21 November 2012

Zimbabwe: Telecoms Customer Engagement Survey


The telecommunications industry is growing. The Ministry Of Finance (MoF) estimates that this year, the sector will grow by 6,00 percent (compared to 5,50 percent in 2011).

Driven by significant supply side interventions, the sector is one of the fastest growing in the economy. Voice penetration has increased by over 20 percent percent in one year (the current voice penetration rate is estimated at 89,80 percent, compared to 68 percent in November 2011). And these interventions have not been without results. Internet usage, for example, has already grown by 165 percent over the past three years and is still growing. The country's internet traffic conducted through mobile phone devices is currently the highest in the world at 58,10 percent. These market indicators, by any standard, are very encouraging. An important question, however, is will this be sustained in the long run. The need to further expand network coverage, to improve current network quality, the financial and market share impact of these demands and the general price sensitivity of the end user are hurdles that telecommunications companies will have to overcome.

Zimbabwe is getting close to 100,00 percent mobile penetration - this is impressive, but challenging times are ahead. Business cycles in other countries suggest that competition in the telecommunications industry will increase in the days ahead. This research was commissioned with the view that the market dynamics of the telecommunications industry are changing and as the findings of this report suggest, so should the players. The battle for the customer will be fought over content and services - not access. Already, there have been multiple entrants of operators with both voice and data capabilities. The battle is no longer only between Econet, Telecel and NetOne - TelOne, Africom, and Broadacom amongst others are proving to be aggressive players. Our research also shows that one in five respondents is a multiple subscriber who uses the different service providers frequently.

This report focuses on an imperative for telecommunication companies that are serious about not only growing marketing share but increasing average revenue per user and retaining high value customers. The recent price wars (and promotions) between operators attempting to attract new subscribers has helped to raise subscriber numbers, but this may not be sustainable in the long run. Lessons from Ghana and Tanzania show that if anything, price undercutting will negatively impact operators' bottom lines.

Now, more than before, telecommunications companies need to find creative ways in which to engage their customers. Customer engagement is defined as the strengthening of the customer relationship across the company touch points. Customer engagement has been thoroughly researched and explained by renowned global consulting groups, Gallup Consultancy International and McK-insey et al.

Research has revealed that fully engaged customers spend more, stay with you longer, and are more profitable than average customers. It is not surprising to know that organisations that have placed customer engagement at the foundation of their marketing strategy tend to win in the marketplace.

These organisations understand a simple fact: organisations that engage their customers outperform those that do not. Sadly, our research findings suggest there is still much more to be done to unlock customer value. We believe that customer engagement is crucial in sustaining the operations of any entity. This report also shows that the number of multiple subscribers poses a challenge for telecommunications companies. When we assess the number of customers that want to leave their current service provider, the result is alarming.

As in previous reports, we do not claim that the customer engagement issues raised in this report are comprehensive. Also, by the nature of the research, we can only provide a generalised snapshot of the engagement levels that we see at this time. Given this, we would encourage you to read this report with an open mind and inquisitive attitude.

Are these really the customer engagement challenges facing your own business? If not, how and why are your organisation's challenges different? And how do those particular engagement challenges impact you? As the country nears saturation levels for mobile telephony, what does this mean for you?

Memory Nguwi is the Managing Consultant of Industrial Psychology Consultants (Pvt) Ltd a management and human resources consulting firm. Phone 481946-48/48-1950/2900276/2900966 or cell number 077 2356 361 or e-mail to www.ipcconsultants.com

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