pankaj singh-0550-customer retention @ hutch

8/2/2019 Pankaj Singh-0550-Customer Retention @ Hutch

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A Market research on

Customer Retention at HUTCH, Bangalore.

Submitted in partial fulfillment of the requirement for

MBA Degree of the Bangalore University

ByPankaj Kishore Singh

05XQCM6058

Under the Guidance of

Prof. Shinu Abhi.

M.P.Birla Institute of Management,

Associate Bharatiya Vidya Bhavan,

Bangalore 560 001.

2005-2007


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DECLARATION

I hereby declare that the research work embodied in the dissertation entitled

Customer Retention at HUTCH, Bangalore, has been carried out by me under the

guidance and supervision of Prof. Shinu Abhi, , 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: (PANKAJ KISHORE SINGH)


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CERTIFICATE

I hereby certify that the research work embodied in this dissertation entitled

Customer retention at HUTCH, Bangalore, has been undertaken and completed byMr. Pankaj Kishore Singh 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 Prof. Shinu Abhi

Date: MPBIM, Bangalore


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CERTIFICATE

This is to certify that Mr. PANKAJ KISHORE SINGH has carried out the

project work embodied in this dissertation entitled CUSTOMER RETENTION

SURVEY OF HUTCH, Bangalore under the guidance of Prof. Shinu Abhi,

M.P.B.I.M, Bangalore.

Place : Bangalore (Dr. N.S. Malavalli)

Date: PRINCIPAL


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ACKNOWLEDGEMENT

I am happy to express my deep sense of gratitude to Dr. Nagesh Mallavali,

(Principal, M.P.Birla Institute of Management), for their encouragement, guidance andmany valuable ideas imparted to me for my project.

I extend my sincere thanks to Shinu Abhi (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.

(Mr. PANKAJ KISHORE SINGH)


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CONTENTS

PART A

Page No.

Executive summary 01

1. INTRODUCTION 05

1.1. Background of the study.

1.2. Statement of the problem.

1.3.Need and significance of the study.

1.4. Objectives of the study.

2. REVIEW OF LITERATURE 13

2.1 Purpose of review.

2.2 Methodology.

2.3 Conclusion.

3. COMPANY PROFILE 23

4. RESEARCH METHODOLOGY 37

4.1 Type of Research.

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.


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PART B (SURVEY FINDINGS)

Page No.

5. DATA ANALYSIS AND INFERENCES. 40

PART C

6. SUMMARY AND CONCLUSIONS. 66

6.1 Conclusions from the study.

6.2 Implications of the study.

6.3 Direction for further Research.

ANNEXURE:

1. Questionnaire 75

2. Bibliography 78


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LIST OF TABLES

Page. No.

1. Table showing data based on age. 412. Table showing data based on profession. 42

3. Table showing data based on rating of the network coverage. 43

4. Table showing data based on concern of call breaking. 44

5. Table showing data based on ability to call at the first attempt. 45

6. Table showing data based on the calls made to the customer care 46

help line in the last one-month.

7. Table showing data based on finding the Interactive Voice Response 47

System (IVRS) user friendly.

8. Table showing data based on finding the executives friendly with a 48

helpful attitude.

9. Table showing data based on rating the ability to give information about 49

various value added services.

10. Table showing data based on the registration of query/complaint in the last 50

one month

11. Table showing data based on the rating the ability to listen and understand 51

the query/concern.

12. Table showing data based on answering mode of the query/concern satisfactorily. 52

13. Table showing data based on getting a follow up call to resolve the query. 53

14. Table showing data based on communication about the launch of new rate 54

plans/schemes/offers in time..

15. Table showing data based on finding theHUTCHadvertisement relevant 55

and easy to understand.


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LIST OF TABLES

Page No.

16. Table showing data based on receiving the monthly bills well in advance 56

before the due date.

17. Table showing data based on finding the payment reminder through 57

SMS/calls useful.

18. Table showing data based on finding the bills error free. 58

19. Table showing data based on rating of theHUTCHservices.. 59

20. Table showing data based on the activation/cancellation of offers/services 61

like roaming STD/ISD etc taking place within the time committed.

21. Table showing data based on the plan changes taking place within the 62

time committed.

22. Table showing data based on rating the time taken for service restoration 63

in case of barring/suspension.

23. Table showing data based on rating of theHUTCHoverall services 64

24. Table showing data based on preference between prepaid and postpaid 65

cellular service of HUTCH.


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LIST OF CHART

Page. No.

1. Chart showing Hutch user based on age group. 41

2. Chart showing Hutch user based on Profession. 42

3. Chart showing Rating of the network coverage. 43

4. Chart showing concern of call breaking. 44

5. Chart showing Ability to call at the first attempt. 45

6. Chart showing call made to customer care in the last one month. 46

7. Chart showing user friendliness of the Interactive Voice Response 47

System (IVRS).

8. Chart showing helpfulness of the Customer Care Executive s. 48

9. Chart showing ability to information about various value added services. 49

10. Chart showing registration of query/concern in the last one month. 50

11. Chart showing ability to listen and resolve the query. 51

12. Chart showing answering the query/concern satisfactorily. 52

13. Chart showing follow up of call to resolve the query/concern. 53

14. Chart showing communication about the launch of new plans /schemes. 54

15. Chart showing finding the HUTCH advertisement relevant. 55

16. Chart showing receiving the bill on time. 56

17. Chart showing finding the payment reminder through SMS/calls useful. 57

18. Chart showing finding the bills error free. 58


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LIST OF CHART

Page. No.19. Chart showing rating of the HUTCH Value Added Services. 59

(a) SMS

(b) MMS

(c) GPRS

20. Chart showing Activation/Cancellation of services. 61

21. Chart showing plan changes taking place within the time committed. 62

22. Chart showing rating of the time taken for service restoration. 63

23. Chart showing rating of the overall HUTCH Services 64

24. Chart showing preference between Prepaid and Postpaid. 65


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EXECUTIVE

SUMMARY


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EXECUTIVE SUMMARYIntroduction

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 disambiguation 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 customer defection. The problem is

extremely acute in the telecom industry, with customers joining and quitting in short

periods. The problem to addressing here is how a service firm evaluates retentionstrategies when it is likely to Pay-off?

Research Objectives

To understand the intricacies of Customer Relationship Management Customer Relationship Management in action in the service sector To examine the current customer retention strategies being deployed by HUTCH. To evaluate of retention strategies when it is likely to pay-off. To identify the deficiencies in the existing Customer Retention Strategies To modify the Customer Retention Strategies


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Research Methodology

Primary data: - Structured questionnaire & Observation technique. Secondary data: - Data analysis, company website, literature survey, magazines,journals & expert opinion.

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 is not possible. Hence, the project used stratified random sampling technique.

Respondents should be selected from the youth and working executive segment, who are

the major respondents of the survey.

The advantage of this technique is that it is both economical and reasonably reliable.

Sample Size.

The sample size comprises 150 respondents. The sample size of 150 respondents is

considered by me to make reasonable projection in the study of this kind.

Sample Description.The sample description will include customers of Hutch in both prepaid and

postpaid sections. The youth segment is a major respondent 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.

Findings:

Maximum number of Hutch service user are in the age group of 20-30 (almost

57%) 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 Hutch was good.


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Suggestions and Recommendation:

With effective implementation of customer databases, companies will be able to

reestablish contact with customers, and will be able to work successfully towards

increasingcustomer retention, repeat sales, and customer referrals. Reach out to the customers with

special offers. 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.


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PART-A(Theoretical Settings)

CHAPTER-1

INTRODUCTION


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1.1Background 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 two factors:

Industry retention rate: If the industry retention rates are lower, theleverage effect on profits will also lower. 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.


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Segmentation issues: Basic segmentation issues need to be addressed todetermine if viable segment exists and can be identified; otherwise there may be

more profitable avenues for the firm to pursue. Attracting and keeping the

highest-value customers is the corner stone of a successful 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.

Choice of a CRM PlatformA companys choice of a CRM solution will affect its ability to collect, analyze

and use the data. A balanced CRM solution should offer thefunctionality 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.


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Todays 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.

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.

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.


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Customer retention in current scenario

In the cellular sector, attrition rates in the region of 30% are not unusual, but a

few Companies have managed to achieve rates of around 15%. Attrition management

products are profiled and a model shows the typical cost reductions available from a

churn management programme.

Key strategies include:

Incentives and tariff bundles which target the most profitable customers Loyalty schemes which are appropriate to the value of the business savedAcquisition strategies which attract the right type of customer, reducing fraud and

bad debt

Proactive customer serviceStrategies 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.

Benefits of Customer Retention

Customer retention affects both revenues and costs in the equation of profitability:

Profit =Revenue Cost

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


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f) Price premiums as current customers usually do not wait for promotions or price

reduction before they make their purchases

Tips to make CRM Success

Define your business objectives and goals against which results can be measured Given each CRM product, focus on three dimensions: People, processes and

technology.

Establish systematic approach to product management including teamdevelopment, IT,

marketing, services, sales management as well as software.

Clearly identify corporate and customer needs. Research the requirements andbehaviour of customers and guideposts to an effective delivery of services.

Manage organizational change effectively. The human factor is imperative to aprojects success.

Invest in training-more essential than any piece of software. Focus on proactive selling, relationship building so as to effectively up sell and

cross-sell.

The keys to implement successful CRM

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.

What data is collected and stored should be measured carefully. Theimpulse will be tograb 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.


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Recognize the individuality of customers and respond appropriately. ACRM systemshould, 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

programs 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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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.

1.2 Statement of the problem.

Though many service industries are affected by the customer defection. The

problem is extremely acute in the telecom industry, with customers joining and quitting

in short periods. The problem to addressing here is how a service firm evaluates its

retention strategies when it is likely to Pay-off?

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.

1.4 Objectives of the study.

To understand the intricacies of Customer Relationship Management Customer Relationship Management in action in the service sector To examine the current customer retention strategies being deployed by HUTCH. To evaluate of retention strategies when it is likely to pay-off. To identify the deficiencies in the existing Customer Retention Strategies To modify the Customer Retention Strategies


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CHAPTER-2Literature Review


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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:

CUSTOMER CHURN IN THE COMMUNICATIONS INDUSTRY

The power in the communications market has clearly shifted to the consumer.

Never before have the barriers to switching communication providers been so low. And

while loyalty tends to be high among older consumers, younger consumers are

accustomed to continuously shopping around for the best plans, features, and perhaps

most importantly the coolest phones. According to global consulting firm, Accenture,

the steady increase in customer churn rates is being driven by several factors, including

equipment envy, flexible pricing plans, customer service, network performance, and

number portability. And as deregulation continues and technology advances, the players

in the communications industry continue to expand beyond the traditional

telecommunications companies to include cable providers, wireless service providers,

satellite service operators, and broadband phone service providers.

Customer retention statistics for consideration:

Customer churn among cable and telecommunications companies is projected tocost organizations up to $10 billion annually worldwide.

Carriers will lose 15% to 30% of their customers each year. In the U.S. alone, 20 to 30 million customers or more are expected to defect

annually.

So, faced with this competitive landscape, several new tactics are being employed

to retain customers in an industry where differentiation (whether it be on price, plans, or

phones) is extremely difficult to maintain. These tactics include:

Bundling As much of a customer acquisition as a customer retention tool, the more

products a consumer has from a single vendor, the higher the exit barrier.


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Predictive Analysis Customer data analytics allow CSPs to analyze customer

profitability and predict churn.

Outreach Historically, outbound activity in the communications sector has almost

entirely been devoted to customer acquisition. Now, outreach programs actively target

high-value, at-risk customers with marketing offers to prevent churn.

'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 Hutch 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 worlds 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 annualchurn 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.


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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. Weve for instance found that contact

centers can drive away customers to a rival service provider if a customer has to wait

long before his problem is looked into. Globally, handset issues have made a difference

too for instance, a Telco not being able to provide GSM or CDMA service. Regarding

churn, something interesting thats been noticed is that its 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, its 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 wouldnt 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.

In the case of a client such as Sprint, what kind of demands would a company thats

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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CELLCOS FACE THE CHURN AS COMPETITION INTENSIFIES

India shares the honours with Hong Kong when it comes to churn rates among its

cellular subscribers. With monthly rates ranging between 3.5 per cent and six per cent,

India has one of the highest churn rates in the Asia-Pacific region, which is a direct fall-

out of the increasing competition in the cellular sector. With a cellular penetration of

around 1.6 per cent, India is a growing market, which should ideally be showing very low

churn rates.

For instance, the churn rate in China is between 0.8 per cent and one per cent.

Usually, high churn rates are a feature of mature markets where operators are forced to

attract customers from their competitors, since the market as a whole is not growing.

According to figures available with research firm Gartner, Indias churn rate is

close to Hong Kongs 4-6% and way above that of other Asia Pacific markets like

Indonesia (1-2%), Malaysia (2-2.5%), Singapore (1.7-2.1%) and Thailand (1.9-2.6%).

The figures indicate the range of the monthly churn rates.

Churn is estimated based on the average number of cellular connections for a

given month. The high levels of tariff-driven competition in India are one reason for the

high churn rate among cellular subscribers. India has about 12 mobile players, with as

many as six cellular operators (including limited mobility players) in circles like

Mumbai. This is much higher than the average 4-5 players in countries like Australia,

Philippines and Singapore.

Even in countries like Indonesia, Malaysia and Thailand having about 7-8 players,

there are only 4-5 key cellular players, since other operators use analog systems which

are being phased out. Hong Kong and Taiwan have about six players and have

comparatively higher churn rates of 4-6% and 2-3.5% respectively. Companies need to

introduce systems to reduce churn so as to increase profitability. According to Gartners

telecom analyst, Kobita Desai, Customer retention is just as important as market

expansion. One of the key areas of profitability for companies is churn management.

Billing solutions and customer care services can play a key role in reducing churn rates.

TIMES NEWS NETWORK [FRIDAY, AUGUST 22, 2003 12:29:18 AM]


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TELCOS INVEST BIG TO PLUG BILLING ISSUES

With churn rates in the telecom industry touching a high of 7-8%, operators are

increasing investments in billing to ensure customer retention and plug loopholes in their

revenue streams. Billing problems are the biggest cause of churn as customers dont think

twice before changing their service provider due to bad billing procedures. Also, as

telecom offerings expand beyond mobile and fixed line to broadband and IPTV,

operators need more robust and comprehensive billing mechanisms. Little doubt then that

state-of-the-art billing equipment and innovative solutions have caught the fancy of

telcos.

Hutchison Essar, BSNL, MTNL, Bharti Airtel, as well as Idea Cellular are

investing big in billing solutions. And the opportunity is lucrative as IT giants Wipro

Infotech, HCL Technologies, TCS, Satyam Computers and Tech Mahindra are in the

queue for bagging the billion-dollar billing contract of public sector BSNL.

According to industry estimates, operators lose 1-4% of their revenues due to

inefficient billing mechanisms. Any failure to properly capture the services provided and

to charge the appropriate fees will have a material adverse effect on our revenue. This

makes billing extremely critical and we can spend some millions to save billions, said an

official at a telco.

While billing is largely understood to be connected to post-paid users only, billing

solutions also cover pre-paid subscribers who form around 70% of Indian mobile user

base. Indian pre-paid subscribers are also extremely cautious and like to know details of

everything that has an impact on their cash outflows, namely the recharge voucher that

they should buy to get maximum talk time, promotions on various recharges and current

balance.

They are give up use of service if these details are not easily accessible to them.

To prevent this and to empower customers to have information within seconds, we

developed CARE, an Hutch spokesperson said.

TIMES NEWS NETWORK [MONDAY, APRIL 02, 2007 02:35:31 AM]


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LOST CUSTOMER ASSESSMENT

In todays competitive global marketplace, it is estimated that an average businessloses 20% of its customer base each year. Most industry experts agree that it costs 5

times more to replace a customer than it does to retain one (Hart, Heskett, and Sasser

1990). As it costs much more to acquire and service new customers than current ones, so

it makes good business sense to reduce customer churn to the minimum

Lost Customer (Churn) research is also important as defecting customers have the

most of the information. They always know when a companys value proposition is

foundering in the face of the competition (Reicheld, 1996). Furthermore, Marketing

Science Institute, 2002 working paper mentions that, the vast majority of customers who

leave will not bother to tell why they left, but they will complain about the company to

numerous friends and business associates. The views of lost customers can provide

valuable insights to direct the companys strategy. The insights include; it identifies the

root causes of customer attrition, focuses controllable reasons for loss, highlights key

elements of product and service delivery that are impacting on customer churn based on

this company can develop a complete and proactive customer retention strategy

The most effective way of churn management is to understand subscribers churn

related behaviour in advance and form an action plan to combat this. But, lost customer

problem stems from the fact that 70% to 95% of dissatisfied customers do not bother to

complain to the service provider (Harari 1992). Services present a unique challenge for

marketers because the opportunities for failures are greater. The people element of

service delivery, heterogeneity, perishability and intangible nature of services increases

the pitfalls with services.

The Indian telecom landscape has today emerged as one of the most dynamic

business segments in the country. A survey (2004) conducted by TNS mode named

Indias Cell Track involving 30 million subscribers reflected that 2/3 of users are under

age of 35 mostly among students. Further, survey pointed out that when subscribers were


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asked whether they changed your mobile service provider in GSM 24% said yes and in

CDMA 35% said yes. There was 69% retention observed in post-paid connection

compared to 71% retention in pre-paid connection. In nutshell, lost customer is an area of

concern for the mobile service provider in post paid connections. Thus, the purpose of

this article is to identify, describe, and understand the reasons behind switching behavior

of ABC telecommunication lost customers.

Dr. Rajeev Kumar

Lal Bahadur Shastri Institute of Management

SCRAMBLING FOR CONTROL OF HUTCH ESSAR

(Published: January 11, 2007 in Knowledge@Wharton)

It's hard to say where valuation math ends and acquisitive ego begins with the

current high bidding levels for Hutch Essar, India's second largest mobile phone services

provider, which currently has 22.3 million subscribers and Rs. 5,800 crore in revenues

($1.3 billion).

At first sight, it seems obvious why Hutch Essar's valuations climbed so rapidly to

such high levels. India's current high economic growth makes it an attractive market for

foreign investors. Also, it is not every day that one gets to control a big player in a

tightly-regulated policy environment where entry barriers are high. Whats more, the

country's mobile phone subscriber base is adding six million new subscribers each month

and fast approaching 200 million, or a tenth of the world's subscribers.

Keeping Customer Churn Low

A. T. Kearney's Doshi says that, as with other global majors, customer retention

will be the top challenge Hutch Essar's new owners will face. "Customer churn is high

across the world for mobile users, but higher in India," says Doshi. "The only way

[mobile phone services companies]do it globally is by strengthening customer

relationships; price becomes a factor, in addition to service levels and dropped calls.

Once you have parity on those dimensions with all others, you need to adopt an end-to-

end customer touch model." Doshi says at that stage, the key issues include convenience


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in the billing and payment cycle, the resolution of customer problems and "customer

reach" -- how companies proactively reach out to customers on an ongoing basis with

new options and offers. "In sum, the big challenges facing Hutch Essar will be how to

reverse the ARPU decline and how to put in place a leading end-to-end customer

relationship model," says Doshi.

He tempers an optimistic outlook with other, more sobering considerations. In the

short term, he says, the challenges a new owner faces will be in customer retention and

ARPUs. "While everything started with a bang [a few years ago], most operators have

seen a decline in their ARPUs," he says. Hutch Essar's ARPUs of Rs. 375 a month

($8.50) compares with industry averages of Rs. 325 ($7.30), according to Doshi, who

adds that Hutch Essar's current ARPU levels have actually fallen from levels of Rs. 450about 18 months ago, and that they have declined at a faster rate than those of others.

"Initially, customers were thrilled with the mobile phone, but now they have started

optimizing their use," says Doshi. "That is one thing that [any potential buyer] will have

to deal with."

If trends in the U.S. mobile phone services industry could point to things to come

in the Indian market, a simple expression that Iyengar employs to arrive at customer

lifetime value is useful: 'M' multiplied by 'R,' divided by 1+I-R, where 'M' stands for the

margin per customer, 'R' for the retention rate and 'I' for the cost of capital. The ARPU in

the U.S. market is currently around $50 a month, Iyengar says.

If one applies those ARPU numbers, profit margins and retention rates to Hutch

Essar's 22.27 million existing customer base, the total value works out to $17.6 billion.

That, incidentally, is close to the $17.4 billion that Goldman Sachs believes is the

appropriate break-even price its client Vodafone should keep in mind. Goldman Sachs

further said that Vodafone would be overpaying if it valued Hutch Essar at more than $20

billion. Hypothetically, if one assumed a higher customer retention rate of 90% (instead

of 82%), the enterprise value shoots up to $26.75 billion. In contrast, with other things

being equal, a lower capital cost of say, 7%, pushes up the enterprise value to $19.5

billion.


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Doshi feels Hutch Essar's price tag is on the high side: "At $20 billion, that's

almost $1,000 a user," he says. He points to China Mobile's failed bid last July to acquire

Millicom International Cellular SA of Luxembourg, a provider with then about 10

million subscribers across Latin America, Africa and South Asia. (Its current subscriber

base is closer to 13 million, and like Hutch Essar, it, too, is adding about a million

subscribers a month.) By the time the deal talks failed, China Mobile had offered $5.3

billion for Millicom, or about $500 a customer.

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 oncustomer 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 profitableto 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 shiftthrough 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 itscustomers, and create customer specific strategies for greater loyalty.

The SAS data mining techniques predict a customer's likelihood of cancellation orswitchover by scoring them on a scale of 0 to 1.

It is necessary to proactively strategize and service customers so as to retain thehigh value ones.


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.

CHAPTER-3COMPANY PROFILE


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CORPORATE PROFILE

Hutch is brought to us by Hutchison Telecom, one of the worlds leading cellular

service providers. They are known for their innovative approach and world class

technology. Their goal is to provide superior products and services, anytime and

anywhere.

Hutchison established its presence in India in 1994, through a joint venture with Max

India Limited. In 1995, Hutchison Max Telecom became the first operator in India to

launch its cellular service.

Today, Hutchison is the one of the largest providers of cellular services in India

with presence in all the major regions - Orange in Mumbai and Hutch in Delhi,

Karnataka, Andhra Pradesh, Chennai, Kolkata, Gujarat, Haryana, Rajasthan, UP (E), UP

(W), Rest of Bengal and Punjab. It is part of the Hong Kong based multinational

conglomerate Hutchison Whampoa Limited, a Fortune 500 company, and one of the

largest companies listed on the Hong Kong Stock Exchange. Its operations span 42

countries across the Asia Pacific region, Europe and the Americas.

Hutchison affiliates jointly account for the largest number of cellular subscribers

in India numbering over 7.6 million. Hutchison Telecom is a wholly owned subsidiary of

Hutchison Whampoa Limited, a Hong Kong based industrial conglomerate. It is also the

country's largest roaming operator, with a more extensive network in India and aroundthe world than any other operator.

Hutchison Whampoa is a Fortune 500 company, and one of the largest companies

listed on the Hong Kong Stock Exchange. Its operations span 42 countries across the

Asia Pacific region, Europe and the Americas. Hutchison Telecom is ranked among the

global leaders in mobile communications. It offers a wide range of integrated

telecommunications services including fixed line services, internet services, broadband

networks, mobile telephony (voice and data), trunked mobile radio and radio

broadcasting among others.

Hutchison has also bagged licenses to provide 3G cellular services in nine

European countries. It had a combined turnover of over $10 billion dollars in the year

2000.


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The Essar Group is one of India's largest corporate houses with interests spanning

the manufacturing and service sectors like Steel, Oil & Gas, Power, Telecom & BPO,

Shipping & Logistics and Engineering & Constructions. The Group has an asset base of

over Rs 20 billion (US$ 4.4 billion) and employs over 4000 people.

Company profile (In India)

Telecom is the fastest growing and the most competitive industry in

the world, with India emerging as one of the globes most promising markets. Till the

mid 1990s, telephony in India was characterised by an abysmally low number of users

and poor service. But reforms in the late 1990s led to an explosion in competition and

availability.

The Indian telecom market, ruled by majors such as Hutch, BSNL, MTNL,

Bharti, (GSM category) and Reliance and Tata Teleservices (CDMA), is in the process of

consolidation. Mobile phones, once a luxury item, have now become a necessity.

According to a report by the Telecom Regulatory Authority of India (TRAI), the country

at the end of March 2004 had 42.58 million fixed lines and 33.58 million mobile phones.

Already, metros like Bombay and Chennai and states of Delhi and Punjab have more

mobile phones than fixed lines, with Hutch emerging as the leader in both the Mumbai

and Kolkata circles.

Hutch is a leading telecom communications company in India and is one of the

major cellular service providers in karnataka. They strive to bring you the best of mobile

telephony at the most affordable rates.

In India, Hutchison Telecom operates its cellular services in 13 circles: Orange in

Mumbai and Hutch in Delhi, Karnataka, Andhra Pradesh, Chennai, Kolkata, Gujarat,

Haryana, Rajasthan, UP (E), Punjab, West Bengal & Sikkim and UP (W), bringing the

best of mobile telephony to the country at the most affordable rates. The Hutchison

network covers almost

25% of the national footprint and 70% of national purchasing power, with a subscriber

base that now exceeds 6 million.


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Achievements

Hutch is arguably Indias most customer centric telecom company. Its heavy

investments in network enhancement, customer service, retail and distribution network

and value added services have led to the making of a superior product with a high

customer loyalty.

In the telecom business, a key variable is the Average Revenue Per User (ARPU),

and Hutchs circle-by-circle ARPUs lead its closest competitor by a wide margin. This

includes the Southern region where it was launched only a year ago. Hutch was rated the

best network in the country and the number one mobile company in the area of customer

satisfaction (Source: TNS Cell track, 2004).

It has also won the Creative Advertiser of the Year award for 2003 at the ABBYs

the Indian advertising awards. Hutch has also won a host of advertising awards such as

the ABBYs in the telecom category, a bronze Lion at Cannes for direct marketing and the

best new campaign of the year award for its network campaign from Brand Equity and

CNBC. Business World magazine declared Hutch The Most Admired Telecom

Company in 2002. Business Today rated it as one of the most Strategic Marketers for the

year 2004.

Hutch has also been a pioneer in introducing new tariffs as well as value added

services. Its decision in 2000 to reduce monthly rentals to Rs. 395 set a new benchmark

for others to follow. Other market-blazers in the past few years include Talk Share (an

attractive tariff plan for the family/small business), Rollover (helping consumers carry

forward their airtime), Roaming Rewards (a rewards programme) and much more.

These apart, Hutch launched an e-mail facility on mobile phones in 2001 and

made available Hotmail exclusively for its users. It boasts of Hutch world, the most

comprehensive GPRS service in the country, besides value added services like cricket

updates, ring tones, jokes, logos, movies, stock information news, horoscopes and music

cards.


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Product

Hutch is a cellular service provider. Its communication network service is the

product, offered to both post-paid and pre-paid subscribers. Yet, Hutch has made no

conscious effort to segregate the two segments in terms of branding, communication

platforms, value-added services or customer care. Its aim is to complement and facilitate

the basic need to communicate in the easiest, most enjoyable way.

Its prepaid cards have various refill denominations (from as low as Rs. 50 to more

than Rs. 3,000) with different validity periods and talk time. Hutch post-paid offers

consumers a host of talk plans to choose from, depending on usage patterns and needs. It

is also the country's largest roaming operator, with a domestic and international network

that is more extensive than that of any other operator. Hutch, which has a roaming

coverage of over 1,200 cities and towns in India and over 130 other countries, enables

users to stay connected even while traveling on highways.

Thanks to its comprehensive GPRS service across the country, users can

download video clips, click and send images, avail of e-mail and messenger services,

play Java games, watch movie trailers and much more.

Recent Developments

Imaging is poised to become the next major application of cellular technology.

This has prompted Hutch to launch a new service, which allows GPRS phone users to

click their favourite moments on their MMS phones and have Kodak prints delivered

anywhere in the country, within five days.

Hutch has also developed over 400 Java games that can be downloaded and played on

GPRS phones.

Hutch provided complete coverage of the historic Indo-Pakistan cricket series. On

offer was everything that a cricket buff could want, ranging from live video clips, instant

updates on voice and SMS, expert analysis and a host of downloads.

The company had also introduced a new downloadable game contest titled Rahul

XI where at the end of the contest period, the top ten winners of the game would meet

the Hutch brand ambassador, Rahul Dravid, in person.


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Promotion

Since an extensive network is the heart of the Hutch business, the brand has

continuously reinforced its superiority through innovative advertising. It began its Indian

campaign in May 2002 based on a focused and no-frills positioning statement -

Delivering to consumers that, which is useful in an easy-to-use and enjoyable manner.

The campaign was kicked off in the launch cities with teaser advertisements that greeted

passers by with a Hi. This was later followed by the Hutch brand reveal.

The Hutch launch in Chennai is considered a milestone in direct marketing. On

the launch day, newspapers bearing personalised messages greeted its competitors

consumers. This exercise was replicated in the other launch markets across the country.

In a business where the quality of the network directly defines the quality of

service, communicating this superiority became the crux of the communication. Hutchs

latest campaign emphasised superior network, enabling Hutch to use its country wide

coverage as the differentiator. The campaign theme wherever you go our network

follows blends perfectly with the visual showing a dog following a child wherever he

goes. The combined effect of words and images has worked wonders in conveying the

message that the Hutch network is as good as mans best friend. In its campaigns, white

is used not just as a colour but as an illustration of its commitment to transparency.

Sensing that many subscribers were confused about the way roaming and other

services operate, Hutch launched infomercials featuring two animated characters, H and

I, with an aim to simplify these products. In a similar vein, it explained GroupTalk a

concept of lower call rates within a group. The Get Together theme was supported by

the visual of kids forming a group.

Hutch also sees culture as an integral part of its promotional efforts. It has co-

hosted cultural and heritage events such as the Prithvi theatre and the Kalaghoda Art

Festival in Mumbai, the Odeon theatre festival in Kolkata and other local events. The

company website is also increasingly used for marketing, promotion and customer

service. Its retail outlets, the Hutch Shops, further enrich the Hutch experience.


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Hutch in Karnataka

In Karnataka, as in all other telecom circles, Hutch brings you the best networkand coverage you can get-wherever you go. In Bangalore alone, we have installed over

180 towers to facilitate better communications and coverage. So whether you are sitting

inside a swanky restaurant in the city, or roaming into a remote village in the state, you

will always stay connected.

With leading-edge technology, 24X7 customer support and sophisticated value-

added services across the world and in India, Hutch continues to assure its users a world-

class experience. Now in Karnataka, as in all other telecom circles in India, Hutch is the

preferred cellular service - with the widest and most extensive coverage in the state and a

wide range of innovative and user-friendly services for their customers.


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Service Profile

PREPAID

Going cellular with Hutch Prepaid is easy and veryaffordable. You can stay touch with whomever

you need to, from wherever you are, whenever you

feel like - with our new and convenient plan on

prepaid.

Charges

Go prepaid at just Rs. 99, with the new Talk 99 starter pack.

Offers Providing by Hutch

Full talktime

Recharge with Rs 777 and get Full talktime minus service tax (Rs 692) Also get 10

months validity on a base plan.

Recharge with Rs 500 and get Full talktime minus service tax (Rs 445) Also get 6 months

validity on a base plan

SMS@1p

Now you can send local SMS @ just 1p/message for 30 days. Just recharge with Rs 49

and enjoy the benefit of this offer within 24 hours

Half rate

Now get all local calls at half rate with the Rs 55 bonus recharge on Hutch Prepaid. Enjoy

local calls to all mobiles at 49p/min (normal tariff - 99p/min) and local calls to landlines

at 99p/min (normal tariff - Rs 1.99/min). Call benefits are valid for 30 days from the date

of recharge.

Recharge with 499

Calls to local Hutch phones, mobile phones & landline phones at Rs 1.99/min, STD Calls

to all mobiles & landline phones at Rs 2.99/min, ISD Calls at Rs 7.2/9.99/40 per minute,

SMS to local mobile phones at Rs 1,National SMS at Rs 2, International SMS at Rs 5


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Recharge with Rs 59

Calls to local Hutch phones at 30p/min, Calls to other mobile phones at Rs

50p/min, Calls to landline phones at 99p/min, STD Calls at Rs 1.50/min, ISD Calls at Rs

7.2/9.99/40 per minute, SMS to local Hutch and mobile phones at Re 1, National SMS at

Rs 2, International SMS at Rs 5.

Group Talk

Lower call rates within your call group

Easy Chalta Rahe Prepaid

Get incoming for life at just Rs 99 / month, with the Easy

Chalta Rahe Prepaid. What's more, you also get full talktime on

all future recharges.

STD to any phone @ Re 1

Now call any phone in India at Re 1/min for a monthly fee of Rs 250.

HutchMoto

Now you can get the cool new MOTOROLA PINK RAZR with a Hutch

connection, Rs.501Talktime, 200 mins Local Calling and 777 Local SMS Free.

Sagem & Motorola offer

Go mobile without making your pocket lighter. Buy a Sagem or Motorola handset

along with a Hutch prepaid connection.

Chota Recharge

Now with Chota Recharge, you can recharge your prepaid for as little as Rs 10.

What's more, you also get full talktime on your Chota Recharge ranging from Rs 10 to Rs

198.

STD calls @ Re 1

Now make calls to any Hutch phone in the country from your Hutch phone at just

Re 1. At a monthly rental of just Rs 25.


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POSTPAID

Choose from our value-for-money talk plans and get connected the way you want to!

Enjoy a wide range of value added services and infotainment services on Hutch Alive and

Hutch World. Get the widest national and international roaming coverage as well. Add to

it a host of convenient payment options to pay your monthly bills, no matter where you

are in Karnataka!

Offers providing by Hutch

Hutch Citibank Card

Now you can earn even while paying your Hutch bills. Shop with your Hutch

Citibank Card and earn reward points that you can use to pay your next month's bill.

STD to any phone @ Re 1

Now call any phone in India at Re 1/min for a monthly fee of Rs 250.

Make your name your Hutch number

Now, your Hutch number can reflect a part of you. With the new 99860 number

series from Hutch, you can personalise your Hutch number. This means, you can choose

the last five digits of your Hutch number. It can be your name, birthday, anniversary or

even your vehicle number.

Night SMS @ 10p

Send SMS to any Hutch phone from 10 pm to 10 am at just 10p per SMS. Youcan enjoy this rate at a monthly rental of just Rs 25 per month.

Payment choices

Pay online

Now, all Citibank card and account holders can pay their Hutch bills through the

Internet or by telebanking. ICICI and GTBL account holders can pay their Hutch bills

through the Internet.

Direct debit

ICICI bank account holders can pay their bills through the bank's Bill payment

service.


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Easy pay

For customers in Bangalore, paying Hutch bills is really easy. Just dial 600 (toll-

free) on your Hutch phone from wherever you are in the region. Hutch will collect your

money as cash or cheque, and debit it in your bill. A nominal charge of Rs 30 will be

charged per pick up.

VALUE ADDED SERVICES

Enjoy a range of value added services, including infotainment services with

Hutch World and Hutch Alive. Get the widest prepaid roaming national and

international coverage, download ring tones and logos or get instant cricket

scores. Check Yahoo! mails or chat with Yahoo! buddies and more...!

4 Business

a] Mobile Email Solutions

Blackberry

Hutch brings you the worlds most desired integrated communication device.

Give your organization the edge with the power of wireless email and Internet.

HutchMail

Get instant and secure access to MS Exchange and Lotus Notes from wherever

you are.

Microsoft Mobile Mail

Stay in touch with your business emails, even when you're not in office.

POP3 / IMAP

Now you can receive and send emails, directly from your Hutch phone.

b] Data Access

EDGE data card

Access Internet on the go, through the EDGE data card.

EDGE Business LAN service

Stay connected to your corporate intranet and database, even on the move.

Fax & data services

Send & receive faxes, access emails and much more, through your Hutch phone.


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HutchAccess

Access the Internet on your Hutch phone, anytime, anywhere.

c]Business Applications

SMS @ work

Collaborate and communicate with your colleagues more efficiently.

Customised Business SIM

Place orders, check inventory, make transactions, and more in real time.

Network monitoring alerts

Monitor your systems, simply by using SMS.

Automatic Vehicle Location System

Track and monitor vehicles wherever they are.

d] Voice Solutions

Advantages

Connects the entire EPABX network through GSM number/s. Landline routes are free to make other local PSTN-PSTN calls. Saves on landline installation and cabling expenses. Can be installed instantly.

How it works

You will need to attach a fixed mobile terminal with a SIM connected to the

EPABX of your organization. Post which all calls made to GSM phones will be

routed directly through the mobile network (and not the PSTN network) using

LCR (low cost route) software


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Planet Hutch

Live Search

Hutch brings you the power to search PlanetHutch and the world-wide-web,

quickly and easily. Live Search powered by Microsoft is India's first mobile search

consumer offering.

Hutch Pink Ticker

Get non-stop news, cricket scores and more on your phone screen with the Hutch

Pink Ticker.

Java games

Get set to challenge yourself with over 400 games

Polyphonic ring tones

Let your Hutch Phone ring the hottest tones.

Downloads

Cartoons, wallpapers, and more - your Hutch

Phone is a whole lot of fun.

News

What is happening around you? Be in the know through your Hutch Phone.

Movie zone

From movie trailers to the hottest Bollywood buzz, catch it all right here.M-Guru

Astrology, Vaastu, Fengshui, personality tests and more.

3D Wallpapers

Have fun in 3D. Download wallpapers for your phone.

WAP sites

Browse, learn and enjoy - on your Hutch Phone.

HutchAccess

Enjoy Internet on your Hutch Phone, anytime, anywhere.

Railway bookings

Now you can book your railway tickets from your Hutch Phone.

SMS tones

Load your phone with SMS tones and let your messages alert you, the musical way.


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CHAPTER-4RESEARCH METHODOLOGY


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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 HUTCH 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 is not possible. Hence, the project used stratified random sampling technique.

Respondents should be selected from the youth and working executive segment, who are

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 150 respondents. The sample size of 150 respondents is

considered by us to make reasonable projection in the study of this kind.


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4.4 Sample description.

The sample description will include customers of Hutch in both prepaid and

postpaid sections. The youth segment is a major respondent 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 experts opinion.

4.7 Limitation of the study.

This study was restricted to the city of existing customers of HUTCH inBangalore

Metropolitan Area and therefore the results of this study can not be generalized.

Due to the time constrain, an extensive research could not be undertaken,therefore the sample size was restricted to 150 respondents only.

Analysis of the data obtained from the questionnaire was done on the assumptionthat the respondents gave the correct information to the best of their knowledge.

Preferences and responses of customers could change over a period of timenecessitating periodical surveys.


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PART BRESEARCH FINDINGS

CHAPTER-5

DATA ANALYSIS ANDINFERENCES


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5.1 QUANTITATIVE DATA WITH INFERENCES AND OBSERVATIONS

The quantitative data have been reinforced with our observations through personalenquiry notes and inferences have been derived accordingly.

Table No.1

Classification of data based on age:

Age Prepaid Postpaid Total Percentage

Below 20 10 02 12 8

20-30 54 31 85 56.67

30-40 28 13 41 27.33

Above 40 8 04 12 8

Total 100 50 150 100

Source: Field Investigation

Chart. No.1

Hutch users based on age group

0

10

20

30

40

50

60

below 20 20-30 30-40 above 40

Category

No.ofr

espondent

prepaid

postpaid


Inference: Maximum no. ofHUTCH service users are in the age group of 20-30 and

majority of them uses prepaid services. Company is not able to retain its customer after

30 year age. So company should focus on that.


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Table No.2

Classification of data based on Professions

Category Prepaid Postpaid Total Percentage

Student 62 08 70 46.67

I.T profession 14 15 29 19.33

Management 20 17 37 24.67Others 04 10 14 09.33

Total 100 50 150 100


Hutch users based on professions

0

10

20

30

40

50

60

70

Student I T

Proffession

Management Others

Professions

No.ofrespondent

Prepaid

Postpaid


Inference: Maximum no. of HUTCH service users are student other than workingexecutive. Students are not continuing with Hutch after entering into corporate world. So,company should focus on corporate segment by giving benefit to them.


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Rating of Network Coverage

0

10

20

30

40

50

Excellent Very good Fair Average Poor

Category

No.ofrespondent

Prepaid

Postpaid

Table.No.3

Classification based on rating of the network coverage:


Excellent 00 01 01 0.67

Very good 11 05 16 10.67

Fair 46 19 65 43.33Average 24 17 41 27.33

Poor 19 08 27 18.00

Total 100 50 150 100


Chart. No.3


Inference: 43% of the respondent found the network coverage is fair, (Both prepaid and

postpaid). Retention rate is also high because of network coverage of HUTCH. Company

should focus on its network so that his customer will not switch to other service provider.


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Concern on call Breaking

0

5

10

15

20

25

30

35

Agree Strongly

Agree

Neither

Agree orDisagree

Disagree Strongly

disagree

Category

No.o

frespondent

Prepaid

Postpaid

Table.No.4

Classification of data based on concern of call breaking:


Agree 32 15 47 31.33

Strongly agree 22 13 35 23.33

Neither agree or disagree 17 19 36 24Disagree 17 02 19 12.67

Strongly disagree 12 01 13 08.67

Total 150 50 150 100


Chart. No.4


Inference: 30% of the respondent faced the concern of call breaking and most of them

are prepaid. The customers using postpaid services rarely encounter the concern for call

breaking. This is also a reason of retention. So that company should also focus on that.


56/89

Table.No.5

Classification of data based on ability to call at the first attempt:


Agree 18 11 29 19.33

Strongly agree 11 10 21 14 Neither agree or disagree 30 14 44 29.33

Disagree 33 09 41 27.33


Total 100 50 150 100


Chart. No.5

Ability to call at first attempt

0

5

10

15

20

25

30

35

Agree Strongly

Agree

Neither

Agree orDisagree

Disagree Strongly

disagree

Category

No.ofrespondent

Prepaid

Postpaid


Inference: 57% of the prepaid respondents are not able to make calls at the first attempt

and 22% of the postpaid respondents not able to make calls at the first attempt. This is

happening because of network connectivity so that company should focus on its network.


57/89

Table.No.6

Classification of data based on the calls made to the customer care help line in the lastone month:


Yes 37 14 51 34

No 63 36 99 66Total 100 50 150 100


Chart. No.6

Calls made to customer care in the last one month

0

10

20

30

40

50

60

70

Yes No

Category

No.ofrespondent

Prepaid

Postpaid


Inference: 34% 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.


58/89

Table.No.7

Classification of data based on finding the Interactive Voice Response System (IVRS)user friendly:


Agree 13 08 21 41.18

Strongly agree 08 03 11 21.57 Neither agree or disagree 10 01 11 21.57

Disagree 04 02 06 11.76


Total 37 14 51 100


Chart. No.7

User friendly of interactive Voice Response(IVRS)

0

2

4

6

8

10

12

14

Agree Strongly

Agree

Neither

Agree orDisagree

Disagree Strongly

disagree

Category

No.ofrespondent

Prepaid

Postpaid


Inference: 63% of the respondents found the IRVS user-friendly. (Out of which 21

respondents were pre-paid and 11 respondents were post-paid). About 21% of

respondents are in between.


59/89

Table.No.8

Classification of data based on finding the executives friendly with a helpful attitude:


Agree 14 07 21 41.18


Neither agree or disagree 05 04 09 17.65Disagree 06 00 06 11.76


Total 37 14 51 100


Chart. No.8

Helpfulness of the Customer care executives

0

10

20

30

40

50

Agree Strongly

Agree

Neither

Agree or

Disagree

Disagree Strongly

disagree

Category

No.ofrespondent

Prepaid

Postpaid


Inference: 69% of the respondents found the executives customer friendly. 13% of the

respondents stated that executives were not customer friendly. And rests of them are in

between. These are the area where company is doing well.


60/89

Table.No.9

Classification of data based on rating the ability to give information about various valueadded services:


Excellent 05 02 07 13.73

Very good 09 06 15 29.41Fair 15 04 19 37.25

Average 07 02 09 17.65

Poor 01 00 01 01.96

Total 37 14 51 100


Chart. No.9

Ability to give information on various value added

services

0

2

4

6

8

10

12

14

16


Category

No.ofrespondent

Prepaid

Postpaid


Inference: Majority of the respondent (i.e. 37.25%) found the ability to give information

about various plans to be fair enough to benefit the customers. Promotional offer should

not inform to the customer through call, sometimes customer get irritated because

company use to inform twice or thrice in a day. The best way to inform about

promotional offer is SMS.


61/89

Table.No.10

Classification of data based on the registration of query/complaint in the last one month:


Yes 32 27 59 39.33

No 68 23 91 60.67Total 100 50 150 100


Chart. No.10

Registration of query complain in the last month

0

10

20

30

40

50

60

7080

Yes No

Category

No.ofrespondent

Prepaid

Postpaid


Inference: 61% 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 complicated and not fast enough.


62/89

Table.No.11

Classification of data based on the rating the ability to listen and understand theQuery/concern:

Category Prepaid Postpaid Total PercentageExcellent 02 01 03 05.08

Very good 08 05 13 22.03

Fair 17 13 30 50.85

Average 04 06 10 16.95

Poor 01 02 03 05.09

Total 32 27 59 100


Chart. No.11

Ability to listen and resolve the query

0

24

6

8

10

12

14

16

18


Category

No.ofrespondent

Prepaid

Postpaid


Inference: 51% of the respondents rated the ability of listen and understand the

query/concern to be fair (i.e. both pre-paid and post-paid). Company should focus on

ability to listen on query or complain and try to resolve its quickly.


63/89

Table.No.12

Classification of data based on answering mode of the query/concern satisfactorily:


Agree 11 09 20 33.90Strongly agree 06 04 10 16.95

Neither agree or disagree 08 07 15 25.42

Disagree 06 05 11 18.64


Total 32 27 59 100


Chart. No.12

Answering the query concern satisfactorily

0

2

4

6

8

10

12

Agree Strongly

Agree

Neither

Agree orDisagree

Disagree Strongly

disagree

Category

No.ofrespondent

Prepaid

Postpaid


Inference: 51% 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)


64/89

Table.No.13

Classification of the data based on getting a follow up call to resolve the query/concerns:

Category Prepaid Postpaid Total PercentageAgree 12 08 20 33.90


Neither agree or disagree 13 11 24 40.68

Disagree 03 04 07 11.86


Total 32 27 59 100


Chart. No.13

Follow up of call to resolve the query concern

0

2

4

6

8

10

12

14

Agree Strongly

Agree

Neither

Agree or

disagree

Disagree Strongly

disagree

Category

N

o.ofrespondent

Prepaid

Postpaid


Inference: 13% of the respondents did not get follow up call to resolve their

query/concerns in spite of lodging complaints. (03 respondents were pre-paid service

users and 05 respondents were post-paid service users). And 40% of the respondents are

in between.


65/89

Table.No.14

Classification of the data based on communication about the launch of new rate

Plans/schemes/offers in time:Category Prepaid Postpaid Total Percentage

Yes 63 32 95 63.33

No 37 18 55 36.67

Total 100 50 150 100


Chart. No.14

Communication about the launch of new rate &

plan

0

10

20

30

40

50

60

70

Yes No

Category

No.ofrespondent

Prepaid

Postpaid


Inference: 63% of the respondents are communicated about the launch of new rate plans/

schemes/offers in time. (Out of 100 prepaid respondent 63 of them were communicated

and out of 50 postpaid respondents 32 of them were communicated). Company should

increase the percentage of communication about the plan and offer so that its retention

rate will be come down.


66/89

Table.No.15

Classification of data based on finding the HUTCH advertisement relevant and easy to

understand:Category Prepaid Postpaid Total Percentage

Yes 56 29 85 56.67

No 44 21 65 43.33

Total 100 50 150 100


Chart. No.15

Finding the HUTCH advertisement relevant

0

10

20

30

40

50

60

Yes No

Category

No.ofrespondent

Prepaid

Postpaid


Inference: 57% of the respondents found the HUTCH advertisements relevant,

informative and easy to understand. In today scenario advertisement is a better way to

communicate to the customer about its various plan & offer. And advertisement should

be easy to understand so that customer will not get negative response from theadvertisement.


67/89

pankaj singh-0550-customer retention @ hutch

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