sarala agarwal-airtel
TRANSCRIPT
CUSTOMER RETENTION STRATEGY AT AIRTEL,
BANGALORE.
A DISSERTATION SUBMITTED IN PARTIAL FULFILLMENT OF THE
REQUIREMENTS FOR THE AWARD OF MBA DEGREE OF BANGALORE
UNIVERSITY.
Submitted By SARALA AGARWAL Reg.No-02XQCM6050
UNDER THE GUIDENCE OF DR.K.V.PRABHAKAR
(ADJUNCT PROFESSOR/INTERNAL GUIDE)
MR.NEELKANTH (ASSISTANT SALES MANAGER, AIRTEL/EXTERNAL GUIDE)
M.P.BIRLA INSTITUTE OF MANAGEMENT
ASSOCIATE BHARTIYA VIDYA BHAVAN.
BANGALORE-560001 2002-2004
DECLARATION I hereby declare that the research work embodied in the dissertation entitled “Customer
Retention Strategy at AIRTEL”, Bangalore, has been carried out by me under the guidance and
supervision of Dr.K.V.Prabhakar, Adjunct Professor, M.P.Birla Institute of Management,
Bangalore.
I also declare that this dissertation has not been submitted to any University/Institution for
the award of any Degree/Diploma.
Place: Bangalore
Date:7th September 2004
(SARALA AGARWAL)
CERTIFICATE
I hereby certify that the research work embodied in this dissertation entitled
“Customer retention strategy at AIRTEL”, Bangalore, has been undertaken and completed by
Ms Sarala Agarwal under my guidance and supervision.
I also certify that she has fulfilled all the requirements under the covenant governing
the submission of dissertation to the Bangalore University for the award of MBA degree.
Place: Bangalore
Date: 7th September 2004 (Dr.K.V.Prabhakar)
Adjunct Professor
MPBIM, Bangalore
CERTIFICATE
I hereby certify that this dissertation is an offshoot of the research work undertaken and
completed by Ms Sarala Agarwal under the guidance of Dr. K V Prabhakar, Adjunct Professor,
M.P.Birla Institute of Management, Bangalore (Internal Guide) and Shri Neelkanth, Assistant
Sales Manager, Airtel, Bangalore (External Guide).
Place: Bangalore
Date: 7th September 2004 (Dr.Nagesh.Malavalli)
Principal, M.P.Birla Institute Mgmt
ACKNOWLEDGEMENT
I am happy to express my deep sense of gratitude to Dr. Nagesh Mallavali, (Principal,
M.P.Birla Institute of Management), and Mr.Neelkanth (Assistant Sales Manager, Airtel) for their
encouragement, guidance and many valuable ideas imparted to me for my project.
I extend my sincere thanks to Dr.K.V.Prabhakar (Adjunct professor/ Internal Guide) for
providing me all the information required and the guidance through out the project without which
this project would not have been possible.
I have gained a lot of knowledge, both theoretical and practical, throughout the course of
carrying out this project, I also learnt a lot about the intricacies of the actual business world.
With special regards I would also like to sincerely thank all my lecturers and friends for
their help in completing my project successfully.
(Ms. SARALA AGARWAL)
CONTENTS
Page.No EXECUTIVE SUMMARY 1
Chapters PART ‘A’ (THEORITICAL SETTING)
1. INTRODUCTION
1.1. Background of the study. 3
1.2. Statement of the problem. 13
1.3. Need and significance of the study. 13
1.4. Objectives of the study. 13
2. REVIEW OF LITERATURE
2.1 Purpose of review. 14
2.2 Methodology. 22
2.3 Conclusion. 22
3. COMPANY PROFILE 23
4. RESEARCH METHODOLOGY
4.1 Type of Research. 39
4.2 Sampling Technique.
4.3 Sampling size.
4.4 Sampling Description.
4.5 Instrumentation Techniques.
4.6 Actual collection of data.
4.7 Limitation of the study.
PART ‘B’ (SURVEY FINDINGS)
5. DATA ANALYSIS AND INFERENCES.
PART ‘C’ (CONCLUSIONS AND RECOMMENDATIONS)
6. SUMMARY AND CONCLUSIONS.
6.1 Conclusions from the study.
6.2 Implications of the study.
6.3 Direction for further Research.
ANNEXURE:
• Questionnaire
• Select Bibliography including websites used.
LIST OF TABLES Table. No. Table depicting Page.No.
1. Table showing data based on age.
2. Table showing data based on rating of call quality.
3. Table showing data based on rating of the network coverage.
4. Table showing data based on concern of call dropping.
5. Table showing data based on ability to call at the first attempt.
6. Table showing data based on the call’s made to the customer care help
line in the last one-month.
7. Table showing data based on finding the Interactive Voice Response
System (IVRS) user friendly.
8. Table showing data based on finding the executive’s friendly with a
helpful attitude.
9. Table showing data based on rating the ability to give information
about various rate/plans/schemes/offers.
10. Table showing data based on rating the ability to give information about
various value added services.
11. Table showing data based on the registration of query/complaint in the last
one month
12. Table showing data based on the rating the ability to listen and understand
the query/concern.
13. Table showing data based on answering mode of the query/concern satisfactorily.
14. Table showing data based on getting a follow up call to resolve the query/concerns.
15. Table showing data based on communication about the launch of
new rate plans/schemes/offers in time.
16. Table showing data based on communication about the procedure/mode
to upgrade the rate plans/schemes/offers.
17. Table showing data based on finding the AIRTEL advertisement relevant
and easy to understand.
18. Table showing data based on receiving the monthly bills well in advance
before the due date.
19. Table showing data based on finding the payment reminder through
SMS/calls useful.
20. Table showing data based on finding the bills error free.
21. Table showing data based on rating of the AIRTEL services.
22. Table showing data based on rating of the AIRTEL overall services.
23. Table showing data based on the activation/cancellation of offers/services
like roaming STD/ISD etc taking place within the time committed.
24. Table showing data based on the plan changes taking place within the
time committed.
25. Table showing data based on rating the time taken for service restoration
in case of barring/suspension.
26. Table showing data based on preference between prepaid and postpaid
cellular service of AIRTEL.
LIST OF CHART
Chart. No. Chart depicting Page.No.
1. Chart showing Airtel user based on age group.
2. Chart showing Rating of call quality.
3. Chart showing Rating of the network coverage.
4. Chart showing concern of call dropping.
5. Chart showing Ability to call at the first attempt.
6. Chart showing call made to customer care in the last one month.
7. Chart showing user friendliness of the Interactive Voice Response
System (IVRS).
8. Chart showing helpfulness of the Customer Care Executive’ s.
9. Chart showing ability to information about various plans.
10. Chart showing ability to information about various value added services.
11. Chart showing registration of query/concern in the last one month.
12. Chart showing ability to listen and resolve the query.
13. Chart showing answering the query/concern satisfactorily.
14. Chart showing follow up of call to resolve the query/concern.
15. Chart showing communication about the launch of new plans /schemes.
16. Chart showing communication about the procedure to upgrade the new plans
17. Chart showing finding the AIRTEL advertisement relevant.
18. Chart showing receiving the bill on time.
19. Chart showing finding the payment reminder through SMS/calls useful.
20. Chart showing finding the bills error free.
21. Chart showing rating of the AIRTEL Services.
22. Chart showing rating of the overall AIRTEL Services.
23. Chart showing Activation/Cancellation of services.
24. Chart showing plan changes taking place within the time committed.
25. Chart showing rating of the time taken for service restoration.
26. Chart showing preference between Prepaid and Postpaid.
EXECUTIVE SUMMARY
Page 2
EXECUTIVE SUMMARY
Topic: Customer retention strategy at Airtel
Customer retention is the key business issue. Effective churn management allows the
company to stay ahead of its competitors, increases profitability and improves investor confidence.
There are no simple solutions; must adopt aggressive strategies which cut across the customer
lifecycle and underpin all business processes. Customer Retention is not given the attention due to
it, by most firms. It has been found that customer retention has more impact on profits than market
share, economies of scale and other variables that are considered to provide competitive to a firm.
In fact, it has been found that companies, which reduce customer defections by 5 per cent, could
boost profits from 25 per cent to 85 per cent.
The whole gamut of Customer Relation Management strategies center around the basic
idea of RETENTION so as to get the mass out of their existing or potential customers.
Problem statement:
Though many service industries are affected by the churn phenomenon the problem is
extremely acute in the telecom industry, with customers joining and quitting in short periods. The
problem we are addressing here is – How can a service firm evaluate when retention is likely to
pay-off?
Objective of the study:
Objective of the study was to understand the importance of Component of Life Time Value
of Customer, examine the current customer retention strategies being deployed by AIRTEL. And
to understand the intricacies of Customer Relationship Management, Managerial implication of
Customer Relationship Management. Also to identify the fault deficiencies in the existing
Customer Retention Strategies of Airtel
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Research technique used:
The data for the study are collected both from the primary source and the secondary source.
The project employs systematic, objective and quantitative Research techniques using a well-
structured questionnaire, which form the primary information collected. The secondary data
sources are magazines, management journals and websites.
Using the primary data separate tables were furnished under specific headings, these were
analyzed with the help of descriptive analysis and percentage, and the data was analyzed and
interpreted. Detailed charts are developed showing the data obtained from the respondents, the data
collected from the respondents were organized, processed and tabulated to depict the results. The
sample size comprises of 100 respondents.
This study was restricted to the city of existing customers of AIRTEL in Bangalore
Metropolitan Area only.
Findings:
Maximum number of Airtel service user are in the age group of 22-27 and majority of them
uses prepaid service, they found the call quality and the network coverage to be good. And most of
them liked the value added services, and are happy with the communication procedure they use.
The postpaid customers found the bill error free. The overall rating given to Airtel was Very Good
Suggestions and Recommendation:
With effective implementation of customer databases, companies will be able to re-
establish contact with customers, and will be able to work successfully towards increasing
customer retention, repeat sales, and customer referrals.
Reach out to the customers with special offers, or as they call it, “high touch”
opportunities. Membership cards and programs that entitle your customers to special offers,
discounts, or preferential treatment. After sales satisfaction and complaint inquiries and surveys. Event oriented communications in which the customer is genuinely interested.
Enhanced and empowered customer, after sales, and technical support. Integrated Customer
Relationship Management (ICRM) is the latest marketing strategies that have to be developed to
meet the challenges raised from the daily marketing consulting services.
PART ‘A’
(THEORETICAL SETTING)
CHAPTER-1
INTRODUCTION
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1.1 Background of the study.
Customer Relationship Marketing is a practice that encompasses all marketing activities
directed toward establishing, developing, and maintaining successful customer relationships. The
focus of relationship marketing is on developing long-term relationships and improving corporate
performance through customer loyalty and customer retention.
Customer Retention marketing is a tactically driven approach based on customer behavior.
It's the core activity going on behind the scenes in Relationship Marketing, Loyalty Marketing,
Database Marketing, Permission Marketing, and so forth.
The whole gamut of Customer Relation Management strategies center around the basic
idea of RETENTION so as to get the mass out of their existing or potential customers. Retention
rate is a very good indicator of repeat buying behavior and is a fairly good indicator of future
behavior. Retention rate is a good indicator - not of loyalty but of the lack of it; in other words, a
low retention rate can signal that the customers are not loyal, but a high retention rate does not
necessarily indicate a strong loyalty.
Improving customer retention rate leads to significant increase in profits; profitability is
determined by three factors:
Industry retention rate: First an assessment of average industry retention rate is required; the
lower the industry retention rates, the lower the leverage effect on profits. Current industry
retention rates have a direct impact on long-term customer value. When retention rates are 50% or
below, the average customer stays with the firm for two years or less. If a firm improves its
retention rates from 50% to 55%, the average retention increases to 2.2 years from 2.0 years. In
contrast, if average retention rates in an industry are relatively high, in the order of 75% or greater,
then an increase of 5% in customer retention has a far greater impact. The key to estimating
average retention rates is to examine switching cost in the industry.
It is recognized that in industries with low average retention rates individual firms may,
through inventive strategies and service excellence programs, improve their retention rates to
significantly higher levels than the industry average.
Segmentation issues: Basic segmentation issues need to be addressed to determine if viable
segment exist and can be identified; otherwise there may be more profitable avenues for the firm to
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pursue. “Attracting and keeping the highest-value customers is the corner stone of a successful
marketing program”. Underlying this statement is the necessary condition that the market can be
segmented and that identifiable segments vary in customer value. The direct way to test this
necessary condition is to apply volume segmentation to the market. When high, medium, low and
non-user segment exists and can be identified; the potential rewards from focusing customer
retention programs on the high users can be substantial. Retention improvement for this segment
could lead to significant increase in profits .An insightful approach is one that combines volume
segmentation and margins by customer group.
Benefit segmentation is another approach, which may assist in determining the viability of
retention strategies. In particular, the firm is seeking to identify and measure segments that value
benefits beyond economy (i.e., the price sensitive segment). Benefits such as reliability,
responsiveness, confidence, and security offer the firm the opportunity to establish a relationship
with a particular segment. Customer seeking economies do not.
Components of life time value of customer: The firm needs to assess its ability to calculate the
long-term value of a customer or segments; in many case the necessary information may not
available. Long-term customer value (LTV) is based on the concept of customers as sources or
streams of profitable revenue, resulting from both their own increasingly knowledgeable usage and
the patronage of others whom they recommend their service supplier. The revenue curve is
determined by the degree to which each of the components-customer acquisition cost, base profit,
profits from increased purchases and higher balances, reduced operating cost, profit from referrals,
and profit from prices premium-contribute to profits over time.
LTV is likely to be significant when the following characteristics are present:
1. High marketing expenses to obtain a new customer.
2. High administration cost to “enter” the customer into the firm’s system.
3. Relatively low servicing costs.
4. Reasonable margins on sales
5. High sales volume per customer.
6. High word of mouth.
The presence of the above factors will enhance the LTV of customers. The individual firms needs
to assess the degree to which these factors are present in determining the potential of increasing
profits through customer retention.
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Customers of today are becoming smarter, more price conscious more demanding, that led
the customer to churn*.
We can categories the customers based on churn-frequency:
• The habitual churner: who likes to change suppliers frequently.
• The possible churner: who might move if they are given the right offer at the right time.
• The sluggish churner: which comprises of old and affluent customers who are cynical about
the benefits of change.
Exploring the Value of Customer Retention
Customer retention is not only a cost effective and profitable strategy, but in today's
business world it is necessary. This is especially true when we remember that 80% of our sales
come from 20% of your customer and clients. With these statistics we need to address the
question: why most marketing and sales campaigns are designed for the new customers.
Perhaps we need to rethink our marketing and sales strategies, after all many experts will
tell us that it is five times more profitable to spend marketing and advertising money on retaining
current customers than it is to acquire new customers. In years past the importance of focusing on
customer retention was not as important; stickiness came naturally. We shopped in our
neighborhood shops and our corner grocery stores. We had a personal connection with our service
providers and the thought of shopping at another store would have never crossed our minds.
Sophisticated technology and database equipment have made it possible for specialized
firms to make attempts towards customer retention through database marketing programs.
Establishing a detailed client database will allow these companies to keep track of personal
information and individual preferences of all their customers. This enables them to provide better
service and value. Just like the corner grocery store owner keeps information on 200 customers in
his head, the large superstore can now keep track of 20,000 customers through its customer
database. With effective implementation of customer databases, companies will be able to re-
establish contact with customers, and will be able to work successfully towards increasing
customer retention, repeat sales, and customer referrals.
*Churn: the loss of customers and the resulting loss in revenue for service providers
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To achieve the objectives of the database and customer retention programs, the entire
campaign should be designed and carried out with the customer in mind. The exercise will only be
effective if the customer recognizes and associates some value with being part of our database.
When Do Prospects Become Customers?
As the focus of our program shifts from acquisition to retention, the goals become those of
establishing loyalty, advancing the relationship and building a sense of community, participation
and affinity. As with prospecting, however, the data strategy should also help determine whether
customers do or do not meet the company’s criteria for retention.
We need to look for factors that will feed back into the acquisition cycle to reduce
marketing costs, increase success rates or both. We also need to look for trends in the length of
customer relationships and determine if steps can be taken to avert the loss of customers at critical
points along the way. Even a small improvement in retention can result in a significant rise in
profitability and our overall ROI. Since all organizations continually update customer data,
reviewing and analyzing the data will identify opportunities where up selling, cross- selling and
service sales can be increased.
The development of the data strategy as it relates to retention issues should address such
questions as:
• What characterizes our best customers, and what keeps them loyal?
• How do the information and service needs of new customers differ from those of
established customers?
• Is it necessary to keep all prospect information once a customer relationship is established?
• What changes does the organization need to make as the relationship goes along?
• How many service calls did customers place?
• How were they resolved?
• What was the time to the resolution on those calls?
• What is the potential for developing other customers such as these?
• Why does one group or class of customers respond to opportunities when another does not?
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Choice of a CRM Platform
A company’s choice of a CRM solution will affect its ability to collect, ana lyze and use the
data. A balanced CRM solution should offer the functionality the organization needs and provide
the agility to help users address changing demands in the marketplace. The ideal CRM solution
should be timely in that it is quick to install and deploy, and it should be cost-effective from its
initial deployment through its long- term use.
All information about a particular customer should be in one database (not separate
databases for marketing, sales or support), and everyone in the organization should be looking at
the same data. Universal access to information by all departments makes it possible to present a
unified face to each customer.
In addition, the CRM solution should be customizable to reflect the unique business
outlook and preferences of the organization using it. It should be readily reconfigurable to record
new types of information or to discontinue collecting information that is no longer relevant or is
not useful. In short, it should be adaptable to new requirements as the needs of the organization
evolve.
Today’s Internet technology enables companies to use customized relationship
management services hosted by application service providers (ASPs). An Internet-based solution
can make it easy for prospects and customers to use self-service tools and information request
forms via the Web. The CRM solutions offered by the best ASPs include management and
administrative tools to monitor application usage and provide expected levels of service.
Developing an effective data strategy for the CRM process is a way to develop the
information you need to better run your company. Ultimately, it comes down to deciding whom we
intend to pursue as prospects and retain as customers. The CRM solution should provide us with
the tools and flexibility to support that quest on an ongoing basis.
Intelligent analysis of data can indicate whether a company’s activities are in line with its
goals for customer acquisition and retention. It can be crucial to both the speed and the quality of
the company’s re sponse, and it can influence the future direction of the product and service
offerings.
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Most importantly, a well-developed data strategy and its effective use in concert with the
CRM system will allow us to be selective in the types of customers with whom we choose to deal.
Integrated Customer Relationship Management
The development of the Customer Relationship Management (CRM) marketing practice
has made more and more people realize the importance of strong customer relationship in building
sustainable competitive advantages in their market competitions and in generating sustainable
profits in the long run.
However, the currently popular CRM marketing practice often produces disappointing
outcomes. Surveys after surveys, a surprisingly high rate of failure has been reported for CRM
practices. The failure rate of CRM systems ranges from 50% to over 80%. The major CRM system
developers received much lower customer satisfaction scores than companies in other industries
did. The more popular this marketing practice gets, the more people realize that the current CRM
practice hardly manages customer relationship.
Integrated Customer Relationship Management (ICRM) is the latest marketing strategy
developed to meet the challenges raised from daily marketing consulting services, as the existing
marketing theories and practices fail to solve the problems companies have in their efforts to build
strong customer relationship.
Integrated Customer Relationship Management (ICRM) provides a theoretical framework
to define and to construct customer relationship under market competitions. ICRM also provides a
practical guideline for the practice of effective Competitive Customer Relationship Management.
The business philosophy behind ICRM is to put customer needs in the center of marketing
practices and integrates all major marketing functions (including database marketing) into the
Customer Relationship Management process. The ultimate goal of the ICRM practice is to help
companies achieve sustainable competitive advantages through strong customer relationship.
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Current scenario of customer retention.
In the cellular sector, churn rates in the region of 30% are not unusual, but a few
companies have managed to achieve rates of around 15%. Churn management products are
profiled and a model shows the typical cost reductions available from a churn management
programme.
No single measure will effectively combat churn. An approach is required which focuses
effort on each business area, most valuable customers, and maximizing return on investment is
required.
Key strategies include:
• Incentives and tariff bundles which target the most profitable customers
• Loyalty schemes which are appropriate to the value of the business saved
• Acquisition strategies which attract the right type of customer, reducing fraud and bad debt
• Proactive customer service
Customer retention solutions combine award-winning data warehousing and analytics,
consulting services, and industry-specific data architectures to offer:
• Accurate reporting on who is leaving your company.
• Insights into the major factors influencing the decision to leave.
• Industry-leading accuracy for predicting which customers are likely to churn in the near
future.
• Proactive, rules-based analysis of account behavior.
• An accurate early-warning alert system.
• Flexible and scalable technology that can keep up with the company's growth.
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BENEFITS OF CUSTOMER RETENTION
Customer retention affects both revenues and costs in the equation of profitability:
Profit =Revenue – Cost
Revenues are enhanced due to increased sales and costs are lowered due to lesser generation and
marketing costs of such revenues.
Scholars have outlined six economic benefits of customer retention:
a) Saving on customer acquisition or replacement costs,
b) A guarantee of base profits as existing customers are likely to a minimum spend per period,
c) Growth in per customer revenue over time,
d) A reduction in relative operating costs as firms can spread the cost over many more
customers and over a longer period,
e) Free of charge referrals of new customers from existing customers, and
f) Price premiums as current customers usually do not wait for promotions or price reduction
before they make their purchases
Certain non-economic benefits from customer retention are: increased customer trust,
commitment and cooperation.
STRATEGIES FOR RETAINING CUSTOMERS
In service marketing, customer retention has been conceptualized as resulting from
customer perceptions of services quality and customer satisfaction. Scholars have advocated
four steps as essential to retain customers:
a) Define the market structure,
b) Segment the customer base and determine segment value,
c) Identify the segments service needs, and
d) Implement a segmented service strategy.
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Seven Tips to CRM Success
1. Define your business objectives and goals against which results can be measured
2. Given each CRM product, focus on three dimensions: People, processes and technology.
3. Establish systematic approach to product management including team development, IT,
marketing, services, sales management as well as software.
4. Clearly identify corporate and customer needs. Research the requirements and behaviour
of customers and guideposts to an effective delivery of services.
5. Manage organizational change effectively. The human factor is imperative to a project’s
success.
6. Invest in training-more essential than any piece of software.
7. Focus on proactive selling, relationship building so as to effectively up sell and cross-sell.
Goals of CRM
• To provide better customer service.
• To make call centers more efficient.
• To cross sell products more effectively.
• To help sales staff close deals faster.
• To simplify marketing and sales processes.
• To discover new customers.
• To increase customer revenues.
What are the keys to successful CRM implementation?
• Break CRM project down into manageable pieces by setting up pilot programs and short-
term milestones. Pilot project should incorporate all the necessary departments and groups
that get projects rolling quickly and should be small and flexible enough to allow make
changes during implementation.
• CRM plans should include a scalable architecture framework.
• The system should be flexible and expandable according to data it might collect in future.
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• What data is collected and stored should be measured carefully. The impulse will be to
grab and then store EVERY piece of data, but there is often no reason to store data. Storing
useless data is waste of time and money.
• Recognize the individuality of customers and respond appropriately. A CRM system
should, for example, have built-in pricing flexibility.
What causes CRM projects to fail?
Lack of an interactive communication among everyone in the customer relationship chain
can lead to technology being implemented without proper support or buy-in from users. For
example, if the sales force is not completely sold on the systems benefits, they may not input the
kind of demographic data that is essential to the program’s success. One Fortune 500 company is
on its fourth try at CRM implementation, primarily because its sale force resisted all the previous
efforts to share customer data.
... A Few Thoughts Worth Remembering About Customer Retention :
"A customer service program must hold everyone in the organization accountable."
"The way we treat our employees is directly related to how they in turn treat customers." –
--(Joe Sperry, Consultant to the telecommunications industry)
"In cellular, 1% churn can be translated into roughly $500,000 in revenue."
"...96% of customer churn is lost with no feedback to provider."
"...A company has to determine its customer's definition of quality service and then measure its
performance against those expectations."
"One bad-mouthing customer can cost you 10 new customers." –(Larry Harris, President, Crico
Communications paging company)
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1.2 Statement of the problem.
��How can a service firm evaluate when retention strategies pay-off?
��How does a service firm identify right strategies to retain customers rather than acquiring
the new customers?
Which is more expensive as the saying goes that that "It is five times more profitable to spend
your marketing dollars to retain the customers that you have than to use the dollars to beat the
bushes for new customers." Most people would agree with this statement.
1.3 Need and significance of the study For many firms improving customer retention rates can lead to significant increase in
profitability; a 5% increase in retention can increase profitability from 25% to over 85%. The more
customers the firm can retain over time, the more likely the firm will achieve greater profitability
and growth. Recognizing the benefits of customer retention, many firms are investing substantial
resources in relationship management programs to improve profitability.
Customer retention is not only a cost effective and profitable strategy, but in today's
business world it is indispensable. This is especially true when we remember that 80% of our sales
come from 20% of our customer and clients.
1.4 Objectives of the study. �To examine the current customer retention strategies being deployed by AIRTEL.
�To identify the faults/deficiencies in the existing Customer Retention Strategies.
�To modify the Customer Retention Strategies.
�To understand the importance of the components of Life Time Value of Customers.
�To understand the intricacies of Customer Relationship Management.
�Customer Relationship Management in action in the service sector.
�Managerial implication of Customer Relationship Management
CHAPTER-2
Review of literature.
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2.1 Purpose of review. The purpose of literature review is to explore the historical and current scenarios of the
customer retention rate in the mobile service industry and general industry as a whole to retain
customer.
Over and above, the purpose of the literature review is to understand in totality the
foundation of the research problem. The abstracts in the following pages are some of the key
literature reviewed in this project:
SAS POWERS CHURN MANAGEMENT AT BHARTI CELLULAR
Using Enterprise Miner software and OLAP technologies, Bharti built models that predict
the customer propensity to churn and provide information to drive product strategy. Every time a
customer calls to complain about network congestion, Anil Nayar knows that he/she's only a drop-
call away from switching over to a rival cellular services provider. That's a big reason why Anil
Nayar, President (Mobility), Bharti Tele-Ventures doesn't wait for complaints before starting to
troubleshoot.
Instead, Nayar and his team pick up the truck load of data that they maintain on their 7.37
lakh subscribers, crunch it to find out who's most likely to dump Bharti's AirTel in favor of a rival
operator. That done, the next step is to figure out how to keep these potential 'churners' from
leaving.
But does churn management work? Sure, says Nayar, pointing out that prior to its implementation,
the churn ratio at Bharti touched a peak of 3 percent, but now it's a little over 2 percent. Still, that's
not really the point Nayar wants to make. Says he: “If we hadn't done anything about it, the rate
could have gone beyond 3 percent.” Considering that the average cost of customer acquisition in
the mobile business is as high as INR 3000, retention directly impacts the bottom line.
Bharti cottoned on to churn management way back in November 1999, when in one of its
quality meetings it was noticed that the single-biggest factor in opportunity cost (or non-
conformance in telecom-speak) was churn. Immediately, the company set about pulling in all the
data it had on it's customers. The idea was to meld discreet bits of data into an intelligent whole,
why customer retention is important and its benefits of to the company something that would
betray the churner. Was it poor service, network congestion, or ill suited tariff plans that the
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customer was most complaining about? If the probability of churn could be predicted accurately,
then not only could glitches in service be fixed, but the bottom line could be improved.
As Bharti started dialoguing and looking for ways and means to make sense of customer
data, it led to American data mining major SAS' churn management solution. It's software tools
allow the user to sift through enormous quantities of data that the business generates to find hidden
trends and patterns that will help in customer retention. Explains Gourish Hosangady, CEO &
Managing Director, SAS India, “The online application enables a company to build a 360 -degree
view of its customers, and create customer specific strategies for greater loyalty”.
Customer retention, however, is only one part of churn management. It also makes the
overall organization much more effective by identifying potential problems and opportunities.
Bharti was able to optimize its coverage by studying customer complaints and usage behavior. In
another busy commercial market, it was prompted to set up extra powerful transmitters because an
analysis of the complaints revealed that there were more users operating out of basement offices.
The end result of such analysis is that it allows Bharti to manage its network investment much
more effectively. So how do the churns tools work? It starts with a search database, where information is
stored in a structured manner. Data mining software pulls together all the raw data in whatever
forms it is held into one system and combs through it using artificial intelligence techniques or
complex mathematical models. The SAS data mining techniques predict a customer's likelihood of
cancellation or switchover by scoring them on a scale of 0 to 1. If a customer scores 0.73 it means
there's a 73 percent chance of his/her churning. Ergo, the lower the score, the more contented the
customer. Once you know the scores, it is easy to figure out which customers (like defaulters) to
let go.
Bharti did not stop at churner identification. It went a step ahead and used the data-
warehousing tool to launch new products. For example, when statistics showed that a number of
pre-paid subscribers in Delhi were not locals, but business visitors who subscribed to AirTel back
in their hometowns, Bharti launched regional roaming for pre-paid subscribers. Says Nayar, “Data
is a powerful resource, and it is up to you to find business insights in it.”
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'TELCOS HAVE TO MINIMISE CUSTOMER CHURN'
It's a fiercely competitive market, and for mature entrants in any sector — whether it is
telecom, banking, insurance or retailing — retaining profitable customers is now the number one
business plan.
SAS, a leader in business intelligence tools, provides operational and analytical CRM
(customer relationship management) solutions for companies such as Citibank, StanChart, Orange,
Goodlass Nerolac and BPL. These help in gathering data at the various multi-channel customer
contact points and in planning, targeting, acting and learning from the data generated. Recently,
SAS implemented its customer retention solutions at AirTel to reduce a big problem telecom
carriers are facing today — churn. That means losing customers to another carrier.
Gourish Hosangady, managing director and CEO, SAS India, explains how IT solutions
can help tackle churn, the common denominator in the world’s liberalised telecommunications
industry, which is now hitting India too.
�How bad is the problem of churn, and why is the telecom industry more vulnerable than
the other sectors?
Customer acquisition and retention has been a concern for all industries, but more so for
the highly liberalised telecom sector. The entry of the fourth cellular operator has fiercely
increased competition in this industry and so it is imperative to understand the reasons for churn
and to contain them. In India, the month on month churn is estimated at 3.5%.
Churn costs European and US telcos close to $4 billion each year. The annual churn rates
globally of 25% to 30%. Carriers at the upper end of this spectrum get no return on investment on
new subscribers because it takes typically three years to pay back the cost of replacing each lost
customer with a new one.
�In your experience, what are the commonest reasons for customers to switch from one
service provider to another?
Some of the common driving factors for churn are poor performance, poor customer care, rate
plans and handset issues. We’ve for instance found that contact centers can drive awa y customers
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to a rival service provider if a customer has to wait long before his problem is looked into.
Globally, handset issues have made a difference too — for instance, a Telco not being able to
provide GSM or CDMA service. Regarding churn, something interesting that’s been noticed is that
it’s much higher in the case of pre -paid services, with a churn rate of 8:1, than in post-paid service
where the rate is 3:1.
The idea of pre-paid cards is that the customer will mature to become a post-paid one and
so it pays to retain him too. After all, it’s five times more expensive to acquire a new customer
than to retain an existing one.
�What are the best ways to prevent these high rates of customer churn?
Effective customer service could be a deterrent to churn. Branding and service
differentiators also help in taking customers away from competitors. All this wouldn’t be difficult
if you have proper operational and analytical CRM tools in place that would help segment and
analyses customer behaviour and predict their propensity to churn.
In a rapidly changing telecom market, it is necessary to proactively strategize and service
customers so as to retain the high value ones. Analytical customer retention solutions would help
identify the high-, mid- and low-value customers and the valuable ones who are most likely to
cancel services, and their reasons for doing so. They would also help in better campaign targeting
and a more focused strategy.
Î�In the case of a client such as Sprint, what kind of demands would a company that’s a
global leader in the telecom industry have and how would CRM solutions help?
Our solutions give Sprint a central repository that makes things easy for its marketers. The
multidimensional data base (MDDB) that Sprint has, let internal sales and marketing groups
research customer information from their desktops via the Sprint intranet.
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CELLULAR OPERATORS TURN TO SOFTWARE TO CHECK CHURN *
��
��������� Indians may not change their mobile handsets too often, but when it comes to cellular
service providers, churn rates here are one of the highest in the world --- 5-6 per cent per month,
which largely occurs in the pre-paid segment.
With the going slated to get tougher as fourth operators swing into action, existing players
have started harnessing software tools to enable better churn predictions. The reasons for churn
differ with each market. Airtel, the Bharti group’s cellular service, found dropped calls and wrong
tariff plans to be the chief culprits in Delhi. BPL Mobile in Mumbai makes a distinction between
voluntary churn, for reasons like change of city or loss of handsets, and involuntary churn,
prompted by issues like large unsettled bills where the customer becomes untraceable.
India being an emerging market has higher churn rates as compared to developed markets
like Australia and Hong Kong, according to research firm Gartner. Says Gartner analyst Kobita
Desai, “Developed markets like Australia and Hong Kong have a monthly churn rate of 3 per cent,
which usually occurs in the post-paid segment. India, being an emerging market, is driven by the
pre-paid segment.”
Airtel has been one of the earliest adopters of software to control churn in the Indian
market. The company implemented SAS Institute’s customer rete ntion solution a year ago in Delhi
and plans to do the same for Mumbai, when it launches services. BPL Mobile (Mumbai) president
and COO Deepak Verma said the company is in talks with both SAS and Computer Associates to
adopt a similar solution. Its rival Orange is also expected to follow suit.
While software solutions predicting churn are suddenly popular with Indian companies now,
they have been in use for about five years in Europe and the US, said SAS India CEO and
managing director Gourish Hosangady. BPL currently uses an in-house software package to
predict churn. “With volumes increasing, we need a more specialised package which will build in
more parameters to monitor customer behaviour. It will also help us to target the right customers
when we acquire subscribers, since this would have an impact on long-term retention. Retention
costs are at least five time lower than new acquisitions,” says BPL’s Verma
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BPL puts the annual industry churn rate at 48 per cent in the pre-paid segment and 30 per
cent in the post-paid segment. BPL’s case for getting focused on churn solutions seems logical in
the light of Airtel’s imminent entry in the Mumbai market. In Delhi, Airtel has implemented the
SAS solution only in the post-paid segment, but plans to extend it to the pre-paid segment as well,
according to Mohit Deora, chief marketing officer, Airtel (Delhi).“An example of how the solution
helps is with respect to tariffs plans. We were able to realign tariff plans best suited to customers
and rationalize their billing cycles,” said Deora �
* Times news network [Thursday, July 18, 2002 7:58:43 am]
CUSTOMER RETENTION: INTEGRATING LIFETIME VALUE INTO
MARKETING STRATEGIES. *
Everyone wants to retain their existing customers. Few companies, however, are
implementing positive strategies aimed at retention. Most companies are organized for acquisition.
Their advertising and sales programs are designed to find and promote their products and services
to new customers. The companies are organized on a product or brand basis, not on a customer
segment basis. While they all have customer service departments, and most have a customer
service toll free number, they lack an integrated marketing strategy that is directed at retention, and
that defines retention as the measurement of success. In this article, we will explore the meaning of
a retention strategy, showing how it can be set up, and how lifetime value can be used to measure
it.
You have often heard it said that "It is five times more profitable to spend your marketing
dollars to retain the customers that you have than to use the dollars to beat the bushes for new
customers." Most people would agree with this statement, even though they have no way of
proving it. Indeed, the majority of large American and Canadian firms today are experimenting
with database marketing programs aimed, in large part, at retention. Most of these companies are
not yet sure whether their experiments will be successful. A significant number of the programs
will fail and ultimately be scrapped. How do such programs work? Let’s look at the theory.
I like to go back to the old corner grocer. Prior to 1950, most groceries in the US and Canada were
sold in small grocery stores. The proprietor would meet you at the door. He knew you by name. He
knew your preferences. He would put things aside for you. He built his business through
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recognizing his customers and doing favors for them. Customers were loyal to these stores because
of the recognition and personal attention they received. These small stores have been virtually
wiped out through the advent of supermarkets. Supermarkets have a much wider variety of goods.
The average grocery store had 800 SKUs on their shelves. Supermarkets today have 30,000 SKUs.
Mass marketing took over. Prices came down. Variety increased. Food purchases fell from 31% of
the average family budget in 1950 to about 10% today; yet the food we buy with that 10% is better
in quality and quantity to what we bought with 31% in 1950. We have all gained.
At the same time, we have lost something valuable. Companies today have tens of thousands– in some cases millions-- of customers. We do not know who they are. We cannot
recognize them and talk to them as the old corner grocers did. Loyalty has disappeared. Customers
are loyal until tomorrow’s newspaper, when they see a coupon for something at another store and –
woosh, they are gone. What is true of grocery stores is also true of department stores, drug stores,
hardware stores, office supply stores, banks, movie theatres – virtually every sales organization
today.
What has begun to change this picture has been the advent of computers. In the past 15
years, computers have become so sophisticated and powerful, and their prices have become so
inexpensive, that it is possible to keep in a computer today the kind of information that the old
corner grocer kept in his head, and to use that information to recognize and do favors for our
customers. By setting up a customer database, and using it to start a dialog with their customers,
some companies have been able to reestablish contact with their customers designed to build
loyalty, referrals and repeat sales. Retention building is possible.
There is one key principle at work here, however. Database marketing only works to build
retention if the customer benefits from the retention strategies. It works if the customer says to
herself, "I’m glad that I’m on that database, because…" The company running the database has to
complete the sentence by designing and running programs that capture the loyalty of their
customers. If the customer does not see some value to herself in the database activities, she will
chuck out your newsletters unread. She will ignore your communications.
She will leave your gold cards in her top bureau drawer. For the database program to be
successful, the marketer must design the program from the customer’s point of view. If you can
come up with a strategy that makes customers happy, then they will reward you with something
that you want, but which costs them next to nothing: loyalty. What are these strategies?
Page 25
• Membership cards and membership programs
• Welcome and thank you communications
• Satisfaction surveys, followed up by phone calls and letters
• Beefed up customer service, empowered to solve problems
• Enhanced technical support with follow up satisfaction calls
• Frequent buyer programs which permit customers to build up equity
• Event driven communications that are meaningful to the customers’ lives
• Databases that keep track of customer’s purchases, preferences, co mplements and
complaints, which are used to carry out loyalty building services and dialogs.
• Integrated marketing programs where the advertising, direct communications,
customer service, database marketing and sales programs are all orchestrated
together and designed to build loyalty.
• Segmentation of the customer base by lifetime value groups, and different
marketing programs designed for each segment.
* Article by: Arthur Middleton Hughes
Let’s look at this last strategy, to illustrate wha t we mean. Here we have divided our
customers into five groups (quintiles), from the most profitable to the least profitable. We may
then design varying marketing strategies for each group:
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The gold customers should not be bombarded with marketing programs. On the contrary,
they should be rewarded with super services. These are 80% (or some other large percentage) of
our revenue. We must retain these loyal folks. We spend our marketing dollars on the middle three
quintiles: encouraging them to move up, to get in to Gold Heaven. On the other hand, the bottom
quintile may be costing you more than they are worth. Don’t waste marketing dollars here. We
don’t want to retain them.
How can the success of these programs be measured? The answer is lifetime value.
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2.2 Methodology of literature review.
Methodology of literature review encompasses different facets of information sources
concerning customer retention. It started with search in the Management Magazines, Text Books,
and lots of other Marketing Text and Journals.
Information on customer retention strategies were mostly available on the web sites, lots of
articles and presentation on the web sites were analyzed and used in the research for better
understanding of the topic. (A list of website has been provided in the Annexure)
2.3. Conclusions from literature review.
After an extensive literature review, the study has revealed the following conclusions:
�Everyone wants to retain their existing customers; it is five times more profitable to spend the
marketing dollars to retain the customers than to use the dollars to beat the bushes for new
customers.
�SAS' churn management solution. It is software tools that allow the user to shift through
enormous quantities of data that the business generates to find hidden trends and patterns that
will help in customer retention.
�The online application enables a company to build a 360-degree view of its customers, and
create customer specific strategies for greater loyalty.
�The SAS data mining techniques predict a customer's likelihood of cancellation or switchover
by scoring them on a scale of 0 to 1.
�It is necessary to proactively strategize and service customers so as to retain the high value
ones.
CHAPTER-3
COMPANY PROFILE
Page 29
BHARTI TELE-VENTURES LTD. (BTVL)
The premise of the telecommunications business is simple- there is no billing, no revenue
and hence, no profit, with the usual threat of survival. In the highly competitive and growing
Indian market, Bharti Tele-Ventures Limited Group Company is the leading wireless access, data
solutions, and long distance services provider. It has well understood that the only way it can
sustain and grow is by being price competitive, with services that meet customer expectations for
quality and continuous availability.
Bharti Tele-Ventures Ltd (BVTL) was incorporated on July 7, 1995 as a public limited
company. BTVL is a leading private sector provider of telecommunications services. By the end of
April 2004, it had an aggregate of 7.6 million customers, out of which over 7 million were mobile
customers. Among the 23 circles in India, the company offers mobile services in sixteen, it also
provides fixed line services in 5 circles.
The company complements its mobile and fixed-line services with national and
international long distance service. It has a submarine cable landing station at Chennai, which
connects the submarine cables between Chennai and Singapore. By leveraging its nation-wide
fibre optic backbone, last mile connectivity in fixed line and mobile circles, VSATs, ISP and
international bandwidth access through the gateways and landing stations, the company provides
reliable end to end data and enterprise services including VSAT and internet services to the
corporate customers.
Business is conducted through its subsidiaries. The company holds 99.7% in Bharti
Cellular Limited mobile circles except the circles of Punjab, AP, Karnataka, where it holds 100%.
It even holds 100% in Bharti Infotel Limited which operates in fixed line, long distance and group
data services. Finally, Bharti Aquanet Ltd. holds 51% and also owns landing station in Chennai.
Business Divisions
• Mobile: According to COAI reports by the end of March 31,2004, approximately 90% of
India’s total number of GSM mobile customers resided within the Bharti’s mobile
customer base which accounts for approximately 25% of the total all India GSM mobile
base. This has made Bharti the largest GSM mobile service provider in the country.
Page 30
• Fixed-Line: Bharti was the first private sector operator to provide fixed-line services in
India. Currently they provide fixed-line services in the circles of Madhya Pradesh,
Chattisgarh, Haryana, Delhi, Karnataka, and Tamil Nadu. The circles have high
telecommunications revenue potential especially for carrying data traffic.
• Long-distance, group data and enterprise services: Long distance and enterprise
services gets enormous support from the submarine cable landing station at Chennai. This
also facilitates the company to offer best value to the customers. The company matches the
mobile and fixed-line services with national and international long distance services and
provides these services across India.
Mobile footprint
The company believes that the demand for mobile services in India will continue to grow
rapidly as a result of the following factors:
• Lower tariffs and handset prices over time.
• Constant growth in the category of Pre-paid customers
• Continued development of India’s economy leading to greater economic growth.
• Greater variety and usage of value added services.
Strategies of the Company
• Capture maximum telecommunications revenue potential with minimum geographical
coverage.
• Position itself to tap Data transmission opportunities and offer advanced mobile Data
services.
• Focus on satisfying and retaining customers by ensuring high level of customer
satisfaction.
• Leverage strengths of its strategic and financial partners
• Emphasizes on Human Resource Development to achieve operational efficiencies.
• Focus on Telecommunication to enable the company to better anticipate industry trends
and capitalize on new telecommunications related business opportunities.
Page 31
Human Resources
• It has been ranked as the 14th best employer amongst the top 25 companies in India. It is
also the only company whose HR Department has received a special award for aligning
People Systems to business need.
• Their strong beliefs that people are the key differentiators and make the biggest difference
for a successful business has encouraged and made them to create an organization powered
by unique structure, systems and leadership style.
• The company nurtures an environment where people are respected and their uniqueness is
valued. This has resulted in a vibrant, productive, people oriented and progressive
workplace.
• Their business and people philosophy is guided with a framework of strong values and has
resulted in differentiating them as an employer of choice in today’s market p lace.
• Formal job description documents are issued to all the employees clearly mentioning “key
results area”. They believe that an individual can be effective only when he/she knows
what is expected of him/her.
• This has helped the company in setting goals, communicating to each of the employees
about the expectations from them and also in establishing role clarity.
Key Strengths
Bharti Tele-Ventures have created strong brand name recognition and a reputation for
offering high quality services to its customers. Not only does it have a quality management
team with a vision and proven execution skills, it also has strong relationships with
international strategic and financial investors. Some of them are:
Sins Tel, Warburg Pincus, International Finance Corporation, Asian Infrastructure
Fund Group and New York Life Insurance.
Future Plans
The company is considering the proposal of pumping in Rs.2,000 cr in the current fiscal,
out of which around 65% of the investment is expected in the mobility business and the balance in
fixed-line services. The company has also plans to list on the NASDAQ in 2005-5, which is likely
Page 32
to be another trigger. In terms of top line revenue, mobile telephony services are expected to fetch
about 60% and the rest is expected to come from fixed-line services. The company is also planning
to acquire companies in East Asia, West Asia and Africa. It also intends to raise Rs.3,000 cr
through a planned overseas listing. Following its recent acquisition of Hexacom in Rajasthan, the
Bharti Group firm is considering the acquisition of one more company in the country by the end of
this financial year.
COMPANY- AIRTEL
Airtel comes to us from Bharti Cellular Limited - a part of the biggest private integrated
telecom conglomerate, Bharti Enterprises. Bharti provides a range of telecom services, which
include Cellular, Basic, Internet and recently introduced National Long Distance. Bharti also
manufactures and exports telephone terminals and cordless phones. Apart from being the largest
manufacturer of telephone instruments in India, it is also the first company to export its products to
the USA.
Bharti Enterprises has been at the forefront of technology and has revolutionized
telecommunications with its world class products and services. Established in 1976, Bharti has
been a pioneering force in the telecom sector with many firsts and innovations to its credit. Bharti
has many joint ventures with world leaders like Singtel (Singapore Telecom); Warburg Pincus,
USA; Telia, Sweden; Asian infrastructure find, Mauritius; International Finance Corporation, USA
and New York Life International, USA.
Bharti is the leading cellular service provider, with a footprint in 15 states covering all four
metros and more than 7 million satisfied customers.
Airtel's the leading mobile service provider is now present across 135 towns in Karnataka and
is available over 58 showrooms and 13000 outlets .To help serve the customer better Airtel
Karnataka has three offices, one each in Bangalore (Bangalore Zone), Hubli (North Karnataka) &
Mangalore (South Karnataka).
�
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9,6,21�
“T o make mobile communications a way of life and be the customers' first choice.”
0,66,21�
To meet the mobile communication needs of customers through:
• Error- free service delivery
• Innovative products and services
• Cost efficiency
• Unified Messaging Solutions
BHARTI VALUES
Innoventuring
• Generate and implement entrepreneurial and innovative ideas, which will continuously create
new growth engines.
Customer First • Committed to delivering service beyond the expectations of the customer. The quality of
customer responsiveness clearly differentiates us from others.
Performance Culture • Benchmark the processes and performance against world-class standards. Distinguishing between
performers and non-performers and by valuing achievement at the individual as well as the team
level. A culture of inclusiveness where feedback, learning and ideas are actively encouraged,
sought and acted upon.
Valuing Partnership
• Committed to building exemplary relationship with the partners, which stand on the principles of
mutual trust and mutual growth.
Page 34
Valuing People
• Nurture an environment where people are respected and their uniqueness is valued. Belief that
people are the key differentiators.
Responsible Corporate Citizenship
• Committed to making a positive and proact ive contribution to the community. As a responsible
corporate citizen the company will contribute to and abide by environmental and legal norms.
Ethical Practices • Uphold the highest ethical standards in all internal and external relationship. The company will
not allow misuse or misrepresentation of any kind.
AWARDS:
• Consecutively for four years 1997,1998, 1999 and 2000, AirTel has been voted as the Best
Cellular Service in the country and won the coveted Techies award.
• The Asia Pacific Award for the Most Innovative HR practices-2000
• The Golden Peacock National Training Award for excellence in Training practices-2000
• The Golden Peacock National Quality Award-2001
Airtel & Visual Identity
Page 35
For a brand to be successful, it must build enduring relationships with its different audiences.
Integral to this relationship is the visual image of the brand the consumer carries in his/her mind.
The Airtel brand image is created through the consistent application of a carefully developed
visual identity, which helps Airtel distinguish itself in a cluttered market. Airtel's visual identity
helps create instant brand recall and strengthens the relationships that its audiences have with it.
The Airtel visual identity has different elements that work together to create a strong and
consistent identity for the brand. The most important of these are:
The Airtel Logo
The Airtel logo is a strong, contemporary and confident symbol for a brand that is always
ahead of the rest. It is a specially drawn woodmark.
The Airtel Image style
It incorporates two solid, red rectangular forms whose counterform creates an open
doorway.
The Airtel Typographical style
The title case lettering with its capital 'A' was deliberately chosen to reinforce the brand's
leadership position. The red dot on the letterform 'I' cues Airtel's focus on innovation. The words
'Express Yourself' are written in Humanist 777 BT typeface, very much part of the brand identity.
The Airtel Colour Palette
The lettering is grey so that the pure black of Airtel is visually unharmed.
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Airtel Advertising
The relationship between advertising and visual identity is a complex one and must be
understood clearly. Campaigns are born in response to market trends, to competitor activity, to
new product launches. Unlike visual identity, advertising must be constantly reinvented to engage
target audiences and garner mind share. Yet, applications in this area entail large budgets and are
surely the most visible of all brand identity channels. They present extremely powerful
opportunities to reinforce Airtel´s visual identity and therefore can be equally dangerous if they
misuse or dilute it. Remember that the way an ad looks does not constitute Airtel´s visual identity.
The brand's visual identity is made up of the logo, the typographical style, the colour palette and
the image style.
SERVICES
Airtel Prepaid
Airtel Prepaid, the Ready Cellular Card from Airtel comes from Bharti Enterprises, India's
leading integrated telecom service provider. Going mobile with Airtel Prepaid is a new way of life.
With a host of great features, also simple to use, Airtel Prepaid makes everything that are dreamt
and believed, possible
Page 37
Aisi azadi aur kahaan?
Airtel Prepaid, the Ready Cellular Card from Airtel comes to you from Bharti Enterprises,
India's leading integrated telecom service provider.
FREEDOM OF SPEECH REDEFINED...
Going mobile with Airtel Prepaid is a new way of life.
Some of the many advantages that a customer will enjoy with Airtel Pre-paid…
• Total Cost Control
Enjoy the liberty of total cost control with Airtel Pre-paid! Re-charge as much as the
customer feels the need to! This is called a complete freedom!
• No Rentals
Buy an Airtel prepaid card without having to pay any rentals!
• No deposits
The Airtel prepaid card comes without having to pay heafty deposits!
• STD/ISD facility till the last rupee
Now experience complete freedom like never before with Airtel! The STD/ISD facility
allows the customer to make long distance calls in India and Overseas from the cellular
phone!
• Instant Balance Inquiry
Check the talk-time instantly by calling the toll-free number!
Page 38
• 60-second pulse
Airtel provides the customer with a 60-second pulse rate! Freedom for the customer to
experience like never before!
• Instant Recharge
The customer can avail themselves of instant recharge on the pre-paid card with just a few
simple steps!
• 24-hour recharge facility
With the round-the-clock recharge facility, the customer recharge Airtel prepaid card
anytime, anywhere!
• Caller Line Identification
Call Line Identification gives the customer the power to know the phone number of the
calling party even before they answer the call, thus giving them the choice to either reject
or take the call. It provides the added advantage of saving the incoming number directly in
the Handset Phone Book, so that the next time the customer want to call the same person,
they do not need to retype his/her number, simply they can use the phone book.
• Call Divert, Call Hold and Call Wait
The customer can avail themselves of special services like call waiting, call hold and call
divert – all with their Airtel prepaid card!
• Short Messaging Service (SMS)
With Airtel’s Short Messaging Service (SMS), the customer can send messages and jokes
to their friends and colleagues, anytime anywhere!
• SMS based Information Services
With Airtel's SMS based information services, the customer can get upto-the-minute
cricket scores, order flowers as well as send couriers or check their daily horoscope!
• Voice Mail service
Voice Mail lets the customer receive messages even when their handset is switched off or
when they are outside the coverage area. They can listen to their messages whenever they
Page 39
feel like, from anywhere in the world. Voice Mail can store up to 75 messages, with each
message of two-minute duration.
Airtel Postpaid
Airtel welcomes the customers to a vibrant world of unlimited opportunities. More exciting,
innovative yet simple new ways to communicate, just when they want to, not just through words
but ideas, emotions and feelings; to give them the unlimited freedom to reach out their special
people in your special way.
Experience complete freedom
The Airtel Post-paid customer can enjoy the following facilities -
• Easy Billing
The luxury of viewing details of their last 3 billing cycles and the convenience of paying
their Airtel bill online!
• Call Divert, Call Hold and Call Wait
Special services like call waiting, call hold and call divert – all with the Airtel
Postpaid connection!
• Short Messaging Service (SMS)
With Airtel's Short Messaging Service (SMS), the customer send unlimited messages and
jokes to their friends and colleagues, anytime anywhere!
• Caller Identification
Call Identification gives the customer the power to know the phone number of the calling
party even before they answer the call, thus giving them the choice to either reject or take
the call. It provides the added advantage of saving the incoming number directly in the
Handset Phone Book.
Page 40
• Voice Mail
Voice Mail lets the customer receive messages even when their handset is switched off or
when they are outside the coverage area. They can listen to their messages whenever they
feel like, from anywhere in the world. Voice Mail can store up to 75 messages, with each
message of two-minute duration.
• STD/ISD Facility
The STD/ISD facility allows the customer to make long distance calls in India and
Overseas from their cellular phone!
• Roaming (National and International)
Airtel's Roaming service allows you to use your mobile phone to make or receive calls
from almost anywhere in India and abroad! Enjoy roaming within the country as well as
across international destinations!
Airtel MTV Card
The best offers and the coolest of bargains on the hippest stuff on the market, download the
hippest tunes from the hottest new tracks and dress up your phone with the latest wallpapers,
ringtones, picture messages, screensavers and backgrounds! All this and loads more! Only with the
MTV Airtel SIM!
Page 41
Airtel Roaming gives the customer two great options:
• Airtel National – The customers can enjoy roaming in India across 42 partners networks
and over 750 cities.
• Airtel International – The customer can roam across international destinations, in nearly
119 countries including USA, Canada, UK etc. with 284 partner networks.
Long Distance
The National Long-Distance facility allows the customers to make long distance calls in
India and Overseas from their cellular phone. This service is applicable to both Postpaid and
Prepaid customers
Specials:
E a s y C h a r g e
Recharge as and when customers like!
New Airtel Prepaid brings to the nation a never before 'Azadi'. Giving every Indian the right
to be unconditionally, completely free! Free to never run out of words, explore every opportunity,
reach out to anyone, anywhere and express themselves. The customers can discover the world of
New Airtel Prepaid; discover freedom like never before!
Page 42
Other Value added services with Airtel
To subscribe for this service the customers can simply fill in the online AirTel form.
Once the form has been processed they will be contacted at the earliest to complete the remaining
formalities. If the customer wish they could walk up to any of the AirTel showrooms across their
city to apply for a connection and get activated instantly by paying in cash/ credit card.
AIRTEL POSITIONING-REPOSITIONING.
From ‘Touch Tomorrow’ top ‘ Live Every Moment’
In late 2002, Bharti Cellular Ltd. (Bharti), India’s largest cellular telephone company
released a television Commercial (TVC), which despite using the ‘oft-repeated’ celebrity
endorsement route was unusual in terms of its celebrity selection. Instead of using the usual movie
stars/sports celebrities, it chose one of the country’s most successful music composers, A R
Rahman to promote its brand.
The campaign attracted considerable media attention because this was the first time
Rahman had agreed to do a television commercial and also because, Rahman had been paid Rs. 10
mn for the campaign, a sum usually unheard of, for celebrity endorsers in India. The campaign
received brickbats as well as bouquets in the media, both for the selection of Rahman and the
TVC’s execution. However, Bharti claimed to have scored an ace in terms of getting Rahman to
compose five exclusive Symphonies downloadable as rind tones for Airtel users.
The TVC was a part of the brand repositioning and restructuring efforts for Airtel, as part
of which, Bharti changed the brand’s tagline in early -2002 from ‘ Touch Tomorrow’ to Live Every
Moment’. Thee company also decided to undertake a compressive brand-building program and
choose the slogan ‘Unlimited Freedom’ for the same. Commenting on these changes, company
source said, “Airtel’s brand identity and campaign will now have a new younger and int ernational
look and feel that builds on the earlier positioning”.
Page 43
Bharti’s massive media expenditure plans were no surprise, considering the fact that it was
the largest cellular telecom company in the country— reaching over 600million people in 16(out of
29) states in India. The company posted revenue of Rs.8.48 billion and a net loss of Rs.1 billion in
the financial year 2000-01. The Airtel brand (and the prepaid card services brand, Magic) and top-
of –the-mind recall amongst cellular phone users and enjoyed a leadership position in most
markets. Industry observers attributed it to Bharti’s strong brand and positioning strategies.
Repositioning Airtel – Once again! Owing to consistent marketing efforts, the Airtel and Touch Tomorrow Campaign became
very popular. Therefore Bharti’s decision to withdraw this campaign (Touch Tomorrow) in 2002
came as a surprise to many. The new campaign was accompanied by a change in the logo as well.
The data behind the new logo was to give Airtel a younger look. The logo symbolizes innovation,
energy and friendliness.
As a part of its restructuring and repositioning exercise, Bharti unveiled new brand
architecture. The proposed two-tiered architecture has categories under two head – wired and
wireless. All the wireless products were placed under the Airtel brand, which also included Tango,
Freenet and Magic. According to company sources, the objective of this new architecture was to
establish Bharti as a global telecom company.
The company reportedly allocated Rs.1 bn for media coverage and other brand building
activities. Commenting on the new brand identity of Airtel, a Bharti spokesperson said, “Airtel’s
brand identity and campaign will now have a new younger and international look and feel that
builds on the earlier position of ‘Touch Tomorrow’ injected with renewed energy and heightened
optimism.
CHAPTER-4
RESEARCH METHODOLOGY
4.1 Type of Research:
The project employs systematic, objective and quantitative Research techniques using a
well-structured questionnaire. Customer Retention Strategies have been studied extensively in the
mobile service industry. The research investigation is restricted to the existing/potential customers
of AIRTEL in the Bangalore Metropolitan Area. The primary data was collected using a well-
structured questionnaire. The descriptions also involve cross analysis of respondents from different
consumer segments entailing age, preference, and usage as variable parameters.
Separate tables were furnished under specific headings, these were analyzed with the help
of descriptive analysis and percentage, and the data was analyzed and interpreted. Detailed charts
are developed showing the data obtained from the respondents; the data collected from the
respondents were organized, processed and tabulated to depict the results.
Since our research investigation is highly qualitative in nature, the research data has not
been subjected to rigorous quantitative treatment. It is our belief and conviction that the qualitative
analysis is as useful as quantitative analysis in drawing significant inferences and making
projections.
4.2 Sampling Technique.
Since the population for the study is quite large and since the study is limited by the
constraints of resources and time, complete enumeration of the population by census method was
not possible. Hence, the project used random sampling technique. Respondents were mostly
selected from the youth segments, who were the major respondents of the survey.
The advantage of this technique is that it is both economical and reasonably reliable.
4.3 Sample size.
The sample size comprises 100 respondents. The sample size of 100 respondents is
considered by us to make reasonable projection in the study of this kind.
4.4 Sample description. The sample description includes customers of Airtel in both prepaid and postpaid sections.
The youth segment was taken as the respondents because they are more prone to switch to
different service providers and usually they are the trendsetters. Hence it is our strong belief if we
could develop strategies to retain them, its easier to retain the other segments too.
4.5 Instrumentation technique. � Structured questionnaire.
� Observation technique.
� Tables/charts.
4.6 Actual collection of data. Data has been collected from various sources, there is a combination of both primary and
secondary data that has been used in this research. A well-administered questionnaire has formed
the main profitable source of the primary data collection. This enabled us to capture a first hand
insight into the actual findings of the research.
Published articles relating to customer retention in the mobile service industry and also
papers submitted by renowned people have formed the source of secondary data. Articles have
been sourced from magazines and journals dealing with current issues in mobile service industry.
Internet has been a major secondary source for the extraction of the expert’s opinion.
5.2 Limitation of the study. 9�This study was restricted to the city of existing customers of AIRTEL in Bangalore
Metropolitan Area and therefore the results of this study can not be generalized.
9�Due to the time constrain, an extensive research could not be undertaken, therefore the
sample size was restricted to 100 respondents only.
9�Analysis of the data obtained from the questionnaire was done on the assumption that
the respondents gave the correct information to the best of their knowledge.
9�Preferences and responses of customers could change over a period of time
necessitating periodical surveys.
PART ‘B’
RESEARCH FINDINGS
CHAPTER-5
DATA ANALYSIS AND
INFERENCES.
Page 49
5.1 QUANTITATIVE DATA WITH INFERENCES AND OBSERVATIONS The quantitative data have been reinforced with our observations through personal enquiry
notes and inferences have been derived accordingly.
Table.No.1 Classification of data based on age:
Age Prepaid Postpaid Total Percentage
18-22 24 15 39 39%
22-27 26 24 50 50%
28-35 5 6 11 11%
Total 55 45 100 100% Source: Field Investigation Graph.No.1
Source: Field Investigation
Inference: Maximum no. of AIRTEL service user are in the age group of 22-27
and majority of them uses prepaid services. Also retention rare is high in this age
group.
Airtel users based age group
0
10
20
30
18-22 22-27 28-35Age group
No.
of
resp
onde
nts
0%
20%
40%
60%P
erce
ntag
e
Prepaid Postpaid Percentage
Page 50
Table.No.2 Classification of data based on rating of the call quality:
No. of Respondents Category Prepaid Postpaid Total Percentage
Excellent 18 15 33 33% Very Good 11 13 24 24%
Good 20 14 34 34% Average 5 2 7 7%
Poor 1 1 2 2%
Total 55 45 100 100% Source: Field Investigation Graph.No.2
Source: Field Investigation Inference: 34% of the respondent found the call quality good, and 33% of the respondent found
it excellent (both the prepaid and the postpaid service users).
Rating of call quality
0
5
10
15
20
25
Excellent Very Good Good Average Poor
Category
No.
of
resp
onde
nts
0%
10%
20%
30%
40%
Per
cent
age
Prepaid Postpaid Percentage
Page 51
Table.No.3
Classification based on rating of the network coverage:
No. of Respondents Category Prepaid Postpaid Total Percentage Excellent 15 14 29 29%
Very Good 17 17 34 34% Good 17 14 31 31%
Average 6 0 6 6%
Poor 0 0 0 0%
Total 55 45 100 100%
Source: Field Investigation Graph.No.3
Source: Field Investigation
Inference: 34% of the respondent found the network coverage very good,
(both prepaid and postpaid). Airtel has a plus point of good network coverage.
Rating of the network coverage
0
4
8
12
16
20
Excellent VeryGood
Good Average Poor
Category
No
of
resp
onde
nt
0%
10%
20%
30%
40%
Per
cent
age
prepaid postpaid "percentage"
Page 52
Table.No.4 Classification of data based on concern of call dropping:
No. of Respondents Category Prepaid Postpaid Total Percentage
Yes 26 18 44 44%
No 29 27 56 56%
Total 55 45 100 100%
Source: Field Investigation
Graph.No.4
Source: Field Investigation
Inference: 44% of the respondent faced the concern of call dropping and
most of them are prepaid. The customers using postpaid services
rarely encounter the concern for call dropping
Concern of call dropping
05
101520253035
Yes NoCategory
No.
of
resp
onde
nts
0%10%20%30%40%50%60%
Per
cent
age
Prepaid Postpaid Percentage
Page 53
Table.No.5 Classification of data based on ability to call at the first attempt:
No. of Respondents
Category Prepaid Postpaid Total Percentage
Yes 40 28 68 68%
No 15 17 32 32%
Total 55 45 100 100%
Source: Field Investigation Graph No.5
Source: Field Investigation
Inference: 68% of the respondents are able to make calls at the first attempt and
32% of the respondents not able to make calls at the first attempt.
Ability to call at the first attempt
01020304050
Yes No
Caregory
No.
of
resp
onde
nt
0%20%
40%
60%80%
Per
cent
age
Prepaid Postpaid Percentage
Page 54
Table.No.6 Classification of data based on the call’s made to the customer care help line in the last one
month:
No. of Respondents
Category Prepaid Postpaid Total Percentage
Yes 42 29 71 71%
No 13 16 29 29%
Total 55 45 100 100% Source: Field Investigation Graph.No.6
Source: Field Investigation
Inference: 71% of the respondents called up the customer care in the last one
month. The customers do not often call the customer care for complaints
as the response rate is also very low.
Calls made to customer care in the last one month
01020304050
Yes NoCaregory
No.
of
resp
onde
nt
0%
20%40%
60%
80%P
erce
ntag
e
Prepaid Postpaid Percentage
Page 55
Table.No.7 Classification of data based on finding the Interactive Voice Response System (IVRS) user
friendly:
No. of Respondents Percentage
Category Prepaid Postpaid Total
Yes 32 28 60 85%
No 10 1 11 15%
Total 42 29 71 100%
Source: Field Investigation
Graph.No.7
Source: Field Investigation
Inference: 85% of the respondents found the IRVS user-friendly. (Out of which 32 respondents
were pre-paid and 28 respondents were post-paid).
User friedlyness of Interactive Voice Response System(IVRS)
05
101520253035
Yes NoCaregory
No.
of
resp
onde
nt
0%
20%
40%
60%
80%
100%
Per
cent
age
Prepaid Postpaid Percentage
Page 56
Table.No.8 Classification of data based on finding the executive’s friendly with a helpful attitude:
No. of Respondents
Category Prepaid Postpaid Total Percentage
Yes 29 25 54 76%
No 13 4 17 24%
Total 42 29 71 100%
Source: Field Investigation
Graph.No.8
Source: Field Investigation
Inference: 76% of the respondents found the executive’s customer friendly. 24% of the
respondents stated that executives were not customer friendly.
Helpfulness of the Customer care executives
05
101520253035
Yes NoCategory
No.
of r
espo
nden
t
0%
20%
40%
60%
80%
Per
cent
age
Prepaid Postpaid Percentage
Page 57
Table.No.9 Classification of data based on rating the ability to give information about various rate
plans/schemes/offers:
No. of Respondents
Category Prepaid Postpaid Total Percentage
Excellent 11 9 20 29%
Very Good 8 4 12 17%
Good 14 11 25 35%
Average 9 3 12 17%
Poor 0 2 2 2%
Total 42 29 71 100% Source: Field Investigation
Graph.No.9
Source: Field Investigation
Inference: Majority of the respondent (i.e. 35%) found the ability to give information about
various plans to be good enough to benefit the customers.
Ability to give information about various plans
0
5
10
15
Excellent VeryGood
Good Average Poor
Category
No.
of
resp
onde
nts
0%10%20%30%40%
Per
cent
age
Prepaid Postpaid Percentage
Page 58
Table.No.10 Classification of data based on rating the ability to give information about various value
added services:
No. of Respondents Category Prepaid Postpaid Total Percentage
Excellent 10 4 14 20% Very Good 10 6 16 23%
Good 12 11 23 32% Average 8 6 14 20%
Poor 2 2 4 5% Total 42 29 71 100%
Source: Field Investigation
Graph.No.10
Source: Field Investigation
Inference: 32% of the respondents rated the ability to give information about various value
added services to be good.(majority of them belong prepaid segment)
Ability to give information on various value added services.
0
4
8
12
16
Excellent VeryGood
Good Average Poor
Category
No.
of
resp
onde
nt
0%
10%
20%
30%
40%P
erce
ntag
e
Prepaid Postpaid Percentage
Page 59
Table.No.11 Classification of data based on the registration of query/complaint in the last one month:
No. of Respondents
Category Prepaid Postpaid Total Percentage
Yes 25 23 48 48%
No 30 22 52 52%
Total 55 45 100 100%
Source: Field Investigation
Graph.No.11
Registration of query/complaint in the last one month
08
162432
Yes NoCategory
No.
of
Res
pond
ent
0%20%40%60%80%
Per
cent
age
Prepaid Postpaid Percentage
Source: Field Investigation
Inference: 52% of the respondents did not register any query/complaint in the last one month.
Since the complaints or query are not given responses, the customers desist
complaints. Perhaps the complaints handling process is cumbersome and not fast
enough.
Page 60
Table.No.12 Classification of data based on the rating the ability to listen and understand the
query/concern:
No. of Respondents Category Prepaid Postpaid Total Percentage
Excellent 10 9 19 39% Very Good 4 4 8 17%
Good 6 4 10 21% Average 4 6 10 21%
Poor 1 0 1 2% Total 25 23 48 100%
Source: Field Investigation
Graph.No.12
Source: Field Investigation
Inference: 39% of the respondents rated the ability of listen and understand
the query/concern to be excellent. (i.e. both pre-paid and post-paid).
Ability to listen and resolve the query
02468
101214
Excellent VeryGood
Good Average PoorCategory
No.
of
resp
onde
nts
0%10%20%30%40%50%
Per
cent
age
Prepaid Postpaid Percentage
Page 61
Table.No.13 Classification of data based on answering mode of the query/concern satisfactorily:
No. of Respondents
Category Prepaid Postpaid Total Percentage
Yes 14 13 27 56%
No 11 10 21 44%
Total 25 23 48 100%
Source: Field Investigation
Graph.No.13
Source: Field Investigation
Inference: 56% of the respondents who lodged complaints in the last one month, are satisfied
with the answering mode of the query/concern by the customer care executives.
(i.e. percentage of both pre-paid and post-paid respondents)
Answering the query/concern satisfactorily
01020304050
Yes NoCategory
No.
of
Res
pond
ent
0%
20%
40%
60%
Per
cent
age
Prepaid Postpaid Percentage
Page 62
Table.No.14
Classification of the data based on getting a follow up call to resolve the query/concerns:
No. of Respondents
Category Prepaid Postpaid Total Percentage
Yes 13 9 22 46%
No 12 14 26 54%
Total 25 23 48 100%
Source: Field Investigation
Graph.No.14
Follow up of call to resolve the query/concern
0
5
10
15
20
Yes NoCategory
No.
of
Res
pond
ent
0%
15%
30%
45%
60%
Per
cent
age
Prepaid Postpaid Percentage
Source: Field Investigation
Inference: 54% of the respondents did not get follow up call to resolve their query/concerns
in spite of lodging complaints. (12 respondents were pre-paid service users and 14
respondents were post-paid service users).
Page 63
Table.No.15 Classification of the data based on communication about the launch of new rate
plans/schemes/offers in time:
No. of Respondents
Category Prepaid Postpaid Total Percentage
Yes 35 25 60 60%
No 20 20 40 40%
Total 55 45 100 100% Source: Field Investigation
Graph.No.15
Communication about the launch of new rates/plans
010203040
Yes NoCategory
No.
of
Res
pond
ent
0%20%40%60%80%
Per
cent
age
Prepaid Postpaid Percentage
Source: Field Investigation
Inference: 60% of the respondents are communicated about the launch of new rate plans/
schemes/offers in time. (Out of 55 prepaid respondent 35 of them were communi-
-cated and out of 45 postpaid respondents 25 of them were communicated).
Page 64
Table.No.16 Classification of data based on communication about the procedure/mode to upgrade the
rate plans/schemes/offers:
No. of Respondents
Category Prepaid Postpaid Total Percentage
Yes 30 27 57 57%
No 25 18 43 43%
Total 55 45 100 100%
Source: Field Investigation
Graph.No.16
Communication about the procedure to upgrade the rates/plans
0
10
20
30
40
Yes NoCategory
No.
of
Res
pond
ents
0%
20%
40%
60%
80%P
erce
ntag
e
Prepaid Postpaid Percentage
Source: Field Investigation
Inference: 57% of the respondents are communicated about the procedure/ mode to upgrade
the rate plans/schemes/offers, of which 30 respondents are using pre-paid service
and 27 respondents are using post-paid.
Page 65
Table.No.17
Classification of data based on finding the AIRTEL advertisement relevant and easy to
understand:
No. of Respondents
Category Prepaid Postpaid Total Percentage
Yes 43 33 76 76%
No 12 12 24 24%
Total 55 45 100 100%
Source: Field Investigation
Graph.No.17
Finding the AIRTEL advertisement relevant
0
1020
3040
50
Yes NoCategory
No.
of
resp
onde
nt
0%
20%
40%
60%
80%
Per
cent
age
Prepaid Postpaid Percentage
Source: Field Investigation
Inference: 76% of the respondents found the AIRTEL advertisements relevant, informative
and easy to understand. The prepaid customers mostly found the advertisements
relevant and informative.
Page 66
Table.No.18 Classification of data based on receiving the monthly bills well in advance before the due
date:
No. of Respondents
Category Post paid Total Percentage
Yes 37 37 82%
No 8 8 18%
Total 45 45 100%
Source: Field Investigation
Graph.No.18
Source: Field Investigation.
Inference: 82% of the respondents receive the monthly bills well in advance
before the due date. (This is applicable only to postpaid service users).
Receiving the bill on time
Yes82%
No18%
Yes
No
Page 67
Table.No.19 Classification of the data based on finding the payment reminder through SMS/calls useful:
No. of Respondents
Category Post paid Total Percentage
Yes 37 37 82%
No 8 8 18%
Total 45 45 100% Source: Field Investigation.
Graph.No.19
Finding the payment reminder through SMS/calls useful
Yes82%
No18%
YesNo
Source: Field Investigation
Inference: 82% of the respondents found the payment reminder through
SMS/calls useful for the monthly bills.
Page 68
Table.No.20 Classification of the data based on finding the bills error free:
No. of Respondents
Category Post paid Total Percentage
Yes 30 30 78%
No 15 15 22%
Total 45 45 100%
Source: Field Investigation
Graph.No.20
Finding the bills error free
Yes78%
No22%
Yes
No
Source: Field Investigation
Inference: 78% of the postpaid respondents found the bills error free i.e. 30
respondent out of 45 respondent using post-paid services.( As bills are given
only to post-paid customers).
Page 69
Table.No.21 Classification of the data based on rating of the AIRTEL services:
SERVICES
Category SMS % MMS % GPRS % RM/VM %
Excellent 42 42% 17 22% 20 25% 11 14%
Very Good 32 32% 24 31% 16 20% 15 18%
Good 18 18% 19 25% 25 31% 31 39%
Average 5 5% 7 9% 11 13% 16 20%
Poor 3 3% 10 13% 9 11% 7 9%
Total 100 100% 77 100% 81 100% 80 100% Source: Field Investigation Graph.No.21
Source: Field Investigation
Inference: The respondents found the SMS services was excellent i.e. 42%, RM/VM was
found good i.e. 39% and MMS and GPRS to be average which were 25% and
31% respectively.
Rating of the Airtel services
0%10%20%30%40%50%
Excellent Very Good Good Average PoorCategory
Per
cent
age
SMS MMS GPRS RM/VM
Page 70
Table.No.22 Classification of the data based on rating of the AIRTEL overall services:
No. of Respondents Category Prepaid Postpaid Total Percentage
Excellent 14 12 26 26%
Very Good 16 19 35 35%
Good 20 9 29 29%
Average 4 5 9 9%
Poor 1 0 1 1%
Total 55 45 100 100%
Source: Field Investigation
Graph.No.22
Rating of the AIRTEL overall services.
05
10152025
Excellent VeryGood
Good Average Poor
Category
No.
of
resp
onde
nts
0%10%20%30%40%50%
Per
cent
age
Prepaid Postpaid Percentage
Source: Field Investigation
Inference: Overall the service is considered to be very good by the respondents
both the prepaid and postpaid Airtel service user.(i.e. 35% of the respondent).
Page 71
Table.No.23 Classification of the data based on the activation/cancellation of offers/services like roaming
STD/ISD etc taking place within the time committed:
No. of Respondents
Category Prepaid Postpaid Total Percentage
Yes 35 26 61 61%
No 20 19 39 39%
Total 55 45 100 100%
Source: Field Investigation
Graph.No.23
Activation/Cancellation of services
0
10
20
30
40
Yes NoCategory
No.
of
Res
oond
ent
0%
20%
40%
60%
80%
Per
cent
age
Prepaid Postpaid Percentage
Source: Field Investigation
Inference: 61% of the respondents found the activation/cancellation of offers/
services like roaming STD/ISD etc takes place within the time
committed to them.
Page 72
Table.No.24 Classification of the data based on the plan changes taking place within the time committed:
No. of Respondents
Category Prepaid Postpaid Total Percentage
Yes 35 28 63 63%
No 20 17 37 37%
Total 55 45 100 100%
Source: Field Investigation
Graph.No.24
Plan changes taking place within the time committed
0
10
20
30
40
Yes NoCategory
No.
of
Res
pond
ents
0%
20%
40%
60%
80%
Per
cent
age
Prepaid Postpaid Percentage
Source: Field Investigation
Inference: 63% of the respondents found that the plan change takes place within
the time committed.
Page 73
Table.No.25 Classification of the data based on rating the time taken for service restoration in case of
barring/suspension:
No. of Respondents
Category Prepaid Postpaid Total Percentage
Excellent 13 9 22 22%
Very Good 10 5 15 15%
Good 15 20 35 35%
Average 12 5 17 17%
Poor 5 6 11 11%
Total 55 45 100 100%
Source: Field Investigation Graph.No.25
Rating of the time taken to restore services in case of barring/suspension.
05
10152025
Excellent VeryGood
Good Average Poor
Category
No.
of
Res
pond
ent
s
0%
10%
20%
30%
40%P
erce
ntag
e
Prepaid Postpaid Percentage
Source: Field Investigation
Inference: 35% of the respondents rated the time taken for service restoration case of
barring/suspension to be good of which 15 respondents were pre-paid and
20 respondents were post-paid service users.
Page 74
Table.No.26 Classification of the data based on preference between prepaid and postpaid cellular service
of AIRTEL.
Category No. of Respondents Percentage
Pre paid 55 55%
Post paid 45 45%
Total 100 100%
Source: Field Investigation
Graph.No.26
Preference between Prepaid and Postpaid
55%
45% Pre paidPost paid
Source: Field Investigation
Inference: 55% of the respondents preferred prepaid cellular service to postpaid.
Most of the customer in the youth segment prefer prepaid, as they can
switch over to different rate plans easily.
PART ‘C’
CONCLUSIONS AND
RECOMMENDATIONS
CHAPTER-6
SUMMARY OF CONCLUSIONS AND
A SCHEME OF
RECOMMENDATIONS
Page 77
6.1 Conclusions from the study. The respondents using Airtel services are more in the age group of 22-27 (from the survey
conducted on 100 respondent of the youth segment), they prefer prepaid for the ease of use and to
limit their bills. Most of the customers found the call quality and network coverage to be good.
44% of the respondent’s encounter the problem of calls dropping. Both the prepaid and postpaid
customers found the customer care executives customer friendly.
The postpaid customers are not many in the youth segment because they prefer to keep
switching to different schemes and prefer to enjoy the value added services. The customer does not
complaint, thinking that doing so is of no use. But our personal enquiry has shown that those
customers who have lodged/raised complaints/queries got instant response. The communication
system of using SMS/calls to remind the customer about their due date for the validity of their
account is found to be very useful; the company also update the customers regarding new plans
/schemes through SMS/Calls.
The overall rating of Airtel service is found to be very good. Their wide network
coverage is an added advantage to the company.
Many subscribers shift to another vendor due to brand image. Beyond the brand image,
higher churn is generally attributed to the numerous tariff options available to customers. A
customer may also churn due to billing disputes with a particular vendor billing fraud also comes
into play. The tariff plans is the quality of customer service that prompts a customer to churn or
remain loyal. In the current market scenario there is hardly any difference in offerings, prices and
quality of service offered by different operators. Virulent competition has ensured that there is not
much difference between the tariffs plans offered by different vendors. This is where customer
service and value-added services come into play. If an operator does not anticipate market needs or
does not provide value-added services offered by the competitor, then the customer is likely to
churn. Other than this, some of the key factors that encourage churn are inadequate network
coverage, which includes dropped calls that occur in places where network coverage is thin and
blocked calls that occur when the demand for network services exceeds capacity.
Page 78
The churn problem is more prevalent in the prepaid segment, which today accounts
for the vast majority of Indian cellular users. The prepaid customer is more price-sensitive than the
post-paid one. With rentals as low as Rs 300, customers with low usage prefer prepaid cards. Also,
students and those who like to experiment with different networks prefer the prepaid offering.
6.2 A SCHEME OF RECOMMENDATIONS: MICRO-LEVEL RECOMMENDATIONS:
��Reach out to the customers with special offers, or as can be called, “high touch” opportunities.
��Membership cards and programs that entitle the customers to special offers,
discounts, or preferential treatment.
��Welcome, acknowledgement, sales recognition, and ‘thank you’ statements.
��Periodical survey pertaining to after sales satisfaction and complaint/inquiries.
CRM package is not a substitute for either dedicated teams or customer satisfaction
surveys.
��Event oriented communications in which the customers are genuinely interested.
��Enhanced and empowered customer, after sales, and technical support
��Integrated Customer Relationship Management (ICRM) is the latest marketing
strategies that have to be developed to meet the challenges raised from the daily
marketing consulting services. CRM is not just a software package, it is a doing
business powerfully. More specifically, it is a state of mind. It delivers, only when it
is rooted strongly in the company’s culture.
��The company should effectively use the software package to track customer needs.
A customer needs survey should be undertaken to reinforce the software package.
Such a survey will bring to light several opportunities not only for customer
retention but also business expansion.
��Effective implementation of customer databases, with which the company will be
able to re-establish contact with customers, and will be able to work successfully
towards increasing customer retention, repeat sales, and customer referrals. When
the company develops a CRM package, care should be taken to see that such a
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CRM package captures the insights on the customer that the company could
leverage to improve its service quality, mere generating huge units of customer data
like usage- and – destination patterns is not enough.
��Customer retention through database marketing programs
��A commitment to quality in all aspects of the customer service.
��Implement SAS’s churn management system to reduce churn and retain valuable
customers.
��Treat each customer differently as per needs. Since the customer needs keep on
changing, the product offerings have to be regularly changed too.
��The customer attributes typically considered in a churn analysis can be broadly
categorized into customer demographics, contractual data, technical quality data,
billing and usage data and events-type data.
��Put in place relationship teams to look after corporate and platinum customers.
��The company must introduce a plethora of value-added services to increase
customer ‘stickiness’.
��Devise more attractive incentives, tariff bundles, loyalty schemes and proactive
customer service along with acquisition strategies to attract the right type of
customer, thus reducing fraud and bad debt.
��Since the company has relatively a large base of customers and is operating in a
high- volume scenario, the key to survival in terms of customer retention is
standardization of services through computers. At the same time, the key to
competitive advantage is differentiation. This is where the customization of service
comes in.
��The customer service department can be streamlined with performance rating of the
staff on the basis of such parameters as:
9�Responsiveness (Is the staff quick to attend to the customers).
9�Assurance (Does the staff inspire trust, comfort and confidence).
9�Reliability (Does the staff do it right the first time).
9�Empathy (Does the staff come across as caring about the customers).
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��The complaints handling process needs:
9�Act quickly: If the complaint is made during service delivery, time is of the
essences to achieve a full recovery. When complaints are made after the
fact, many companies have established policies of responding within 24
hours or sooner. Even when full resolution is likely to take longer, fast
acknowledgment remains very important.
9�Admit mistakes, but do not be defensive: Acting defensively may suggest
that the organization has something to hide or is reluctant to fully explore
the situation.
9�Show that you understand the problem from each customer’s point of view:
Seeing situations through the customer’s eye s is the only way to understand
what they think has gone wrong and why they are upset. Service personnel
should avoid jumping to conclusions with their own interpretations.
9�Don’t argue with customers: The goal should be to gather facts to reach a
mutually acceptable solution, not to win a debate or prove that the customer
is an idiot. Arguing gets in the way of listening and seldom diffuses anger.
9�Acknowledge the customer’s feelings, either tacitly or explicitly (for
example, “I can understand why you are u pset”). This action helps to build
rapport, the first step in rebuilding a bruised relationship.
9�Give customers the benefit of the doubt: Not all customers are truthful, and
not all complaints are justified. But customers should be treated as though
they have a valid complaint until clear evidence to the contrary emerges. It
is a good idea to check records to see whether there is a past history of
dubious complaints by the same customer.
9�Clarify the steps needed to solve the complaint: When instant solutions are
not possible, telling customers how the organization plans to proceed shows
that corrective action is being taken. It also sets expectations about the time
involved. So firms should be careful not to over promise!
9�Keep customers informed of progress: Nobody likes being left in the dark.
Uncertainty breeds anxiety and stress. People tend to be more accepting of
disruptions if they know what is going on and receive periodic progress
reports.
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9�Consider compensation: When customers do not receive the service
outcomes they have paid for or have suffered serious inconvenience and/or
loss of time and money because the service failed, either a monetary
payment or an offer of equivalent service in kind is appropriate. This type
of recovery strategy may also reduce the risk of legal action by an angry
customer. Service guarantees often lay out in advance what such
compensation will be, and the firm should ensure that all guarantees are
met.
9�Persevere to regain customer goodwill: When customers have been
disappointed, one of the biggest challenges is to restore their confidence
and preserve the relationship in the future. Perseverance may be required to
defuse customers’ anger and to convince them that actions are being taken
to avoid a recurrence of the problem. Truly exceptional recovery efforts can
be extremely effective in building loyalty and referrals.
��It is also imperative for the company to take a comprehensive view of the retention
strategies of its leading competitors so that some of these strategies can be
benchmarked for the benefits of the company.
��The company has two options in the matter of customer retention:
9�The company can work to retain all of its customers.
9�The company can focus only on those customers who fits with the
company’s growth vision.
The company can trade-off between these two options with the help of rate of attrition
of customers
��It should be reiterated that customer retention is not enough; it should be augmented
with customer loyalty programs that reward the customer for their loyalty. This will
enable the company to retain customer even during a price war. Today customers
expect rewards for their loyalty when choosing a loyalty program, the company
needs to take into account the different types of motivators like reward,
philanthropy and customer intimacy and match them to the target customers. There
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are many options for inventing loyalty; the company can offer discounts, provide
points redeemable for free stuff, offer improved services or priority treatment. As
the company looks at its loyalty program, it can determine which rewards appeal
most to its customers and then match the reward to their desires.
��The company should take a fresh look at all those business processes that have a
bearing on its basic business objective of providing quality offering to its customer
at the lowest cost and in the least amount of time.
��While it is imperative to ensure friendly, unified interaction with the customer at the
front end, the real diffentiator is the attitude of the company towards the customer.
The company could well have service quality levels of 99%, the customer may have
only a clinical perception of its efficiency. This happens when the productivity
parameter at the individual level are not synchronize with the business needs of the
company. If the intangible warmth is missing there is every likelihood that the
customer will switch at the earliest opportunity.
��Since there is very little difference among the services provided by mobile phone
firms, it is imperative for the company to offer unique value proposition to the
customers. In our view, this UVP is an effective differentiator. The company can
forge this UVP with the help of the following dimensions of service mindedness:
9�Empathetic customer orientation: Ability to understand the customers needs
and require from their perspective and realistically applicable whether or not
something is do-able.
9�Commitment to excellence: Commitment of meeting the customer’s goals
within the given resources.
9�Responsiveness: Taking responsibility for creating delightful experience for
the customers.
9�Reliability and trustworthiness: Ability to generate and win confidence of
customers.
9�Creative problem solving: Ability to come up with innovative solutions to
customer problems.
9�Timeliness: Ability to accomplish things within the time constraints and
deadlines.
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9�Tolerance for pressure: Ability to maintain control and poise in the fame of
adversity and pressures.
9�Service recovery mindset: Ability to undo the bad service experience of a
customer by taking the corrective action “there and then” itself.
MACRO-LEVEL RECOMMENDATION:
��The personality of Airtel company is reflected in its positioning. The company may re-
position its service product (as necessitated by the market- forces); in such an event, we
recommend that the company’s repositioning strategy be based on the brand “identity
prism”. A typical adaptable BIP is given below:
REFLECTION PICTURE OF THE CUSTOMER SELF-IMAGE
EXTERNALIZATION
LIBERATION
RELATIONSHIP
CULTURE
INDIVIDUALISM
SELF-INDULGENCE
INTERNALIZATION
PHYSIQUE PICTURE OF THE COMPANY PERSONALITY
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��The company should base its current customer-driven philosophy on the “Concept of
Customer Intimacy”. Which tells us that we should not only sell the service product to
the customer but at the same time we should see that it is used in the best way. After all,
the customers pay us not for the service but for the solution. In the absence of the
application of this concept, customers either do not get what they need or they get what
they do not need.
��The company is currently in the paradigm of new genre customers, it therefore, should
address the following questions:
Î�Is the company’s customer -centric marketing relatively adequate.
�Is it designed to give customer delight?
�What switching barrier have it created?
Î�Is the company’s CRM program enough to give maximum pay -offs.
�Will customers defect from competitors and join the company?
Î�What is company’s CRM strategies for future customers?
��As a corollary to the above, we recommend that the company practise the concept of
“Service Heart” which is emotion -laden team. What is the anatomy of service heart and
what the company can do to attract and keep customers for life? We see the following
basic attitudes and actions:
�Include me: Inclusion of customers in the marketing program not only to
capture the creativity of the customers but their commitment and allegiance rise
as well.
�Connect me: Service is more than a process of meeting needs. It is an
experience that resonate with the heart.
�Teach me: Customers now expect the service provider to educate them and they
expect that service education process to be hassle-free.
�Show me the trust: Reliability is important to customers. Reliability is what the
company do to convince the customer, the company can be trusted.
�Help me be strong: Customers desire power in their lives. They are attracted to
the service provider intent on helping them gain that power.
�Delight me: It goes by many handles --- delight, dazzle, and knock the socks
off! Services with surprises tugs at the heart strings of most customers.
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�The patient with me: Customers do not expect the company to be perfect. They
do expect the company to care.
�Be generous: The wisdom of generosity lies in its being laced with authenticity.
Customers will be benefitted greatly from the initiatives of satisfaction,
retention and customization.
��We also recommend the company to adopt/adapt the Acquisition-Retention-
Profitability Model (ARPRO) developed by Reinartz, Thomas and Kumar. The model
is given below:
Acquisition versus Retention
Customers are highly
loyal but also expensive
to attract.
Ideal Customers
Customers are highly
loyal but also expensive
to attract.
Responsive
customers but
rarely repurchase
Low Value
Customers
Ret
entio
n Po
tent
ial
Responsiveness to Acquisition Programs
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In the sum, our analysis calls for meticulous planning, analyzing and implementation the
superior CRM strategies to retain key customers:
Planning involves:
• Identifying key customers and calculate their life time value.
• Identifying profit opportunities.
Analysis involves:
• Analyzing the key customer segment and find out its revenue potential.
• Analyzing the defection rates of customers and the implication of it is in the ultimate
revenue.
Implementation involves:
• Developing a right a right kind of image, organizational culture and ethos.
In our view, the service company that manages to attract, nurture and preserve the
customers’ love will win, and win big. The guided missile is to create “oasis of service excellence
in the deserts of service mediocrity”.
6.3 Directions for further research.
9�Sample size can be increased to include more customers and reduce chances of
error of limitation.
9�The sample segment can be extended to include other segment of customers, to test
the retention rate in the industry beyond the youth segment, and add more
parameter to calculate the life time value of customer.
9�Further study can cover more areas inside and outside Bangalore Metropolitan Area
to exclude the chances of geographical differentiation.
ANNEXURE
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QUESTIONNAIRE
A Study on Customer Retention at AIRTEL
PERSONAL DETAILS: Name: Age: Profession/occupation: Address: NETWORK RELATED
1. How do you rate our networks call quality? Excellent [ ] Very good [ ] Good [ ] Average [ ] Poor [ ]
2. How do you rate our network coverage? Excellent [ ] Very good [ ] Good [ ] Average [ ] Poor [ ]
3. Do you face concern of call dropping? Yes [ ] No [ ]
4. Are you able to make calls at the first attempt? Yes [ ] No [ ]
CUSTOMER CARE HELPLINE 5. Have you call the customer care helpline in the last one month?
Yes [ ] No [ ] (If Yes continue, if No go to Q.no-10)
6. Do you find our Interactive voice response system (IVRS) user friendly? Yes [ ] No [ ]
7. Do you find our executives friendly, with a helpful attitude? Yes [ ] No [ ]
8. How do you rate our ability to give information about various rate plans/schemes/offers? Excellent [ ] Very good [ ] Good [ ] Average [ ] Poor [ ]
9. How do you rate our ability to give information about various value added services? Excellent [ ] Very good [ ] Good [ ] Average [ ] Poor [ ]
10. Have you registered a query /complaint in the last one month? Yes [ ] No [ ] ( If Yes continue, if NO go to Q.no-14)
11. How do you rate our ability to listen , understand and resolve your query / concern ? Excellent [ ] Very good [ ] Good [ ] Average [ ] Poor [ ]
12. Were your query /concern satisfactorily answered ? Yes [ ] No [ ]
13. Did you get a follow up call to resolve your query/concern ? Yes [ ] No [ ]
Page 89
COMMUNICATION 14. Is the launch of new rate plans/schemes/offers communicated to you in time ?
Yes [ ] No [ ]
15. Is the procedure/mode to upgrade the rate plans/schemes/offers communicated to you ? Yes [ ] No [ ]
16. Do you find our advertisement relevant and easy to understand ? Yes [ ] No [ ]
BILLING 17. Do you receive your monthly bills well in advance before the due date ? Yes [ ] No [ ]
18. Do you find the payment reminders through SMS/Calls helpful ? Yes [ ] No [ ]
19. Do you find the bills error free ? Yes [ ] No [ ]
VALUE ADDED SERVICES 20. How do you rate our services on the following ?
Excellent Very good Good Average Poor a) SMS b) MMS c) GPRS d) Reach Me / Voice Me
21. How do you rate our overall services ? Excellent [ ] Very good [ ] Good [ ] Average [ ] Poor [ ]
SYSTEMS 22. Do activations/cancellations of offers/services like roaming, STD, ISD etc takes place
within the time committed to you ? Yes [ ] No [ ]
23. Do Rate plan changes take place within the time committed to you ? Yes [ ] No [ ]
24. How do you rate the time taken for service restoration in case of barring/suspension ? Excellent [ ] Very good [ ] Good [ ] Average [ ] Poor [ ]
25. Which cellular service do you prefer ? a) Post-paid [ ] b) Pre-paid [ ] Give reason________________________________
Thank You
Page 90
SELECT BIBLIOGRAPHY Online Research
�� www.google.com
�� www.indiainfoline.com
�� www.airtelworld.com
�� www.businessstansard.com
�� www.bhartiteleventure.com
�� www.expressindia.com
�� www.dbmarketing.com
Magazines and Journals
��Marketing Mastermind
��Services marketing quarterly.
��Advertising express
��Strategic Management.
��Effective Executive.
��Marketing White book 03-04
Books
�� Strategic Marketing
�� Customer Relationship Management.
�� Marketing Management – Philip Kotler
***********