satisfaction Measurement is an important part.
6. Conclusions
AirTel has successfully used its CSM programme in driving its overall business objectives. Apart
from serving as a barometer of customer satisfaction, the CSM system has been integrated with its
operational fabric and the company has immensely benefited in the areas of:
• Strategic planning
• Allocation of resources
• Alignment of internal quality initiatives and enhancement of continuous improvement
• Advertising and communication strategy
• Linkage with employee satisfaction
• Linking the employee KRA’s and performance incentives to Customer Satisfaction
These are positive steps towards getting closer to the customer. In a highly dynamic and
competitive industry, where only the fittest will survive, the future is bright for the company
whose overriding business mantra is to listen to the “Voice of Customer”.