Faculty of Commerce, Law and Management

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    Customer retention strategies for the prepaid mobile telecommunications sector in South Africa
    (2012-01-23) Flynn, Teresa
    This study will propose ways in which companies can focus retention strategies in the local prepaid mobile telecommunications sector. Currently there is little academic literature on this topic, even though in-house marketing research has been done by the operators. The purpose of this research is to investigate the customer retention strategies in the prepaid mobile telecommunications sector in South Africa. This will be done by triangulation of what consumers believe is important in their retention, what the organisations deem as paramount, and what retention experts state are the motivators of retention. Data was collected using both a survey questionnaire for consumers, and through face to face interviews with marketing management at mobile telecommunications operators, as well as independent expert consultants on the topic of customer retention. The findings from this study were that the consumers want to keep the same cell phone number as it is part of their identity. The customer looks at the total offering when considering pricing, and not just certain costs, and prefers a prepaid model as spending is controlled in this manner. Both consumers and management agree that rewards and loyalty programs are seen as a value add, especially where they offer instant gratification. A reliable product is necessary for a consumer to stay with the company, as is accessibility to support and other products. Management realises that the total customer experience across all touch points is a retention enabler, with one really bad experience being enough cause for a customer to churn. The consumer survey indicated that customer service is a driver that all market players need to improve on. An organisation‟s brand allows a consumer to identify with the firm, and is more a pull factor than a push factor, unless it is perceived as dishonest or unethical. The only time a consumer‟s demographics came into play regarding customer behaviour was age making a difference was when using a cell phone to access the internet - iii older age brackets use it sparingly if at all. Although other value added services such as SMS and MMS are used across the board. Companies model consumer behaviour, and base it on data from previous churners to identify possible churners. Of these, only profitable churners are then recognised for retention campaigns. Retention campaigns are measured for success. The prepaid market makes up 80% of the mobile telecommunications market in South Africa, and the revenue they contribute is approximately 35% of the total. Therefore this customer base should not be neglected or ignored. Due to the demographics of emerging markets, prepaid offerings are the way of the future. The research paper finishes with several recommendations on how to enrich customer retention strategies for the prepaid mobile communication market.
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    Customer retention in the credit card market in South Africa
    (2011-05-30) Mudau, Abel
    Regulatory, structural and technological factors have significantly changed the credit card environment throughout the world during the past two decades. Increased competition in the credit cards market and the arrival of non-traditional credit card providers like retailers and airlines has not made the situation any easier for banks, who are the main players. This has resulted in a decrease in customer loyalty and higher customer churn. The retention of customers has become the ultimate determinant of the survival of any organisation and each company has to continuously improve its service offerings to ensure that it can retain its customers. It is critical that organisations understand and completely satisfy their customers’ needs in order to retain them. The purpose of this research was to explore the challenges that the South African credit card organisations face in their attempts to retain customers. More importantly, this study explored the challenges that are distinctive to South African credit card issuers, as perceived by the banks. In-depth, semi-structured interviews were used to obtain the views of customer retention analysts and practitioners, credit card associations (VISA and MasterCard), senior managers and executives involved in the credit card environment. The main findings were that the credit card organisations would not be able to retain customers unless they provided a consistent quality of service and continually attempted to satisfy their customers’ needs. The loyalty programmes that were in place generally didn’t help to retain customers even though customers complained in instances where there was none. The competition in the South African credit card market was found to be not strong enough to result in a huge exodus of customers from one company to another. The high turnover of frontline employees was found to have a very negative impact on customer retention rates. This report will assist credit card managers and executives that are involved in customer retention activities to appreciate the challenges that arise when implementing different customer retention strategies. With that insight, they will be in a better position to either refine their strategies or find other ways of mitigating these challenges.
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    Drivers of Customer Equity in Acquiring and Retaining Customers in the South African Automobile Industry
    (2011-03-22) Barron, Brandon
    The recent global financial crisis has made customers think twice before purchasing anything that involves a substantial financial expense. Availability of credit from financial institutions makes purchasing of expensive goods like houses and motor vehicles much more difficult. Companies have realized this fact and now need to target their marketing activities to persuade customers to make those purchases that they might not be that willing to undertake considering these restrictions and added hassle. This research looks at the following question. What are the drivers of customer equity in acquiring and retaining customers in the South African luxury automotive industry? The Customer Equity driver model was targeted to see which of the drivers (Value, Brand and Relationship equity) is seen as more important to the customer when deciding to purchase a vehicle. A sample of 95 customers of 3 Series BMW„s and 32 BMW dealer staff were used in gathering the required data. All respondents completed an online questionnaire on importance ratings and performance against these ratings for certain competitors of BMW. The responses were analyzed using descriptive analysis as well as statistical methods of factor and principal component analysis. The results were interpreted to answer the questions posed and to see which Customer Equity (CE) drivers and their respective levers customers see as more important in this economic down turn. The results showed that the Value equity driver is seen as the most important by customers and dealers followed by Relationship equity and Brand equity drivers respectively. The Value equity lever of vehicle build quality was seen as the most important lever by both the customers and dealers. In comparing BMW‟s performance against the CE drivers it can be seen that BMW is performing well in Relationship and Brand equity driver areas but they still need to improve their Value equity driver.
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    Factors influencing customer retention in South African retail banks
    (2011-03-22) Boyens, Martin
    Increased retention of its customers increases a bank’s market share and can have a significant impact on profits (Reichheld and Sasser 1990). Many customer satisfaction studies have shown clear links between customer satisfaction, customer loyalty and customer retention. Although customer satisfaction is seen as the main driver for customer retention, the objective of this research was to identify the underlying factors that influence a customer to close his or her account and move to another bank. The methodology used was quantitative, with questionnaires made available on the Internet. A sample of 290 respondents who possess a cheque account at a bank in South Africa was used. A snowballing sampling technique was used to be able to achieve the sample size required. The study found service elements to be the main drivers for customer retention in South African retail banks, but did, however, find that the product itself factored together with service elements, suggesting that in the banking industry the boundaries between the product and service becomes blurred. The second and third factors indicated the need for convenience, whether online or through other channels, and should be taken into account in all service delivery plans. The key message and conclusion of the research is that the product and the service offering from the bank are interlinked and should not be seen as separate offerings to customers. The study may be of value to other service related companies