Maintaining and developing quality-oriented customers

Maintaining and developing quality-oriented customers

Almost two years of economic crisis have not stopped the growth and development of Indonesia's cellular phone operators, particularly GSM. With prepaid SIM cards, GSM operators have been able to tap into the changing behavior of crisis-wary consumers who are limiting their pulse usage. The prepaid SIM card has become popular because of its advantage in being able to monitor and limit pulse usage.

But like businesses in any era, GSM operators not only encounter customers concerned with the benefits available to them and price, but also those people, better known as quality- oriented customers, who place more emphasis on quality than cost.

Not all GSM operators have focused on the latter group during the crisis. Before the crisis, their number was smaller than those consumers concerned with both quality and price, or looked for price over quality. The crisis, with its harsh impact on consumer spending power, further reduced the number of quality- oriented customers.

Their number may be smaller, but quality-oriented customers should receive greater attention because they are likely to be loyal. Their main concern is not price but quality, and their loyalty should be won with quality products and superior service.

Initially, the objective to serve quality-oriented customers was not an easy task for Excelomindo Pratama (XL), the GSM operator most concerned with this group.

As the newest face in the GSM market, XL did not have to be concerned with educating the market. Yet XL quickly gained a response from customers and prospective customers that was far beyond expectations, despite the fact XL prepared its system and infrastructure according to predictions of customer numbers.

XL's emergence in the wake of other operators, partly due to its efforts to install a better infrastructure, inevitably created a more conducive starting point for its debut, making quality its point of differentiation with other operators.

Why quality? Because this aspect received insufficient attention from the market's predecessors, which were more focused on educating the market. While XL started out with a range not as wide as its competitors, and relatively higher fees, the market accommodated its entry. Its SIM GSM card, with its advertising slogan Langsung Kring (Starts Ringing Instantly), quickly made its voice heard in the market.

XL's guarantee of quality covers two aspects: service quality and communications quality. Service quality: XL's Customer Service Staff (CS) are trained not only to give answers to questions, but to take the initiative in offering solutions to cellular subscribers' problems.

XL is the only cellular operator to use Fiber Optics in Java, Bali and Lombok. Fiber Optic's transmission communication quality is considered clearer and faster than microwave frequency. XL also installed Microcell XL in Jakarta's communication-heavy Golden Triangle: Jl. Sudirman, Kuningan and Jl. Thamrin. Use of Microcell XL increases network channels and minimalizes the general customer complaint of "No Network" or "Network Busy".

Of course, at the outset, XL offered better service and communication quality for all its customers, regardless of whether they were frequent or infrequent users. However, after a sufficiently satisfying response, it decided it needed to show more appreciation to its frequent users. This came as the crisis began to strike Indonesia.

As we are all aware, the worst crisis in Indonesia in the past 30 years has caused changes in customer behavior. Many customers suddenly began calculating price versus quality, or price value. The drastic change in consumer behavior put businesses on notice that they would have to develop an outreach which was suited to customers' needs, wants and expectations.

With quality oriented-customers, businesses have taken the approach known as "romancing the brand". This includes providing content and context differentiation which is equal to or better than prior to the crisis. For value-oriented customers, companies have been forced to embark on "rationalizing the brand", which entails offering the same content differentiation but reducing context differentiation.

To price-oriented customers, "economizing the brand" is the necessary approach, characterized by lowering content and context differentiation offered to customers (see Figure 1).

Outreach to customers does not only identify differentiation, but also nine core marketing elements. This is why XL set out to offer service with greater benefits for its quality-oriented customers, instead of offering added-benefit service for a higher price. The process remained quality focused (see Figure 2).

Subscribers identified as quality-oriented customers receive appreciation based on the number of phone pulse units they use. Initially, XL offered discounts to certain businesses, but it now applies to all quality-oriented customers. Among them are the creme de la creme: the very heavy users.

In implementing Treachy and Wieserma's recommendations in The Discipline of Market Leaders, XL developed special customer outreach to these exclusive customers. It introduced Customer Relations Officers (CRO) to serve the needs of the customers. For instance, XL CROs can assist in airport check-in or gain access for economy-ticket holding passengers to use executive lounges at airports.

Why does XL go to all the trouble? Quality-oriented customers need a product with an extra package, which also takes the form of a loyalty program.

How has the outreach fared? XL has managed to ensure that the number of its quality-oriented customers has not dwindled, a reason in itself for a sense of achievement. It is even more satisfying when we consider that most cell phone users today have a preference for prepaid GSM SIM cards, which do not foster a closer relationship between an operator and its customer.