| |
Innovation
in Market Management at a South American Telecommunications
Company
With deregulation of long-distance services just around the
corner, a South American telecommunications company found that
its customers were becoming more demanding and increasingly
dissatisfied with its services. The company's questions to Integral:
Could it focus on customer and employee satisfaction to achieve
competitive advantage? And can a dollar value be assigned to
customer satisfaction?
Action: In this South American
country, telecommunications service is currently divided between
two monopolies. But deregulation comes into effect in the fall
of 1999, opening the door for not just these two competitors
but for other entrants as well. Integral surveyed the client's
most profitable segment of customers to determine what their
behavior would be in the post-monopoly era, and how the client
could attract and retain customers.
Integral found that satisfaction is an indicator of anticipated
behavior. For example, Integral determined that a "very satisfied"
customer is six times more likely to recommend the client's
services than is a "satisfied" customer. What's more, by migrating
its customers to higher levels of satisfaction, this telecommunications
company could increase the average tenure of its customers.
The value of successful satisfaction management? For this client,
approximately $80 million annually ($5.9 million from new recommendations
and $73 million from increased tenure of customers, according
to Integral's calculations).
Results: To realize this
potential revenue, Integral recommended a portfolio approach
- composed of 22 individual steps - to improve both customer
and employee satisfaction. For higher levels of customer satisfaction,
Integral suggested focusing on improved billing, the frequency
of problems with the line, etc. For higher levels of employee
satisfaction, we recommended improvements in performance and
experience recognition systems, better training opportunities,
and so on.
|
|
|
