Abstract

The main objective of this study is to assess the impact CRM between MTN and NEXTTEL Cameroon. Primary data was obtained through a questionnaire. 400 copies of the questionnaire were administered and 400 questionnaires were filled and brought back by the researcher for analysis. The questionnaires were analyzed using SPSS 20.0.

Descriptive analysis was done with the help of tables. The primary data was collected through questionnaires from customers of MTN and NEXTTEL in a five point Likert scale ranging from strongly agree (SA) to strongly disagree (SD). Based on multiple regression analysis, this paper finds these results that the regression indicated these four predictors: customer acquisition, customer retention, customer value increase, and complain handling when applied altogether.

Hypotheses were further tested using the calculated t-values in the regression tables to provide answers to specific research objectives. The researcher found that customer value increase practice by MTN and NEXTTEL, and customer retention significantly predicts the extend of CRM as did customer acquisition and complain handling in assessing the impact of CRM on both companies.

The study proposed that there is no impact of CRM dimensions on customer satisfaction. The regression analysis revealed that there is a statistical positive relationship between MTN and NEXTTEL  CRM dimensions. Finally, this research recommended keeping effective contact to increase familiarity between telecommunication sectors and customers will enhance customer relationship management.

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Today, there have been a serious competition the major telecommunication industries in Cameroon between MTN,ORANGE,NEXXTEL and CAMTEL. But each  of them tries to distinguish  from the other through the services they offer and their interaction  with their customers.

Generally, there has been a variation of at least, 4% among the Telco operators with the accumulated turnovers of the two operators namely MTN and Orange between 2014 and 2015. This, thus, confirms the difficulty of the year despite the launch of the 3G technology which has contributed nearly 14.2% of total income, that is, almost 32 billion for MTN.  Specifically, the Telco year in Cameroon was marked by several challenges:

• Double launch of the 3 & 4 G technologies and the renewal of licenses that have induced new business offers and business models.
• Competitive pressure from the third operator pushing other operators to reinvest in urban and rural network coverage and quality.
• Managing the outsourcing transition of technical jobs undertaken by operators to better focus on the core of their business.

MTN remained the Leader in market share while recording a drop of 6.5% on its turnover and a drop of 5% on the number of subscribers. Furthermore, MTN also registered a drop by 12 points on market share; following the 2014-2015 rating scale of Media Intelligence.

Also, despite the drop in EBITA (Income before Interest, Dating Imports and Amortization) from 42.8% to 36.2%, MTN Cameroon still remains extremely important for the African arm of the Group. In addition, the above challenges can also be explained by the investments made on the qualitative and quantitative expansion of the network and development of new technologies.

Orange recovered growth (customer database). This is seen via the “subscriber database” that has grown by 14% thus, it gained market share by 3 Points following the rating scale Media Intelligence.

Its turnover in 2015 experienced a near stabilization (- 0.4%, that is, nearly – 655 960 000 FCFA). However, the 3rd and 4th quarters seriously impacted growth by a net loss of (- 6.55% in subscribers and – 2.78% ARPU) in 4Q15. An almost similar situation at MTN with reference to its launch of the 4G technology, eight months after launching the 3G.

Nexttel, on its part, did not publish any information to suggest any contrary tends vis-a-vis the other operators. It published an unconfirmed result of 3 000 000 subscribers in 4Q15, which was expected based on internal forecasts in 2Q15.

However, it is still important to point out the great 3G coverage and quality of Nexttel in Cameroon. It is worth noting that 96% of Nexttel subscribers have more than two SIM cards. Thus, 1/6 subscribers had three SIM cards (one for MTN, one for Orange and the last for Nexttel). This rendered the market very unstable, especially for the Prepaid.

For telecommunication sectors to fulfil their primary objective of profit maximization, they ought to have a large pool of reliable customers who can stay with the institution for the near future. To maintain these customers, customer relationship management is the bond that keeps them together to improve business relationships with customers better, specifically focusing on their satisfaction.

Customer relationship management plays an essential function in driving customer satisfaction. Satisfied customers are profitable to the firm not only because they are likely to make repeat purchases but because they promote the firm through words of mouth. Therefore, customer relationship management improves the firm’s market share by bringing in more customers (Urehman and Jam, 2010).

However, proper implementation of customer relationship management is a must for customer satisfaction. For customer relationship management to be implemented successfully, the policies of the firm’s strategy structure ought to be flexible and explicit particularly the pricing policies. These are vital issues that increase customer satisfaction and firms profit (Khaligh et al.2012).

Customer relationship management prescribes that to satisfy the customers, it is essential to understand the customers.  Customers should be well understood for their tastes, attitudes, preferences and decision making factors. This helps the firm in identifying their target customers and coin out measures to provide them with the quality of services they desire thereby leading to satisfaction. That is why this study tries to assess the impact of customer relationship management on the telecommunication industries.

Moreover, every customer belonging to any of those telecom industries  constitute one of the most important assets that a telecommunication industry like MTN or NEXTTEL should preserve and continuously expand on. As customers are of such significant importance, it is necessary for banks to satisfy their needs and wants so as to establish and maintain long term relationship with the customers to enable them to combat the increasing competition in the global market.

Customer satisfaction is an important tool in all marketing activities.  This is critical for long term success and sustainability of any organisation (Peppers & Rogers, 2012; Hansenmark & Abinsson, 2014). Globally, businesses are focusing on customer satisfaction to improve products and services and increase customer loyalty in the face of rising competition (Turkyilmaz & Ozkan, 2009).

This continued focus is encouraged by the fact that increased customer satisfaction increases retention and loyalty, competitive advantage, market share and profits as well and improved organisational performance (Carter, 2010; Voss & Voss, 2011). Customer dissatisfaction, on the other hand, leads to switching, complaints and consequently reduction in profitability, market share and competitiveness (Munari & Manrai, 2013).

To keep customers in the highly competitive and changing market arena, most companies are emphasising on maintaining and expanding their customer base using customer acquisition marketing strategies for survival aimed at maintaining and enhancing relationships with customers (Krishnamoorthy & Srivasan, 2013).

Firms have realised the need for creating and maintaining long-lasting relationships with the existing customer base than attracting new customers and providing customised services preferred by customers through customers lifetime value (Ampofu, 2012).

Originally customer relationship management was based on three major principles; shielding the current customers, fostering new customers and enhancing asset value of all the customers.

With the advent of CRM which was integrated with high end software and technology, business perspectives were totally changed. A CRM system eventually emerged as consisting of company-full of information which is depicted sophistically to increase business profit and meliorate customer satisfaction and loyalty, on the same hand reduces business cost and investment.

1.2 Statement of the Problem

Customer satisfaction is one of the most important issues concerning business organizations of all types, which is justified by the customer orientation Philosophy and the main principles of continuous improvement of modern enterprises.

The client is the end goal of businesses, since it is the customer who pays for supply and creates demand. Businesses often follow the saying that “the customer is always right” because happy customers will continue to buy goods and services. In today’s competitive business environment, customer satisfaction is an increasingly important component of an effective organization.

The biggest management challenge in the new millennium of liberalization and globalization for a business is to serve and maintain good relationship with the king – the customer. In the past producers took their customers for granted, because at that time the customers were not demanding nor had alternative source of supply or suppliers. But today there is a radical transformation.

The changing business environment is characterized by economic liberalization, increasing competition, high consumer choice, demanding customer, more emphasis on quality and value of purchase etc.

The problem is that customer satisfaction is seldom expressed in financial terms. Many organizations simply categorize customer satisfaction measurement as a form of “marketing intelligence” instead of using it as a management tool to build the customer into their quality improvement processes and increase profit.

As a result, companies often know the cost of providing good service but they rarely know the cost of providing bad service. Many market research companies agree that even “satisfied customers” will defect. Therefore, this study concerns on customer satisfaction using customer relation strategies to meet customer needs in order to make customers loyal and retain them for better profit in today’s modern market within the context of the telecommunication sector.

1.3 Objectives of the Study

The objectives of this study are divided into main and specific objectives.

1.3.1. Main Objective

The main objective of this study is to assess the impact of customer relation management in the telecommunication sector.

1.3.2 Specific Objectives

1. To assess the level of customer acquisition in MTN and NEXTTEL.
2. To determine customer retention in MTN and NEXTTEL.
3. To compare the level of customer value increase between MTN and NEXTTEL.
4. To assess the level of complaint handling in MTN and NEXTTEL.

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