Customer service 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 service is not given the attention due to it, by most firms. It has been found that customer service 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 retention 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.
Research Focus: 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 – what are the innovative services the company can provide to its customers in relation to those needed by the customers so that the company can effectively hook the current customers and acquire new customers? Research Objectives: Objective of the study was to understand the importance of Component of Life Time Value of Customer, examine the current customer services strategies being provided by AIRTEL.
Also to identify the fault deficiencies in the existing Customer service Strategies of Airtel. 10 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 well structured questionnaire, which form the primary information collected. The secondary data sources are magazines, management journals and websites. Using the primary data, separate tables have been furnished under specific headings; have been analyzed with the help of descriptive analysis and percentage, and interpreted.
Detailed charts have been 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 existing customers of AIRTEL in Bangalore Metropolitan Area only. Major Research 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. Recommendations: 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 call it, “high touch” 11 opportunities. Membership cards and programs that entitle your customers to special offers, discounts, or preferential treatment.
After sales satisfaction and complaint inquiries and surveys. Event oriented communications in which the customer is 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.
Its importance varies by product, industry and customer. As an example, an expert customer might require less pre-purchase service (i. e. , advice) than a novice. In many cases, customer service is more important if the purchase relates to a “service” as opposed to a “product”. Customer service may be provided by a person (e. g. , sales and service representative), or by automated means called self-service. Examples of self service are Internet sites. Customer service is normally an integral part of a company’s customer value proposition.
Customer service may be employed to generate such competitive advantage as a particular service proposition can be harder to copy for competitors. The implementation of a particular customer service proposition must consider several elements of the organization, including culture hiring training incentives processes Support technology A company may attempt to differentiate itself from its competition through the provision of better customer service. The consistent delivery of superior service requires the careful design and execution of a whole system of activities that includes people, technology, and processes.
Although, the rewards will include improved revenue from customers that are impressed with the service provided 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 pursue. “Attracting and keeping the highest-value customers is the corner stone of a successful 15 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 volumes 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. 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 company’s 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 stablished?
- What changes do 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 responds to opportunities when another does not?
Using Enterprise Miner software and OLAP technologies, Bharti built models that predict the customer propensity to churn and provide information to rive product strategy. Every time a customer calls to complain about network congestion, Anil Nayar knows that he/she’s only a drop call away from switching over to a rival cellular services provider. That’s a big reason why Anil Nayar, President (Mobility), Bharti TeleVentures 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 20 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 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 ompany 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. 21 Bharti did not stop at churner identification. It went a step ahead and used the data warehousing 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 prepaid subscribers. Says Nayar, “Data is a powerful resource, and it is up to you to find business insights in it. ”
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 world’s liberalized telecommunications industry, which is now hitting India too. 22 How bad is the problem of churn, and why is the telecom industry more vulnerable than the other sectors? Source : Customer acquisition and retention has been a concern for all industries, but more so for the highly liberalized 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? SOURCE. Theses Some of the common driving factors for churn are poor performance, poor customer care, rate plans and handset issues. We’ve for instance found that contact centers can drive away customers 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 that’s been noticed is that it’s 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, it’s five times more expensive to acquire a new customer than to retain an existing one. 23 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 wouldn’t be difficult if you have proper operational and analytical CRM tools in place that would help segment and analyses customer behavior 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. In the case of a client such as Sprint, what kind of demands would a company that’s a global leader in the telecom industry have and how would CRM solutions help? Source : Theses 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.
The cash profit from operations of Rs. 2,193 crore grew by 82% over last year. The net profit for the quarter ended March 31, 2007 was Rs. 1,353 crore, a growth of 98% over last year. The revenues & net profit for the full year ended March 31, 2007 was Rs. 18,520 crore and Rs. 4,257 crore, a growth of 59% & 89% respectively, on a year on year basis. Bharti had over 3. 9 crore customers, as on March 31, 2007, an increase in the total customer base of 86%, over the last year and maintained its leadership position through an improved market share of all India wireless subscribers at 22. % as on March 31, 2007, up from 20. 4% last year.
Commenting on the results and performance, Mr. Sunil Bharti Mittal, Chairman & Managing Director, Bharti Airtel Limited, said, “The Indian telecom sector has witnessed an unprecedented growth this year led by the mobile segment. At Bharti Airtel, this has been a year of accelerated growth and market leadership, and we are delighted to be leading the telecom revolution in the country.
The demand for the telecom services across all segments remains buoyant and we believe that this growth momentum can be sustained. We are confident that Bharti Airtel’s professional management team with 25 enhanced empowerment, backed by world-class product offerings is well placed to strengthen our leadership position in the market. ” In line with emerging international practice, the Board of Directors has adopted a rotation policy for statutory and internal auditors for a maximum tenure of five years and rotation of audit partner every three years.
Accordingly, they have recommended the appointment of S R Batliboi and Associates, Chartered Accountants, a member firm of Ernst & Young Global as statutory auditors at the conclusion of the forthcoming annual general meeting on 2 July 2007 and Ernst and Young as auditors for US GAAP for the financial year ending 31 March 2008.
The Board has also proposed to appoint Price Waterhouse, Chartered Accountants as internal auditors after conclusion of their tenure as statutory auditors of the company. 6 Bharti Airtel Limited – Summary of Consolidated Financial Statements – represents Consolidated Statement of Income as per United States Generally Accepted Accounting Principles (USGAAP) (Amount in Rs. Crores, except ratios) Quarter Ended Particulars Mar.
Wide range of voice and broadband plans to offer best in class value to consumers Strategic alliance with HCL to offer Airtel broadband with PCs. Existing Airtel landline customers to get special prices on HCL Laptops and PCs Broadband speeds of upto 2 Mbps coupled with rich content such as music downloads and online gaming Jaipur, April 20, 2007: Airtel Broadband & Telephone Services, India’s largest private broadband and telephone service provider, today completed the first phase of rollout of its network in Jaipur.
The Pink City will now form part of Airtel’s network of broadband and telephone services in 94 cities across the country with over 1. 88 million customers. The Company will offer world-class fixed line and broadband services to customers in Jaipur with a variety of plans to choose from. As an endeavour to further promote broadband penetration in the city, Airtel announced a strategic alliance with HCL – wherein a Airtel broadband connection will be offered with every HCL PC.
Existing Airtel landline customers buying HCL PCs will also be given a special price on the fastest selling models of HCL PCs, starting from Rs. 9,000 for a desktop and Rs. 29,000 for a laptop. Speaking on the occasion, Mr. Manoj Kohli, President & CEO, Bharti Airtel Limited said, “The Government of India has declared 2007 as the year of broadband and it will be our endeavour to increase broadband penetration in the country and bring world-class services to our customers. In line with our strategy of focusing on key markets for growth, we believe that Jaipur is one of the main cities with huge potential for socioeconomic development and Airtel will be a catalyst in facilitating business, educational and cultural exchanges.
Added Mr. Atul Bindal, President, Airtel Broadband & Telephone Services, “At Airtel, our focus is on providing ‘More Value’ to our customers. We believe in providing world-class services that offer a rich broadband and telephony experience to our customers. It is also our endeavour to enable customers to ‘Do More’ with the same telephone connection. We are very happy to introduce these initiatives in Jaipur, which are aimed at driving the PC and broadband penetration further. ” Airtel will offer broadband speeds of upto 2 Mbps to its customers in Jaipur.
The Company also offers its broadband customers a variety of content services such as Games on Demand, music@ease, InTouch and Online Test Preparation packs. Games on Demand in an exciting online gaming service that enables customers to enjoy unlimited access to blockbuster games through the Airtel Broadband Consumer Portal, for just Rs 199 per month. With music@ease Airtel broadband customers can download high quality 28 full digital tracks at affordable prices. InTouch is a Video Postcard service allows customers to send video messages to their loved ones.
Online Test packs from Airtel offer customers online competitive tests for GRE, GMAT, SAT and MBA. 29 Source: www. bhartiairtel. in Sunil Bharti Mittal conferred Degree of Doctor of Science (Honoris Causa) by G. B. Pant University New Delhi, April 21, 2007: The prestigious Govind Ballabh (G. B. ) Pant University of Agriculture & Technology has conferred the Degree of Doctor of Science (Honoris Causa) on Mr. Sunil Bharti Mittal, Chairman & Group CEO, Bharti Enterprises. The honour has been conferred on Mr.
Mittal for his invaluable contribution for the welfare of society and the nation as a whole, in the field of his profession in particular and other areas of public interest in general. The degree was awarded to Mr. Mittal by the Hon’ble Governor of Uttarakhand & Chancellor of G. B. Pant University of Agriculture and Technology H. E. Shri Sudarshan Agarwal on the occasion of 23rd Covocation of the University held today at its campus in Pant Nagar. Also present at the occasion were the Hon’ble Chief Minister of Uttarakhand Maj. Gen.
Receiving the honour Mr. Mittal said, “I am delighted to receive this singular honour from such a renowned institution. The award of this prestigious degree of Doctor of Science is a testimony to the work that I led through Bharti Enterprises towards some key transformational projects, which have served the nation in a very meaningful manner.
I would like to offer my sincere thanks to the University for having considered me for this high honour”. The honour from the G. B. Pant University is yet another recognition of the immense contribution made by Mr. Sunil Bharti Mittal towards the society and the nation. Mr. Mittal was recently conferred the coveted Padma Bhushan Award by the Government of India for his contribution towards the development of a world-class telecom sector in the country further resulting in the economic development of the nation.
The Institution of Electronics and Telecommunication Engineers (IETE) has also conferred its highest honour ‘The Honorary Fellowship’ for 2006 on Mr. Sunil Bharti Mittal for his scientific vision and invaluable contribution to the progress of electronics & telecommunications. The G. B. Pant University of Agriculture and Technology was established in 1960 as a first Agricultural University in the country. The G. B. Pant University is a symbol of successful partnership between India and the United States.
The establishment of this university brought about a major change in agricultural education, research and extension. It paved the way for setting up of other agricultural universities in the country. 30 Source: www. bhartiairtel. in Bharti Airtel reduces its ISD Tariffs • • • • Rates reduced by 11% on International calling Benefit to over 35 million Airtel mobile users across India Calls to USA, Canada, Europe (fixed line), South East Asia, Australia & New Zealand for as low as Rs. 6. 40 per minute ISD calling from mobile has become more economical than Fixed/Landline phones
New Delhi, April 01, 2007: Bharti Airtel, India’s leading telecom services provider today announced the reduction in International Long Distance Tariffs (ISD) for all its mobile customers in India. This is in line with the company’s endeavour to make International calling more affordable and deliver greater value to its growing number of mobile users. With effect from 1st April 2007, Airtel mobile customers can call USA, Canada, Australia and many other countries (details given in table below) for as low Rs 6. 40 per minute – a reduction of 11% from the earlier rates.
With this, Airtel has made ISD calling from mobile more economical than making ISD calls from Fixed/Landline phones. This spell huge benefits for the mobile user as Airtel continues to lead in driving affordability in the Indian telecom market. “India is a global economic powerhouse today with business interests spanning boundaries. We also have a large and growing base of over 22 million Non Resident Indians. I am happy that Airtel is taking a step further to dissolve these boundaries and bring people closer to connect with their business associates, friends and family internationally.
Roam seamlessly with India’s largest mobile network No roaming rental , No roaming surcharge, No security deposit Benefit to over 33. 73 million Airtel mobile users across India New Delhi, February 14th 2007: Reiterating its commitment to driving affordability in the Indian telecom market, Bharti Airtel India’s leading mobile services provider announced a reduction in roaming tariffs that are at par with existing local call tariffs. With effect from February 15, 2007 Airtel mobile users can avail significant lower roaming tariffs.
All local calls while roaming will be charged at Rs 1. 40 per min. , STD calls at Rs 2. 40 per min and incoming calls while roaming will be charged at Rs 1. 75 per minute. These revised tariffs spell huge benefits for the Airtel user as they save close to 55% on local calls and 40% on STD calls. Equally promising are savings on incoming calls while roaming that are around 56%. In addition, the monthly roaming rental of Rs. 49 has been waived off. Mr Sanjay Kapoor, Joint President, Mobile Services, Bharti Airtel Limited, said, “Every Indian travels across the country for work, to meet their social commitments or on vacation.
New Delhi, February 12, 2007: Bharti Airtel has joined hands with The GSM Association to launch a pilot programme that will eventually enable over 25 million Indians abroad to remit money to India through their mobile phones. In this initiative for India, Bharti Airtel and State Bank of India have created an innovative public/private partnership to serve Indians at home and abroad. “We believe that this coming together of the mobile and banking industry is a giant leap in mobile commerce,” added Sunil Bharti Mittal, Chairman & Managing Director, Bharti Enterprises; Board Member of the GSM Association, and the board sponsor of this programme.
It will revolutionise the money transfer industry with its advantages, such as reach, ease of use, and lower transaction costs and provide immense benefits to 25 million of Indians across the world and their families in India. ” India is the biggest recipient of overseas remittances in the world at $25bn, accounting for around 10% of the world market. The remittances market is growing by 20% in India every year. This programme will enable global Indians to easily and securely send remittances to their dependents, many of whom don’t have bank accounts.
Intent is to enable individuals access to the benefits of a full range of financial services regardless of socio economic level or geographical location using the ubiquity and ease of mobile communications. The programme will complement existing local remittances channels and make transferring money internationally significantly more affordable. Mr. O. P. Bhatt, Chairman, State Bank of India, India’s largest bank, added: “We are happy to partner with the GSM Association in this landmark project.
We piloted a project in a small Himalayan village of Pithoragarh in India with Airtel and have seen the tremendous results in this unbanked village. This project has the potential of transforming the lives and economies across the globe” About the GSMA Programme The pilot programe launched by GSM Association is aimed at tapping the ubiquity and ease-of-use of mobile communications to enable the world’s 200 million international migrant workers to easily and securely send remittances to their dependents, many of whom don’t have bank accounts.
By exploiting the extensive reach of the mobile networks, the programme will complement existing local remittances channels and make transferring money internationally significantly more affordable. Spearheaded by a special group of 19 mobile operators with networks in over 100 countries and representing over 600 million customers, the GSMA believes the programme could double the number of recipients of international remittances to more 33 than 1. 5 billion, while helping to quadruple the size of the international remittances market to more than $1 trillion by 2012.
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. % 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.
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.
