“Customer Service as a ‘Differentiator’–
A Cross-Sectional Study of the Mobile Market of Bangladesh
Background of the Study:
 |
| Customer Service |
‘Differentiation’, as opposed to price-focus, is a feature-based
strategy to outperform one’s competitors. This approach primarily focuses on
creating a separate or unique identity of the company or products to the eyes
of customers. Whereby, price-based competition emphasizes price cutting (cost
cutting) and other methods of aggressive pricing, differentiation focuses on a
quality perspective by adding new or unique features to the offerings. In Bangladesh
Differentiation strategy is an
integrated set of action designed to produce or deliver goods or services that
customers perceive as being different in ways that are important to them. It
calls for to sell non-standardized products to customers with unique needs.
(Prof. Ferhat Anwar, Undated)
Differentiation
can be (a) the target market , (b) the brand, (c)a character or a personality,
(d) Positioning, (e) product benefits - More Value-Added (MVA), (f) a single,
key persuasive sentence, and / or (g) integration across communication. The
factors can be summed up in five ways – Identity, Personify, Create a new
generic, Change the name, and Reposition the category
Strategies of Differentiation:
Getting into the
mind with a new idea or product or benefit is an enormous advantage. An
attribute is a characteristic, peculiarity, or distinctive feature of a person
of thing. Leadership is the most powerful way to differentiate a brand. The
reason is that it’s most direct way to establish the credentials of a brand.
And credentials are the collateral you put up to guarantee the performance of
your brand.
Positioning Strategy: Position is that one thing, that one
descriptive sentence or slogan the company is known for; that one specific idea
that first comes to mind about the product; and that one characteristic that
sets the service apart from competitors. (Prof. Ferhat Anwar, Undated)
 |
| Customer Service |
Dimensions of Customer Service:
- Availability of product or service (to what extent products & services of a company are available)
- Lead time (difference between time of placing the order and delivery-time) variability
- System recovery (if something goes wrong, how quickly system can recover)
- Presence of ‘shadow’ system [ability to cater to the specialized needs of favored customers]
- Availability of system information [includes, information availability, quickness, accuracy and completeness]
- Post sale support system [accessories, maintenance, follow-up etc.]
(Prof. Nurur
Rahman, Undated)
Findings of qualitative study
The
Model
The
big question:
|
The
Model
|
Is it possible to differentiate
(a service offering) based on pre- & post- sales customer services?
Rationale of the study
Over the last 2 years,
Grameenphone Ltd. has invested heavily in developing a aide network customer
service. Value-added services were introduced and specially, access to customer
service has been made available for the wider population. In this backdrop, the
Grameenphone management now wants to find out whether these investments have
made inroad to the customer heart and any position of differentiation has been
created in terms of retaining the customers.
Objectives of the Research
Broad Objectives
of the Research: To find out whether quality in customer service retains
customers.
Specific Objectives of the Research:
- To find out whether (pre & post sale-) customer service can make an operator ‘different’ (better or worse in customer perception) from its competitors -
- To identify the effect of product / service availability on customers’ perception
- To identify the effect of lead time variability on customers reaction toward an operator
- To identify the effect of ‘system recovery time’ on customers’ level of satisfaction
- To find whether having a shadow system makes customers satisfied
- To identify the effect of system information availability on customers’ perception toward an operator
- To identify effect of post-sale support system on customer perception
Hypothesis
Ho¹: Quality of Pre- &
Post-sale ‘customer service’ has direct relationship with the retention rate of
customers.
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| Customer Service |
Executive Summary:
Findings
from the study:
There was not reasonable ground to disprove the null hypothesis that
‘quality of customer service’ directly related to the retention rate of a
customer (time with an operator). In other words, Quality of customer service
has reasonable relationship with the retention of customers. Besides, other key
findings of the study are:
- ‘Perception of customer service’ is strongly dependent on eight independent parameters - Ease of use and customer friendly, Cost effectiveness of customer service, Easy & cheap information about products & services, Behavior of customer service people, Lead time variability, Availability & reach of customer service points, Readiness to go the extra mile, Ease of access to customer service people
- Quality of ‘customer service’ can help build positive impression about the operator in the perception of the customer
- Quality of ‘customer service’ can help build loyalty and attachment within the customer. However, this relationship does not hold true if we try to incorporate time-length of subscription in the equation. As the correlation # 3 shows, people who have been longer with a particular operator have shown less favorable attitude about the respective operator
- The principal component analysis identifies the following 06 components to be consistent with the factor analysis (in order the importance):
§
Ease of access to customer service people,
§
Easy & cheap information about products
& services,
§
Cost effectiveness of customer service,
§
Availability & reach of customer service
points,
§
Readiness to go the extra mile,
§
Behavior of customer service people.
Recommendations:
- Grameenphone should continue in its path to emphasizing customer service as a key differentiator while positioning itself apart from other operators.
- The key components while defining customer service are- a) Ease of access to customer service people, b) Easy & cheap information about products & services, c) Cost effectiveness of customer service, d) Availability & reach of customer service points, e) Readiness to go the extra mile, f) Behavior of customer service people.
- Appeal of a particular service might wear off with the length of time a customer sticks with a particular operator. So, Grameenphone should continue to redefine the 6-factors customer service with new features and facilities.
- On a more general note, the operator instead of concentrating on price based-competition should focus on a qualitative positioning. Otherwise they might soon find their profit base eroding rapidly.
- Grameenphone should identify customer service as a core competence area (in addition to network quality and value-based services) and continue build on that.
Methodology:
Scope:
The primary
scope is to find the answers to the specific objectives as described above
The research
will reflect the perception of mobile phone subscribers of Bangladesh
The report will
reflect the opinion of the respondents, and findings will be based on those
sampled opinion
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| Customer Service |
The mobile
subscribes living within Dhaka city have been
taken as the sample frame of the study; however, the background of the study
encompasses the whole mobile industry of Bangladesh
Only the
subscribers of five operators (GP, Aktel, CityCell, BanglaLink and Tele Talk)
have been considered for the study. Subscribers of any other fringe operators
were not considered.
Limitations:
- Sample sizes for Tele Talk and City Cell subscribers are short of the planned number (30); so any deductions based on these samples regarding Tele Talk and City Cell might not be statistically correct
- Many of the findings & concepts from the qualitative study could not be accommodated. Some of them (as following) were dropped from quantitative survey:-
- Development of new features in mobile packages
- Role of pricing in customer perception etc.
- Customer service (a comprehensive construct) was replaced by 6 parameters – product/service availability, lead time variability, availability of shadow system, system recovery time, availability of system information, and availability of post sales support service.
- Respondents of the quantitative survey have shown a tendency to over state the time for which they are using the current operator
Sampling type:
Quota sampling
method was employed, where sample units represent the proportional distribution
of the population. Sample elements are individual subscribers of different mobile
operators (Grameenphone, Aktel, BanglaLink, CityCell, and Tele Talk). Sample
frame is all the mobile phone subscribers of Bangladesh
Sample size:
Sample size is
182 (calculation of the sample structure
is given in the appendix # 2)
Field survey method:
As it is a cross
sectional study, survey elements were chosen from the subscribers of five
mobile operators. However, individual elements were picked based on
convenience. Although the study covers the mobile phone industry of Bangladesh Dhaka . The
researcher acted as interviewer. Sample elements were given the questionnaire
on the spot to fill up. The questionnaire was self-administered.
Contribution of research:
Individual: As a
student of marketing, I am getting a hands-on learning in the pros & cons
of research. Learning to apply the tools & techniques from classroom to the
applied world of real-life business problems.
Organizational:
findings and learning from the study can be used by the mobile operators of Bangladesh
Society: Maybe
the learning are minute and fraught with mistakes (of an apprentice), however,
it will add to the total understanding of mobile service marketing in
Bangladesh as very little have been done in areas of differentiation and per
se.
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| Customer Service |
Analysis techniques used:
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Sections of
the Findings
|
Analysis
Technique used
|
|
Reliability of
data
|
Cronbach’s
Alpha
|
|
Distribution
of sample
|
Descriptive
statistics, graphs
|
|
Quality of
customer service
|
Regression
model and ANOVA table
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Relationship
between customer service & impression about operator
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Correlation
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Test of null
hypothesis
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Paired sample
t-test and descriptive statistics
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Key components
for customer service
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Key component
factor analysis
|
Findings & Recommendations:
Reliability:
The reliability
test shows Cronbach’s alpha to be .649 proving the data to be reasonably
reliable.
Case Processing Summary
A List wise
deletion based on all variables in the procedure.
Reliability Statistics
Scale Statistics
Distribution of Sample
Interpretation:
As
the above pie-chart shows, Grameenphone has clearly lead the pack in terms of
retaining their customers over the years followed by Aktel. On the other hand,
BanglaLink has majority of their subscribers for less than 1 year. This fact is
consistent with the core hypothesis, as Grameenphone has been spending heavily
on customer service over the years; and currently has more than 600 customer
contact points through out Bangladesh
Interpretation:
Both
Aktel and BanglaLink have majority of their subscribers coming from the age
group of 15-25 year; where as Grameenphone has substantial number of customers
who are older than 25 years – this fact can have important implication
regarding retention & loyalty as young people are generally more
inquisitive and less loyal; and whenever any new offers come along they are the
first to jump ship.
What is Quality Customer Service?
Customer
Service, to the best of understanding, is a construct, which can mean both pre-
& post- sales services. But, when customers talk about quality of service,
they usually mean speed, convenience, availability and other related concepts.
So, for our analysis, ‘customer service’ has been replaced by the following 8
parameters or concepts:
a) Ease of use
and customer friendly, b) Cost effectiveness of customer service, c) Easy &
cheap information about products & services, d) Behavior of customer
service people, e) Lead time variability, f) Availability & reach of
customer service points, g) Readiness to go the extra mile, h) Ease of access
to customer service people
The following
regression model tries to understand the strength and direction of relationship
between these eight parameters (independent variables) and perception about
customer service – based on survey results.
Model Summary
a Predictors: (Constant), Ease of use and
customer friendly, Cost effectiveness of customer service, Easy & cheap
information about products & services, Behavior of customer service people,
Lead time variability, Availability & reach of customer service points,
Readiness to go the extra mile, Ease of access to customer service people
ANOVA(b)
b Dependent
Variable: Overall impression about customer service of current operator
Interpretation: From the above
regression model, the ‘R’ score (0.678) and the level of significance imply
‘perception of customer service’ is strongly dependent on eight independent
parameters. However, there might be other factors (apart from these 8) to
consider as the ANOVA table shows – Residual values constitute a significant
portion of the total ‘sum of squares’ value. Relationship between Quality of Customer
Service & Impression about Operator Correlations
# 1
Descriptive Statistics
Interpretation:
As
the above correlation table shows, variable ‘overall impression about current
operator’ and ‘overall impression about customer service of current operator’
have strong correlation (0.591) and they are both unidirectional. Thus,
it can said based on this analysis that quality of ‘customer service’ can help
build positive impression about the operator in the perception of the customer.
Interpretation: The following correlation tries to
measure the degree of correlation between the variables ‘feel love & pride
to do business with current operator’ and ‘overall impression about customer
service of current operator’. Result of this test also shows quality of
‘customer service’ can help build loyalty and attachment within the customer (correlation
score 0.548). However, this relationship does not hold true if we try to
incorporate time-length of subscription in the equation. As the correlation # 3
shows, people who have been longer with a particular operator have shown less
favorable attitude about the respective operator (negative correlation).
Correlations
# 2 Descriptive Statistics
.
Quality of Customer Service: Determining the Key Components
Communalities
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Sl
|
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Initial
|
Extraction
|
|
01
|
Lead time variability
|
1.000
|
.562
|
|
02
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Ease of use and customer
friendly
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1.000
|
.618
|
|
03
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Behavior of customer
service people
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1.000
|
.644
|
|
04
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Readiness to go the extra
mile
|
1.000
|
.648
|
|
05
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Availability & reach
of customer service points
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1.000
|
.737
|
|
06
|
Cost effectiveness of
customer service
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1.000
|
.779
|
|
07
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Easy & cheap
information about products & services
|
1.000
|
.787
|
|
08
|
Ease of access to customer
service people
|
1.000
|
.809
|
Extraction Method: Principal
Component Analysis.
Interpretation:
The principal component analysis identifies the following 06 components to be
consistent with the factor analysis (in order the importance):
a) Ease of access to customer service people, b) Easy & cheap
information about products & services, c) Cost effectiveness of customer
service, d) Availability & reach of customer service points, e) Readiness
to go the extra mile, f) Behavior of customer service people.
Thus, we can
conclude a model for determining the quality of customer service:
Customer Service
= f (Ease of access to customer service people, b) Easy & cheap information
about products & services, c) Cost effectiveness ofcustomerservice,dAvailability&
reach of customer service points, e) Readiness to go the extra mile, f)
Behavior of customer service people)
Quality of Customer Service Determines Degree of Customer Retention
Test of
Hypothesis-
Ho: Quality of
Pre- & Post-sale ‘customer service’ has direct relationship with the
retention rate of customers (time with current operator).
Decision rule: If the mean value of the
variable “time with current operator” is not significantly different from the
mean value of variable ‘overall impression about the current operator’, then
there is not sufficient ground to disprove the null hypothesis.
Paired Sample t-
Test:
T-Test
Variables
compared= “longevity with current operator” and “Overall impression about
customer service of current operator”
Paired Samples Statistics
|
|
Mean
|
N
|
Std. Deviation
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Std. Error Mean
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|
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Pair 1
|
Time with the current operator
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3.09
|
127
|
1.414
|
.126
|
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|
Overall impression about customer service of current operator
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3.39
|
127
|
.968
|
.086
|
Paired Samples
Correlations
|
|
N
|
Correlation
|
Sig.
|
|
|
Pair 1
|
Time with the current operator & Overall impression about
customer service of current operator
|
127
|
.022
|
.808
|
Paired
Samples Test
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|
Paired Differences
|
t
|
df
|
Sig. (2-tailed)
|
|||||
|
|
Mean
|
Std. Deviation
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Std. Error Mean
|
95% Confidence Interval of the Difference
|
|
|
|
||
|
|
|
|
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Lower
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Upper
|
|
|
|
|
|
Pair 1
|
Time with the current operator - Overall impression about
customer service of current operator
|
-.30
|
1.696
|
.151
|
-.60
|
.00
|
-1.988
|
126
|
.05
|
Interpretation:
The
level of significance for T-test is low but not lower than the critical point
(0.05). The Lower and upper limit of the confidence interval contains ‘zero’
among them. So, there is not enough evidence to disprove the null hypothesis.
So, quality
of customer service has reasonable relationship with the retention of
customers. However, the correlation value of the paired sample variables show a
weak (0.22) relationship among the two variables.
Perceptual position of the four operators (in eyes of the customers):
[Ref: “Differentiation in Mobile Market
of Bangladesh
A significant number of the respondents did
not answer this question, while asked to differentiate Aktel from other
operators based on a certain factor. This can lead to the conclusion that Aktel
has failed to create any clear position in the perception of the customers.
Apart from that- low call charge, 10-second pulse and features & facilities offered by the operator
(Aktel) has been cited as consistent factors with Aktel. (Fig-3)
Similarly, regarding
CityCell most of the respondents struggled to delineate a position for the
operator. Most of respondent could only cite the CDMA technology as the major
differentiating factor for the operator.
(Fig-4)
However, when asked
with the same question regarding GrameenPhone, most of the respondents talked
about the nation-wide coverage and higher quality of network for the operator.
(Fig- 5)
Regarding
BanglaLink, respondents could not identify any one or two area for differentiation,
prompting one to speculate that BanglaLink although vibrant & dynamic had
given away to many messages cluttering the perception of the customer; and forcing the customers
from forming any clear perception about the company.
Results of the
above analysis is presented in the following table:
Table:
Perceptual position of the 4 operators (in customer mind)
|
|
GP
|
Aktel
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CityCell
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BanglaLink
|
|
Area of Focus
|
Service, Coverage & Net
Quality
|
Low price, 10-secod pulse and
Features & facilities
|
CDMA technology & lower
rate
|
No clear position
|
Recommendations:
·
Grameenphone should continue in its path to
emphasizing customer service as a key differentiator while positioning itself
apart from other operators.
·
The key components while defining customer
service are- a) Ease of access to customer service people, b) Easy & cheap
information about products & services, c) Cost effectiveness of customer
service, d) Availability & reach of customer service points, e) Readiness
to go the extra mile, f) Behavior of customer service people.
·
Appeal of a particular service might wear off
with the length of time a customer sticks with a particular operator. So,
Grameenphone should continue to redefine the 6-factors customer service with
new features and facilities.
·
On a more general note, the operator instead of
concentrating on price based-competition should focus on a qualitative
positioning. Otherwise they might soon find their profit base eroding rapidly.
·
Grameenphone should identify customer service as
a core competence area (in addition to network quality and value-based
services) and continue build on that.
 |
| http://softcomweb.com/ |
Limitations:
Lack of
availability of the respondents forced the study to be completed with 132
sample elements rather than the initial 182 (stipulated). However, the
researcher tried to meet the 30-sample mark under each category of population.
At the end, the sample was more or less representational of the population
groups.
Conclusion:
There was not
sufficient ground to disprove the hypothesis that “Quality of Pre- &
Post-sale ‘customer service’ has direct relationship with the retention rate of
customers (time with current operator)”. In other words, customer service can
give an edge to a particular operator over its competitors. Grameenphone
already has some degree of perceptual positioning distinct from its competitors
(in terms of customer service and network quality). However, the problem with
any service is competitors can quickly catch up with one’s position and emulate
Grameenphone’s current offerings. So, the challenge is to redefine the basic
concepts of customer service (a) Ease of access to customer service people, b)
Easy & cheap information about products & services, c) Cost
effectiveness of customer service, d) Availability & reach of customer
service points, e) Readiness to go the extra mile, f) Behavior of customer
service people) with innovative offers and facilities. Only, thus, Grameenphone
can stay ahead of its competitors and create a differentiated position in terms
of retaining its customers.
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