The relationship between customer relationship management and customer satisfaction in telecommunication companies in Cameroon
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Today, there is fierce competition in the telecommunication companies in Cameroon, and one of the key issues is the company’s ability to practice effective Customer Relationship Management to achieve customer satisfaction in order to retain its existing customers and look for more.
The subject of Customer Relationship Management and Customer Satisfaction has become a global issue. The study sought to examine the relationship between customer relationship management and customer satisfaction. The questionnaire was the main data collection tool used to gather data from 100 customers of CAMTEL which is one of the telecommunication companies in Cameroon.
The estimation tool used to test the study hypothesis was Statistical Package for Social Science (SPSS), version 21. Findings revealed that customer relationship management has a significant positive effect on customer satisfaction as measured by their satisfaction with the quality of product rendered.
The results also show that a high level of CRM will lead to a higher level of customer satisfaction with the quality of services rendered.
This shows that the more satisfied customers are the more likely they will stay or stick to Camtel’s product. Customer Relationship Management is a significant driver of customer satisfaction in the telecommunication company (Camtel).
The study recommended that the management of telecommunication companies (Camtel) should invest resources and capacity to intensify the management of customer relationships as this has been shown to impact performance and profitability.
The researcher recommends there should be a further study on the effects of CRM on Customer retention in telecommunication companies. Another research can be conducted to assess the impact of CRM practices in the telecom in Cameroon.
1.1. Background Information
Fundamentals of business can be seen as developing and changing rapidly. Customers’ needs, organizational strategies, and competition lead to this change. In a time of the industrial revolution, the main focus was on mass marketing and mass production. Today, customers’ needs are changing rapidly and they also change the processes of organizations.
The old concept of business was a product-oriented model of “design-build-sell” which was changed to a new customer-oriented model by “sell-build-redesign” (Rygielski, Wang& Yen, 2002).
At the same time, the process of traditional mass marketing process was changed to the new one-to-one marketing concept. In the old marketing concept, the main focus was to reach more and more customers but to acquire new customers was more resource-consuming as compared to retention the current customers.
Organizations realize that they don’t just focus on transactions; they turn them towards opportunities to sell products with good service experiences to establish long-term to one relationships with each customer. In recent years, organizations had to quickly decide the right way to build long-term relationships with customers through different tools and techniques.
Customer Relationship Management (CRM) was also a tool having different techniques to attract, acquire, retain and build a strong relationship with customers.
CRM was a dual creation process in which information was captured, integrated, accessed then exchanged to create value for future customers from current customers (Boulding, Staelin, Ehret, & Johnston, 2005).
Today, CRM was becoming popular rapidly and organizations are investing in the implementation of CRM systems. In 2006 worth 3.6 billion dollars licensed global CRM software was purchased and it was increased by 10.5 percent per year according to this 6.6 billion dollar in 2012 (Haenlein & Kaplan, 2009).
According to a study from 2000 to 2005 organizations invest 220 billion dollars in CRM (Payne, 2006). Organizations are more concerned about their customers and it increased the importance of customer relationship management.
This changing and competitive business environment is causing most firms to devise ways to cope with the rapid changes in the environment such as technology. One of the aspects that have compelled all these changes is the endless change and evolution of technology.
Customer needs to keep on changing and firms keep looking for ways to accommodate these needs. Hunt (2009) indicates that a good customer relationship management program helps the firm to satisfy customer needs.
Furthermore, the Customer Relationship Management (CRM) concept has evolved in such a way that it must be viewed as a strategy to maintain a long-term relationship with the customers. Relationship building and management, or what has been labeled as relationship marketing, is a leading approach to marketing (Kotler, 2005).
Scholars have put forward various definitions of Customer Relationship Management practices. Stone, Woodcock & Machtynger (2005) define CRM as a management approach that enables the firm to identify, attract and increase of profitable consumers by managing relationships with them. According to Sugandhi (2007), CRM involves establishing and maintaining long-term mutually beneficial relationships with strategically significant customers and managerial efforts to manage business interactions with the customers by combining business processes and technologies that seek to understand the firm’s customers.
Peck, Payne, Christopher & Clark (2014) posit that CRM is a business strategy for engaging customers through building trust and brand loyalty. Sugandhi (2007) opines that CRM aims at ensuring that business connects with the customer conversations and establishing long-term relationships with the customers. It forms an integral part in establishing a close connection with the customers. A better understanding of the customers enables the firm to formulate ways to effectively meet those needs. This reduces complaints hence boost customer satisfaction with CRM, the firm can easily understand the customers much better by addressing their needs in the most efficient manner, this enables the firm to attract and acquire new customers (Hunt et al., 2008).
The telecommunications sector in Cameroon, liberalized by the law of July 1998 allowed the entry of two private mobile operators alongside the incumbent fixed telephony. The ICT (Information Communication Technology) sector in Cameroon contributes only about 3.5% of GDP, which is low for the region.
The sector requires considerable development for the country to make better use of the digital economy. To this end, the government has in-train its ‘Cameroon Digital 2020’ program, aimed at improving connectivity nationally. A large number of small ICT (Information Communication Technology) projects form part of the overall program.
Cameroon was for many years one of the few countries in Africa with only two competing mobile operators, MTN Cameroon and Orange Cameroon. After some delays, Nextel Cameroon majority-owned by Viettel) launched a third network in late 2014, including the country’s first 3G mobile service.
The operator has grown swiftly, signing up more than three million subscribers and claiming a 16% market share. Competition in 3G followed in early 2015 when both MTN and Orange launched services. Mobile broadband based on LTE was established at the end of 2015 and this has been the catalyst for a fast-developing mobile broadband sector.
The investment programs among operators over the next few years will considerably boost mobile broadband services in rural areas of the country, many of which are underserved by fixed-line infrastructure.
Fixed-line penetration in the country is extremely low, and the privatization of Camtel’s fixed-line business has failed several times. Given this condition, fixed-line services are relatively insignificant in terms of internet connectivity.
Telecommunication firms are undergoing significant changes as a result of advancements in technology and regulatory reorganization (Toili, 2010). CAMTEL is today among Africa’s major companies in the telecommunications sector with a bright future.
Cameroon telecommunication is partly own by the government and it is already nineteen years and it is recalled that it is the fruit of the liberalization of the ICT (Information Communication Technology) sector ushered in during the second half of the 90s.
Set up the presidential decree No. 98/198 of 8 September 1998, the incumbent telecommunication operator in Cameroon has since 2005 launch a number of projects to equip the company with a productivity tool that meets demand in terms of service quality and infrastructure capacity.
At the commercial level, the wireline had for long been the core of the company’s business, until the advent of the CTPhone (Cameroon Telecommunication Phone), which is a mobile fixed phone using the CDMA (Code Divisional Subscriber Line) technology.
Camtel has about 120,000 wireline subscribers and over 400,000 CTPhone customers. These figures will experience steady growth with the completion of ongoing projects, including the MORA (upgrading access networks) project, which aims at providing quality service to subscribers as far as telephone, internet via ADSL (Asymmetric Digital Subscriber Line), and eventually, telephone images are concerned.
There is also the project to expand the CTPhone network by 350,000 additional CDMA (Code Divisional Subscriber Line) lines in partnership with China, in order to accommodate the ever-growing number of CTPhone customers.
Camtel has a national Fibre Optics Backbone which is a key factor in the development of all sectors of our national economy. It also satisfies the desires of those who visibly adhere to the objective of making Cameroon an emerging country in the short run.
After the national optic fiber backbone which has been expanded to a considerable distance of 12,000km, which had the purpose of entering into the next code-named 65.
Today, Camtel can boost over 110,000 fixed phone lines and about 155,000 CTPhone lines. Camtel has also rolled out other products such as ADSL (Asymmetric Digital Subscriber Line), or broadband internet, dedicated lines transmitted through the optical fiber and prepaid cards all of which enable users to enjoy phone
CAMTEL is located in four urban cities in Cameroon are Douala, Kribi, Yaounde, and Limbe, headed by urban delegates who are equivalent to assistant directors.
Administratively having 3 sub directors under him, heading the financial, commercial, and the technical service, each having its chief of services and commercial agencies (they are directly answerable to the chief of commercial service).
Camtel is made up of services and not departments. There are ten regional representatives who are headed by regional representations who is equivalent to a sub-director having eight chiefs of centers. They are all in the regional headquarters. The agencies are directly linked to the chief of the commercial agency.
1.2. Problem Statement
Customers are the major products of every telecommunication company and the ways these products are managed determine the effectiveness and efficiency of the telecommunication companies and ultimately their performance.
This is because most telecommunication companies offer customers the same set of services and the only way to differentiate from others and gain a competitive advantage over the other telecommunication companies is to treat customers as kings.
Peck et al. (2014) note that firms have realized the significance of CRM and hence they are developing capabilities to sustain competitive advantage in the delivery of superior products and services, distinct selling prepositions, and maintaining long-term relationships with the customers (Peppers & Rogers, 2004).
In Cameroon, Camtel being one of the firms in the Telecommunication sector uses CRM to allow customers to easily interact with the firm. This is aimed at enhancing efficiency in managing responses timely and service quality.
CRM has been a subject for conceptual discussion and empirical investigation. Although some studies have endeavored to investigate the relationship between CRM and customer service performance: Waqas & Muhammad (2015) studied the link between customer relationship management and performance.
The results found that CRM was an important tool in enhancing customer service performance. Werner Reinartz & Wayne (2012) found that customer relationship management had a positive effect on performance.
In their study, Khodakarami & Chand (2014) found that CRM contributed to sales growth and performance. Makau (2013) studied the effect of customer relationship management in commercial banks in Kenya.
It was found that the use of customer relationship management enhances interaction and relationships between the customers and banks. Kibera (2012) investigated the link between customer relationship management practices and the marketing productivity of commercial banks in Kenya.
It was found that customer relationship management practices were positively related to marketing productivity. Gatobu (2012) found that CRM impacted positively on the firm’s market share and competitiveness.
The limited focus was given on the link between CRM practices and performance. In Camtel, in the past years, we had problems of customer dissatisfaction sometimes due to lack of proper communication, poor reception, no follow-up, etc. From the above, we then come up with this main question: What is the relationship between Customer Relationship Management and Customer Satisfaction in Telecommunication companies (Camtel).
Customer Satisfaction is identified in this study according to Bilton and lomon (1999) as service quality and product quality. Thus we use these types of customer satisfaction to generate our specific question as follows:
What is the relationship between customer relationship management and service quality in telecommunication companies (Camtel)?
What is the relationship between customer relationship management and product quality in telecommunication companies (Camtel)?
1.3. Research Objectives
In trying to find answers to the research questions and on the basis of the above background discussions relating to our problem statement, the main objective of the study is to examine the relationship between CRM on customer satisfaction of telecommunication companies (Camtel).
The specific objective of the study is:
To examine the relationship between CRM and service quality in telecommunication companies (Camtel).
To examine the relationship between CRM and product quality in telecommunication companies (Camtel).
To make policy recommendations.