Customer Retention Strategy Retaining Customers and Adding Value T Mobile

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   Executive Summaryccc Introductionccc Rationale behind Conducting the Researchccc Aimccc Objectivesccc Research Questionsccc Research Hypothesisccc Brief Background of T Mobilecc Literature Reviewccc Customer Retention: A Critical Perspectiveccc The Chain of Customer Satisfaction, Retention and Loyaltycc c Importance of Marketing and CRMccc Attributes Determining the Churn of the Customerccc Strategies of Customer Retention in Telecom Industryccc Assessing the Life Time Value of a Customercc Action Plan of Retaining the Customer Group while Confronting Challengesccc Key Measures for Retaining the Existing Base of Customerscc c T Mobile and Customer Retentionccc Research Methodologycc Strategy of Researchccc Research Sampleccc Collection of Primary Dataccc Analysis of Datacc c Parameters of Validity and Reliability in Researchcc c Considering the Ethical Aspects while Conducting the Researchcc c Analysisc c Discussionccc The Present Business Environmentccc Step by Step Approach of winning back the Existing base of Customersccc
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cc c The Adopted Approach of T Mobile in Retaining Their Customersccc Role of CRM in Improving the Rate of Retaining the Customersccc Correlation of Consumer Behavior and Retentionccc The Strategies of Retaining the Customers from the Perceptive Of Telecom Industryccc Conclusionccc Recommendation while Designing the Action Plan for Customer Loyalty and Retentionccc Appendixcc c References:ccc c


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c c The dissertation report on the strategies of retention in the telecom industry reviews the dynamics of relationship marketing in the context of current competitive environment which provides little or no scope for creating differentiation amongst the existing as well as the emergent players of the market. The focus of the paper is to assess the various customer retention and loyalty generation schemes which are being followed by T Mobile in UK. This research is primarily conducted in two phase wherein the phase one involves the review of the established literature related to customer retention strategies and the second phase focuses upon analysis of the primary data collected from the existing customers of T Mobile. The research paper opens with an introduction about the chain of customer satisfaction, retention and loyalty of the consumers which in turn strengthens the profitability of a firm. Customer retention thereby is considered as one of the vital concepts in the arena of intensified competition when relationship marketing emerges as the sole medium of creating the minimal differentiation in the market. The assessment of the theories leads to practical evaluation of the T Mobile customers by conducting a survey, which was analyzed to understand the effectiveness of the practiced method in retaining the customer base and sustaining in the competition. The discussion section which follows the practical analysis of customer data of T Mobile reflects the importance of CRM in increasing the long term value of the business. At the same time as the market of telecom is reaching its saturation level, marketers are focusing more upon the existing customer base and over their life time cycle through various techniques of cross selling and up selling the products. The research report finally ends with certain recommendation which can be effective in measuring the effectiveness of strategies and improving the rate of retention of the customers. c


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¦   c The purpose of the dissertation paper is to assess the customer retention strategies of T Mobile in United Kingdom. In the contemporary context wherein the market is rapidly approaching the level of saturation and the elements of creating differentiation in the market are quickly disappearing, the concepts and practice of customer retention has usurped the domain of marketing. The buzz word in the present time is that of customer based relationship marketing. The concept of customer relationship marketing is said to consist of three different attributes which are acquisition of the customer, their development followed by the process of retention (Lawrence and Buttle, 2006). The research related to the strategies of customer retention reveal that there exists a positive and a negative approach of retaining the customer. The positive approach is associated with the schemes of rewards and loyalty benefits whereas the negative aspects talks about the barriers of switching for a different service provider. In United Kingdom there exits various big and small telecom service providers which are giving each other a tough competition and adopting every possible action plan of eating away each other¶s market share. This case is not unique to the telecom industry of the company, keeping aside the case of monopolistic competition, the consumers in the present day market have more opportunity and options easily available at their disposal which enables them in acquiring similar services at almost similar prices from the wide array of global as well as the local service providers existent in the market. Additionally along with maintaining the optimum level of quality in service it is also essential that loyalty bonuses or reward programs are held which can make the consumer feel the recognition from the consumer for continuance of their service. As the market of telecom in United Kingdom is gradually reaching it saturation level the focuses of the players have shifted from customer acquisition to customer retention while maintaining the constant lookout for including the element of differentiation. Almost the entire population of the country has a service contract with some or the other service provider. The only segments of customer that the telecom players can target upon are the younger generation of foreign nationals who have migrated to the country. This group of customers is therefore difficult to find as these segment of customer is
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more involved in switching the service provider one after the other. In such an environment even the small and emerging player in the market are adopting the approach of differentiated product offering strategies which can lure the existing base of customers in switching their existing service provider. T Mobile, being one of the largest communication companies of the country boasts a strong base of clients which is close to 30 million of the entire population. The company also runs more than 700 retail store across the nation. Despite a strong presence in the country the company was gradually feeling the pressure of the intensifying competition and emergence of the small players which were adopting specific strategies of creating differentiation be offering specific products offering. Responding such need T Mobile is not just focusing upon strategies of retaining their existing customer base but also in enhancing the technical infrastructure of processing business. Despite the focus of the companies in retaining the existing level of customers, there is a major list of companies that focuses heavily upon acquisition of customer base (Huber and O¶Gormann, 2008). It has been argues that the cost associated with acquisition of a new customer is much more than maintaining an existing base of customer. This is because investment involved at the initial stage of acquisition is significantly high which impact the profitability of the firm. The stage wherein the customer is retained and has developed the level of commitment towards the company is likely to depict repeated purchase which can strengthen the bottom line of the company without spending much to attract them. Again the strategy of retention is also focused around the attributes of building loyalty and satisfaction which in turn helps in building the image and value of the brand in the broad market through positive word of mouth. There are various strategies which are essentially followed by an organization in increasing the profitability of the firm; these are the strategies of cross selling as well as up selling. When a marketer adopts the strategy of retention of customers it is also essential to understand the various segment of customers, which can form the basis of designing the strategies. For the need and requirement of each specific segment is different from the other. One of the major segments is that of prepaid and the post paid customers.
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The focus of the marketer is to convert the prepaid group of customers into the postpaid form so that they can earn more revenue over the life time of the customer. Also the use of post paid services can help the customers in enjoying the additional benefits attached with the service like loyalty benefits. The marketers are keen in post paid customer as the cost of maintaining them is less and the barriers of defection is pretty high. The shift in focus of the marketers in refining their existing strategies of marketing and customer retention is due to increasing intensity of the competition which has engulfed the market. In order to sustain this competition and maintain one¶s competitive edge it becomes indispensable for the big and small player to devise novelty in their existing strategies of doing business and drawing in customers.

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c The rationale for conducting the research is relevant in the context of present competitive environment where market has reached the saturation level. In such a case the various novel approaches are adopted by the marketer in maintaining their share in the market. One such approach is that of retaining the existing base of customer which can help the business entity in reducing the cost associated with acquisition of new customers. Also in a matured market like United Kingdom it is even more difficult to find a new group of customer. In case the marketer is able to find a group the scope of defection of such a group is significantly higher as this group comprises of the young population who migrate to the country from other neighboring country and are on a constant lookout for cheaper and cost effective options of service providers. The scope of the research was therefore to develop an understanding of the various strategies of customer as prevalent in the telecom industry with special focus upon the tactics of T Mobile in United Kingdom. Like its competitors the company provides the provisions of both prepaid as well as the post paid schemes for servicing the customers. Though it was believed that pre paid schemes are effective in attracting new groups of customers, the cost associated with maintaining the prepaid customers are expensive for the company with respect to the post paid ones. Also the probability of switching for the prepaid customers is much easier than post paid ones which impacts the profitability
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of the firm. The objective of the study therefore is to consider the strategy which can retain the different segments of customers and strengthen the bottom line of the company while adding value to the brand image and value in the closely competitive market.

c The aim of the undertaken research is to evaluate the various concepts of customer retention strategies and its role in effectively retaining the existing group of customers and adding value to the organization.



cc The primary objectives that the undertaken research intends to answer are as given below: 

Develop a critical assessment of the various theories as well as the concepts of customer retention

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Assess various positive as well as negative customer retention tactics that are commonly practiced by an organization in retaining their valuable group of customers

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Evaluate the effectiveness of the post paid/ contract connections in retaining the existing base of customers and the role of Telecom Company in accomplishing the same.

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Analyze the various strategies and approaches as adopted by the telecom companies for retaining their existing customers by converting the pre-paid customer group into post paid users.

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Make a comparative assessment of the new players in the UK telecom market and evaluate their impact upon the existing and established players


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 c The questions that were intended to be answered through this research survey are as given below: 1. To find the strategies, both positive and negative in nature as used by the T Mobile in retaining their existing base of customers 2. What are the effective strategies of customer retention and evaluate if the establishment of the post paid contract with the customers is an effective tool in retaining the customers 3. To check if there is a degree of variation in the profitability of the pre paid as well as the post paid group of customers 4. To assess if the existing customers are defecting towards the new entrants in the telecom market and understand the various strategies followed by other organizations in the industry for retaining the customers

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c The research paper proposes to test the following hypothesis, which can be modified during the stage of actually conducting the research when the literature section has been reviewed and assessed. The research survey is expected to be conducted through collection of quantitative data which focuses to accept or reject the hypothesis formed for conducting the analysis. H1-Post paid customer group are considered more valuable from the company¶s perspective of profitability, with respect to the prepaid customers H2-Establishment of a long term contract with the existing customer base is an effective approach of retaining them with the company for their lifetime

 
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c T Mobile is considered as one of the leading telecom service provider of United Kingdom. It is the part of the company called µEverything Everywhere Limited¶ which runs two major brands known as T Mobile and Orange. T Mobile, being one of the
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largest communication companies of the country boasts a strong base of clients which is close to 30 million of the entire population. The company also runs more than 700 retail store across the nation. Despite a strong presence in the country the company was gradually feeling the pressure of the intensifying competition and emergence of the small players which were adopting specific strategies of creating differentiation be offering specific products offering. As the telecom market of the country is gearing towards the level of saturation, it was not an effective approach is adopting the strategy of acquiring new base of customers. The company thereby shifted its focus towards designing the strategies of customer retention which in turn was helpful in maintaining the profitability of the company. Though a significant number of players focused upon acquisition of new customers, the rapidly rising level of saturation has led the marketers to look for other options of maintaining their competitive advantage. Responding such need T Mobile is not just focusing upon strategies of retaining their existing customer base but also in enhancing the technical infrastructure of processing business. The company has introduced not just advanced technological infrastructure in effectively maintaining its CRM database but has also brought in certain changes in their organizational structure which can address the future needs in an effective and efficient manner that aimed to integrate CRM with the regular processes of business. Despite the fact the company at certain point in time ruled the telecom business of the country, has recorded the highest rate of customer churn. The purpose of the research is to understand the measures undertaken by the company to combat the same and sustain its competitive positioning in the business market. c


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c Ever since the days of industrial revolution and mass manufacturing of products, the approach of mass marketing was considered as the only means of catering the client base. The concept retained its popularity as long as the business houses had to meet the same needs of different customers, which eventually distanced the consumers from the business firms. This aspect was not considered seriously till the global boundaries of trade and commerce were lifted and consumers were presented with the options of selecting the firm not just on the basis of the products delivered but also the services provided to them. In reality it was the gradual intensification of competition amongst the existing as well as the emerging players that the concept of services marketing started ruling the marketing arena. The objective of the marketer under this concept was not just to address a large client base but also to build and maintain the relationship with them. The focus of the marketer therefore shifted from acquisition of customers to retention of the existing base of customers (Sheth and Kellstadt, 2002). As attested by Thurau and Hansen (2000), the marketers have essentially realized the advantages of retaining their existing customer base when they aspire to scale the world of business, which in turn has made the element of customer retention an important aspect of the core strategy of business. Contrasting these views, various other researchers opine that in order to gain a profitable share in the market, business houses are primarily focusing upon acquiring new customers rather than retaining the existing ones (Buttle, 2008, Cahill, 2007). Also the concept of retention is considered as a reactive strategy which is adopted when the other viable strategies of acquisition fail to drive in any effective results (Pilecki, 2007). However, the aspect of relationship management and reducing the gap between the firm and the customers has started attracting the interest of various marketers. Again the attribute of gaining the cost advantage by doing away with the additional cost associated with acquisition of new customers is diverting the attention towards customer retention and profit generation (Raab, 2008).


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The strategy of customer retention is focused upon the attributes like commitment of customers, their loyalty as well as managing the relationship. In the post globalization era where the customers have the liberty of choosing from a wide array of products and services from various emerging as well as established players, the probability of losing the existing customer base to the competitor is growing strong. As a matter of fact, in the telecom industry various players started feeling the heat of their shrinking customer base, while they were busy focusing upon acquisition of new customer strategies (Jacade, 2008). In such a scenario the need of customer retention as a part of core business strategy is not just essential for business prospects but has become indispensable for its survival. The research has also revealed that the experiences like dissatisfaction with the services of the existing provider; availability of better and cost effective alternatives in the broad market as well as certain negative experience with the current service provider leads a customer to switch their service providers and fuel up the already heated competition amongst the players (Urquizo, 2006). Furthermore, in an industry like telecom which is heading towards saturation, the prospects of acquiring customers and expanding the existing base seems like a remote possibility. The demand of such an environment is to invoke the aspect of loyalty in the existing group of customers which is made possible by retaining them and managing a healthy relationship with them. The relationship management with the customers therefore not just helps in reducing the gap by understanding their need better and retaining them but also in negating the scope of search for alternative service providers. 
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 c cº  c The concept of satisfaction, retention and loyalty chain of the customer is considered the core of developing the strategies of CRM (customer relationship management) which in turn leads to understand the dynamics of profitability of a firm. As attested by Schiffman (2006), a consumer develops a tendency of behaving positively towards a brand and its products when he derives satisfaction after using their services. This positive attitude also helps in building the positive image of the brand through positive word of mouth. Satisfaction, so much so is considered as one of the basic criteria which


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is responsible for generating a greater rate of retention, loyalty and in turn the profitability of the organization (Anderson and Mittal, 2000).

Fig: 1

Adapted from Heskett et al, 1994

Apart from the theoretical aspect, the importance of the quality of delivered services has magnified with the growing intensity of the competition in the broad market. In an industry like telecom wherein the elements of differentiation of products are limited, a company can earn the competitive advantage on the basis of its special services. The focus upon services also helps a company in maintaining and strengthening its relationship with the customer which negates the scope of churning despite availability of competitive options in the broad market (Pezeshki, 2009). In order to improve the services and operational proficiency of a firm it is essential that the manager is capable of understanding the different impact of different services upon the satisfaction level of the customers. This understanding in turn helps the marketer in focusing upon those services which has a greater degree of positive impact upon the customers. Various studies and research conducted in the past have reinstated the fact that there exists a strong relationship between the satisfaction level of a customer and their future intention related to continuation of relationship and product purchase (Reichheld V
, 2000). Additionally the changing behavior of the marketing domain by shifting the focus from transactional approach to relationship marketing has brought in significant changes in the strategies of handling the customers. So that the value of the organization is created through its valued customers and the customers in turn bring in repeat purchases. In its actuality the concepts of retention and defection are considered as the two different sides of the same coin. If retention details the probability of the customer repurchasing the products and services of a given product, the defection details the scope of switching to other service providers. It is an established fact that reducing the
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churning rate of the consumers can strengthen the bottom line of the company (Kotler, 2006). The role of business intelligence thereby is also increasing as it helps a marketer in formulating the appropriate strategies by assessing the effectiveness of the implemented strategies amongst the customer groups (Lee and Trim, 2006). The development of technology and intensity of the competition has made the marketers look for options which can gauge not just the sentiments of the markets and the customers but also assess the effectiveness of every strategic approach of the company vis-à-vis the competition, so as to sustain its market share in a comfortable manner in the near future. ¦  
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c c½c The role and concept of marketing has essentially been understood to create, communicate as well as deliver the value to the end consumer. It plays a major role in aligning the process of a business house as per the demand of the consumers. The database marketing in one such field, which provides information about various segments and groups of customers through identifying and analyzing the different available segments from the entire population which in turn helps a firm in reaching their targeted group of customers in an effective manner. As the focus of marketing has shifted from transactional mode to the building of relationship, the economic value of the customer has been raised dramatically. The growing importance of relationship aspect in marketing has redirected the strategy of relationship development in the long term scenario rather than focusing upon short term attributes like generating sales (Pezeshki, 2009). As defined in the below figure the value of the customer in the present context of relationship marketing is considered as the present value of future cash flow which can be accomplished by maintaining a healthy relationship (Kumar and Reinartz, 2005).


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Fig: 2

Sources: Adapted from Kumar and Reinartz (2005)

Apart from the value rendered by the customer in strengthening the bottom line of the company, building and maintaining the relationship emerges as the sole element of differentiator in the competitive market (Yastrow, 2007). Moreover the customers are not interested in the amount of profit that the company is making but in what measures the company is taking in meeting their needs, which in turn can be easily accomplished by enhancing the personal relationships with the customers. In the contemporary business world, the role of CRM has increased manifold as it emerges as an effective tool in improving the rate of retaining a customer. The focus of CRM model is upon appreciating the innate need of the customer which when delivered leaves them at awe. Such an experience from the end of the service provider minimizes the scope of defection and in turn improves the profitability of the firm. Taking cue from the chain relationship of customer¶s level of satisfaction to their degree of retention and loyalty it can be inferred that all these factors come into play while determining the longevity of the customer. The attribute of loyalty is considered as the emotional criteria which helps an organization in driving in their economic value.  
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c The growing intensity of the competition in the broad market has witnessed churn of customers from the existing service provider to any new player in the markets. There
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are various factors which are responsible for impacting the churning rate of customers, one of which is the wide and the easy availability of options from various global as well as local providers. The advancement of technology has not just flooded the markets with wide array of options in terms of services and services providers but also has minimized the cost associated with switching of service providers (Jacade, 2008). As the element of differentiation is essentially disappearing from the market, the marketers are on a constant lookout for the best possible measure of creating differentiation. Such practices are shaping through the element of innovation in the strategy of marketing and management of customer relationship. The importance of CRM is also an offshoot of this competition which was capable of creating the much needed differentiation in the market. In order to assess the various categories of customer churn it is essential to understand the segments of churning process which impacts the operations of a business organization. The two popular category of customer churn is that of voluntary as well as involuntary. Along with this other factors resulting from the growing intensity of the competition like elasticity of price, brand value, nature and the quality of services are responsible in influencing the churn of existing customer base (Xevelonakis, 2005). Apart from these some of the widely accepted categories of customer churn are as given below: 

Situational: The parameters defining the situational causes are like the elements of availability, accessibility, convenience as well as the quality of services which helps in boosting loyalty. Despite the correlation of these factors with the behavioral aspects, the basic behavioral attributes cannot be considered for measuring loyalty as the emotional aspects are essentially missing in them.

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Contractual: These causes are also related with the financial benefits that a customer can enjoy after using a long term contract. The attributes of contracts can be used for attracting a customer and retaining them with the organization by extending the duration of the contract and providing the customers with loyalty benefits for using that service.
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Economic: The primary reason as widely understood and believed for rising rate of customer attrition is the economic one. The prospects of cost advantage in switching the existing service provider has been one of the major causes of churn (Buttle, 2008). Apart from it certain overhead charges as levied by the existing service provider also leads the customer to make this move of severing the relationship and lookout in the broad market for cost effective options.

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Functional: Sometimes customers readily switch their existing service provider due to high end technical services provided by the new users. However, such a stay in certain cases doesn¶t last long and the customers return back to their original service provider. The reason for this switch was technical compatibility which the other provider was not capable of addressing and forcefully infuses commitment in the customer to use the services of his previous provider.

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Psychological: The causes associated with the psychology of the customers are also responsible in determining their longevity with an organization. The very element of commitment has no strings attached with material aspects of business, which thereby can be achieved by moulding the attitude of the customer with the quality of the services and meeting their innate needs even before they voice it. Such an approach by the marketers positively influences the behaviour of the consumer and helps in restricting the rate of churn (Schiffman, 2006).

It is essential for a marketer to measure the degree of loyalty such that measures can be taken in maintaining the existing base and competitive positioning of the brand in the broad market. One noticeable aspect here is that the loyalty or the satisfaction of the customer cannot be achieved by modeling through various tools but by improving the level as well as the quality of services provided to them, which in turn takes care of the retention (Rai, 2008).  


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 c¦  c Telecom industry is one such industry which has undergone significant transformation ever since the advancement of technology. If development of technology has been a
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boon for the prosperity of the industry, the diminishing line of differentiation in terms of product delivery started impacting the existing players. As the market is developing and barriers of entering the marketing are declining the competition is intensifying at a phenomenal rate. The scope of expanding the market share is rapidly heading the saturation level and therefore the existing players are devising means of eating up each other¶s market share by attracting customers with lucrative offers. The concepts like loyalty discounts and bonuses are some of the attributes which has emerged as one of the means of retaining the existing group of customers (Capon, 2009). This approach is considered as a positive manner of attracting and retaining customers. Along with the positive action plan there exists a series of negative approaches of retaining customers which levies penalty upon customers in case of switching their service providers. Despite such measures of retaining customers through positive and negative approaches, the process of measuring the rate of retention is very difficult in this industry. The marketer is not able to gauge the particular group of customer which helps in strengthening their profit margin. Additionally it becomes equally difficult in measuring the behavioral aspects of the customer in the context of their satisfaction, retention as well as loyalty. Another challenge that is typically faced by the marketers of this segment is that when certain low involvement products or a packaged service is brought by the user off the self it becomes extremely difficult in back tracking the specific segment of customer. Though retention and profitability of the firm are believed to be interrelated, the behavior of a consumer is never measured or improved by the figures of profits and revenue (Peppers and Rogers, 2008). Notwithstanding the challenges in retaining the customer amidst the competitive environment and wide availability of options, hunting for new customers is way too expensive from the perspective of this industry. As attested by Brown (2004) acquisition of fresh customer happens to be eight times more expensive than retaining the existing group, thereby the attention and the energy of the marketers are shifting majorly towards the effective strategies of customer retention. Also the companies are capable of generating greater revenue over the life time of a customer through cross selling and up selling of various products and services like that of broadband for internet, music,
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insurances to name a few. A study carried by Gupta et al (2004) reinstated the fact that if a company is capable of retaining its existing base of customers by just 1% it can witness a rise in the level of profitability by atleast 5%. In a similar study carried out by Ralston (1996) revealed that changing as low as one unit in the level of satisfaction of the customers can bring in 6% of change in the likelihood of retaining the customers. Again as per the conceptual model of customer retention the retention process is seen in the context of switching intention of the customers. It is thereby important for the marketers in identifying the factors responsible for defection of the customers which can help them in not just predicting the probability of churns but also the risk associated with the switching of customers at a particular point in time (Chun et al, 2007). Though utilization of the forecasting techniques help in predicting the probability of the churning rate of the customers considering the aspects like frequency of call, time and duration of usage, selection of calling plans, unpaid balances etc these approaches are predictive than being descriptive in nature which fail to provide the essential directives for managers in improving the operations of their company (Ahn et al., 2006). 

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c A firm can strengthen its competitive positioning in the market when it is capable of calculating the value of the customer that evolves over a period in time. The very term µlifetime value (LTV)¶ of a customer is associated with the economic value attached throughout the course of his life cycle with the organization. The ability to assess the probability of retention and defection through this model helps a marketer in designing his strategies of business (Kurma and Reinartz, 2005). Despite the usefulness of LTV, accurately calculating the same is not just complex but also uncertain. A marketer thereby needs to consider some of the major aspects which can help in the process of prediction and analysis. Some of the major steps are as given (Pezeshki, 2009): 

Rate of Churn: The rate at which customers end their existing contract or relationship with the organization in a given period in time defines this rate.

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Rate of Discount: This attribute is the capital cost which is essential used for discounting future revenue from a customer.
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Cost Associated with Retention: When the marketer equates the cost involved in retaining a specific group of customer it eases the process of assessing their value.

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Period of Service: This aspect is related to length of the relationship the customer has with the organization and the length which the marketer decides to consider for making the assessment.

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Periodic Revenue: This refers to the revenue generated by a customer over a period in time which can indicate in assessing their value from the organizational perspective in the long run.

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Profit Margin: Though the figure is essentially the difference between revenue and cost reflected as percentage of profit, it can provide certain cue in doing a trend analysis with the rate of defection and acquisition of customers.

Understanding the parameters responsible for calculating the customer life time value is one step forward in estimating the value of the customer and thereby designs the strategies in a manner which can strengthen the bottom line of the company. Apart from this knowing the value of various customers also helps in segmenting them in various groups and approaching each of them in a specific manner which in turn can support the process of customer retention (Kotler, 2006). Segmenting the existing base of the customers also helps the organizations in prioritizing the need and demand of the group on the basis of their value from the organizational perspective. So much so segmentation is one of the most vital aspects of customer relationship management, as a good understanding of the various attributes of service quality as well as the parameters of customer value coupled with the role played by each segment of the customers are considered as the effective elements which helps in the process of business decision making and reduce the cost associated with operation by ensuring optimal allocation of resources (Matzler and Sauerwein, 2002). Additionally the classification of customer groups and the service offering can be influenced by the level of expectation of the customers (Matzler and Renzl, 2007).


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c The telecom market in United Kingdom is highly competitive with various small and big players cluttering the broad market. In such a market of close competitors, wherein each player is greedily eyeing at the other¶s share in the market the real challenge is about retaining the existing customer base. The major players are changing their strategy of product promotion and marketing to attract customers for combo offers while shelling out limited money. As the option of pre paid services eases the process of switching the service providers, the company are considering every possible options of converting their pre paid customer groups into to the contracted (post paid) ones (Pilecki, 2007). As the market is losing the elements of differentiation, wherein every small and big player offering the best possible combo deals, the focus of the marketers has shifted towards establishing a relationship with the customer group so that they are capable of understanding their need in an effective manner. As widely understood the customer is not interested in the performance of an organization the only concern that they have is how effectively their needs and demands are met and queries are addressed. Such aspect can be handled in a better manner when the relationship is established and services of the company focuses upon catering the consumer needs rather than selling their products. The process of relationship building can be initiated once the marketer has rightly identified the various segments and addresses the specific needs of each one of them (Capon, 2009). The process of assessing the performance of the firm with respect to a particular segment of valued customers can also help in the process of making necessary amendments in the strategy of business. Notwithstanding the fact that identifying the valued segment of customer and acutely calculating the value of customer is challenging, the marketers can devise segment specific approach of addressing needs which can add the element of customization in them and has a greater scope of increasing the level of satisfaction of the customers.


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c As already discussed and attested by various researchers the cost associated with retaining an existing base of customer is eight times less than the cost involved in acquiring a newer group. A marketer can reduce the cost of acquiring new customers when he is capable of managing and maintaining the existing group. The process of retention can be effective when the strategy of retention and customer relationship is considered as a core part of the business strategy (Restrepo, 2006). Doing so can also help an organization in using its available resources in the optimal manner. This lucrative process can deliver desired results once the marketer is capable of segmenting the various groups of customers and assessing the one most valuable amongst them. Some of the major aspects which when followed can help in maintaining the existing customer base is as follows: 

Segmenting the customer base: The role of segmentation is very critical when a marketer decides to design the strategies of retention. Different segment has different potential of generating benefit for the company; such that once the profitable segment of the customer is identified it is easily for the marketers in execution of their strategies. The effective segmentation will also take into consideration the factors responsible of customer attrition and the means of managing them in an effective manner.

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Designing a strategic plan of action that focuses on customer retention and their management: As the cost associated with acquisition of new customer is significantly higher than retaining the existing base the focus of the marketer has also shifted more towards refining their existing strategies of acquisition. In this context the process of assessing the life time value of the customer is also helpful in designing the retention strategies in a manner which considers that influential factors which impact the decision making process of the consumers (Schiffman, 2006).


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Improving the level and penetration of service provided: A customer is easily attracted when he feels that the services offered by the company is much more than the price he is actually paying for it. When a single service provider can increase the range of services the scope of hunting for comprehensive service provider decreases and increases the chances of retention (Kotle, 2006).

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Making offers for every specified segment of customers: The effective strategy of segmentation is not limited to identifying the profitable group but also to design the action plan which can generate interest amongst the customer group in continuing with the services of their existing providers. This can be made possible when the objective of the business are realized by every member of the company and prepares offer plans as well as service types which cannot be replicated easily by the closest competitors. Such an approach can serve the dual purpose of retaining the existing customers and attracting new ones with the element of differentiation.

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Maintaining a recovery of services desk: The primary objective of maintaining a recovery desk is to assist those customers who wish to breach their existing contract for various external factors and offer them the helping hand by providing the best possible alternative or compensation and increasing the scope of commitment towards the service provider (Restrepo, 2006). Such an approach can negate the scope of negative experience and can boost the element of loyalty.

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Training the employees in meeting the organizational objectives: The process of training the existing employee is also important in the process of retention. This is because like the well equipped technological infrastructure of a company is capable of effectively managing the customer data, a well trained employee is also capable of effectively addressing the client¶s needs in a manner the scope of customer attrition decreases and brand value increases through positive word of mouth.

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Making an assessment of the customers who leave the organization: When the customer leaves the services and severe a contract it is essential for the
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marketer in identifying the actual reason that has led to exist. Apart from assessing the company¶s capability it is also required to keep an eye on the competitive offering in the broad market which can lure the customers. A proactive approach is required in this field which can be useful for a marketer in not just retaining their existing customer group but also to attract the new ones. An organization can have the optimal strategy when it comes to segmenting, targeting as well as positioning their product in the market. Yet such an idealistic organization can fail in the competitive environment when it essentially overlooks the strategies of retention and relationship management with the customers. c 
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 c The telecom industry is one of the most dynamic industries which are essentially driven by the rapid changes happening in the market. Apart from responding to the changing needs of the customers, the industry also needs to keep itself updated as per the advancements of technology which are effective tools in driving the company towards competitive success.

Amongst the various available service providers of telecom

services, T Mobile is one of the leading players which provide mobile telephony to the customer of United Kingdom. In order to sustain its position amongst various emergent as well as existing players in the market, the company is focusing upon various strategies of customer retention (Huber and O¶Gormann, 2008). Though a significant number of players focused upon acquisition of new customers, the rapidly rising level of saturation has led the marketers to look for other options of maintaining their competitive advantage. Responding such need T Mobile is not just focusing upon strategies of retaining their existing customer base but also in enhancing the technical infrastructure of processing business. The company has introduced not just advanced technological infrastructure in effectively maintaining its CRM database but has also brought in certain changes in their organizational structure which can address the future needs in an effective and efficient manner that aimed to integrate CRM with the regular processes of business (Budzick and Dupré, 2008).


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Despite enjoying a significant customer base of roughly 30 million customers and operating as one of the biggest communication company of United Kingdom, T Mobile felt the need of retaining its existing base of customer. The growing competition in the country was such that claiming the largest share of the market was no longer significant as the availability of varied options eases the process of switching the service provider. There was a time when T Mobile registered a 34.8% churn rate which was considered highest in the country, and the total cost that the company had to spend for replacing these departed population of customers was close to $162.3 million (Thompson, 2005). The concept of retaining the customer has emerged as one of the aspect which can help the company in accomplishing profit while putting a check upon the cost associated with acquisition of new customers. T Mobile has therefore shifted its focus upon the various strategies which can improve the level of relationship with its existing base of the customers. For doing so apart from improving the technical and technological infrastructure of the company, it has joined hands with companies¶ specialized in delivering effective IT solution. Such a strategic move has enable T Mobile in reducing the time spent for handling the customers by 29%, stated O¶Reilly, Collection Risk Manger at T Mobile (2009). The role of CRM and use of advanced technology has thereby become indispensable in maintaining a strong foothold amongst the various players in the closely competitive market.

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c The methodology followed for this research began with the critical assessment of literature which focused primarily upon the identified objectives which the research aimed to answer. The review of literature was therefore directing more towards the various strategies of customer retention evaluating the practical importance of retaining the existing customer group from the perspective of company¶s health. Considering the reviews from various researches as discussed in the literature section, the aim of this research study was to develop certain hypothesis around the questions formulated for conducting the research. In order to develop a deep insight into the given topic a primary research survey was carried out which centered its attention upon strategy of quantitative research. The conducted survey considered the customers of T Mobile as the sample for analyzing the trend of customer relationship and retention with the help of statistical tools. The customer survey was conducted as a step forward to answer the various questions that were posed at the beginning of the research work.  

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c In the given project of dissertation the strategy followed for conducting the research is a quantitative one. The basic aspect which the research proposes to analyze various variables like effectiveness of the currently practiced strategy of retention, profit margin associated by retaining the customer base along with the differences of post paid and the pre paid customer groups. Further in this context quantitative technique seems the best one as the collected data from these variables are numerical in nature and the analyzed results derived from interpretation of this data can be easily used for generalization of the trend in the larger population (Kothari, 2003). This approach of conducting the research was also useful in collecting and analyzing data from a larger customer base. Had the approach of qualitative method been used it would have consumer significant amount of time unnecessarily. The qualitative method also would have provided with limited data when it comes to numbers which in turn makes it difficult to evaluate the concepts of customer retention and loyalty management. Another reason for preferring quantitative technique over the qualitative one is due to the reason that this method also provides the requisite tools for collection as well as analysis if the
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collected data. In reality considering every limitation that was confronted during the course of carrying out this research work it was felt that the quantitative approach of assessing data is the best possible strategy of research. ½

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c As the given research was proposed to be conducted upon the existing customers of T Mobile, the sample considered for the study was the number of customer currently associated with the organization and its services. The sample data is gathered from the secondary source which was helping in doing the analysis by using the appropriate technique of sampling. The sampling technique chosen in this case was that of nonprobabilistic one which is also known as the non-random technique of sampling. This technique is very simple in nature and is doesn¶t take into account the total number of population (Burns and Burns, 2008). Another advantage of using this sampling technique is that it doesn¶t consider the sample size vis-à-vis the population. The sample considered is this case was also within the limited boundaries of survey as well as time. Other parameters that come under the boundary of limitation are availability of resources for conducting the research. After taking a due account of the scope demanded by the research and the limitation existing in the system, the nonprobabilistic sampling technique was considered which focused upon the sample size of 200 customer of T Mobile. Considering this as the base sample it was also decided to have an equal distribution of pre paid as well as the post paid customers, which can help in interpreting the trend of retention in these two major segments of customers. In this case therefore, 200 customers were segregated in equal halves, wherein the first 100 questionnaire was filled from the pre-paid service users and the rest 100 were dully filled by the post-paid users.  
 c c  c  c The major source for collection of the primary data was done by interviewing the existing base of T Mobile customers with the help of a semi-structured questionnaire. The questionnaire was designed on the basis of the hypothesis which the research aims to test. The questionnaire method was adopted for collection of primary data as this is
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one of the simplest manners of sourcing the required data from the sample population chosen for conducting the research (Bryman and Bell, 2007). In the initial stage of the research a pilot questionnaire was also done amongst the group of people associated with the research. This piloting was conducted upon a very small sample of 10 people with the intention to validate the reliability aspect of the questionnaire when used as a research instrument upon the final group of sample population. The questionnaire was designed in a manner which was easy to fill by the customer groups. The design also helped the researcher to analyze the results by assessing the various options of the Likert scale. Apart from directly collecting the questionnaire from the targeted sample group, the survey used the online channels of social networking like Facebook and other related sites for assess the interested user groups of T Mobile customers. It was also found that there were several profiles of various customer groups of T Mobile which was established in these social networking channels. These sites created through the online platform were another effort of marketing the services of the company and maintaining the relationship with the customer base. Further the process administering the survey by means of the popular channel of online media also helped in instituting a direct contact with customer base. It was also easier for the researcher in directly approach the user group of T Mobile services by simply uploading the questionnaire in the respective networking site after conducting the pilot research survey amongst the third party survey taking website, after which the same link was posted in various other networking sites of T Mobile users to reach the intended audience for collecting the population data. Along with the online tools of survey, a small group of the company¶s customers were also approached for the process of primary data collection. Collection of primary data for conducting research and deducing meaning is of vital importance as the primary category of data ensures in collecting relevant information directly and freshly from the targeted group of audience/ respondents. Apart from filling of the questionnaire, the attributes of observations are also fairly used in developing a clear idea of the various strategies followed by T Mobile in attracting as well as retaining
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the customer base. Another aspect which intensifies the use of primary data is the fact that freshly collected data are flexible enough which can be aligned as per the research objective which is not accomplished successfully when only secondary medium is used. After collecting the relevant data through primary sources the next step is to clean and process them which can lead to interpretation of meaningful results. Some of the simple mathematical as well as statistical tools like hlookup and vlookup were used which not just validates the collected data but also helps in ensuring that the authenticity of the collected data is maintained.  c c  c Once the relevant quantitative data was collected through the use of survey questionnaire, the next was to analyze them by cross tabulating them with various variables like level of customer satisfaction, profitability of the firm, impact of the competition upon retaining the existing base of customer. Cross tabulation is one of the effective techniques of data analysis which has similarity with the technique of correlation analysis. The technique of cross tabulation was chosen as it allows developing a connection between various variables with the data point established from the collected data through survey questionnaire. The primary objective of the research is to find out which groups of consumers viz. the post paid or the prepaid are in reality, more profitable from the perspective of business, and to assess if the strategies adopted for retaining the prepaid customers are driving in effective as well as desired results. Therefore the different set of data collected from prepaid as well as the post paid customers, was tabulated and analyzed for assessing the profitability of the adopted strategy. Apart from the effectiveness of strategy the process of tabulating the data helped in doing a comparative assessment of the attributes like level of customer satisfaction, defection as well as the correlation of effectiveness of retention strategy with the profitability of the firm. After analyzing the data collected through primary sources, the inferences are presented in tabular as well as graphical form which eases the process of associating them with the theoretical concepts and establishing the correlation.
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c The attributes of validity as well as reliability are one of the vital elements that help determining the credibility of the research results. In order to establish validity, the questionnaire prepared for conducting the survey was tested in a pilot batch before using the same in the sample population chosen for conducting the research. When the questionnaire was tested in the pilot batch which consisted of a small third party sample, it became easier for the researcher in collecting the feedback from the users (third party sample users in our case) which in turn helped in making the necessary changes. This scope of bringing in the requisite changes for improving the effectiveness of the questionnaire increases the validity as well as the reliability of the research. It is critical to ensure the validity as well as the reliability of the collected data as the analysis as well as interpretation of the research findings is directly dependent upon them. The process of using cross tabulation of data for analysis of data provides the scope of conducting a comparative assessment with the data available through secondary sources and ensure that the results has a common trend line when equated with other researchers results. The validation of collected data is critical as even the slightest scope of misinterpreting data increases the chance of leading towards skewed results, which can defeat the purpose of conducting the research. Maintaining some of these steps also ensures that data is neither tampered nor manipulated for tailoring the results in the desired manner, which can then help in making a genuine assessment of the problem chosen for the survey.  

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c Ethics is considered as the basic foundation which has the capability of directing the behaviour of a human being and determines his actions as well as his relationships with his surroundings (Cooper et al, 2006). In the given research the ethical aspects were taken into consideration in order to prevent any unforeseen negative consequences that could befall upon the participants when they participated in the survey and provided candid feedback. Consideration of the ethical attributes also helped in ensuring the fact that there is no scope of misusing the personal as well as the sensitive form of information collected from the respondents group. At the same time ethical practices
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also ensures that the data collected for this research are not used for any other purposes and are destroyed once the analysis is completed. The care was thereby undertaken in maintaining the confidentiality of the collected information. At the same time it was also considered that the respondents are made aware of the nature as well as the scope of conducting the research, by defining the aim and objective of the conducted research before beginning the survey. A brief document of introduction detailing the nature, scope as well as the objective of the research was handed away to every sample customer who participated in the survey. The introductory document also ensured in taking the voluntary consent of the participants while providing them with every detail which they seek related to survey. c


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 cc The customers of T Mobile were selected as the sample group for conducting the research. The selected sample population group was segregated on the basis of their service plan which was post paid or pre paid in nature, which then was divided on the basis of various demographic parameters like age, sex, and educational as well as professional background. The wide range of customer group in terms of the demographic parameters helped in assessing the trend that in terms of demand as well as the expectation of the customers while selecting the services of the company. The macro level segmentation of the customer group during the process of survey helped in judging the level of preference of the customers. Further a single copy of the questionnaire was used for both online as well as filed survey of the customer groups so that there exists no discrepancies in the manner of interpretation of the questions and collected of relevant data. (A copy of questionnaire is attached in the appendix for ready reference). The major findings from the conducted survey have been discussed in the following section. The data gathered from the survey revealed that the strategies of the service providers are more acquisitive in nature. Though the importance of retaining the customers is understood by the audience the emphasis is more upon the acquisition and expanding the customer base. This approach of the marketers leads the customers to hunt for various alternatives which are available easily in the broad market. The practices and the services rendered by the T Mobile group are taken in a very positive manner by the customers. The post paid group of the customers which primarily comprises of the corporate clients is significantly happy with the kind of services provided to them. The add-on features like corporate discounts, bundled services as well as the support services through their 24 hour customer service desks are some of the aspects which are readily accepted and appreciated by the corporate segment of the customers. The below figure depicts the effectiveness of the currently used strategy of the company. The group of respondents when asked to rate their preference in terms of the service provided by T Mobile with respect to its closest competitors revealed that
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strategy of retention as followed by the company is considered useful when assessed in the competitive environment. One interesting finding here is that though more than 50% of the population who respondent the survey voted in favor of the currently used strategy of customer retention, there exists a good 20% from the same population pool who feels that the strategies followed are not yet equipped fully in meeting the needs and demand of the contemporary population.

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Considering the various aspects like saturation of the market, increasing intensity of the competition, rapid increase of the number of new players in the market are some of the factors which exerts a pressure upon any existing service providers in designing its marketing and promotional strategies in a manner that the existing base of the customers are not lured away by the other players in the market. The growing intensity of the competition made the business environment so dynamic that it was not enough to design an effective strategy but to ensure that it can face the challenges as posed by the competitors.


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The element of differentiation has always been a critical element which helped in demarking the strong players versus the emerging counterparts. However with the growing standardization and the rapid emergence of a number of small players, the aspect of differentiation is losing its ground. The marketers are consciously working upon various permutation and combination of strategies which can help them in devising a unique differentiation which cannot be replicated easily by the competitors. In the case of T Mobile more than 50% of the respondent population feels that the company has differentiated itself from other player by improving the quality of service, whereas other 50% of the respondents are not quite sure if there actually exists an element which can differentiate T Mobile from its closest competitors. In actual terms almost every player of the UK telecom market are focusing upon the improving the service which in turn makes it difficult in determining if the level as well as the quality of service provided by the company is actually a differentiator or not.


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In the business environment wherein the possibility of creating differentiation in the market are essentially decreasing the focus has shifted towards devising some novel attributes which can be used as a source of creating differentiation. The process of creating customization is one such aspect which is typically used by the marketers in the contemporary business environment which helps in differentiating it from its closest group of competitors. The survey data reveals that T Mobile incorporates maximum customization in order to retain their existing base of the customers. There is a group more customers who still feel that the degree of customization is not present in the services as well as the products delivered by the company. As the population of this group was more than 25%, the raw data was analyzed to develop an insight about the nature of the respondents. It was then found that the prepaid group of customers felt the lack of customization, which was infact another reason of their switching the service provider. One thing however needs to be noted here is that the focus of the company is more upon the post paid customers who have been identified as the valued segment, hence little or no customization for the prepaid segment.


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The concept as well as the practice of CRM in the context of building the value of a brand and retaining the customer base has become very critical in the recent past. The use of CRM is also seen to have delivered the desired level of services to the consumer groups. From the perspective of the customer it was not important to assess what approaches the company is undertaking in beating the competitive heat but to know about the strategies and approaches that it has adopted in meeting the needs and demands of the customer group. The techniques of CRM are also considered to play an effective role in retaining the existing base of the customer, as it focuses upon those factors which help in determining the actual need of the consumers. In reality at the very core of a CRM strategy there lays the ability for creation of mutual values for both the parties. The importance of CRM is attested by the customer group as they have felt that there needs were addressed in an effective manner by the company post implementation of the strategies of CRM. From the organizational perspective CRM tools has enabled not just in effective maintenance of the customer database which improved the state of relationship but also to determine the profitable group of the customers.


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When the competition in the market intensifies it is essential in using every possible tool of marketing and promotion in spreading the awareness of the product and services offering of a brand. Apart from this the strategies as well as the means of communication and promotion helps in building relationship with the existing base of the customers. When the respondents groups were asked to rate the importance of advertisement in building the brand image in the customer¶s minds, it was found that close to 70% of the respondent population were of the opinion that there is a strong association of the promotional and advertising strategies which helps a marketer in building the image of the brand. The means of promotion and advertisements are other aspects which help in strengthening the relationship of the consumer with the brand and its services. If from the perspective of the customer advertisements are a medium of awareness building from the perspective of marketers it is a tool which can be effective in building relationship. At the same time the marketers of T Mobile are also focusing upon the tools of CRM and CSM (customer satisfaction marketing), which can take care of the relationship with the sensitive group of customers.


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The survey also helped in understanding the association of the brand value in sustaining in the competition. When the respondents were asked to rate the value of the brand amongst its closest competitors, more than 40% of the total respondents population voted in favor of brand value in the face of the competition. Therefore the role of competition is also critical in creating the value of a brand. In other words, for sustaining in the competition it is essential for every player to strengthen their value of the brand which is possible through retaining the existing customer base and providing quality service which helps in spreading a positive word of mouth. At the same time it also became evident that close to 17% of the respondents were not aware if there exists a correlation in building the value of a brand for sustaining in the competition. When crossed checked with the existing data it revealed that it was the pre paid consumer group who had little or no concern about the market competition or the value of the brand. For them the discounts deals matter above everything else. The marketer can thereby develop a different approach of addressing it¶s prepaid as well as the postpaid customers. It thereby became evident from the survey that the telecom players like T Mobile are facing heated competition from the various small and big players. In order to sustain this competition and maintain their existing share in the market the focus of the company has shifted towards relationship marketing and retaining the existing base of the
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customers. In order to effectively manage the existing database of the customer and strengthening the relationship with them, the company is upgrading the existing technological infrastructure at the company. Apart from this the company is also taking considerable measures of converting the pre paid group of customers into post paid, by luring them with attractive offers including loyalty benefits. The firm is faced with the difficulty of measuring the value attached with every customer yet it considers the various attributes which when taken care of can help in driving in value for the organization. The future value of the firm is derived from the present value attached with the consumer groups, a fact which was reestablished through this survey of T Mobile customers. c


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c The lifting of trade barriers, improvement of the economy and the advancement of the technology has together attributed to increasing intensity of the competition in every sphere of business. This is because the ease of entering the marketplace has invited various small and big players in the business arenas which are challenging the sustainability of various business houses. Keeping aside the case of monopolistic competition, the consumers in the present day market have more opportunity and options easily available at their disposal which enables them in acquiring similar services at almost similar prices from the wide array of global as well as the local service providers existent in the market. In such a scenarios of cut throat competition amongst the marketers in attracting the customers or retaining their existing base of customers, emotional attributes emerge as an important criteria which can influence the decision making process of the customer irrespective of the price. The need and role of customer services has thereby magnified in the recent past for a company can no longer afford to induce negative feelings in the minds of the customers which can lead towards defection. Inefficiency in services has led many customers to switch their long time service provider which in turn impacts the business significantly. Though various business houses considered the price factor in impacting the churning of customers, the quality of services are more critical in leading towards defection. In true sense drop in price for a particular segment of products might not attract significantly positive response from the customer group, but improving the level of services can improve the level of satisfaction of the customers which can be effective in retaining them and converting them as loyal group in a gradual manner. Additionally along with maintaining the optimum level of quality in service it is also essential that loyalty bonuses or reward programs are held which can make the consumer feel the recognition from the consumer for continuance of their service. Developing a positive attitude amongst the existing customers is also effective in building a positive brand image of the brand through positive word of mouth. An effective strategy of customer
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relationship management thereby helps a marketer in creation of mutual values for every participant involved in the process of customer company relationship maintenance (Restrepo, 2006). Considering the fact that designing the effective strategy of retaining the valuable customer group is not devoid of challenges, both predictive and descriptive approaches of assessing the business environment are to be taken into consideration which can help a marketer in designing the strategies. Doing so can also encourage the marketer in treating the strategies of retention as a core part of their entire business plan (Pilecki, 2007). The growing need of customer retention has also led the marketers to focus upon CSM (customer satisfaction marketing) rather than blindly following the direction of CRM. Henceforth, with the limited scope of differentiation in an industry like mobile telephony the approach of quickly addressing the needs of the customers can help a player in maintaining a strong foothold against the growing competition. 
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As it was seen that maintaining the existing base of the customer is significantly profitable for the business which cannot be accomplished when the approach of acquiring new customers is followed, in order to effectively design the strategies of retaining the customer there are certain steps which are to be considered by the marketer for deriving desired results. Some of the well defined steps of accomplishing the same are discussed below (Thompson, 2005): 

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VV  : It is critical for the marketers to closely follow the trend of the customer, in terms of their usage of services or payment. Any significant decline in the same can be an indicator of probable churn which can be avoided when necessary measures are taken in the right time. As emotions tend to play a key role in impacting the decision making process of the customer, the same cue can be used for keeping the customers from leaving the services of the company.

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 V : The mode of communication has always been identified as an essential attribute of marketing and relationship building.
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The various modes and channels of communication like phone calls, email, direct mails etc can be used from time to time to prevent the customers from entering the verge of defection. Maintaining a customer database and sending a note or SMS on their birthdays and anniversary are another means of maintaining the customers involved with the company. 

ºV 

V

V
 
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V VV : The front line employees are an important source of information when it comes to make a decision related to customer retention strategy. As the front line employee are the first line of contact for the customers it is also essential that the marketer carefully assesses any issue raised by them for the inputs provided by them can be effective in maintaining the profitability of the firm. Also treating them with fairness can develop a positive attitude which can help in building a positive relationship with the customers.

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V: Whenever the company hunts for the strategy of retaining its existing customer it also considers the manner in which they should be retained. It is therefore essential for the marketer to develop the risk and revenue matrix of the customers such that priority customers are assessed and strategies are designed accordingly.

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V

 V: The major trend of customer churn in the telecom industry is primarily due to better price deals as available through other service providers. However this is not the only reason that leads to defection. The focus of the marketer thereby should be upon providing the fair and quality services to the customers such that even slightest variation in the prices does not influence them to switch providers.

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aV 

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V : One of the popular means of retaining the customers is to make it difficult for the existing customer group to leave the company services. Some of the simple steps like requirement of a short notice before leaving the services can provide the company with the required opportunity to dive in to the problem and see if that can be rectified for continuation of services.
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

A

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 V : Some customer still tend to leave the organization despite the best effort by the marketer. In such cases by finding the reason of their leave and assessing their level of satisfaction with the new service providers can help the marketers in winning them back and converting them into loyal group of customers. This aspects considers the calculating the second life time value of the customers.


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c T Mobile is considered as one of the leading telecom service providers of United Kingdom which enjoys a large customer base of approximately 30million population. Despite such a strong base the company is not devoid of competitive pressure from various established players like British Telecom, Virgin Mobile or new entrants like Vectone, Lyca and Lebera. There are numerous other small players that have entered the telecom market of United Kingdom and are targeting a specific group of consumer segment. As the market is gradually reaching it saturation level the focuses of the players have shifted from customer acquisition to customer retention while maintaining the constant lookout for including the element of differentiation. The small and emerging player in the market are adopting the approach of differentiated product offering strategies which can lure the existing base of customers in switching their existing service provider. An established player like T Mobile is also not immune from this strategy of the small players. In order to maintain its competitive stance in the market, the company has not just considered the various strategies of customer retention but also has revamped its existing technological infrastructure which provides technical help to the customers. In order to improve the existing level of services provided by the company the advanced technical tools were incorporated for managing the CRM system of the business. At the same time the company has also joined hands with technically specialized companies in addressing the client¶s queries in an effective as well as efficient manner. T Mobile offers both pre paid as well as the post paid schemes of mobile services to its customers. As it became evident that the rate of churn was easier in the pre paid case
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the focus of the marketers shifted to the post paid section which emphasized upon providing loyalty bonuses for continuing with the services. The company has also used a predictive tool to assess the probability of churn beforehand and take relevant steps in addressing the problem in an effective manner. The data collected from the survey results also revealed that practices currently followed by the company has adopted specific strategies for different segment of the customer. The high valued customers are dealt with special care and the strategies adopted for them are of specific nature. Considering the element of customization has helped the company in strengthening its foothold by catering to the different needs of different customer segment in their own way. Another thing that became evident from the survey was that marketing communicating plays an important role in building the brand value by spreading the awareness of its wide array of offering to the various consumer segments. ½ 
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c The concept of CRM is the emerging model of maintaining the relationship with the customers which has become like a buzzword in the world of business marketing. Apart from various tools of marketing and strategies of customer retention, CRM is an effective tool which helps in building the loyalty of the customers. The various ways in which the use of CRM strategies can help in building the loyalty of the customers are given as such: 

Improving the delivery of services by considering a single customer view: The use of CRM in the system of marketing helps in providing an integrated approach of the viewing the customers such that every channel of marketing and communication helps in providing the optimal quality of flawless services that are demanded by the consumers in the contemporary world. As inefficient and poor quality of customer service acts as an important factor of leading towards churning of the customers, it is essential for the marketers in improving the services for maintaining the existing base of the customers through implementation of various models of retaining customers.


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

Optimizing the strategies of marketing by conducting the analysis of the customer: When the techniques and tools of CRM are used it becomes easier for the marketers in digging deep into the available data of the customer and find the pattern of buying and service adoption. Such an idea of the trend of the customers buying patterns helps in preparing for the needs of the customers.



Identification of the potential attribute of customer defection and designing the strategies of being proactive: The process of analysis is very critical when it comes to assess the effectiveness of strategy. The process of identifying the potential of causes of defection can enable the marketer in taking measures in a proactive manner and address the risk associated with customer leaving the organization and resolving the issues which has led to such decisions.



Tie up of the customer centric behaviors and rewarding the employees: Once the marketer is aware of the aspects and the attribute that drive the element of loyalty in the customers, the system of CRM can be easily used for tracking the behavior of the employees. Post that the employees should also be rewarded for doing the right thing which has supported the objective of a company in retaining its customer base.

CRM is thereby such a tool which helps not just maintaining the database of the customers in an effective manner but also in conducting a predictive analysis of the trend of buying and consumer behavior with respect to a specific product or service. Further as the concept and practice of relationship marketing has evolved and is being used essentially in the business strategies, various innovative and technically advanced tools are searched by the marketers which can improve the effectiveness of delivering the desired services. Therefore for strengthening the services as well as the strategies of the organization the use of CRM as a tool is indispensable. 


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 c Until recent past the emphasis and the focus of the marketers were more upon the attributes of marketing their product. With the development of technology, lifting of trade barriers as well as growing intensity of the competitions made the marketers hunt for
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every probable strategy which otherwise was negated or considered insignificant from the perspective of business. The changing trend of doing business made the marketers to focus on such aspects which otherwise was not considered. The aspect of consumer behavior is one such area which started gaining importance as marketers started realizing the value of retaining the existing customer base. In the actual sense, the process of customer retention was not possible by mere implementation of advanced technology or relationship building tools. Though to a certain extent the tools were effective in establishing a fresh point of contact between the customer and the company, and also provided with the scope of knowing the needs of the customer in a better manner. The entire purpose of the tool can be defeated is the basic behavior of the consumer is not taken into consideration (Schiffman, 2006). For it is the basic psychology of the customer which plays an elemental role in influencing the process of decision making in terms of products purchase or service provider switches. When a marketer wishes to influence the thought process of the consumer, it is essential that he carefully considers the trend of buying and the general behavior of the consumer segment with respect to a specific product. The basic know how of the consumer behavior is also essential in designing the strategies of retention in an effective manner. Psychology has a major role in impacting the retention of relationship with a specific service provider. Understanding the concepts of consumer behavior also helps a marketer in assessing the probability of the customers¶ reaction towards a specific segment of product and service and emphasize upon the attributes which can easily attract the attention of the customers. Apart from this the consumer behavior is also effective in understanding the reasons that leads to switch the service providers despite being satisfied with the existing level and quality of services. The process of retaining the customers can be done in an effective manner once the marketer is capable of tapping the right pulse of the market such that the existing base of the customer is retain despite the growing intensity of the competition.


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 c ¦  c In the contemporary age the growing intensity of the competition has brought in significant change in the pattern of doing business. The very attribute of differentiation which helped in segregating one player from another is essentially missing now for the standardization emerged as the mantra of the day. In such an age where in every service provider is offering similar range and type of products and services, the elements of differentiation can be created only by increasing the degree of providing quality services and establishing a relationship with the customers such that there is no scope of leaving the services of the existing providers. Also if the development of technology is boon for the industry on the other hand it has intensified the competition. The innovations are happening in such a short interval that lot of them goes unnoticed. In order to grab the attention of the customer segment it is essential to focus upon the attributes which are of customer¶s interest and present them in a manner which is readily accepted by them. The tale of telecom industry is no different here. The rapid growth of the industry in the recent years has brought the industry closer towards saturation such that the existing as well as the emergent players are no longer focusing upon the aspects of customer acquisition but retaining the existing base, which undoubtedly is the one that helps in strengthening the bottom line. The players are essentially focusing upon various strategies of marketing like loyalty schemes and attracting even the pre paid segment of the customers towards the post paid group. It was found that the simplicity of switching the service providers for the pre paid users leads to a higher rate of customer churn in case of most of the telecom service providers. Again the cost associated with the maintenance of the pre paid group is higher than that of the post paid one. The strategies of the major players are thereby drifting towards converting the prepaid ones into post paid and encash from the value of the customers over the lifetime of their association with the company. The aspects of customer loyalty and their retention rate are essentially of qualitative nature which in turn are of behavioral nature and depend upon intermixing of various complex elements (Jacade, 2008). Thereby the focus of the
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industry players are upon refining the existing strategies of customer retention and focus upon the attributes which are responsible for increasing the rate of customer churn. The tools of CRM are also helpful in this context due to its capability of conducting predictive analysis. Despite the growing importance of the strategies of retention, one thing that became evident was that the strategy of retention is still considered as a reactive sport which comes into play only when the attrition of the customer segments happens in significant manner. c


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  cc In the light of the present day competitive environment it is evident that there is little or no scope for differentiation in terms of price and technology, as both these attributes are standardized essentially. In such a case the scope of attracting new customer decreases, more so because of the rising level of market saturation and the higher cost associated with the acquisition of customers. In such an age where in every service provider is offering similar range and type of products and services, the elements of differentiation can be created only by increasing the degree of providing quality services and establishing a relationship with the customers such that there is no scope of leaving the services of the existing providers. In the case of the telecom industry in United Kingdom it was found that the players of the competitive market were more focused in devising the strategies of customer retention which can effectively used for strengthening their bottom line. The strategy of customer retention is focused upon the attributes like commitment of customers, their loyalty as well as managing the relationship. In the post globalization era where the customers have the liberty of choosing from a wide array of products and services from various emerging as well as established players, the probability of losing the existing customer base to the competitor is growing strong. As a matter of fact, in the telecom industry various players started feeling the heat of their shrinking customer base, while they were busy focusing upon acquisition of new customer strategies. Further as the market of telecom in United Kingdom is gradually reaching it saturation level the focuses of the players have shifted from customer acquisition to customer retention while maintaining the constant lookout for including the element of differentiation. The small and emerging player in the market are adopting the approach of differentiated product offering strategies which can lure the existing base of customers in switching their existing service provider. An established player like T Mobile is also not immune from this strategy of the small players. In order to maintain its competitive stance in the market, the company has not just considered the various strategies of customer retention but also has revamped its existing technological infrastructure which provides technical help to the customers. In


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order to improve the existing level of services provided by the company the advanced technical tools were incorporated for managing the CRM system of the business. Keeping aside the case of monopolistic competition, the consumers in the present day market have more opportunity and options easily available at their disposal which enables them in acquiring similar services at almost similar prices from the wide array of global as well as the local service providers existent in the market. Additionally along with maintaining the optimum level of quality in service it is also essential that loyalty bonuses or reward programs are held which can make the consumer feel the recognition from the consumer for continuance of their service. Developing a positive attitude amongst the existing customers is also effective in building a positive brand image of the brand through positive word of mouth. An effective strategy of customer relationship management thereby helps a marketer in creation of mutual values for every participant involved in the process of customer company relationship maintenance. The value and the importance of the strategies of customer retention thereby have gained a major place in carving a niche for itself in the broad market.

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 c The success of a firm is dependent upon the strategies that it adopts for retaining the customer base and inducing the element of loyalty amongst the existing group of customer. While designing the effective strategy of customer retention and loyalty it is essential that the marketer makes an assessment of the life expectancy of the valued customer over the organization so that the desired benefit can be accomplished. It is also important to evaluate the risk and reward of the planned strategy before implementing it so that there exists no deviation from the objective of core business. Along with all these attributes it is also essential that a proper assessment of time is done. This is because despite realizing the need and importance of customer retention, it is essentially considered in a reactive manner which fails to deliver the effective results. Therefore assessing the situation in a proactive manner is very important so


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that there is no scope for losing the valuable base of customer and struggling in the competitive environment coupled with declining profit margin. Apart from this it is also essential for the marketer in predicting the attributes which can play an effective role in supporting the churning rate of the customers. Understanding of such aspects can help in designing the effective strategies of retaining the existing group of customers. The use of tools from business intelligence is another way of doing the predictive analysis which can help the marketer in designing the strategies of business and customer retention much before the occurrence of the churning event. Finally training the existing staff of the company is another important attribute which can help in developing a healthy relationship with the customer base and negate the scope of their severing the relationship with the firm.


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Hello, as a part of my course curriculum I am conducting a study on the µCustomer Retention Strategies in T Mobile in UK¶. In this regard I would like to consider your opinion to help me in developing a proper understanding of the matter. I would very much appreciate if you can take some valuable from your busy schedule for me and provide the answer for the given questions. (Please tick the appropriate box wherever required). x
 Name (optional): Age: a)

20-30 years b) 30-40 years c) 40-50 years d) 50-60 years e) 60 and above

Professional background: a)

Professional b) Self Employed c) Government Employee d) Student e) Others

Please specify your current designation/grade__________________________ How long have you been using the services of T Mobile? a)

Last 6 months b) almost a year c) 10-15 months e) more than 20 months f) more

than 5 years When was the last time when you visited the customer support cell of T Mobile? a)

Less than 6 months b) 6-10 months c) 10-15 months d) 15- 20 months e) more

than 20 months f) more than 5 years


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x
 1.

Do you think that the association with T Mobile as a service provider has helped

you in developing a stronger relationship with the brand? a) Strongly agree b) agree c) disagree d) strongly disagree e) not sure 2.

Do you think that management of the T Mobile is involved in conducting training

session for the employee that can improve their services? a)

Strongly agree b) agree c) disagree d) strongly disagree e) not sure

3.

Has your need been taken care of every time the company decides to introduce

a new range of product? a)

Strongly agree b) agree c) disagree d) strongly disagree e) not sure

4.

Do you feel the services of the T Mobile are better than other established mobile

solutions provider in the market? a)

Strongly agree b) agree c) disagree d) strongly disagree e) not sure

5.

Are all the elements of customer relationship management as adopted by T

Mobile equally important for you to decide upon continuing your contract? a)

Strongly agree b) agree c) disagree d) strongly disagree e) not sure

6.

Are the post paid schemes more attractive to you than the prepaid ones?

b)

Strongly agree b) agree c) disagree d) strongly disagree e) not sure

7.

Has there ever been a case when you felt that managers should have focused

more upon customer services rather than the marketing and promotion of brand? c)

Strongly agree b) agree c) disagree d) strongly disagree e) not sure


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8.

Given the opportunity to rate other service providers over T Mobile do you think

these it is more attractive? d)

Strongly agree b) agree c) disagree d) strongly disagree e) not sure

9.

Which is one of the most attractive features of T Mobile?

a)

Bundled packages

b)

Service quality

c)

Relationship Management

d)

Range of products and services

e)

Others Please specify___________

10.

The value proposition and Brand value of T Mobile is

a) Attractive b) Unnecessary c) Can¶t say d) Others please specify______________________ 12.

Do you think additional features should have been considered apart from CRM

and service management? a)

Strongly agree b) agree c) disagree d) strongly disagree e) not sure

13.

The mode of promotion chosen for communicating the services or launches of

new packages of T Mobile is effective? a)

Strongly agree b) agree c) disagree d) strongly disagree e) not sure

˜ 
 
 
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