renato civili mba master thesis - crm, customer satisfaction and loyalty in albanian...

CUSTOMER RELATIONSHIP MANAGEMENT

CRM, Customer Satisfaction and Loyalty in the Telecommunications Industry in Albania.

By: Renato Civili, MSc

CRM, CUSTOMER SATISFACTION AND LOYALTY IN THE

TELECOMMUNICATION INDUSTRY IN ALBANIA

By

Renato Civili

Thesis Advisor : Eldi Metushi, Ph.D

A THESIS

Submitted to

SHLUP “Instituti Kanadez i Teknologjisë”

CANADIAN INSTITUTE OF TECHNOLOGY

Faculty of Economy

Department of Business Administration

In partial fulfillment of the requirements for the degree of: Master of Science in

Business Administration

Submitted on July 15, 2016.

1 CRM, Customer Satisfaction and Loyalty in the Telecommunications Industry in Albania

Master of Science in Business Administration, Profile in MBA International Business

Management.

Submitted on July 15, 2016.

Approved:

_________________________________________ Ph.D. Eldi Metushi

_________________________________________ Ph.D. Arjan Kadareja (Head of

Department of Business Administration)

I understand that my thesis will become part of the collection of Canadian Institute of

Technology. My signature below authorizes release of my thesis to any reader upon request. I

also affirm that the work represented in this thesis is my own work.

Renato Civili,


The Learning Relationship works like this: “If you’re my customer and I get you to talk to

me, and I remember what you tell me, then I get smarter and smarter about you. I know

something about you my competitors don’t know. So I can do things for you my competitors

can’t do, because they don’t know you as well as I do. Before long, you can get something from

me you can’t get anywhere else, for any price. At the very least, you’d have to start all over

somewhere else, but starting over is more costly than staying with me”.

- Don Peppers. Managing Customer Relationships. A Strategic Framework, 2004.

“We have only two sources of competitive advantage:

1. The ability to learn more about our customers faster than the competition.

2. The ability to turn that learning into action faster than the competition”.

- Jack Welch, former CEO, General Electric


Table of Contents

CHAPTER 1. INTRODUCTION ............................................................................................................ 7

1.1 Research Background ....................................................................................................................... 7

1.2 Problem Discussion ........................................................................................................................... 7

1.3 Purpose of Study ............................................................................................................................... 8

1.4 Research Questions ........................................................................................................................... 9

CHAPTER 2. LITERATURE REVIEW .............................................................................................. 10

2.1 What Is Customer Relationship Management ................................................................................. 10

2.2 Importance of Customer Relationship Management (CRM) .......................................................... 11

2.3 CRM as a Business Strategy ........................................................................................................... 12

2.4 CRM Benefits ................................................................................................................................. 12

2.5. Customer Relationship Management (CRM) and Marketing ........................................................ 13

2.6 Relationship Marketing ................................................................................................................... 13

2.7 CRM as the Core of Relationship Marketing .................................................................................. 14

2.8 Customer Satisfaction ..................................................................................................................... 14

2.9 Internal Satisfaction ........................................................................................................................ 14

2.10 Measuring Customer Satisfaction and Loyalty ............................................................................. 15

2.11 CRM in Albania ............................................................................................................................ 17

CHAPTER 3. METHODOLOGY ......................................................................................................... 19

3.1 Research Purpose ............................................................................................................................ 19

3.2 Research Approach ......................................................................................................................... 19

3.3 Data Collection Method .................................................................................................................. 20

3.4 Data Analysis .................................................................................................................................. 20

3.5 Validity and Reliability ................................................................................................................... 20

CHAPTER 4. DATA ANALYSIS .......................................................................................................... 22

4.1 Telecommunication Industry Background ...................................................................................... 22

4.2 Market Share Analysis .................................................................................................................... 22

4.2.1 Vodafone Albania .................................................................................................................... 24

4.2.2 Telekom Albania ...................................................................................................................... 24

4.2.3 Eagle Mobile ............................................................................................................................ 25

4.2.4 PLUS Communication ............................................................................................................. 25

4.3 The value added of CRM on these companies ................................................................................ 25

4.4 CRM Performance Measurement .................................................................................................... 27

4.5 The Results of Data Analysis .......................................................................................................... 27

CHAPTER 5. CASE STUDY - Vodafone Albania ............................................................................... 39

5.1 CRM Performance Measurements .................................................................................................. 39

5.2 CRM Business Strategy Analysis ................................................................................................... 39


5.3 Vodafone Strategy - Delivering Great Customer Experience ......................................................... 40

CHAPTER 6. CUSTOMER BEHAVIOR ANALYSIS ....................................................................... 44

6.1 Introduction of the survey ............................................................................................................... 44

6.2 Objectives of the Survey ................................................................................................................. 45

6.3 Methodology ................................................................................................................................... 46

6.3.1 Context and setting of the study ............................................................................................... 46

6.3.2 Respondent profile ................................................................................................................... 47

6.3.3 Data collection instruments ...................................................................................................... 47

6.4 Findings of the Survey .................................................................................................................... 48

6.4.1 Secondary findings ................................................................................................................... 50

6.5 Implications of the results ............................................................................................................... 51

6.6 Conclusions ..................................................................................................................................... 51

CHAPTER 7. CONCLUSIONS AND RECOMMENDATIONS ....................................................... 53

7.1 The results of the research .............................................................................................................. 53

7.2 Recommendations ........................................................................................................................... 56

7.3 Implications for Future Research .................................................................................................... 56

REFERENCES ........................................................................................................................................ 58

Appendix I ............................................................................................................................................ 61

Appendix II ........................................................................................................................................... 65


List of Figures:

• Figure 1. “ The CRM process model (Roberts 2003) …………………….…………10

• Figure 2.“The relationship between Internal Satisfaction and Customer Satisfaction.

(Long and Khalafinezhad, 2012)………………………………………………….....14

• Figure 3. Net Promoter Score (Reichheld 2011)………………………………….....15

• Figure 4. Market Share (Akep Statistics 2016)…………………………………..….22

• Figure 5. "CRM Performance Measurement"…………………………………….…36

• Figure 6. Net Promoter Score of Vodafone (The Image inside Stores)…………......40

• Figure 7. The Image of Survey on Customer Behaviour Analysis………….…….....43

• Figure 8. The Reasons Why Customers are Leaving………………………………...47

List of Tables:

• Table 1. Market Share Analysis (Akep Statistics) ……………………………………23

• Table 2. Pie Chart of Market Share (Akep Statistics 2016)…………………………..24

• Table 3. CRM Initiation Stage………………………………………………………...28

• Table 4. CRM Acquisition Stage ……………………………………………………..29

• Table 5. CRM Regain Stage…………………………………………………………..30

• Table 6. CRM Maintenance…………………………………………………………...31

• Table 7. CRM Up-Selling & Cross-Selling…………………………………………...32

• Table 8. CRM Retain Stage…………………………………………………………...33

• Table 9. CRM Referrals Stage…..…………………………………………………….34

• Table 10. CRM Termination Stage……………………………………………………35

• Table 11. CRM Exit Stage…………………………………………………………….35

• Table 12. Customer Behavior Analysis……………………………………………….46

• Table 13. Age Group Pie Chart………………………………………………………..46

• Table 14. Customer Satisfaction Analysis…………………………………………….46

• Table 15. Customer loyalty Analysis………………………………………………….49

• Table 16. Promoter VS Detractors Analysis…………………………………………..49


Abstract

Telecommunication industry has become one of the fastest growing sectors in the economy of

Albania. Companies are competing to increase their market share, implementing innovative

technologies and developing new resources and capabilities to attract and keep customers with

customer relationship management (CRM) strategies.

The purpose of this thesis is to study the CRM performance, the effective strategies and

approaches that Albanian telecommunication companies are executing as well as to analyze

their effect on customer satisfaction and loyalty. It is interesting to see how the

telecommunication companies operate in Albania in terms of CRM and if there are differences

among the same industry. In addition, we chose the telecommunication companies because it is

interesting to analyze their performance in terms of CRM due also to the fact that their main

outcome is related to the management of customer relationship and the quality of the service

they offer to customers.

To reach this purpose, the thesis starts with research questions based on the topic and literature

review focused on business strategy analysis, performance measurements of CRM, and the

relationship between customer satisfaction, loyalty and recommendation. Using the theoretical

framework, a structured interview is chosen to collect data information about

telecommunication companies such as Vodafone Albania, Telekom Albania, Eagle Mobile and

Plus Communication. These companies were studied through case analysis and compared with

each other and to the theory. The purpose is to see how these companies perform in terms of

CRM and if there are differences in their CRM strategies that could shape their business

performances. A survey on customer behavior is analyzed and a case study is conducted on

Vodafone Albania, as the leading company in the telecommunications industry, related to

measuring the impact of their CRM strategies and effectiveness on their business performance,

customer satisfaction and loyalty.

Keywords: CRM in Albania, Customer Satisfaction, Customer Loyalty, Business Strategy,

Customer Experience, Telecommunication Industry


CHAPTER 1. INTRODUCTION

1.1 Research Background

The last two decades, telecommunication industry has become one of the fastest growing

sectors in the economy of Albania. This industry is also characterized by fierce competition

among four telecom mobile operators including: Vodafone, TELEKOM, Eagle Mobile and

PLUS Communication. During these years, these companies are competing to increase their

market share, executing innovative technologies, developing new resources and capabilities to

attract and keep customers with customer relationship management strategies.

Despite their competition, these companies have realized that for attaining success in such a

competitive environment they have to focus on maintaining positive relationships with

customers by implementing effective strategies which lead to customer satisfaction, customer

retention and loyalty.

The goal of CRM in telecommunication sector is to provide a comprehensive suite of software

applications as well as customer relationship strategies that has enabled these companies to

increase revenue, productivity and customer satisfaction by managing, synchronizing and

coordinating customer interactions across all touch points including: web, customer contact

centers, stores, social media and distribution channels.

The main objective of this study is to explore the CRM strategies and their importance in

assessing the companies’ performance and the kind of marketing relationship that Albanian

telecommunication companies are pursuing in today's rapidly changing and highly competitive

environment, and to study their effect on customer satisfaction and loyalty.

1.2 Problem Discussion

An understanding of how to manage effectively the relationships with customers has become an

important topic for both academicians and business managers in recent years. During these

years, telecommunication companies have developed new resources and capabilities and

bringing new innovative technologies to attract and keep customers satisfied and loyal. But,

despite their innovation, there are still:

Customer complaints about the level of customer service

Customers that are leaving due to poor customer relationship management

No understanding of customer’s needs and requirements


Customer relationship management has become an important strategic approach toward

customers, determining the success of the companies. When talking about marketing today, this

issue has become a focal point determining the success of the companies. There is no marketing

activity without taking into account also the relationship between the company and customers.

The customer today is an important point and actually the one who determines the final success

of the company strategies. The most successful companies (Vodafone Albania with 48.8 of

Market share and Telekom Albania with 31.8 % of market share) have established effective

CRM strategies formulated by putting the customer at the heart of their business. Their CRM

effectiveness has helped their companies to acquire, grow and retain long-term customer

relationships and creating a sustainable competitive advantage in the market.

As we analyze their CRM strategies, we understand that one of the most important objectives of

CRM strategy is focusing on delivering high customer service to generate customer loyalty, as a

key driver of profitability. Creating customer loyalty is an integral part of all CRM activities of

marketing, sales and support department, and understanding customers' requirements is

fundamental on their business success. These companies have a comprehensive understanding

of what drives customer loyalty and how strong those drivers are.

1.3 Purpose of Study

The purpose of this thesis is to study the CRM performance, effective strategies and the

approaches that Albanian telecommunication companies are executing and to analyze their

effect on customer satisfaction and loyalty.

The main objectives of this study are:

1. To analyze the impact of CRM on customer satisfaction, loyalty and business

performance.

2. To find out the main CRM activities of marketing, sales and support department.

3. To investigate on CRM strategies and analyze their approaches on acquisition, retention

and customer development.

4. To measure the impact of customer service on customer satisfaction and loyalty.

5. To analyze the customer behavior and the relationship between customer satisfaction,

loyalty and recommendations.


The key reasons why I am focused on these 5 main objectives are as following:

First, I have focused on analyzing CRM strategies that companies are using and how those

differences could shape their business performances. Second, it is essential to have a

comprehensive understanding on what are their main CRM activities on marketing, sales and

support department to attract, keep and manage positive relationships with their customers.

Third, by investigating on their CRM business strategies and comparing those by putting

benchmarks, we understand the differences on CRM effectiveness and what are their

competitive advantages. Fourth, is important to analyze how customer behavior is affected

from the quality of customer service and the impact on their satisfaction and loyalty. Fifth,

based on the survey on customer behavior analysis, we are going to evaluate how building

positive customer relationships has a profound impact on consumer behavior.

1.4 Research Questions

This study represents a qualitative study focusing on questionnaire and interview with the main

actors in charge of CRM strategies: I have developed open questions (for the case study with

Vodafone) and structured questions. The structured questions on this questionnaire are based on

the article of Werner Reinartz, Manfred Krafft and Wayne D. Hoyer (2004) of American

Marketing Association. The open and structured questions are communicated and answered

from Business Sales Managers and Store Manager of these companies1.

1 The Open and Structured Questions are shown in the Appendix 1 and 2.


CHAPTER 2. LITERATURE REVIEW

2.1 What Is Customer Relationship Management

Customer relationship management (CRM) is a philosophy that encompasses the strategies,

practices, and methodologies that an organization follows when interacting with its customers,

prospects and contacts. It is a corporate level strategy that focuses on creating and maintaining

effective relationships with customers to increase their satisfaction and loyalty with the

organization.

The objectives of CRM are to enhance profitability, income, and customer satisfaction.

Therefore, CRM is mainly a strategic business and process issue rather than a technical issue

(Dowling, 2002). In addition to that, CRM has been increasingly adopted as a core business

strategy and invested in heavily by corporations (Lindgreen, Palmer, Vanhamme, and Wouters,

2006; Rigby and Ledingham, 2004).

An understanding on how to effectively manage relationships with customers has become an

important topic for both academicians and business managers in the recent years. Many studies

are focused on components of CRM strategy, such as the link between satisfaction and business

performance (Kamakura et al. 2002), the link between customer loyalty and profitability

(Reinartz and Kumar 2000), customer profitability heterogeneity (Niraj, Gupta, and Narasimhan

2001), and customer loyalty programs (Verhoef 2003).

A strategic approach of CRM is focused upon the development of a customer-centric business

culture dedicated to winning and keeping customers by creating and delivering value better than

competitors (Buttle and Maklan 2015). With effective CRM strategies, companies can enhance

the customer’s overall experience. By realizing that customers have different economic value to

the company, they are subsequently adapting their customer offerings and communications

strategy accordingly. They have designed different customer relationships, moving away from

product - or brand-centric marketing towards a customer-centric approach (Arnett,

Badrinarayanan 2005).

CRM is a term frequently used in marketing. Building and managing of ongoing customer

relationships delivers the essence of the marketing concept (Morgan and Hunt 1994). However,

the term CRM can be considered both as a business marketing strategy and as an IT system or

application. Moreover, CRM is not a technology itself, but rather a holistic approach to a

company’s philosophy, focused on the customer strategy.


Some companies have implemented CRM processes to a greater degree than others. Therefore,

it is important to identify the types of CRM activities that companies can employ and to explore

how these relate to company performance and profitability (Roberts, K. et al. 2003).

2.2 Importance of Customer Relationship Management (CRM)

Customer relationship management is the strongest and the most efficient approach in creating

and maintaining relationships with customers. Moreover, customer relationship management is

not only a business activity but also encourages a strong personal bonding and long term

relationship of customers with companies. Development of this type of bonding drives the

business to new levels of success (Roberts, K. et al. 2003).

Based on the figure 1, we can analyze an CRM process model that explains the key activities: a)

Collecting customer data by having a comprehensive understanding on customer’s needs and

profile, b) Managing customer touch points by providing a positive customer experience and

ensuring it in all interactions with the company, c) Developing effective business and marketing

strategies to generate more customers, a strategic position in the market and segmenting its

targeted customers to design effective marketing campaigns by improving their value

proposition, as well as develop the right strategy on products, prices, distribution and promotion

channels, d) Developing the marketing programs that attract and maintain long term customer

relationships by generating more ROI, and e) Measuring success as well as evaluating the

customer feedback and the results of the process.

Successful companies are using these CRM activities to improve their business strategies,

developing new ways of relationship that boost customer engagement, satisfaction and loyalty.


2.3 CRM as a Business Strategy

Customer relationship management has rapidly become one of the leading competitive business

strategies in the new millennium. This is why CRM is used as an integral part of the business

strategy, as a tool that facilitate achievement of company’s objectives and generate more

satisfied and loyal customers, design personalized offering based on customers’ stated and

unstated needs and wants.

Successful companies are formulating and implementing customer driven CRM strategies

focusing on improving customer relationships. The strategies are based on: (1) information

technology that is used to uncover insights regarding customer needs, and (2) special programs

designed to meet the discovered needs (Dowling 2002). By treating customers as individuals

will result into higher profits for the company and better customer satisfaction. In this way,

business can earn customer loyalty and generate a buzz through referrals that will further

contribute to customer acquisition. In addition, effective CRM strategies are focusing on

segmenting customers based on needs and profitability as well as designing and implementing

programs to effectively allocate the appropriate resources to each customer (Srivastava,

Shervanie, and Fahey, 1999).

With regard to marketing, the objective of CRM is to evolve from a marketing oriented model

based on a product-centric, to one that deals with each customer individually (Arnett,

Badrinarayanan, 2005)

2.4 CRM Benefits

There are many benefits of Customer Relationship Management (CRM). Appropriate resource

allocation enables benefits to flow to both the firm and its customers (Ramsey 2003). CRM

programs can be either database-driven or customer-needs–driven (Zablah, Bellenger, and

Johnston 2004).

In addition to that, businesses benefit also from the linking of sales, marketing, support as well

as managerial activities in one interrelated system, which would considerably reduce the

amount of manual labor and manual processes. Apart from this, CRM solutions also add value

by business intelligence and data mining of the customer database.


2.5. Customer Relationship Management (CRM) and Marketing

Organizations are increasingly being customer-centric and are embracing customer driven

initiatives that seek to understand, attract, retain and build intimate long-term relationship with

profitable customers (Kotler, 2006).

With CRM, companies are more effective formulating marketing strategies that reach the right

customer with the right message at the right time using the right medium. This is why CRM

leverages and amplifies customer base of an organization. By using an effective CRM software,

one that enables an organization to easily gather critical sales and marketing information, it

becomes a valuable resource for improving productivity as well as performance. CRM enables

that anyone who touches a customer shares the same information and that information should be

easy to access by others. (Long and Khalafinezhad 2012).

Finally, CRM has brought up new dimensions in the field of marketing by significantly

improving marketing approaches, strategies and new ways of interacting with customers.

During the recent years, CRM is an important part of each company that facilitate core activities

to enhance productivity, sales and marketing effectiveness.

2.6 Relationship Marketing

In the literature review concerning relationship marketing, there are some definitions by some

scholars. One definition is by Berry (1986) that says "Relationship marketing is the attraction,

maintaining and enhancing customer relationships. The marketing mindset is that the attraction

of new customers is merely the first step in the marketing process".

Another important definition is by Gronroos (1994) that thinks: “Relationship marketing is to

identify and establish, maintain and enhance relationships with customers and other

stakeholders, at a profit, so that the objectives of all parties are met; and that this is done by

mutual exchange and fulfillment of promises". Moreover, the relationship marketing is an

approach that leads to a trusting rapport between the parties involved in business. He thinks that

it is not only important to get customers and create transactions, but also to maintain and

enhance ongoing relationships, in order to achieve a sustainable growth.

Studying the relationship marketing from another prespective, it involves two important

elements: (1) to identify customers who warrant the formation of close relationships, and (2)


develop and maintain good relationships with them (Lambe, Spekman, and Hunt 2002). In

addition to that, is an organizational strength to have the competence of building relationship

marketing effectively. Is an important organizational ability for identifying, developing, and

managing relationships with key customers successfully. Therefore, it represents an important

source of sustainable competitive advantage.

2.7 CRM as the Core of Relationship Marketing

Relationship marketing is being spoken of as one key business philosophies of the progressive

organizations who are customer oriented or customer centric. Companies have realized that to

be successful on the long term, they need to be closer to the market’s needs, get under the skin

of the customer, anticipate his needs and engineer products and services to satisfy the customer

and nurture his loyalty.

An effective CRM enables these companies to adapt to the needs of different customers

generating more customer satisfaction and loyalty. This is the core of relationship marketing, to

create personalized products for their customers and be able to sell more in the market.

2.8 Customer Satisfaction

Customer satisfaction, as a construct, has been fundamental to marketing for over three decades.

During these years, not only the organizations aim to satisfy the customers but they attempt to

do this more efficiently and effectively that the other rivals in competitive market place to attain

their goals (Kotler and Armstrong, 2011). The most important goal that companies follow up is

to maintain customer loyal to the firm so they dedicate more focus on customer centric

approach in their organizational and marketing strategies.

It is essential to put the customers at the center of the business and aligning the strategies,

activities and processes as an integral part of satisfying its needs and requirements. Moreover, it

is easier and more profitable to sell to presented customers than to find new ones. This is why

organizations are designing better strategies with CRM solutions to become more customer-

focused and service-oriented to increase their satisfaction and loyalty.

2.9 Internal Satisfaction

Many studies have shown the importance and the link of internal (employee) satisfaction to the

external (customer) satisfaction. It is evident that there is a positive relationship between

employee satisfaction and customer satisfaction.


The Figure 2 describes the customer satisfaction and loyalty as dependent variables based on the

employee’s behavior. The figure shows that independent variables as: behavior of the

employees against customer, quality of customer services, the kind of relationship with the

customers, and how customer relationships are managed are the causes that effect customer

satisfaction and loyalty. Based on this analysis, we understand that first, is very important is to

manage, lead and empower the employees by creating the right work environment, capabilities

and systems in order to equip them with the right tools to manage effectively customer

relationships and to deliver a positive customer experience consistently.

Figure 2. The relationship between Internal Satisfaction and Customer Satisfaction. (Long and

Khalafinezhad, 2012)

2.10 Measuring Customer Satisfaction and Loyalty

Over the years, companies have developed many different methods for analyzing the attitudes

and behaviors of their customers. They have attempt to gather data that companies can use to

develop further customer relationship, improve customer satisfaction and loyalty. During the

last years, one of the most used methods that is useful and practical for companies is “The Net

Promoter Score”.


Based on the book "The Ultimate Question" by Reichheld (2011), companies should ask their

customers the ultimate question, such as: “What is the likelihood that you would recommend

our company to a friend or colleague? This essential question allows the company to track

promoters and detractors, producing a clear measure of an organization's performance through

its customers' eyes.

“Net Promoter Score” (Reichheld 2011) is based on the fundamental perspective that the

customers can be divided into three categories. First, are "The Promoters" those that are loyal

enthusiasts who keep buying from a company and urge their friends to do the same. Second, are

"The Passives" those that are satisfied but unenthusiastic customers who can be easily attracted

by the competition. Third, are "The Detractors" those that are unhappy customers trapped in a

bad relationship. Based on this, customers can be categorized in three groups by companies,

based on their answer to the ultimate question, and each group is characterized by different

attitudes, behaviors and, therefore, economic value.

Figure 3. Net Promoter Score by Reichheld (2011).

Promoters (customers that score 9 or 10). Promoters are loyal, enthusiastic fans. They sing the

company’s praises to friends and colleagues. They are far more likely than others to remain

loyal customers and to increase their purchases over time. Moreover, they account for more than

80 percent of referrals in most businesses. They are, in general, pleasant for employees to deal

with.

Passives (customers that score 7 or 8). This group is called "passively satisfied" because this

group is satisfied, but for now. Their repurchase and referral rates are as much as 50 percent

lower than those of promoters. Their referrals are qualified and less enthusiastic.

Detractors (customers that score 0 to 6). Detractors are unhappy customers. They account for

more than 80 percent of negative word-of-mouth. They have high rates of churn and defection.

Some may appear profitable from an accounting standpoint, but their criticisms and bad


attitudes diminish a company’s reputation, discourage new customers and demotivate

employees.

Finally, the Net Promoter Score measurement is simply the total percentage of promoters minus

the total percentage of detractors. Companies are using it to focus on the twin goals of creating

more promoters and fewer detractors, by managing effectively customer relationships,

improving satisfaction and delivering positive customer experience.

2.11 CRM in Albania

Albanian companies operating in telecommunications, banking and tourism have begun

implementing the CRM management systems, thus following the world trends. I refer to some

studies that are conducted in Albania, to describe their results on what the impact of CRM is on

this sector.

Analyzing Hysi et al., (2015) study, which represents an interesting study focused previously on

the telecommunications industry with the topic it pays attention on specific issues from the

experience of their company that has implemented on its structures the SAP CRM program. The

study concludes some positive results from the CRM implementation. The company has

increased the efficiency by reducing service costs, reducing staff cost, minimizing the margin of

error as a result of increasing the accuracy of transactions, reducing the time, and with the

automation system quality service is increased. First, it has allowed the company to be more

transparent to subscribers and enable handling of complaints accurately and to prevent

recurrence of bad experiences. Second, by using it, the company already has a detailed and

updated client database. Third, it has enabled the company to analyze consumer behavior

periodically and as a result, it is likely to achieve up sell and cross sell. Finally, it helps to

design effective marketing campaigns in defining target groups and create new packages of

services.

Another study by Ramaj (2015) is focused on the banking sector to understand that even in the

banking sector there are many benefits from CRM. Based on the results of this study, CRM

implementation is adding value to the marketing department, sales department, e-commerce,

center operations and management as well as to the employees. The study concludes that the

implementation and operation of a CRM system by the Banks is particularly important. Through

this, both management as well as cooperation between the departments of the bank were

facilitated to better serve the customers through the effective registration of their characteristics

and needs. The use of a CRM system contributes significantly to increasing the degree of


customer satisfaction by the Bank. The most important conclusion, however, has to do with the

specific characteristics that a CRM system is good to have in order to achieve the objectives.

Analytical CRM is a tool that helps banks organizing their customer data in order to feed the

marketing for new product design and analysis (and not only for existing customers) with

statistical methods such as segmentation and cluster analysis.

Regarding the tourism industry, there are two other interesting studies by Kalaj and Lacej

(2014) and Taga and Gaspari (2011). Findings of these studies have a significant implication for

the managers of Tour Operators in Albania. This study helps managers of Tour Operators in

Albania understand the CRM dimensions that positively affect customer satisfaction and

customer loyalty. Effective CRM is defined as a function of five dimensions, namely as:

organizational commitment, customer experience, process-driven approach, reliability and

technology orientation.

The findings of these studies show that an effective customer relationship management

positively affect customer response behaviors, customer satisfaction and customer loyalty. On

the other hand, it also shows that customer satisfaction operates as a strong positive mediator

between CRM and customer loyalty.

Finally, even the results of these studies are based on the objective that it is not effective just to

implement technology-based CRM solutions but to also establish the necessary technological

(data-warehouses and customer intelligence systems), organizational (data integration, inter-

departmental communication, links with distributors and resellers) and cultural (customer-

centered service provision) change within companies that would allow CRM strategies to

contribute to productivity and profitability.


CHAPTER 3. METHODOLOGY

3.1 Research Purpose

The purpose of this thesis is to study the CRM, the effective strategies and approaches that

Albanian telecommunication companies are executing and to analyze their effect on customer

satisfaction and loyalty.

To reach this purpose the thesis starts with research questions based on the topic and literature

review focused on: business strategy analysis, performance measurements of CRM, and the

relationship between customer satisfaction, loyalty and recommendation. Using the theory about

these questions, a structured interview for B2B and B2C departments is chosen to collect data

information about telecommunication companies such as Vodafone Albania, Telekom Albania,

Eagle Mobile and Plus Communication. We also use the questionnaire developed in the study

of Reinartz et al., (2004) to determine the CRM strategies of the telecommunication companies

in Albania. A survey on customer behavior is analyzed and a case study is conducted on

Vodafone Albania, as the leading company in the telecommunications industry, related to



3.2 Research Approach

This thesis will go through three main stages of research. Firstly, the thesis is focused on

describing the area of research to try to create a comprehensive understanding of the area and

the importance of the topic of customer relationship management. This is the basis for

descriptive research (Yin, 2003) (Polit D. et al. 2004).

Secondly, the research is focused on literature review and on how customer relationship

management adds value to companies. There are discussed different studies that explore

concepts, strategies and the impact that CRM effectiveness has on business performance,


Thirdly, it has moved from theory to data, analyzing the collected qualitative information

through a structured questioner and open questions directed to Business Sales Managers as

well as Store Managers of the four telecommunication companies. The structured questions in

this questioner are based on the article of American Marketing Association: The Customer

Relationship Management Process: Its Measurement and Impact on Performance by Reinartz


et al., (2004)2. In this study, the authors conceptualize a construct of the CRM process and its

dimensions, operationalize and validate the construct, and empirically investigate the

organizational performance consequences of implementing CRM processes. The first key

outcome of this study was a theoretically sound of CRM process and performance

measurement that outlines three key stages: initiation, maintenance, and termination. The

second key result was that CRM effectiveness has a moderately positive association with both

perceptual and objective company performance. Their findings indicate that the

implementation of CRM processes is associated with better company performance. Finally,

this study had the result that the strongest effect on company performance is the quality of

relationship maintenance that shows the importance of focusing on nurturing relationships

with customers.

3.3 Data Collection Method

As this thesis is aimed at studying the impact of CRM on customer satisfaction and loyalty as

well the positive correlation that those factors have with business performance. The selection of

data sources is made on the four telecom companies: Vodafone Albania, Telekom Albania,

Eagle Mobile and Plus Communication. A survey on customer behavior analysis is used to

understand the connection between a positive customer relationship and purchasing behavior on

this sector. Finally, a case study is conducted on Vodafone Albania as the leading company, on



3.4 Data Analysis

Based on the answers of the interview questions and external resources (AKEP statistics of

2016), the analysis of the collected data consists on examining, categorizing and comparing

them with other companies to measure their performance. The data analysis is focused on

findings on CRM business strategy, measuring the CRM effectiveness and the relationship

between customer satisfaction, loyalty and recommendation based on their customer

experience.

3.5 Validity and Reliability

Validity is an important aspect of every research paper. In order to deal with this, a case study

type of research is preferred, as it is more likely that the findings are valid if they are from

2 Questions of the article are shown in the Appendix


multiple sources (Yin. 2003).

This research study is based on the literature review and on theories that are primarily from

scholarly journals and books of renowned authors. Many different authors’ views on theories

of customer relationship management have been collected as well as theories which reflect the

general view on the impact of CRM on companies.


CHAPTER 4. DATA ANALYSIS

4.1 Telecommunication Industry Background

The purpose of this thesis is not just to analyze the techniques of customer relationship

management (CRM) in Albanian telecommunications industry. The main goal of this thesis is

to provide an understanding of the essence of customer strategy as a necessary and important

element of managing a successful company.

The telecommunications industry is characterized by fierce competition among four telecom

mobile operators including: Vodafone, TELEKOM, Eagle Mobile and PLUS Communication.

During these years, these companies are competing to increase their market share, executing

innovative technologies, developing new resources and capabilities to attract and keep

customers with customer relationship management strategies.

Despite their competition, these companies have realized that for attaining success in such a

competitive environment they have to focus on maintaining positive relationship with

customers implementing effective strategies that lead to customer satisfaction, retention and

loyalty.

The goal of CRM in the telecom sector is to provide a comprehensive suite of software

applications as well as customer relationship strategies that has enabled these companies to

increase revenue, productivity and customer satisfaction by managing, synchronizing and

coordinating customer interactions across all touch points including web, customer contact

centers, stores, and distribution channels.

4.2 Market Share Analysis

Based on the statistics of 2016 on the Electronic and Postal Communications Authority

(AKEP) 3, we can make business performance’s analysis as below.

3 http://akep.al/lajme/466-publikohen-treguesit-statistikore-te-tregut-te-komunikimeve-elektronike-per-tre-mujorin-e-pare-te-vitit-2016

http://akep.al/lajme/466-publikohen-treguesit-statistikore-te-tregut-te-komunikimeve-elektronike-per-tre-mujorin-e-pare-te-vitit-2016

http://akep.al/lajme/466-publikohen-treguesit-statistikore-te-tregut-te-komunikimeve-elektronike-per-tre-mujorin-e-pare-te-vitit-2016


Table 1. Market Share Analysis (Akep Statistics 2016)

By analyzing the AKEP’s statistics, we understand that for the last three years Vodafone

Albania is leading the telecommunication industry, with the highest market share of 48.8%

(1,680,870 number of active customers), followed by Telekom Albania that has reached 31.8%

of market share (1,055,073 number of active customers). During the last three years, Vodafone

has further increased its market share, compared to 2014, respectively by 0.3 % in 2015 and by

1.7 %, in 2016. On the other hand, even Telekom has increased further its market share.

Compared with 2014, it had a higher increase in 2015, respectively by 1.5%. In contrast with

their increase in 2015, in 2016 we see that it has a slight decrease by 0.1 % on market share.

The third company is Eagle Mobile, that has 14.0% market share (465,326 number of active

customers). If we would refer to the last three years, even Eagle Mobile has a slight decrease

on their market share by 0.2%. Plus Communication has the smallest market share, 5.3%

(175,004 number of active customers). The trend that is more evident in these three years is

that Plus Communication has the highest decrease on market share by 3%.

Figure 3. Market Share (AKEP Statistics 2016)

Years Telekom Vodafone EAGLE Plus

2016

31.8%

1,055,073

48.8%

(1,680,870)

14.0%

( 465,326 )

5.3%

( 175,004 )

2015 31.9% 47.4% 14.2% 6.5%

2014 30.4% 47.1% 14.2% 8.3%


4.2.1 Vodafone Albania

Vodafone is leading the telecommunication industry, with the highest market share of 48.8%

(1,680,870 active customers). It is part of Vodafone Group Plc – a global telecommunications

leader, and is present in more than 30 countries and a partner with other networks in over 40

countries4. They have built their success by following the successful patterns and experience of

Vodafone networks all over the world. Based on their global expertise, they have developed

the right resources and capabilities to effectively implement the technologies and CRM

strategies and leading in this sector during the last years. Vodafone was introduced in the

Albanian market in August 2001.

Table 2. Pie Chart of Market Share Analysis (Akep Statistics 2016)

4.2.2 Telekom Albania

Telekom Albania is the second company that has a market share of 31.8% (1,055,073 active

customers). Even Telekom is a leading European telecommunications provider5. It has an

international expertise of formulating and executing effective CRM strategies for achieving

high performance in the market. Telekom Albania was introduced to the Albanian customers in

July 2015, after the acquisition of AMC company. AMC (now Telekom Albania) was

established in May 1996, and was the first mobile telecommunications company to operate in

Albania.

4 www.Vodafone.al 5 www.telecom.com

http://www.vodafone.al/

http://www.telecom.com/


4.2.3 Eagle Mobile

Eagle Mobile is the third company that has a market share of 14.0% (465,326 active

customers). Eagle Mobile is part of the ALBtelecom Company, which is the largest telephony

network operator in Albania. The merger of Eagle Mobile with ALBtelecom assists the

customers who want to have all the services and products of the telephony, mobile and internet

incorporated. The merger of the companies has facilitated the differences between fixed and

mobile technology, in accordance with the customers’ needs, transforming in this way

communication in a service accessible to all. The merging process of ALBtelecom and Eagle

Mobile began in March 2011 6. Eagle Mobile was founded in March 2008.

4.2.4 PLUS Communication

PLUS Communication has the smallest market share of 5.3% (175,004 active customers) . It

was born as an initiative of a group of successful Albanian businessmen with the aim to create

one of the biggest investments in the country7. The company’s philosophy is based on the

strong Albanian values and traditions, combined with the corporate principles, work culture

and the latest technology. Compared with other companies that have international expertise,

PLUS has not built yet the resources and capabilities to be prepared to successfully compete

and increase its market share.

4.3 The value added of CRM on these companies

By implementing CRM, these companies have increased the efficiency by reducing service

costs, reducing staff cost, minimizing the margin of error as a result of increasing the accuracy

of transactions, reducing the time, and increasing the automation system quality service (Hysi

et al., 2015).

The CRM is adding value by improving productivity, effectiveness and developing long term

customer relationships. Companies now have more customer knowledge, are more transparent

to subscribers and manage complaints more accurately as well as prevent recurrence of bad

experiences. CRM maintains subscriber’s records with all the historical events occurred,

payment history to identify whether a client is a regular payer or delayed one and history of

complaints to see if there have been reported service problems. In addition to that, companies

have established detailed and updated customer databases, designing effective marketing

strategies to analyze the consumer behavior periodically and, as a result, to achieve up sell and

6 www.eagle.al 7 www.plus.al

http://www.eagle.al/

http://www.plus.al/


cross sell. It provides categorization of customers based on services they receive and use these

categorizations in its efforts to sell them a better package.

CRM is adding value to marketing, sales and support departments by facilitating and providing

important activities for these companies. CRM ensures a unique customer experience by

organizing activities around the customers’ needs and their unique profile. The activities that

these companies are using in their departments are as following:

1) In Marketing Department

Market knowledge and needs analysis

Segmentation and targeting

Marketing campaigns

Lead generation activities

Marketing feedback analytics

Relationship marketing

Brand management

Customer experience management

2) In Sales Department

Acquisition, retaining and customer management strategies

Customer care management

Need analysis of core customers

Leads management

Generating new potential customers

Sales forecasting, reporting and analysis

3) In Support Management

Providing better customer care

Service contact management

Personalized customer service for core customers

Support and dedicated call center


4.4 CRM Performance Measurement

After conducting the interview with open and structured questions, I made the analysis based

on the answers from Business Sales Managers and Store Managers of these companies.

The tables below represent the questions with their scores respectively, rated on a seven-point

scale, (anchored by 1 "strongly disagree" and 7 = "strongly agree").

The questions are categorized in nine key stages of CRM, mentioned below:

1) Initiation,

2) Acquisition

3) Regain

4) Maintenance

5) Up-Selling and Cross-Selling

6) Retention

7) Referrals

8) Termination, and

9) Exit

4.5 The Results of Data Analysis

Following are the results of the structured questionnaire, which would help us to measure their

CRM performance and the impact on the customer satisfaction, loyalty and productivity.

Investigating on their CRM activities and comparing these by putting benchmarks, we

understand the differences of CRM effectiveness and their competitive advantages.

1. Initiating Stage Analysis

This is the first phase that CRM system enables to identify and follow potential customers.

Regarding the first and second questions, Vodafone and Telekom have established advanced

systems for finding and targeting new potential customers and categorizing them based on their

value. They use data from their personal network, as well as have larger external sources,

contacts and business networks that facilitate them identifying potential high value customers.

These two companies have highest score (both 7) and competitive advantages compared with

their competitors, even because they have more years operating in the market (Telekom was


established in 1996, Vodafone was founded in 2001). Compared with them, Eagle and Plus

have started about 10 years later to operate in the market (Eagle started in 2011), and it has

been challenging for them to enter and compete with these giant companies for market share.

Both have scored 5, based on their limited opportunities for identifying potential customers

from external resources, as well as for their systems.

Regarding other questions on Initiation stage, Vodafone is operating with Sales Force

software, one of the most effective CRM for managing new leads, potential clients and

contacts that facilitates their continuous evaluation of prospects. Even Telekom Albania has

the same system and CRM solutions that allows them to assess the value of new potential

customers, as well as past customers with whom they no longer have a relationship.

Comparing with Eagle Mobile and Plus Communication that have higher advantages based on

these effective tools that facilitate their processes on finding, following and generating more

potential high value customers. Their total score in this stage are respectively 49 (Vodafone),

46 (Telekom), 29 (Eagle) and 26 (Plus)

Table 3. CRM Initiation Stage

2. Activities on Acquiring Customers

The second stage is the measurement of CRM activities for acquiring new customers, which

enables them to increase the customer portfolio and to add value to their company. Regarding

CRM – Measurement at Initiating Stage Vodafone Telekom Eagle Plus

We have a formal system for identifying potential

customers.

7 7 5 5

We have a formal system for identifying who of the

potential customer are more valuable.

7 7 5 4

We use data from external sources or identifying

potential high value customers.

7 7 3 3

We have a formal system in place that facilitates the

continuous evaluation of prospects.

7 7 5 4

We have a system in place to determine the cost of

reestablishing relationship with a lost customer.

6 6 5 4

We have a systematic process for assessing the value

of past customers with whom we no longer have a

relationship.

6 6 3 3

We have a system for determining the costs of

reestablishing the relationship with inactive

customers.

6 6 3 3

TOTAL 49 46 29 26


the first and second questions, Vodafone (7) as well as Telekom (7) have standard systems to

attract prospects and coordinate messages across media channels through email, newsletters,

social media, advertising, face to face with relationship marketing as well as many stores by

covering most of the cities of Albania and reaching more customers comparing with Eagle and

Plus. They have an advanced CRM system that differentiates potential customers based on

their value. On the other hand, even Eagle and Plus have the standard systems to attract

prospects and coordinate messages across media channels and categorize them based on their

economic value, but their do not have the same tools as well as resources to execute them at

the same level. Their scores are respectively 6 (Eagle) and 5 (Plus).

Regarding other questions, Vodafone and Telekom, based on their higher experience, are better

able to systematically present different offers to prospects based on their economic value as

well as differentiate their acquisition investments. Both their scores are 7. On the other hand,

Eagle and Plus have not reached the same expertize, resources as well as systems that would

enable them to categorize and differentiate their potential customers. They scores are

respectively 5.5 (Eagle) and 4 (Plus). Their total score in this stage are 28 for both Vodafone

and Telekom, followed by Eagle with 23 and Plus 18.

Table 4. CRM Acquisition Stage

3. Activities to Regain Customers

By analyzing their activities on regaining customers, these companies have different

performances regarding their approach to reestablish relationships with their customers who

have been lost to competitors (or are inactive). Vodafone (7) has established a systematic

process that is operated by a call center department that is focused on these category of

CRM – Activities to Acquire Customers Vodafone Telekom Eagle Plus

We made attempts to attract prospects in order to

coordinate messages across media channels.

7 7 6 5

We have a formal system in place that differentiate

targeting of our communication based on the

prospect's value.

7 7 6 5

We systematically present different offers to

prospects based on the prospects economic value.

7 7 5 4

We differentiate our acquisition investments based on

customer value.

7 7 6 4

TOTAL 28 28 23 18


customers, by identifying, contacting and following up as well as by prioritizing them based on

their value. Compared with Vodafone, even Telekom (6) has a system in place that enables

them to interact with lost customers, as well as key account managers that are following up

their inactive customers daily to reestablish the relationships with them. But, after the

acquisition of AMC, Telekom is more in a study phase. It’s focused more on studying the

Albanian market as a new business environment for them. They are conducting market

analysis, customer behavior analysis and based on that they will be more proactive on these

activities. Telekom’s score is 6.5.

In addition to that, even Eagle and Plus have developed systems for following and interacting

with their inactive customers, but their solutions and offers are not at the same level with

Vodafone and Telekom. They are trying to reestablish the relationships with lost (or inactive)

customers but their offers and resources have not reached the same performance. Their score is

respectively 5 (Eagle) and 4.5 (Plus). Their total score in this stage are 28 for Vodafone,

followed by Telekom with 26, then is Eagle with 20 and Plus 18.

Table 5. CRM Regain Stage

4. CRM Customer Maintenance

Managing effectively the existing customers is one of the main competitive advantages of

Vodafone and Telekom, compared with Eagle and Plus. They are focusing on providing

solutions and quality customer service to boost customer satisfaction and loyalty for all

customers. Regarding the first two questions, Vodafone and Telekom have a advanced system

CRM – Activities to Regain Customers Vodafone Telekom Eagle Plus

We have a systematic process / approach to

reestablish relationships with valuable customers

who have been lost to competitors.

7 6 5 5

We have a system in place to be able to interact with

lost customers.

7 6 6 5

We have a systematic process for reestablishing a

relationship with valued inactive customers.

7 7 5 4

We develop a system for interacting with inactive

customers.

7 7 4 4

TOTAL 28 26 20 18


for determining which of their current customers are of the highest value and continuously

track customers in order to assess their value. They both have scored (7). On the other have,

different scores are from Eagle and Plus. Eagle and Plus have not the same system for

determining which of our current customers are of the highest value, and this is not enabling

their employees to track customer information in order to assess customer value. Their scores

are respectively 4.5 (Eagle) and 4 (Plus)

Regarding the last two questions, Vodafone and Telekom has again higher performace on

tracking the customer satisfaction status during the entire customer life cycle (relationship

maturity). They have a formal system that enables them to determine which of their current

customers has the highest value, as well as build positive customer relationships with all

categories. They continuously track customer purchasing behavior and based on this analysis

they deliver personalized offers and services. They both scored 7. In contrast with them, Eagle

and Plus have systems that allow them to track the status of the relationship during the entire

customer life cycle as well as determine the cost of retaining customers, but their tools and

resources have not reached the same performance compared with their competitors. Their

scores are respectively 5 (Eagle) and 4 (Plus). Their total score in this stage are 28 for both

Vodafone and Telekom, followed by Eagle with 18 and Plus 16.

Table 6. CRM Maintenance

5. Activities to Manage Up-Selling and Cross-Selling

By comparing the activities on managing up-selling and cross-selling, we see different

approaches of their customer development strategies. Regarding the first three questions,

CRM – Maintenance Vodafone Telekom Eagle Plus

We have a formal system for determining which of

our current customers are of the highest value.

7 7 4 4

We continuously track customer in formation in order

to assess customer value.

7 7 5 4

We actively attempt to determine the costs of

retaining customers.

7 7 4 4

We track the status of the relationship during the

entire customer life cycle (relationship maturity)

7 7 5 4

TOTAL 28 28 18 16


Vodafone and Telekom have achieved advanced procedures of up-selling and cross-selling to

valuable customers. They systematically tend their "share of customer" with high-value

customers. They both scored 7. In addition, Eagle has implemented these customer

development strategies by providing more services for their customers (internet, TV channels

and telephone lines) after the merge with Albtelecom. Their score is 6. Plus company is

following these approaches but with a different (lower) performance. Their score is 4.

Comparing the last two questions, Vodafone and Telekom has the again the same performance.

They have established effective approaches to build mature relationships with their high value

customers. They are providing individualized incentives in order to further develop their

customer value as well as intensify their business relationships. They both have scored 7. In

contrast with them, Eagle are trying to build relationships with high value customers as well as

providing individualized incentives, but there are not reaching the same level with its

competitors. Even Plus is still behind on this point and is challenging for them to attract these

category of high-value customers. Their total score in this stage are 35 for both Vodafone and

Telekom, followed by Eagle with 27 and Plus 20.

Table 7. CRM Up-Selling & Cross-Selling

CRM - Activities to Manage Up-Selling and Cross-

Selling

Vodafone Telekom Eagle Plus

We have formalized procedures of cross-selling to

valuable customers.

7 7 6 4

We have formalized procedure of up-selling to

valuable customers

7 7 6 4

We try to systematically tend our "share of customer"

with high-value customers.

7 7 6 4

We have systematic approaches to mature

relationships with high-value customers in order to be

able to cross-sell or up-sell earlier.

7 7 4 4

We provide individualized incentives for valuable

customers if they intensify their business with us.

7 7 5 4

TOTAL 35 35 27 20


6. Activities to Retain Customers

Related to activities to retain customers, with regard to the first two questions, Vodafone and

Telekom are providing an interactive two-way communication with their customers. Compared

with Eagle and Plus they are better managing customer retaining activities. Their marketing

and sales department activities are actively stressing customer satisfaction and loyalty as their

top priority, and provide relationship marketing to deliver positive customer experience. Both

scored 7. On the other hand, Eagle and Plus are following but not with the same speed. They

both scored respectively 4.5.

Regarding other questions of these stage, again Vodafone and Telekom show their superiority

compared with Eagle and Plus. They have an integrated customer information system across

all customer contact points (mail, telephone, website, stores, social media and face-to-face).

They are providing systematically customized offers and services based on the value of the

customer, managing their expectations effectively and building long-term relationships with

them. Their scores are respectively 7 (Vodafone) and 6.8 (Telekom). In difference with them,

Eagle and Plus have not reached the same resources and capabilities to achieve the same

performance compared with Vodafone and Telekom. Their total score in this stage are 35 for

Vodafone, followed by Telekom with 34, then Eagle with 32 and Plus 27.

Table 8. CRM Retain Stage

CRM – Activities to Retain Customers Vodafone Telekom Eagle Plus

We maintain an interactive two-way communication

with our customers.

7 7 5 5

We actively stress customer loyalty or retention

programs.

7 7 4 4

We integrate customer information across customer

contact points (mail, telephone, Web. fax, face-to-

face).

7 6 5 3

We are structured to optimally respond to groups of

customers with different values.

7 7 4 4

We systematically attempt to customize

products/services based on the value of the customer.

7 7 5 4

We systematically attempt to manage the

expectations of high value customers.

7 7 4 3

We attempt to build long-term relationships with our

high value customers.

7 7 5 4

TOTAL 35 34 32 27


7. Activities to Manage Customer Referrals

By focusing on delivering positive customer experience, Vodafone and Telekom know the

value and the importance of referrals. Regarding the first two questions, they are systematically

tracking and managing effectively their referrals. As we will describe on the case study of

Vodafone, they have started in their stores “The Net Promoter Score” method to measure the

quality of customer service as well as manage the referrals based on the customer feedback that

this method is providing through specific questions. Both companies have scored 7. In contrast

with them Eagle and Plus have not reached to manage these activities due to the lack of tools

and resources. Their scores are respectively 4.5 (Eagle) and 3.5 (Plus)

With regard to the last two questions, Vodafone and Telekom are providing incentives for

existing customers (promoters) that are helping them generate more referrals and new leads.

These companies with their large customer base as well as promoting effecting customer

referrals are gaining more and more customers. They both scored 7. In contrast, Eagle (4) and

Plus (3.5) do not have the same customer base as well as resources to follow and manage

customer referrals with the same level. Their total score in this stage are 28 for both Vodafone

and Telekom, followed by Eagle with 17 and Plus 14.

Table 9. CRM Referrals Stage

8. Measurement at Termination Stage

Related to the first two questions, Vodafone and Telekom have established an advanced

system for identifying non profitable lower-value customers, and have established procedures

for actively discontinuing relationships with low-value or problem customers. They both

scored 7. Comparing with them, Eagle and Plus have not the same system and procedures and,

CRM - Activities to Manage Customer Referrals Vodafone Telekom Eagle Plus

We systematically track referrals. 7 7 4 4

We try to actively manage the customer referral

process.

7 7 5 3

We provide current customers with incentives for

acquiring new potential customers.

7 7 4 4

We offer different incentives for referral generation

based on the value of acquired customers.

7 7 4 3

TOTAL 28 28 17 14


they are trying to attract and acquire these left customers from Vodafone and Telekom. They

are focusing on acquiring all customers in the market even when they have a low-value.

Regarding the last two questions, Vodafone and Telekom try to passively discontinue

relationships with low-value or problem customer as well as offer incentive to low-value

customers for terminating their relationship. This enables them to have more time to focus on

high profitable customers and deliver effective solutions and high customer care for them. But,

based on difficult economic conditions that Albania has, they are not willing to leave totally

their low-value customers, due to their future value as well as recommendations. Both their

scores are 6.

Comparing with them, Eagle (4.5) and Plus (3.5) are trying to attract and acquire these left

customers. They are focusing on acquiring all customers in the market even when they have a

low-value. Their total score in this stage are 26 for both Vodafone and Telekom, followed by

Eagle with 18 and Plus 14.

Table 10. CRM Termination Stage

CRM - Measurement at Termination Stage Vodafone Telekom Eagle Plus

We have a formal system for identifying non

profitable lower-value customers.

7 7 5 4

We have a formal policy or procedure for

actively discontinuing relationships with low-

value or problem customers.

7 7 4 3

We try to passively discontinue relationships

with low-value or problem customer.

6 6 5 4

We offer is incentive to low-value customers

for terminating their relationship.

6 6 4 3

TOTAL 26 26 18 14

9. Activities to Demarket Customers Actively (EXIT)

Related with these questions, Vodafone and Telekom have a formal procedure for

discontinuing relationships with low-value or problem customers. They passively discontinue

relationships with low-value or problem customers, for example, they are raising basic service

fees, they refer to other companies or offer disincentives to low-value customers for

terminating their relationships. They both scored 7. On other hand, even Eagle and Plus have

formal procedures for discontinuing relationships with low-value or problem customers, but


their focus is not in these activities as well as they are not willing to end the contracts with

their customers because they customer base is smaller compared with Vodafone and Telekom.

Their total score in this stage are 21 for both Vodafone and Telekom, followed by Eagle and

Plus that have both 15.

Table 11. CRM Exit Stage

Activities to Demarket Customers

Actively (EXIT)

Vodafone Telekom Eagle Plus

We have a formal policy or procedure for

actively discontinuing relationships with

low-value or problem customers (e.g.,

canceling customer accounts).

7 7 5 5

We try to passively discontinue

relationships with low-value or problem

customers (e.g., raising basic service fees).

7 7 5 5

We offer disincentives to low-value

customers for terminating their

relationships (e.g., offering poorer

service).

7 7 5 5

TOTAL 21 21 15 15

Based on the results of this structured questionnaire, through measuring CRM activities and

strategies of the four telecommunication companies we understand the impact of each stage on

interactions with customers. Comparing those companies by putting benchmarks, we evaluate

their business productivity, understand the differences on their CRM effectiveness and identify

their competitive advantages.

The value of CRM is highly appreciated by these companies, as an effective tool that facilitates

employees’ activities to execute effective strategies to achieve overall performance, attain

growth and increase profitability and market share.

Firstly, based on their global experience, Vodafone and Telekom have highly invested in their

technologies to deliver the same services and customer experience in all markets that they are

operating. Comparing with their competitors Eagle and Plus, their quality of information

technology resources is larger. These companies have invested in technologies that enable

them to manage "real time" customer feedback, give solutions and facilitate their overall

activities.


Secondly, Vodafone and Telekom have invested on developing human resources as well as

their skills and capabilities to deal effectively with their customers. They have systematic

training procedures that enable employees to deal differently and positively with high and low

value customers. They have a reward system for employees for building and deepening

positive relationships with their core customers. In addition to that, their CRM is organized in a

way to optimally respond to customer groups with different profitability. Delivering

customized treatment and personalized offers to different customer segments is their company’

strength, comparing with Eagle and Plus.

Figure 5. "CRM Performance Measurement"

In the figure above we have analyzed the accumulated points for each of the stages of the CRM

adopted by the four companies. As shown above Vodafone and Telekom show higher

accumulated points compared with the other two companies. Furthermore, for some of the

stages this difference is more pronounced. Thus, for the initiation stage, Vodafone and

Telekom show comparable values when compared with each other but higher values when

compared to Eagle Mobile and Plus. Nevertheless, when analyzing these results we observe

that in general Vodafone and Telekom marketing strategies in terms of CRM are very


comparable. When these results are compared with the two other companies we observe that

for some of the stages there is a very pronounced difference. Interesting to point out is the fact

that the retention strategies for all four companies are very comparable suggesting important

efforts for the all above companies in the stage of customer retention. For the maintenance

stage we observe still a difference between Vodafone and Telekom when compared to the

other two companies.

Finally, by analyzing the above tables, we can understand why Vodafone Albania (with 289

total score) and Telekom Albania (with 286 total score) are more competitive compared to

Eagle Mobile (with 199 total score) and Plus Communication (with 168 total score). They have

achieved a higher performance in all nine stages compared with Eagle Mobile and Plus

Communication. Based on their global expertise and years of business experience, they have

developed and maximized their systems, resources and capabilities to effectively implement

the technologies and CRM strategies. Compared to their competitors, they have higher CRM

performance on each activity which enables them to generate more customers, manage and

develop effectively their existing customers, build long term relationships by delivering higher

customer experience as well as regaining back their lost customers by successfully

reestablishing the relationships with them. These are their competitive advantages that enable

them to have a better overall performance and continuously attain more market share.


CHAPTER 5. CASE STUDY - Vodafone Albania

5.1 CRM Performance Measurements

Vodafone Albania (with 48.8% market share) followed by Telekom Albania (31.8 % market

share) are the leading companies in the Albanian telecommunication industry. One of the key

factors that has contributed on attaining their success in such a competitive environment is

their focus and dedication on developing and maintaining positive customer relationships, as

well as implementing the most effective strategies for increasing customer satisfaction and

loyalty.

In contrast with Vodafone Albania, Telekom is focused more on effectively managing the

existing customers, and less on acquiring new customers. After analyzing their business

strategy of the past three years, we understand that after the acquisition of AMC, Telekom is

more in a study phase. It’s focused more on studying the Albanian market as a new business

environment for them and are approaching to enter strategically. They are conducting market

analysis, customer behavior analysis and based on that they will formulate and implement their

business strategy for competing to increase their market share.

5.2 CRM Business Strategy Analysis

The core strategy of Vodafone is the focus on managing effectively their existing customers.

They have 35 Business Key Account Managers (B2B department) that are dedicating 60 % of

their time on activities such as customer care and customer management, finding solutions for

their problems, consulting and analyzing their core customers, as well as providing packages

and offers that are personalized based on customers’ needs.

They maintain an interactive two-way communication with our customers.

They proactively encourage customer satisfaction and loyalty.

They have integrated customer information across all customer contact points. (Sales

Department, Marketing Department, Finance department, Vodafone Stores and their

distributors)

They are structured to optimally respond to groups of customers with different values.

They systematically focus to customize products/services based on the value of the

customer.

They systematically attempt to manage the expectations of high value customers.

They are dedicated on building long-term relationships with their customers.


They are focused on Customer Acquisition 30 %. They are operating with Sales Force

software, one of the most effective CRM for managing leads, potential clients and customer

database. 60% of these new customers are generated from personal activities of Business Key

Account Managers. They use data and find new leads and business contacts from external

sources to identify potential high value customers. 30% are from referrals that are coming from

other satisfied customers (Promoters), and 10% are new customers from stores or returned

back clients called and followed up from their call center operators.

They are focused on Customer Development 10 %. They are performing activities such as:

customer needs analysis, developing new and personalized packages for their core customers

with high value. They are applying the “Pareto Law” focusing on 20% of core customers with

higher value and creating for them a great customer experience. These core customers have

dedicated support of Key Account Managers, and high customer service to ensure that they are

satisfied and happy with the company.

5.3 Vodafone Strategy - Delivering Great Customer Experience

Based on the survey of customer behavior analysis (chapter 6), the main reason why customers

are leaving from companies is poor customer service (65%). Vodafone knows that the best

investment is developing and training their employees to ensure that they are delivering a

unique customer experience and providing high service. The CRM software and technology are

effective tools, but they are not enough. The human resource factor is essential as well as their

skills, capabilities and motivation to use CRM activities as effective tools to manage customer

relationships and deliver great customer experience.

Why does customer experience matter? Because positive experiences lead to satisfied

customers, which correlate to loyal customers and increase lifetime customer value for the

company. Even customer experience is an integral part of CRM and the reason why it’s

important is because delivering a positive customer experience impacts the willingness of a

customer to be a loyal advocate.

Customer experience is not the same thing with customer satisfaction. Customer experience is

the sum of all experiences a customer has with a brand, whereas satisfaction, as a degree of

“happiness”, is just a component of the customer experience. As such, customer satisfaction

impacts the entire customer experience.


How does Vodafone deliver a great customer experience? They have designed an effective

strategy in detail, as a description of all experience that the company wants to deliver to its

customers. They understand that memorable and positive customer experiences are essential

for customer satisfaction and loyalty. They know very well their customers’ needs and have

designed a system for consistently delivering a high customer service, based on international

standards and best practices that should be followed by employees.

Figure 6. Net Promoter Score of Vodafone(The Image inside Stores)

This is why the strategy of Vodafone is focused on delivering a great customer experience, as

the best way to increase customer satisfaction, loyalty as well as overall business performance.

The key factors that have contributed to delivering a positive customer experience as well as

designing a high performing culture in their organization are as following:

They have built a professional business sales team (35 Business Key Account Managers) as

well as trained employees in each store to deliver high customer service.

Sales and periodical customer service trainings for all employees that are in contact with

customers (including employees of Vodafone’s distributors and partners).

Training on Mindset and Skillset development

Motivating their employees with packages, bonuses and promotions.

5.4 Net Promoter Score on Vodafone

One of the most effective methods for analyzing the attitudes and behaviors of their customers

is Net Promoter Score Method, that is implemented on the last months in Vodafone’s stores.

Based on the book "The Ultimate Question" by Reichheld (2011), customers are asked “Based

on your experience with us, how happy are you with our service? And the following question


is “What is the likelihood that you would recommend our company to a friend or colleague?

Vodafone employees are encouraging their customers to share their opinions to answer these

questions in stores or deliver it by SMS.

In addition to that, these method is adding value to the company by providing valuable

information, and a clear measure of an organization's performance through its customers' eyes.

The benefits of the company by this customer behavior analysis are as following:

First, this is enabling the company to measure, evaluate and improve customer loyalty. NPS is

a way to measure customer loyalty. The system recognizes that measuring customer

satisfaction isn’t enough - companies must understand how loyal their customers are in order

to better gauge how happy they are.

Second, customer satisfaction is increased. Vodafone employees could track customer

happiness using NPS from one survey period to the next, and be able to see if the strategies

that they have implemented have improved customer satisfaction or have had a negative

impact.

Third, it creates more customer advocates. The NPS score will give a good indication of how

many customers are advocates of Vodafone Albania. By using NPS regularly, the company can

evaluate if they are creating more customer advocates or losing them. The main focus is

providing for customers a great customer experience that will leverage customer advocates to

spread positive word of mouth and send referral leads.

Fourth, it provides valuable customer feedback. These would enable the company to manage

and improve their customer relationships continuously as well as deal faster with complaints.

Based on customer feedback, the company will proactively address problems and focus on

creating a customer experience that boosts satisfaction.

Fifth, it reduces the customer churn. By focusing on generating more promoters and delivering

positive customer experience, it will result in lower rates of churn. This means that more

customers will have longer, more profitable relationships with the company. With customer

acquisition costs increasing, reducing customer churn would provide a sustainable growth for

Vodafone.

Sixth, is a strategy that will drive revenue growth and boost customer lifetime value for the

company. By doing customer behavior analysis, company will understand what the most


effective CRM strategies are regarding the generation of more promoters, turning more

‘Passives’ and ‘Detractors’ into ‘Promoters’.

With more promoters the company will have the benefits below (Reichheld 2011):

Promoters churn is less and they have a higher customer lifetime value.

Promoters increase spend more than detractors, they are interested in new offerings and

using one supplier.

Promoters are less price sensitive; they’re not always looking for ‘the best deal’.

Promoters typically cost less when it comes to selling, marketing and advertising.

They also have bigger average order sizes.

Promoters account for 80-90% of referrals.

More promoters equal more referrals.

Finally, one of the most important competitive advantages of Vodafone Albania is their focus

on delivering a great customer experience and managing effectively the relationships with

them. These capabilities and investments on the skillset of employees are also the most

effective way to increase customer satisfaction, loyalty as well as promoters.


CHAPTER 6. CUSTOMER BEHAVIOR ANALYSIS

6.1 Introduction of the survey

To better understand the effectiveness of the CRM strategies of the companies we used also a

survey to see what are the customer perception of the CRM activities of the companies. this

analysis is useful to better asses how effective are the CRM strategies of the companies and

to see what is the actual impact on the customers. The customer behaviour analysis is an

essential part to understant better the customers, how they think and feel toward companies,

their brands and services. Through it, companies can identify target customers, ascertain

better the needs of these customers, and then specifies how the product and services satisfies

these needs.

Customer behavior analysis is an effective tool that help companies to better understand their

current and potential customers, so they can deliver better customer services, increase sales

and growth. Through customer analysis, a company seeks to identify and weigh the relative

importance of factors consumers use to choose one product or service over another. These

factors, sometimes called buying criteria, are key to understanding the reasons that customers

choose to buy, engage and become loyal with the company.

Figure 7. The Image of Survey on Customer Behaviour Analysis (Fb:Egnatium Image).


By identifying customer needs through behavior analysis, companies can develop a clear and

concise value proposition which reflects the tangible benefits that customers can expect from

the company's products. And once the primary buying criteria have been identified,

marketing efforts can influence the customer's perception, improve customer relationships

and boost their satisfaction and loyalty.

With regard to the customer behaviour analysis conducted in Albania, I was highly interested

in getting more in-depth knowledge about the customer satisfaction and loyalty built on

customer experience with telecommunication companies in Albania.

Firstly, searching for industry reports or other available data on the subject, I observed that

public data on this topic is either missing or very rare to find. There were no local institutions

or customer related associations such as Customer Association to collect and publish

periodical reports on customer behavior, or customer experience such as customer barometer.

Secondly, there are only a few organizations (i.e. AKEP and an international NGO) that have

published some customer experience data due to sector regulations (customer protection laws

in telecommunications and public health service). Some individual studies of service quality

are conducted in the local banking sector that have shown some data and insights on the

customer experience, that some Albanian banks are currently delivering.

In order to have a deeper understanding about customer behavior analysis related to Albanian

telecommunications industy, I have focused my analysis in a recent survey that is conducted

in May-June 2016, that shows some interesting findings on the impact of customer service on

customer satisfaction and loyalty. These results are collected from the study of the Egnatium

Company 8 . The Customer Experience Experts conducted an online survey aiming to

understand how delivering a positive customer experience impacts the purchase behavior of

Albanian customers.

6.2 Objectives of the Survey

The study was conducted in May-June 2016 and aimed to understand the following:

How effective customer relationship management & positive customer experience

impact the purchase behavior of customers.

8 https://www.facebook.com/egnatiumexperiences/?sk=app_190322544333196&ref=s ( www.egnatium.com )

https://www.facebook.com/egnatiumexperiences/?sk=app_190322544333196&ref=s

http://www.egnatium.com/


How poor customer relationship management generates dissatisfied customers and

how their buying decisions have changed, based on their previous experience with a

product or service.

To what extent they influence their friends and family members after facing a poor

service or purchasing a faulty product.

Which is the complaint rate of dissatisfied customers.

Is there any pattern (time-related, effort spent) in the switching behavior of

dissatisfied customers?

Which fraction of customers are loyal to the companies and are they enough engaged

to be called their advocates (Promoters)?

6.3 Methodology

6.3.1 Context and setting of the study

Egnatium experts have collected fresh primary data from telecommunications industry

through their customers. Basically, these companies work on a monthly subscription basis

and, have a large customer base which could be used to collect feedback. With high mobile

phones penetration and the internet in the most of the local household, almost every

respondent could answer the survey.

Table 12. Customer Behavior Analysis


Table 13. Age Group Pie Chart

6.3.2 Respondent profile

The success of online surveys is depending at their respondent base. At this case, online

surveys were completed from 169 responders that shared their opinions and feedback. This

study has used a stratified sampling as these respondents are not simply Albanian users with

internet access but they had to be eligible for entering into a contractual relationship with

telecommunications companies and be the subscriber of one of them.

6.3.3 Data collection instruments

Their main tools for data collection were online questionnaires. With regard to the questions,

these have been carefully designed to “measure” the satisfaction, behavior end their

experience with these companies. Their online questionnaire was composed on rating scale

questions.


Table 14. Customer Satisfaction Analysis

6.4 Findings of the Survey

Key findings with respect to main questions are as following:

Regarding the relationship between satisfaction, loyalty and recommendations:

1 of 5 customers were very satisfied with their company, and 84% of these satisfied

customers would highly recommend their company to friend and family members (The

promoters).

80 % of satisfied customers said that they would continue to be loyal to their company.

16,8 % of total customers are willing to recommend their company – (The promoters -

Customer advocacy NPS (See the graphic below)

65 % of customers are ready to pay more for a better customer experience with their

current providers.


Telecom providers as an industry are performing better in Customer Service (18%) than

Product offering (14%) (see the figure above).

Figure 8. The Reasons Why Customers are Leaving

The impact of poor customer relationship management:

35,2% of customers said they stopped purchasing from a particular company when they

have a negative customer service and experience.

The main reason why customers have left companies is customer service problems (65%),

followed by competitor’s prices (15%) and product problems (15%). (See the chart

above)

1 out of 4 customers of that group left the company after the last complaint. The

percentage of mollified customers after the last complaint stands at 65%.

Companies could recover up to 65% of dissatisfied customers in risk for contractual

withdrawal if they managed to complain resolution process in a time period of max 3-4

weeks.

31,1% of customer issues get ignored by companies (they need to further insist on

improving customer relationship management).

1 out of 8 customer complained on Facebook and other social media about poor customer

service from companies, whereas 56,8%of dissatisfied customers told their friends and

families about their bad experience with the company.

14% of customers were considering to change the mobile company within the year 2016.

(See the figure below).


Most of the complaints in sector come from internet speed and price of international calls.

Table 15. Customer loyalty Analysis

6.4.1 Secondary findings

Generally, a good customer experience is valued and 70% of customers are ready to pay more

for a better customer experience with their current providers. Customers said that they find

31,8% of the staff under qualified to properly answer their questions and provide them with

good solutions. Most of the complaints seem to lie in the poor customer relationships and

quality of services. What is highly evaluated in this industry is personalization and delivering

a unique customer experience through focusing on managing effective relationships.


Table 16. Promoter VS Detractors Analysis

6.5 Implications of the results

Effective customer relationships and a good customer experience is appreciated by customers

when it is delivered. They develop loyalty toward companies that perform well on this.

Highly satisfied customer are the best opportunity for advocacy and gaining new customers

as they influence their social network to enter in a relationship with high performing

companies.

6.6 Conclusions

Based on this survey of customer behavior analysis, we understand the importance of

building positive customer relationships and the profound impact that has on consumer

behavior. With competition increased in the telecommunication market, recurring poor

customer relationship management seems to be generally penalized with customer exodus.

There is a direct correlation between poor customer relationships and likelihood to continue

business with the company. When a customer had more than one bad experience, they started

looking for another companies. The same for the opposite, satisfied customer paid back with

their loyalty and are willing to recommend their friends to the companies that are delivering

positive customer experience and building long-term customer relationships.

Based on this customer survey analysis, we understand why managing effectively the existing

customers is the main priority of Vodafone and Telekom. They are focusing on providing


positive customer experience through quality customer service to boost customer satisfaction

and loyalty for all customers. With their advanced systems and methods, these companies

track customer satisfaction status during the entire file cycle. They continuously track

customer purchasing behavior and based on these analysis they deliver personalized offers,

services and effective customer incentives to keep them satisfied and loyal.


CHAPTER 7. CONCLUSIONS AND RECOMMENDATIONS

7.1 The results of the research

The purpose of this thesis was not just to analyze the activities of customer relationship

management (CRM) in Albanian telecommunications industry. The main goal of this thesis

was to provide an understanding of the essence of customer strategy as a necessary and

important element of managing a successful company.

I focused on the telecommunications companies because it is interesting to analyze their

performance in terms of CRM due also to the fact that their main outcome is related to the

management of customer relationships and the quality of the service they deliver to

customers. It is important to see how differences in their CRM strategies could shape their

business performances.

As we mentioned previously, the Albanian telecommunications industry is characterized by

fierce competition among four telecom mobile operators. These companies are competing to

increase their market share, executing innovative technologies, developing new resources and

capabilities to attract and keep customers with customer relationship management strategies.

They have realized that for attaining success in such a competitive environment, they have to

focus on maintaining positive relationship with customers implementing effective strategies

that lead to customer satisfaction, retention and loyalty.

Based in this study, we see that companies are increasingly being customer-centric and are

embracing customer driven initiatives that seek to understand, attract, retain and build

intimate long-term relationship with profitable customers (Kotler, 2006).

Firstly, by analyzing CRM strategies of four telecommunications companies, we understand

the impact of their CRM on customer satisfaction and loyalty, and how this affects their

overall business performance. Comparing those companies by putting benchmarks we

understand the differences on business strategy, CRM effectiveness and their competitive

performance.

Secondly, we can better understand why Vodafone Albania and Telekom Albania are more

competitive compared with Eagle Mobile and Plus Communication. They have achieved a

higher performance in all nine CRM stages compared to them. Based on their global


expertise and years of business experience, they have developed their systems, resources and

capabilities to implement effectively their technologies and CRM strategies. Comparing with

their competitors, they have higher CRM performance which enables them to generate more

customers, manage and develop effectively their existing customers, build long term

relationships by delivering higher customer experience as well as regaining their lost

customers by reestablishing successfully positive relationships with them. These are their

competitive advantages that enable them to have a better overall performance and attain more

market share continuously.

Thirdly, based on the case study on Vodafone Albania, we see that their main competitive

advantage is their focus on managing effectively customer relationships to generate customer

satisfaction and loyalty, as a key driver of sustainable growth and profitability. Vodafone’s

business strategy is focused on delivering a great customer experience and all CRM activities

of marketing, sales and support department are an integral part of understanding customers'

needs, as their fundamental of business success. With an effective CRM software,

Vodafone’s employees have a comprehensive understanding of what drives customer loyalty

and how strong those drivers are. In addition to that, by analyzing customer behavior, we

evaluate how building positive customer relationships has a profound impact on the consumer

purchasing behavior. Satisfied customers pay back with their loyalty and are willing to

recommend their friends to the companies that are delivering positive customer experience.

Finally, it is important to emphasize that some other key factors have contributed to their

overall CRM performance. These key factors are the resources and capabilities of their

employees to execute effectively these CRM strategies. Even the best CRM software is not

enough to manage effectively customer relationships. It is imperative to be aware of the

importance of the human resource factor, their skills, capabilities as well as motivation to use

CRM activities as effective tools to deliver positive customer experience and manage

effectively customer relationships. Companies like Vodafone Albania and Telekom Albania

are the first to focus on managing, leading and empowering their employees by equipping

with the right tools to build long-term customer relationships and increase customer

satisfaction and loyalty. High quality service offered by their employees is their main

competitive advantage that has provided them maximal customer satisfaction, loyalty and

sustainable growth.


The key findings of this study are as following:

Customer Relationship Management has an impact on business performance,

customer satisfaction and loyalty, and telecommunication companies are using it to

differentiate and gain competitive advantages in the market.

With effective CRM strategies companies can enhance profitability, sales and the

customer’s overall experience, leveraging satisfaction, loyalty and recommendations.

Companies are using CRM as a core business strategy to know better their customers

by analyzing customer behaviors, and using CRM insights for managing effectively

the relationships to generate more customer satisfaction and loyalty.

With CRM activities of marketing, sales and support department, companies can have

the right tools to provide a deeper understanding of customer’s needs, customer

knowledge and behavior analysis as well as designing effective strategies to acquire,

keep and develop their customers.

Regarding the customer behavior analysis based on the survey the key lessons are as

following:

1 of 5 customers were satisfied with their company, and 84% of these satisfied

customers would highly recommend their company to friend and family members

(The promoters).

80 % of satisfied customers said that they would continue to be loyal to their company.

65 % of customers are ready to pay more for a better customer experience with their

current providers.

Telecom providers as an industry are performing better in Customer Service (18%) than

Product offering (14%)

The impact of poor customer relationship management:

35,2% of customers will stop purchasing from a particular company when they have a

negative customer service & experience.

The main reason why customers have left companies is customer service problems

(65%), followed by competitor’s prices (15%) and product problems (15%). (See the

chart above)


Companies could recover up to 65% of dissatisfied customers in risk for contractual

withdrawal if they managed to complain resolution process in a time period of max 3-

4 weeks.

31,1% of customer issues get ignored by companies (they need to further insist on

improving customer relationship management).

56,8%of dissatisfied customers will talk with their friends and families about their bad

experience with the company.

1 out of 8 customer complained on Facebook and other social media about poor

customer service from companies.

7.2 Recommendations

Based on the current conditions of the Albanian telecommunications companies, it is required

that CRM strategies should be suitable for companies and align with the market’s needs.

The essential purpose of CRM is to serve to the creation of customer satisfaction and loyalty.

Therefore, it is recommended that companies should have more customer knowledge and use

it more effectively on CRM marketing strategies to attract, keep and increase further

customer satisfaction and loyalty. Otherwise, CRM remains simply a statistical data recorder,

and do not serve enough to manage customer relationships effectively.

Based on this study, we analyzed that only an innovative CRM software is not enough to

achieve sustainable growth. It is essential for companies to focus on developing human

resources with the right skills and capabilities to use CRM strategies as effective tools to

deliver positive customer experience and manage effectively customer relationships.

Focusing on empowering employees by equipping them with the right tools is most effective

way to maximize customer satisfaction, loyalty and productivity.

7.3 Implications for Future Research

This study has tried to provide some insight into CRM in telecommunication industry in

Albania. Of course, there are many areas that can be further researched in this field.

Thus a first suggestion is that further studies on how the performance of CRM can be

evaluated are needed. It would be interesting to measure the CRM performance from a


financial point of view, interviewing financial managers as well as CEOs. This would be

helpful to provide a better understanding how CRM impacts their revenues as well as

financial performance. But, keeping in mind that in Albanian business environment would

not be easy to gather these financial information, due to the limitation and lack of sources.

It would be also interesting the possibility of Comparing CRM effectiveness from a customer

perspective. This new perspective would be helpful to further understand the influence that

CRM strategies have on customer’ perception. By analyzing more deeply the customer

behavior we would identify some key patterns and learn how to attract and keep them more

satisfied, by designing marketing strategies based on these customer knowledge, believes and

values.

What about the possibility of including internet companies? I tried to gather information even

from these companies and make comparisons, but I faced some limitations finding data

sources of market share, customer information as well as lack of time to meet their Business

Sales Managers and Store Managers. But, I believe that if other studies would be conducted

on this topic, it would provide a deeper understanding of the impact of CRM on customer

engagement, customer experience, customer satisfaction and loyalty.

Finally a study on how company culture can influence customer relationships. I recommend

future research even on this topic because, (as I mentioned previously that is a positive

relationship on the employee satisfaction with customer satisfaction) further research on how

designing a high performing culture within an organization would increase customer

satisfaction, loyalty and business productivity.


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34. Abhinav Bhardwaj, Sahil Sehgal (2014): Customer Relationship in the Telecom

Sector. Masters International Journal of Management Research and Development.

Volume II, Issue IV, April, 2014 Journal of Applied Business and Finance

Researches, Volume 1, Issue 1: 06-13 (2012)


Appendix I

The article of American Marketing Association: The Customer Relationship Management

Process: Its Measurement and Impact on Performance. Werner Reinartz, Manfred Krafft,

Wayne D. Hoyer (2004), Journal of Marketing Research, Vol. 41, No. 3 (Aug., pp. 293-305

The questioner below is about how CRM is performing in your company.

Is rated on a seven-point scale, anchored by 1 "strongly disagree" and 7 = "strongly

agree."

CRM Initiation - Measurement at Initiating Stage

With regard to your company, to what extent do you agree to the following statements?

(1 "strongly disagree" and 7 = "strongly agree.")

We have a formal system for identifying potential customers.

We have a formal system of or identifying which of the potential customer are more

valuable.

We use data from external sources or identifying potential high value customers.

We have a formal system in place that facilitates the continuous evaluation of

prospects.

We have a system in place to determine the cost of reestablishing relationship with a

lost customer.

We have a systematic process for assessing the value of past customers with whom

we no longer have a relationship.

We have a system for determining the costs of reestablishing the relationship with

inactive customers.

10. Activities to Acquire Customers.


We made attempts to attract prospects in order to coordinate messages across media

channels.

We have a formal system in place that differentiate targeting of our communication

based on the prospect's value.

We systematically present different offers to prospects based on the prospects

economic value.

We differentiate our acquisition investments based on customer value.


11. Activities to Regain Customers (REGAIN)


We have a systematic process/approach to reestablish relationships with valuable

customers who have been lost to competitors.

We have a system in place to be able to interact with lost customers.

We have a systematic process for reestablishing a relationship with valued inactive

customers.

We develop a system for interacting with inactive customers.

12. CRM Maintenance (MAINTAIN)


We have a formal system for determining which of our current customers are of the

highest value.

We continuously track customer in formation in order to assess customer value.

We actively attempt to determine the costs of retaining customers.

We track the status of the relationship during the entire customer life cycle

(relationship maturity.

13. Activities to Retain Customers (RETAIN)


We maintain an interactive two-way communication with our customers.

We actively stress customer loyalty or retention programs.

We integrate customer information across customer contact points( e.g., mail,

telephone, Web. fax, face-to-face).

We are structured to optimally respond to groups of customers with different values.

We systematically attempt to customize products/services based on the value of the

customer.

We systematically attempt to manage the expectations of high value customers.

We attempt to build long-term relationships with our high value customers.

14. Activities to Manage Up-Selling and Cross-Selling


We have formalized procedures of cross-selling to valuable customers.

We have formalized procedure of up-selling to valuable customers

We try to systematically tend our "share of customer" with high-value customers.


We have systematic approaches to mature relationships with high-value customers in

order to be able to cross-sell or up-sell earlier.

We provide individualized incentives for valuable customers if they intensify their

business with us.

15. Activities to Manage Customer Referrals (REFERRAL)


We systematically track referrals.

We try to actively manage the customer referral process.

We provide current customers with incentives for acquiring new potential customers.

We offer different incentives for referral generation based on the value of acquired

customers.

16. Measurement at Termination Stage


We have a formal system for identifying non profitable lower-value customers.

We have a formal policy or procedure for actively discontinuing relationships with

low-value or problem customers.

We try to passively discontinue relationships with low-value or problem customer.

We offer is incentive to low-value customers for terminating their relationship.

17. Activities to Demarket Customers Actively (EXIT)

With regard to your company, to what extent do you agree to the following statements? .

We have a formal policy or procedure for actively discontinuing relationships

with low-value or problem customers (e.g., canceling customer accounts).

We try to passively discontinue relationships with low-value or problem

customers (e.g., raising basic service fees).

We offer disincentives to low-value customers for terminating their relationships

(e.g., offering poorer service).

18. Perceptual Performance

Relative to your competitors, how does your CRM perform concerning the following

statements?

Achieving overall performance.

Attaining market share.


Attaining growth.

Current profitability.

19. CRM- Compatible Organizational Alignment.


We have systematic training procedures for helping employees deal differently with

high and low value customers.

We reward employees for building and deepening relationships with high-value

customers.

Our CRM is organized in a way to optimally respond to customer groups with

different profitability.

Organizing people deliver different treatment and products to different customer

segments presents a strength for our company.

20. CRM Technology


We invest in technology to acquire and manage "real time" customer in formation and

feedback.

We have a dedicated CRM technology in place.

We have technologies that allow for one-to-one communications with potential

customers.

Relative to our competitors the quality of our information technology resources is

larger.


Appendix II

The open questions for the interview in the Case Study of Vodafone are below:

1. How would you describe the objectives of CRM in your company?

2. Do you have CRM strategies for any of the below objectives?

Customer Acquisition

Customer Management

Customer Development

3. How are customers identified and targeted?

4. What are the company’s strategies on increasing customer satisfaction and loyalty?

5. What kind of trainings do employees who are in contact with customers have?

6. Do you have any reward system for building effective customer relationship?

7. How does the firm differentiate its customers?

8. Does it have a strategy to focus on core customers?

9. Does the firm customize its products towards its customers?

10. Does the firm consider any of these types of information important?

Why customers are loyal to the firm?

Why customers are leaving?

Why customers are loyal to competitors?

Why customers are leaving to competitors?

Renato Civili, MSc He has more than 10 years work experience in management positions, in marketing & sales in different companies, in the fields of: - telecommunications,- business consultancy and - international real estates.

He is expert in marketing, customer service and business management.

The purpose of this study is not just to analyze the techniques of customer relationship management (CRM) in Albanian telecommunications industry. The more ambitious goal of this study is to provide a comprehensive understanding of the essence of customer strategy as a necessary and important element of managing a successful company.

renato civili mba master thesis - crm, customer satisfaction and loyalty in albanian...

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