MTN (Ghana) – Customer Relationship Building and Customer Loyalty

Introduction

Good customer relation is considered to be one of the major keys to the success of many businesses across the globe. In recent times most companies are shifting from the old fashioned method of TV and Radio adverts and concentrating on building good relationship with their existing customers. Companies in attempt to consolidate these relationships have introduced some new innovations such as issuing club cards to their customers. Under the club card system card holders are given points based on amount of money spend with the business. The super market chain TESCO in the UK is operating such a system and this has given it competitive advantage over its competitors like ASDA (Walt Mart), Morrison etc.

Customer relationship building

A study conducted by Institute of Customer Relation, UK revealed it cost firms more money to get new customers than maintaining old ones. Due to this some banks in the UK e.g. NATWEST, Lloyds TSB, HSBC etc are strategically shifting from investing into fresh customer winning adverts to focusing on satisfying existing customers. They are concentrating more on consolidating their hold on existing customers by offering them new deals on loans, mortgages etc. Also T-Mobile UK the mobile phone service provider has a very good scheme in which it offers discount to loyal customers on some of their price plans.

Relationship building and gaining customer loyalties are marketing strategies that have become huge phenomenon in corporate Ghana in recent times. A market research survey conducted revealed Ghanaian consumers have seen so many adverts on television and are ignoring these adverts. As a result of this most companies are gradually moving from engaging in vigorous Bill Boards, TV etc adverts and are rather focusing on building healthy relationships with their existing customers. Companies are turning their attention on servicing their existing customers by offering them better deals like promotional sales (buy one get one free) reduction sales etc.

MTN Customer relation and loyalty model

A Ghanaian based company that is performing so well with regards this new wave of change is Mobile Telecommunications Network (MTN) Ghana. The company has developed what could be described as MTN Customer Relation and Customer Loyalty Model. This model has contributed positively to the significant gains in market share of the mobile phone industry in Ghana by the company. For instance the company is making conscious efforts in establishing relationships with governments and community groups which constitute chunks of its customer base. With regards to government the company has set up a foundation to serve that purpose. The foundation in 2008 committed an amount of $600,000 for the refurbishment of part of the labour ward of the Korle-Bu Maternity Block. It has also contributed significantly to other sector of the economy e.g. sports. Currently the company’s Rally Round the Flag Promotion will contribute significantly to course of The Black Star in the impending FIFA 2010 World Cup in South Africa.

The company’s involvement with the communities is evident in its participation in the celebration of local festivals in the country. This is done through the company’s Yello Train programme. The Yello Train for instance was present at the Aboakyer festival in Winneba last year. The participation in Ghanaian festival by the company is an exceptional way of working its way into the hearts of its customers. The company may not be operating club card system like TESCO but this strategy is an effective way of building relation with its customers.

Apart from the community the company is strategically winning the loyalty of its existing individual customers by offering them very exciting deals. For instance through its MTN Zone service it offers up to 99% discounts to customers making calls within the same network. Pay As You Go subscribers could also share credit with each other on the Me2u service. The introduction of Blackberry phones and its affiliate services on the Ghanaian market has also given the company a high positioning within the target market. The company also provides unique customized ringtones in Ghanaian hiplife music, gospel songs and pop music.

Currently the company has long-term competitive advantage over its competitors like Kasapa, Figo, Zein etc in terms of its coverage area and variety of services provided. One of such unique services is SG-SSB Sikatext Phone Banking. This service allows subscribers who are also SSB customers check their bank balances and request mini bank statement. It also allows them monitor the exchange rates on the foreign exchange market on regular basis. Most businessmen who depend on the foreign exchange market will find this service very useful.

Price plans system

The above successes notwithstanding, one area which the company should consider focusing its attention on with regards to maintaining customer loyalty is introducing more innovative schemes like price plans system. Under the price plans scheme customers are usually put on contracts that could range from 12 -18 months. Customers on contracts are given the option of getting free hand sets which would be charged on the price plans. Monthly bills will then be issued to customers to save them the pains of buying phone credits on regular basis under the Pay As You Go system. The company has too many of the customers on the Pay As You Go system and this is not good enough for long term stability of the company.

There is the chance of the company negotiating deals with mobile phones producers like Nokia or Sony Ericson to supply them handsets at competitive prices.

The company will be able to generate more profit from the sale of handsets considering the number of working class customers they have. This will boost their profit margins because customers on contract phones tend to make more calls than those on Pay as you Go. The only problem is this could affect the company’s working capital because it has to pre finance this service.

Conclusion

The company has been very successful in its relationship building strategy in Ghana. However in order for it to maintain its role as market leader in the industry it is very vital it provides cheap phone calls to its customers. Their current phone tariff is high and is beyond the purchasing power of most Ghanaians. A new entrant like Vodafone on the market could pose a threat to MTN particularly if Vodafone is able to come out with cheaper tariffs or introduce the contract system.

Francis Kwaku Egu, UK

kwakuhull@yahoo.com