Influence of the Internal and External Communication Process on the Customer
Satisfaction in the Telecoms
Case Study conducted in the Bulgarian Telecom VIVACOM
Master Thesis
Tsvetomira Dimitrova, S2506068
t.r.dimitrova@student.rug.nl
University of Groningen
Faculty of Economics and Business
MSc International Business and Management
Drs. Ad Visscher
1 ABSTRACT
This paper explores whether there is a relationship between the internal communication process among employees, namely Shop Managers and Sales Representatives, and the external communication process with customers, and the level of customer satisfaction in the telecommunication operators, specifically in VIVACOM. Two (North-East and South-West) out of the four sales regions of the VIVACOM shops are researched. The general trend of the results shows that the customers’ satisfaction is influenced by the way the employees within the organization communicate and especially by the information provision process Shop Managers - Sales Representatives. What is more, the results reveal that the internal communication among Shop Managers and Sales Representatives is inconsistent and the external communication with the customers (the service encounter) is affected in a negative way, confirmed by the unsatisfactory results collected from the customers’ sample. Differences of the employees’ attitudes and quality perceptions in the two areas explored are found which could be explained by the fact that their level of economic development differs.
2 ACKNOWLEDGEMENTS
First of all, I would like to express my gratitude to my supervisor Drs. Ad Visscher for his guidance, supportiveness and advice during the process of writing my Master thesis.
I would also like to thank all the participants who contributed to my research for their kind responsiveness and cooperation. Some of the respondents even helped me with forwarding the questionnaires to colleagues who afterwards reached me by e-mail. Furthermore, I would like to thank the Managers who were willing to approve of my project and later on recommended the names of the employees I contacted in order to participate in the research by filling out questionnaires.
Additionally, I would like to thank to Desislava Dragomirova Dimitrova who conducted the research referring to the customers. She gathered the data in several stores in both of the researched regions. After having the questionnaires filled in by the VIVACOM customers, she sent me the information via e-mail.
3 TABLE OF CONTENTS Page
INTRODUCTION……….6
THE TELECOMMUNICATION MARKET IN BULGARIA………..…...7
Development of the Sector………..……….7
The most innovative telecom in Bulgaria……….9
LITERATURE REVIEW………...11
Human Factor in Services – Employees and Customers………...………...11
The communication process – inside and outside of the organization………...12
The service customer and service encounters……….…...15
Effective communication during service encounters……….………19
Organizational Perception of Customer Satisfaction (OPCS)……….……..….21
Previous Research………..……23
PROBLEM STATEMENT……….25
METHODOLOGY………..26
Data collection, scales and measurement……….………..28
Validity and reliability………...32
ANALYSIS AND RESULTS………..37
Influence of the internal communication process on the customer satisfaction in the North-East Area………..………..38
Influence of the internal communication process on the customer satisfaction in the South-East Area………..…………..40
Influence of the internal communication process on the customer satisfaction – general results for the whole sample……….…..……43
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DISCUSSION………...51
CONCLUSION………53
Limitations and suggestions for future research………...54
REFERENCES……….…55
5 LIST OF TABLES
1: Establishing Validity (Shop Managers)……….32
2: Establishing Validity (Sales Representatives)………...34
3: Establishing Validity (Customers)……….35
4: Cronbach’s Alpha for all three groups of respondents………..37
5: Spearman’s Correlation 1 (Sales Representatives and Shop Managers)………...48
6: Spearman’s Correlation 2 (Sales Representatives and Shop Managers)………...48
7: Spearman’s Correlation (Customers)………49
LIST OF FIGURES 1: Conceptual model……….…….12
2: The Communication Process……….…13
3: Service Encounter Dimensions……….……….16
4: Data Collection Shop Managers/ Sales Representatives via Internet………29
5: Stages in conducting Exit poll survey (directly in the shops)……….……..……..…..30
6: Frequency results and mode, North-East Area, Shop Managers………...38
7: Frequency results and mode, North-East Area, Sales Representatives……….39
8: Frequency results and mode, North-East Area, Customers………...40
9: Frequency results and mode, South-West Area, Shop Managers………..41
10: Frequency results and mode, South-West Area, Sales Representatives………..…42
11: Frequency results and mode, South-West Area, Customers………...43
12: Frequency results and mode, overall sample summary, Shop Managers………....44
13: Frequency results and mode, overall sample summary, Sales Representatives………..45
6 INTRODUCTION
In their article “Telecommunications Standards”, Tarik Taleb and Rolf Winter write about the driving force of telecommunications, explaining that this is “the most significant social revolution that mankind has ever known, changing the way people live, work, interact, socialize.” They stress on the importance of Human resource capital and its increasing influence on the customers satisfaction via the company’s performance. Many organizations have used the phrase: “People are our most important asset,”, yet too few companies act as though top management really believes it. However, in successful service firms employees are seen as a resource to be nurtured, rather than a cost to be minimized (Lovelock, 2002). Hal Rosenbluth, owner of a chain of successful travel agencies, argues in his book, “The Customer Comes Second”, that a company’s first focus should be on its employees: “Only when people know what it feels like to be first in someone else’s eyes, can they sincerely share that feeling with others.”
The human factor in services involves two groups of players: employees and customers. The task of managing employees is part of the internal communication process in a particular organization which has a great impact on the customers’ perceptions for the company’s image, values and performance (Wright, 2002). In high-contact services, as it is in the case of telecoms, customers encounter service employees during service delivery. Services from this environment involve significant interaction among customers and service personnel or the so called front-line personnel. Thus, one characteristic shared by many firms that provide outstanding service is their emphasis on building and leveraging employee skills and knowledge, part of a highly interconnected inner network system.
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the interplay among internal (between employees) and external (employees-customers) communication will be the focus of the research and more precisely if they have any impact on the customer satisfaction. The main trend of the research is in support of this statement.
There are several main sections building up this paper. Starting with the “Introduction” I address the main research question. The section “The Telecommunication Market in Bulgaria” presents a brief summary of the market development, the main players and explains why VIVACOM is chosen for the purpose of the current research. The third section is referring to the literature which is already established and is relevant basis for the investigation. In the “Methodology” section, there are described the research methods that will be applied in the survey. Later on, the analysis and results are presented. Finally, the main findings, implications, limitations and suggestions for future research are presented in the “Discussion” and “Conclusion” sections.
THE TELECOMMUNICATION MARKET IN BULGARIA Development of the Sector
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telephone service. The speed they experience with a DSL connection varies with the distance from the switching station (What is My IP Address, 2014). A big obstacle for the development of infrastructure-based competition on the wholesale broadband market remains the deployment of illegal1 aerial cables. Whilst the fixed voice market is still dominated by the incumbent (Bulgarian Telecommunications Company - BTC) with a market share by traffic volume of more than 92% in all types of calls at the end of 2010, the trend towards fixed to mobile substitution continued also in 2011. As regards mobile penetration in terms of dedicated data service, Bulgaria is with 3.5% still far behind the EU average of 8.1%. The bundling of fixed and mobile voice as well as triple-play and four-play has significantly increased. Despite attempts by the Communications Regulation Commission (CRC) to enforce its decision on regulated Mobile Termination Rates (MTR) for incoming international calls, none of the three mobile operators applies the given rates (Telecommunication Market and Regulatory Development in Bulgaria, 2011).
Bulgaria possesses an evolving telecoms market that reflects the general economy; adoption of EU regulatory principles has created a stable regulatory environment, attracting much foreign investment. The incumbent has been privatized and the liberalized market has attracted new market entrants although the incumbent remains the dominant fixed-line market player. Competition and the trend of fixed mobile substitution have resulted in fixed-line operators focusing on broadband and related services, in turn driving network deployments (Bulgaria – Key Statistics, Telecom Market and Regulatory Overviews, 2013).
9 The most innovative telecom in Bulgaria
The main players on the telecom market in Bulgaria are Mobiltel EAD (M-tel), Cosmo Bulgaria Mobile EAD (GLOBUL) and the Bulgarian Telecommunications Company EAD (BTC).
MOBILTEL EAD is the first Bulgarian telecom, also known under the brand name M-tel, owned by the Austrian telecom supplier Telekom Austria Mobile. It was founded as a joint stock company in 1992. Until recently, it was the biggest mobile operator with over 5.5 million customers and 46.9 % market share but the current data shows that BTC has already outrun it. The company offers various telecommunication services, including fixed-line, mobile, Internet, radio and TV broadcasting. M-tel serves less than 1 million fixed phones and provides Internet access only at locations with 3G coverage. M-tel’s 3G network coverage expands to 98% of the population and 96.60% of the territory of Bulgaria (Company Information MOBILTEL EAD, 2014).
M-tel used to be the biggest and the fastest developing telecom but nowadays it has turned out to be notorious – the financial reports from 2013 show that the company marked the largest decline among the Bulgarian telecoms. M-tel has lost 270 thousand customers who transferred their services to the other mobile suppliers. There is 16.3 % decline in the annual revenue for 2013 (Telecoms’ Blog, 2014).
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The Bulgarian Telecommunications Company (BTC), also known under the brand name VIVACOM, serves 2.6 million fixed phones and provides broadband Internet access to 400,000 households and free Internet access at more than 3,000 public locations in Bulgaria. VIVACOM’s 3G network coverage expands to 99.41% of the population and 99.95% of the territory of Bulgaria which makes VIVACOM the most innovative and fast-developing Bulgarian telecom. The company has confirmed that it is planning to invest €600m in rolling out a Fibre-to-the-Building (FTTB) network which will cover 1 mln households by 2015 (Bulgaria – Telecommunication Market and Development, 2013).
The Bulgarian Telecommunications Company EAD (BTC) is the largest telecommunications company in Bulgaria and a former state-owned monopoly. It was founded as a joint stock company in 1992 as part of the split of Bulgaria's post and telecommunication services into separate companies. In November, 2005, BTC launched its own mobile operator “BTC mobile” under the brand name “Vivatel”. Later on, in January 2009, it was announced that the subsidiary and mobile operator “BTC mobile” became part of the parent company “BTC”. Since October, 2009, BTC and “Vivatel” were united under the brand name VIVACOM. Currently, VIVACOM is leading the market in providing various telecommunication services, including fixed-line, mobile, Internet, radio and TV broadcasting, and data transmission services. The company is headquartered in Sofia, Bulgaria, employs around 3,500 people (3,406 in 2012), and owns a mature distribution network with over 230 retail outlets. VIVACOM’s customer base includes both business and residential subscribers (Company Information, 2014).
11 LITERATURE REVIEW
Human Factor in Services – Employees and Customers
12 Figure 1: Conceptual model
Effective internal communication Effective external communication
(Organizational communication process) (Service encounter with customers)
Proposition 1: The quality of the communication between front-line personnel and the Shop
Managers has an impact on the quality of the communication between the front-line personnel and the customers.
The Communication process – inside and outside of the organization
The second important point of the theoretical framework is the communication process within the organization preceding the effectiveness of the service personal encounter with the customers. Communication is a dynamic, unending, and non-linear process. It is a process in which interrelated elements work together to achieve a desired outcome or goal (Barker, 1984). We are exposed to innumerable bits of information, ideas and thoughts which we process, evaluate and store. This daily stimulus changes us to some extent on a regular basis. The recipient becomes the communicator and this cycle is repeated over and over again. In this context, services are seen as processes cogenerated together with the consumer, and all contact-points between the consumer and the service company are moments-of-truth (Gronroos, 1987). In Figure 2, the general model of the Communication process is presented:
13 Figure 2: The Communication Process
Source: (Beckham, King, 2008)
The communication process has four elements:
A sender – this is the first person to speak or initiate communication.
A receiver – this is the person for whom the message is intended.
The message – this is what a sender wants the receiver to know. It includes a verbal message and nonverbal messages inferred from the sender and the environment.
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This model is the basis of the organizational communication. The most important role of this type of communication is the relationship building (Spaho, 2012). When an employee has an interaction with the customer, every contact point communicates something about the organization and its products/services.
Writers in the field of management, sociology, industrial relations, communications, etc. define the concept for organization in different ways. The core notions that should be stressed include the following five elements: 1) two or more individuals; 2) who recognize that certain goals can be better achieved through interdependent rather than individual actions; 3) take an information and/or materials from the larger environment; 4) operate on them in some fashion, and 5) return the modified inputs to the environment (Farace, 1984). The connection between all of the above- mentioned elements refer to the interplay among the internal and external communication process.
Effective communication is required not only for human relations but also for a good and successful business. Managers spend majority of their time communicating in several forms: meeting, face-to-face discussion, letters, e-mails, etc. More and more employees realize that communication is a very important part of their work because a lot of their work activities are based on teamwork among workers in different functional groups. This is the reason why communication has become more important in companies. Previous research shows that there are significant differences in manners of communication and it appears to be a very important factor which makes some organizations more successful than others. Managers must be good speakers in order to build trust between them and employees as well as among employees which will later result in confidence in the company (Spaho, 2012). They spent some 80 % of each working day in communication with others. Managers have huge responsibility in communication by directing and controlling the organization and effective managers establish themselves at the center of information networks in order to facilitate the tasks completion (Đorđević, 2010).
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individuals stimulate meaning in the minds of other individuals by means of verbal or nonverbal messages in the context of formal organization. The external communication process refers to the service encounter, that is the moment-of-truth when the first-line personnel contacts the customers and is responsible for the first impression they get about the company (Đorđević, 2010).
Proposition 2: Business communication, both inside and outside of the organization is vital and
fundamental for the effectiveness of the organization and its customers’ overall perception for the company.
The service customer and service encounters
All successful service firms are customer oriented. To the greatest extent, these companies try to build their activities around the customer rather than forcing the customer to adapt to their predefined model. They also recognize the fact that not all customers have the same needs so they should be treated in personalized manner. Understanding the nature of the processes used to create and deliver services is the key to designing service encounters and creating exquisite experience for the customer (Lovelock, 2002).
A service encounter is a period of time during which customers interact directly with a service. In some instances, the entire service experience can be reduced to a single encounter, involving consultation from a sales representative, payment, execution of service delivery on the spot, etc. In other cases, the customer’s experience includes a sequence of encounters (Lovelock, 2002). Understanding service encounter is closely related to understanding the notion service relationship, specifically considering three dimensions of “the moment-of-truth”:
Temporal duration
Affective or emotional content
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Because a service encounter is an interpersonal relationship, duration, affective content and spatial proximity play basic roles in how the service relationship develops and the outcomes of the encounter (Price et al, 1995). These dimensions of the service encounter shape service provider performance and the links among provider performance, affective response and satisfaction.
Figure 3: Service Encounter Dimensions
Source: (Price et al, 1995)
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The figure includes both positive (pleasure) and negative (anger, sadness) affective responses and satisfaction. Because of their complexity, service encounters are likely to evoke both negative and positive affective reactions (Derbaix and Pham, 1991), with positive and negative affect making independent contributions to customer satisfaction (Rust, Zahorik, and Keiningham, 1995).
The three dimensions and their impact on service provider performance and service outcomes are presented as follows (Price et al, 1995):
1. Service Encounter Dimension Duration To “unpack” service relationships, we must understand the dynamics of how customer and service provider relate to each other over time (Bakeman and Gottman, 1986). The main finding is that extended encounters create significant opportunities for service providers to experience emotional dissonance that is a disparity between inner feelings and prescribed emotions. In temporally extended commercial encounters, the individual service provider and the customer must sustain role performances over a long period of time. Extended role performance increases the likelihood that service providers will experience and express emotional dissonance. Another consequence of the premium placed on the expenditure of emotional energy in extended encounters is that service provider self-identity and role congruence become especially important to the success of extended encounters. Although it may be possible to initiate service scripts at odds at provider self-concepts for brief interactions, it is more problematic for managers to ask providers to perform roles (which may well be discrepant from their self-identities) for long intervals (Hochschild, 1983; Van Maanen and Kunda, 1989)
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Affective content requires sustained emotional labor likely to lead to emotional dissonance, role stress, and role conflict. The masking or reworking of authentic emotions to make them conform to emotion norms has been linked to psychological and physical dysfunctions, as well as to overall stress and job dissatisfaction. Thus, emotional dissonance, role stress, and role conflict that arise in affectively charged service encounters pose serious managerial challenges.
3. Service Encounter Dimension Proxemics The Proxemic dimension refers to the contact between service provider and customer. Service providers and customers may be remote, as in telephone contacts, or they may be separated by desks or counters, as in retail settings. Generally, proxemics has a strong impact on perceptions of interpersonal encounters. They are often referring to “intimate” service encounters – those in which provider and customer are spatially proximate. Spatial proximity produces feelings of attachment and personal involvement while facilitating perceptions of service providers’ trustworthiness and warmth (Mehrabian, 1981).
As the level of customer contact with the service operation increases, there are likely to be more and longer service encounters. Services are grouped into three levels of customer contact, representing the extent of interaction with service personnel (Lovelock, 2002):
High-contact services tend to be those in which customers visit the service facility in person. Customers are actively involved with the service organization and its personnel throughout service delivery. All people-processing services (other than those delivered at home) are high contact.
Medium-contact services entail less interaction with service providers. They involve situations in which customers visit the service provider’s facilities (or are visited at home or at a third-party location by the firm’s employees) but either do not remain throughout service delivery or else have only modest contact with service personnel.
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electronic or physical distribution channels – a fast-growing trend in today’s convenience-oriented society.
Many services (especially those belonging to the group of high-contact) involve numerous encounters between customers and service employees, either in person or remotely by phone or e-mail. To highlight the risks and opportunities associated with service encounters, Richard Norman, a Swedish consultant used the metaphor “moment-of-truth”:
“We could say that the perceived quality is realized at the moment of truth, when the service provider and the service customer confront one another in the arena. At that moment they are very much on their own…It is the skill, the motivation and the tools employed by the firm’s representative and the expectations and behavior of the client which together will create the service delivery process” (Lovelock, 2002).
Proposition 3: The service encounter represents the “moment-of-truth” – the right moment for
the contact-personnel to influence the customers’ satisfaction.
Effective communication during service encounters
Effective communication during service encounters has a definite impact on customer’s perception of the organization. Communication is an interactive process for building a relationship between the organization and the customer. There has been considerable research on the impact of service quality on consumer perception leading to loyalty towards an organization (Jain et al; 2009).
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Organizations continue to strive for satisfied loyal customer bases in an attempt to enhance the sustainability of their business and secure future revenues and growth. The success of such a strategy is contingent upon service quality being delivered consistently across multiple service encounters. From the customers’ perspective, service encounter provides evidence of the level of service quality delivered by the provider, and these result in the customer’s overall evaluation of, and future intentions towards, the service firm. Furthermore, from the organization’s perspective, each service encounter provides the opportunity to improve the current level of quality delivered to the customer, thus increasing customer satisfaction and loyalty. (Jain et al 2009). The implicit assumption in the quest for customer satisfaction and service quality is that there is a link between positive evaluation and repurchase behavior (Zeithaml et al. 1996). As a consequence, understanding how and what aspects of the service product impact on customers’ evaluation is a critical first step.
Many service managers and researchers have been interested in the dynamics of service encounters, both contemplating and examining how they can enhance the understanding of the customer’s method of evaluating service experiences. Because customers’ evaluations of service encounters are based on the nature of their interactions with service employees, service managers need to be well-aware of the importance of continuously striving to improve the quality of the interactions. Research carried out by Brown, Fisk, and Bitner (1994) has established perceptions of service encounters as important elements of customer satisfaction, perceptions of quality, and long-term loyalty. The role of service encounters for creating and maintaining good relationships between organizations and their customers has also been established (Czepiel 1990).
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Today, there is a new view of communications as an interactive dialogue between the company and its customers, which takes place during the pre-selling, selling, consuming, and post-consuming stages (Anderson and Narus 1990). Communication implies keeping in touch with valued customers, providing timely and trustworthy information on service and service changes, and communicating proactively if a delivery problem occurs. It is the communicator’s task in the early stages to build awareness, convince interested buyers, and encourage them to make the purchase decision (Ndubisi and Chan 2005). Communications also tell dissatisfied customers what the organization is doing to rectify the causes of dissatisfaction. When there is effective communication between an organization and its customers, a better relationship will result and customers will be more loyal.
Proposition 4: The effective communication between an organization and its customers is an
important element determining the quality of the service encounter, thus the customer satisfaction.
Organizational Perception of Customer Satisfaction (OPCS)
The overall communication process, both internal and external is influenced by the so called Organizational perception. The Organizational perception is defined as the way senior managers, representatives, and leaders of organizations perceive the opportunities and risks in the internal and external environments of their organizations (Antal et al., 1997). Customer satisfaction is conceptualized as the positive judgment of a customer following his/her act of purchase of goods or services (Yi, 1990). The combination of these two constructs, organizational perception and customer satisfaction, for the development of OPCS, is very important because it will determine how organizations formulate customer service strategies (Elsbach, 2005).
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From the literature, there are observed two major types of definitions of customer satisfaction. First, customer satisfaction is defined as the fulfilment of customers’ requirements or needs (Fournier and Mick, 1999). This is in line with the mainstream customer satisfaction research which focuses primarily on what customers value from the goods and services provided by suppliers (e.g. Oliver, 1997; Yi, 1990). Based on this definition, customer satisfaction is measured by evaluating the actual perception of individual customers. In practice, most customer satisfaction research has adopted a transaction-specific view by focusing on the customer attitude as a form of consequence of some specific purchase experience (Anderson et al., 1993). The second type of definition is a much less common one which takes the perspective that customer satisfaction is regarded as the company’s ability to fulfil the business, emotional, and psychological needs of its customers (National Business Research Institute, 2005). This perspective is in line with the process view which suggests that service marketers are active participants in the evolution of customer satisfaction in the service domain (Price et al., 1995). While the first definition of customer satisfaction is more in line with the mainstream marketing literature, the second definition, which focuses on the organizational abilities, appears to receive more attention in the real business world (Hamilton and Nowak, 2005). The current research referring to customer satisfaction will be based on this observation.
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of organizations very difficult (Hamilton and Nowak, 2005). OPCS, therefore, very often depends on the subjective assessment of the environment that the organization is facing Organizational perception of customer satisfaction is defined as how organizational leaders perceive the extent to which the customers of their products and services are satisfied (Premkumar et al., 2005).
Proposition 5: The Organizational Perception of Customer Satisfaction is influenced by the
quality of the internal communication between the organizational leaders and the front-line personnel.
Previous Research
There is a significant amount of research referring to the employees’ service quality offered by the telecoms all over the world, the interrelationship between customer equity variables affecting the customer loyalty, the factors that influence customer satisfaction and customer loyalty, the role of the employees in the communication process of the telecoms which is vital and fundamental for building up a sustainable relationship with the customers, etc. Although there are numerous investigations in this field, none of the studies has addressed yet the issue referring to the interaction between the different hierarchical levels within the telecoms and how this particular interaction influence the reliability and effectiveness of the service thus the customer satisfaction.
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Evidence from the telecommunications services in Taiwan, provides an integrated customer loyalty model, revealing the importance of interrelationships between customer equity variables (e.g. company image, relationship quality, customer loyalty, etc.). All those variables are important for managing the relationships of telecom services companies with their customers (Chen, 2011). Collaborative relationships between firms and customers represent a significant trend in the current competitive business environment (Cater & Zabkar, 2009). Brand equity (brand image and company image) is of primary importance in maintaining relationship quality. Thus, the results suggest that a firm should control external marketing communications and maintain promises about the company’s. In creating brand equity, managers can improve brand image and verify the stability of delivery of a company’s promises (company image) at a level that exceeds the customer’s expectations (Chen, 2011).
The findings also reveal that relationship equity (relationship quality) is important to relationship value in predicting loyal customers. Relationship quality is one of the key strategic issues for managers to consider when establishing and maintaining long-term relationships with their customers. There are multiple factors shaping its importance: success, relationship quality variables such as trust, satisfaction and commitment play an important role in buying behavior. Therefore, managers are advised to use measures of relationship quality in addition to brand equity measures. They should also develop strategic and tactical initiatives that ensure that consumers are satisfied with the service, trust it and feel attached to it; they should investigate in depth and also pay attention to inward for the organization factors that influence the customers’ satisfaction and loyalty.
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A study, concerning the Malaysian Telecommunication Service Providers, investigated the factors that influence customer satisfaction and customer loyalty in the telecoms. Findings indicate that important variables for satisfaction included supporting services, product (handy, reliable coverage, friends and family lines) and promotional efforts of the firm; while for loyalty, they refer to convenience, services, satisfaction and cost. The findings indicate that telecommunication service providers should look beyond price wars to keep their customers satisfied and loyal (Ling and de Run, 2009).
PROBLEM STATEMENT
Vital and fundamental for the financial success of a company is meeting, exceeding and anticipating the wants, needs and expectations of both employees and customers. Bearing in mind that nowadays the competition among companies is rather on service level than price level, employees play a significant role in firm’s success. There is a significant research undertaken in the field of the 4 key drivers of international business – cash, profit, assets, growth. The fifth dimension – “people” is a comparatively new field for research and regarding the interplay among the internal and external communication processes influencing the customer satisfaction there have not been conducted research yet.
This research will focus on the effectiveness of the two types of communication process - inward and outward focused for the organization. The field of research is “telecoms” as in nowadays modern world, their power is growing, and much more customers are using the services offered as part of their daily routine. Previous research concerning customers’ satisfaction and loyalty in telecommunications operators has been conducted in China, Taiwan, Malaysia, etc. The current research will be an extension in the sense that it will add value focusing not only on the customers’ point of view but also on the employees inside the organization and the way the inner communication process has impact on the customers. The research units will be employees and customers from the Bulgarian telecom VIVACOM.
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understanding of customers’ methods of evaluating service experiences. Because customers’ evaluations of service encounters and perceptions of the company are based on the nature of their interactions with service employees, service managers need to go deeper and not only pay attention to the employees interactions with customers but also what exactly influences the employees’ performance and what is the role of inward organizational communication in this process. The problem is interesting because there have not been conducted such research yet and it might be considered an important extension in revealing that front-line personal performance actually depends on the good management inside the company.
Customers do not only look for goods or services. They demand a much more holistic offering so that a common knowledge platform is possible (Gronroos, 2004). A connection between the firm and the customer has to be made, so that they find that they can trust one another in this process of reasoning together (Schein 1994; Bohm 1996). As I have already mentioned, the fifth key driver of international business “people”, has two dimensions – employees and customers. Some of the researchers have concentrated on employees, others on customers. The current research is aiming at examining both dimensions together and revealing the overall impact on the customers’ satisfaction.
METHODOLOGY
In this section the purpose of the case study (conducted in the fastest-developing telecom in Bulgaria – VIVACOM) is explained. Furthermore, two out of four Sales Areas are explored in order to answer the research question. Likert scale was used to develop three types of questionnaires aiming at investigating the attitudes and quality perceptions of the three different types of respondents – Shop Managers, Sales Representatives, and Customers. The used research methods are clarified.
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attention to a particular challenge or difficulty in a project. Cases (case refers to the unit of analysis or topic chosen for study) might be selected because they are highly effective, not effective, representative, typical, or of special interest (Neale et al, 2006). In the current research the unit of analysis is the communication process in the Bulgarian telecommunications operator VIVACOM. It is of special interest as there has not been conducted any research in this field yet. What is more, today, there is a new view of communication as an interactive dialogue between the company and its customers. It is the communicator’s task in the early stages to build awareness, develop consumer, convince interested buyers, and encourage them to make the purchase decision (Ndubisi and Chan 2005). Also, of great importance is how the organizational communication, that is the communication between the Managers and employees will affect the service encounter thus the level customer satisfaction.
28 Data collection, scales and measurement
In order to collect the necessary data for the analysis three types of questionnaires have been developed. The first one is aiming at investigating the attitude, organizational and communication skills and quality perceptions of the Shop Managers. The second type of questionnaires is based on the same structure as the first one, referring to the Sales Representatives’ attitudes and perceptions. The third set of questionnaires is aiming at revealing the customers’ point of view and if the level of their satisfaction is somehow influenced by the service encounter with the contacted employees of the organization.
29 Figure 4: Data Collection Shop Managers/ Sales Representatives via Internet
The customers’ data collection was a different story. The Exit poll survey was applied. For this purpose, I also developed a questionnaire but the data was collected directly in several selected shops. A former Sales Representative – Desislava Dragomirova Dimitrova was the one who kindly contributed to my master thesis project via collecting the data in 4 different shops – two in the North-East area and two in the South-West area.
The aim of the Exit survey is quantity measurement of the service quality offered by the organization and the consequent customer satisfaction/dissatisfaction (Shoppixbg, 2014). The concept of the Exit Poll Survey applied in the current research is presented in Figure 5.
In Preparation for the Survey
30 Figure 5: Stages in conducting Exit poll survey (directly in the shops)
During the first stage – In preparation for the survey – I developed the questionnaires and the script that had to be used by the inquirer Dessislava Dimitrova during the encounter with the customers who were willing to participate in the survey. The questions are only a few, formulated in a clear and easy for answering way – a good predisposition for a customer to participate. After having paid their bills, chose new telephone, changed their mobile plan etc., the customers are in a hurry to leave the visited shop and are not willing to spend more time there. That is why, in order to predispose them to participate in the research, the inquirer explained them in short the concept of the survey and mentioned that it would not take them more than 3
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minutes. The shorter the time and the less questions, the more the customers are willing to contribute.
Another important part of the preparation for implementing the survey was setting the time range. Previous research, conducted for my bachelor thesis (“Methods for study and analysis aimed at improving customer service – following the example of supermarkets Piccadilly, 2012), claims that the reliability of the results depend highly upon the willingness of the customers to participate and share their opinion. During January, February and March, 2012, the concept of the Exit Poll surveys was investigated in real conditions by the inquirers (I was also one of them) of the Bulgarian Marketing Research company “Shoppix”. Three types of stores were included in the project – telecoms, computer and grocery stores. The surveys in all of the stores were conducted in three successive days, without setting a specific time range. The inquirers had to present short questionnaires to the customers, referring to the quality of the service in the certain store. After the data processing, the final conclusion was that the customers are most willing to participate in a survey in the time range 15.00 – 18.00. High percentage of the customers who were asked to participate before 15.00h denied, explaining, for example, that they are in a short lunch break, and those asked to participate after 18.00 were in a hurry to help their children with the homework, to do the grocery shopping, etc.
Based on these previous findings, I decided that the most suitable time range for conducting the Exit Poll survey would be between 15.00 - 18.00 h.
After setting in place the necessary requisites, the survey was conducted in 4 shops – 2 in the North-East Area (on 28th and 29th of April, 2014) and 2 in the Capital City, situated in the South-East Area (on 30th of April and 1st of May, 2014). The customers were asked to fill in the questionnaires straight after their service encounter with the front-line personnel.
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general information, cross-tabulation was applied. Cross-tabulation is one of the most useful analytical tools. It is also known as contingency table analysis, most often used to analyze categorical (nominal measurement scale) data. A cross-tabulation is a two (or more) dimensional table that records the number (frequency) of respondents that have the specific characteristics described in the cells of the table. Cross-tabulation tables provide a wealth of information about the relationship between the variables (Cross Tabulation Analysis, 2014).
The Analysis and Results after the data processing from all of the questionnaires are presented in detail in the next section.
Validity and Reliability
In order to establish the validity and reliability of the survey, draft questionnaires are used (following the same structure as the original questionnaires). Before implementing the pilot survey, several questions are addressed to enhance the questionnaire validity.
In Table 1, 2 and 3 there are presented several questions, addressed to establish the Validity regarding the three groups that are being investigated: Shop Managers, Sales Representatives and Customers.
Table 1: Establishing Validity (Shop Managers)
Questions
Results
1. Is the questionnaire valid? Is the questionnaire measuring what it intended to measure?
The questionnaire is aimed at measuring the attitude and quality perceptions of the Shop Managers referring to the communication process – inward and outward for the company. The questions used are relevant.
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information needed to reveal the main research question concerning the effectiveness of the internal communication process and its impact on the external communication with the customers (from the Shop Managers’ perspective).
3. Is it appropriate for the sample? The questionnaire is short, with straightforward questions. The questions are addressed to the Shop Managers of the company. It is appropriate for the sample.
4. Is the questionnaire comprehensive enough to collect all the information needed to address the purpose and goals of the study?
The questionnaire is divided into sections. Each of them is addressing specific questions in order to reveal the effectiveness of the communication process - inward and outward focused for the organization.
5. Does the instrument look like a questionnaire?
Likert scale is used to develop the questionnaire. It is a scaling method used to design questionnaires, measuring either positive or negative response to a statement.
34 Table 2: Establishing Validity (Sales Representatives)
Questions
Results
1. Is the questionnaire valid? Is the questionnaire measuring what it intended to measure?
The questionnaire is aimed at measuring the attitude and quality perceptions of the Sales Representatives referring to the communication process – inward and outward for the company. The questions used are relevant.
2. Does it represent the content? The questionnaire covers all the necessary information needed to reveal the main research question concerning the effectiveness of the internal communication process and its impact on the external communication with the customers (from the Sales Representatives’ perspective).
3. Is it appropriate for the sample? The questionnaire is short, with straightforward questions. The questions are addressed to the Sales Representatives of the company. It is appropriate for the sample.
4. Is the questionnaire comprehensive enough to collect all the information needed to address the purpose and goals of the study?
The questionnaire is divided into sections. Each of them is addressing specific questions in order to reveal the effectiveness of the communication process - inward and outward focused for the organization.
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questionnaire? questionnaire. It is a scaling method used to design questionnaires, measuring either positive or negative response to a statement.
Source: (Radhakrishna; 2007)
Table 3: Establishing Validity (Customers)
Questions
Results
1. Is the questionnaire valid? Is the questionnaire measuring what it intended to measure?
The questionnaire is aimed at measuring the attitude and quality perceptions of the Customers referring to the service encounter with the Front-line personnel. The questions used are relevant.
2. Does it represent the content? The questionnaire covers all the necessary information needed to reveal the main research question concerning the effectiveness of the internal communication process and its impact on the external communication with the customers (from the Customers’ perspective).
3. Is it appropriate for the sample? The questionnaire is short, with straightforward questions. The questions are addressed to the VIVACOM customers. It is appropriate for the sample.
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enough to collect all the information needed to address the purpose and goals of the study?
Each of them is addressing specific questions in order to reveal how the customers perceive the quality of the service encounter with the personnel.
5. Does the instrument look like a questionnaire?
Likert scale is used to develop the questionnaire. It is a scaling method used to design questionnaires, measuring either positive or negative response to a statement.
Source: (Radhakrishna; 2007)
The next step is to establish Reliability, using a pilot test by collecting data from subjects not included in the sample. The data collected from the pilot test is analyzed using SPSS (Statistical Package for Social Sciences) or another software (Radhakrishna, 2007). Cronbach’s alpha is used to determine whether there is an internal consistency of the scale. It is expressed as a number between 0 and 1. Internal consistency describes the extent to which all the items in a test measure the same concept or construct and hence it is connected to the inter-relatedness of the items within the test. Internal consistency should be determined before a test can be employed for research or examination purposes to ensure validity. The acceptable values of alpha range from 0.70 to 0.95 (Tavakol; 2011). Reliability of 0.70 or higher is required for the pilot study before using the instrument to continue with the research.
37 Table 4: Cronbach’s Alpha for all three groups of respondents
Group of Respondents Cronbach’s Alpha N of Items
Shop Managers .785 10
Sales Representatives .909 10
Customers .929 6
ANALYSIS AND RESULTS
The questionnaires are checked for validity and reliability. The necessary data for the purpose of the research is collected successfully from all three groups of respondents, namely Shop Managers, Sales Representatives and Customers. The data is processed via the statistical program SPSS.
Initially, in order to summarize the information from the questionnaires and follow the main trend of the results, I use Frequency tables which are constructed by arranging collected data values in ascending order of magnitude with their corresponding frequencies (Interactive Maths, 2014). I also use “mode” which is a measure for central tendency. With Likert scale data (it is applied in the current research), the best measure to use is the mode, or the most frequent response (Statistics blog, 2014). In Appendixes 5, 6 and 7 there are presented detailed Frequency and Mode SPSS tables with the results.
38 Influence of the internal communication process on the customer satisfaction in the North-East Area
To begin with, I present the results from the survey in the North-East Area. Regarding the Shop Managers’ results, Figure 6 is a summary of the main trends that come out of the questionnaires collected. Overall, the Shop Managers in this area have positive attitude towards their work with the Sales Representatives and the consequent high quality the company offer during a service encounter – the mode which represents the most frequent answer is 4 (Agree). The only exception is concerning the Training program (Q6). The mode of this question is 2 (Disagree) which express the negative attitude towards the relevant preparation the company offer for their employees.
Figure 6: Frequency results and mode, North-East Area, Shop Managers
Regarding the Sales Representatives in the North-East Area, I find out that they have negative attitude in some aspects, regardless of the positive statement of the Shop Managers for their reliable mutual work and positive outcomes for the customers. It turns out that the Sales Representatives do not agree that the information they receive from the Shop Managers is well-understood and reliable (Q1), that the targets are concrete and achievable (Q2) and that the communication between Sales Representatives and Shop Managers is clear and effective (Q3_A)
Серия1 0
2 4
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– the mode for these questions is 2 (disagree). For the rest of the aspects in the questionnaire, there is accordance between the two groups of respondents.
Figure 7: Frequency results and mode, North-East Area, Sales Representatives
40 Figure 8: Frequency results and mode, North-East Area, Customers
Conclusion: There is a divergence of the attitude of the Shop Managers and the attitude of the
Sales Representatives towards the reliance of their mutual work. The first group of respondents demonstrates positivism whereas the second one is more negative. These results are a reflection of the inconsistent internal communication process. Thus, the communication with the customers (the service encounter) is affected in a negative way, confirmed by the unsatisfactory results collected from the customers’ sample in the North-East area.
Influence of the internal communication process on the customer satisfaction in the South-West Area
Similarly as the Shop Managers in the North-East are, the Shop Managers in the South-West area also have positive attitude towards their work with the Sales Representatives and the consequent high quality the company offers during a service encounter – the mode which represents the most frequent answer is 4 (Agree). For the last question (Q7_C) regarding the friendliness of the Sales Representative who are under their supervision the mode is even higher – 5 (Strongly agree). The only exception here is also concerning the Training program (Q6). The mode of this
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question is 2 (Disagree) which express the negative attitude towards the relevant preparation the company offer for their employees.
Figure 9: Frequency results and mode, South-West Area, Shop Managers
42 Figure 10: Frequency results and mode, South-West Area, Sales Representatives
43 Figure 11: Frequency results and mode, South-West Area, Customers
Conclusion: In the South-West area sample, both Shop Managers and Sales Representatives
demonstrate positive attitude towards the reliance of their mutual work. Undoubtedly, this parity affects the consistent internal communication process in the organization and its consequent positive impact on the customers’ satisfaction. The results of the exit poll customer survey conducted in the South-West area confirms the satisfaction of the customers with the service quality offered by the employees of the company.
Influence of the internal communication process on the customer satisfaction – general results for the whole sample
44 Figure 12: Frequency results and mode, overall sample summary, Shop Managers
The general results concerning the whole sample of the Sales Representatives are identical with the results for the North-East area. The Sales Representatives have negative attitude in some aspects, regardless of the positive statement of the Shop Managers for their reliable mutual work and positive outcomes for the customers. It turns out that the Sales Representatives do not agree that the information they receive from the Shop Managers is well-understood and reliable (Q1), that the targets are concrete and achievable (Q2) and that the communication between Sales Representatives and Shop Managers is clear and effective (Q3_A) – the mode for these questions is 2 (disagree). For the rest of the aspects in the questionnaire, there is accordance between the two groups of respondents.
45 Figure 13: Frequency results and mode, overall sample summary, Sales Representatives
The customers do not agree that the Sales Representatives are prepared enough (Q1) and they consider that further training programs should be applied (Q4_B). There is not a precise answer - either positive or negative, regarding the customers’ attitude towards the level of the customer service offered by the Sales Representatives. The customers are neutral in this aspect. Taking into account all of the above-mentioned results, the overall picture is that the customers have negative perception about the service offered by the telecommunications company.
46 Figure 14: Frequency results and mode, overall sample summary, Customers
Conclusion:
The general trend of the results shows that due to the inconsistent internal communication among Shop Managers and Sales Representatives the external communication with the customers (the service encounter) is affected in a negative way, confirmed by the unsatisfactory results collected from the customers’ sample. In both of the areas and generally for the whole sample, it is confirmed that “The effective communication inside the organization influences the way the Sales Representatives communicate with the customers (Q3_B – questionnaires “Sales Representatives” and “Shop Managers”). It is also confirmed that “The quality of the service encounters with the Sales Representatives affects the customers’ long-term intentions towards the company” (Q4_A – questionnaire “Customers”). All three groups of respondents are unanimous regarding the fact that the employees need further training in order to improve their performance and reach the high quality standards the company is aiming at.
47 Correlation Analysis
After analysing the general trend of the research, the next step is to go deeper and explore more precisely the relationships which determine the interplay among the internal communication process in the organization and the external communication process, namely the service encounter, with the customers. Thus, the initially mentioned five propositions are discussed. The moderate, strong and very strong correlations which are important for revealing the significant relationships among the internal and external communication process are presented. In Appendix 8 there are presented detailed tables with the Spearman’s rank correlation coefficient.
The first proposition states that “The quality of the communication between front-line
personnel and the Shop Managers has an impact on the quality of the communication between the front-line personnel and the customers”. The starting point here is the conclusion from the frequency tables and modes according to which generally, the quality of the communication among Shop Managers and Sales Representatives determines whether the customers will be satisfied or not with the service offered, thus it turns out that the internal communication has an impact on the quality of communication between front-line personnel and customers. I apply some correlations in order to support these results. What I find out is that there are strong correlations only for the South-West area. Neither the North-East area sample, nor the general sample results from the correlation analysis are supportive for the first proposition. In table 5 and 6, there are presented the Spearman’s correlations, which are strong and significant.
48 Table 5: Spearman’s Correlation 1 (Sales Representatives and Shop Managers)
Timely and reliable
information provided by SM
SWA Shop Managers
The communication between SR and SM is clear, timely and effective
0.529**
SWA Sales Representatives
The communication between SR and SM is clear, timely and effective
0.611**
**Correlation is significant at the 0.01 level (2-tailed). All correlations have a significance of 0.00.
Based on the previous correlation, it is not surprising that there is also strong correlation regarding the effective communication inside which has impact on the communication with the customers and the effective communication among both groups of employees. It means that the way the Shop Managers provide information to the Sales Representatives who are under their supervision is significant for the quality of the internal communication process thus the quality of the communication with customers.
Table 6: Spearman’s Correlation 2 (Sales Representatives and Shop Managers)
Effective communication inside influences the communication with customers
SWA Shop Managers
The communication
between SR and SM is clear, timely and effective
0.714**
SWA Sales Representatives
The communication
between SR and SM is clear, timely and effective
0.417**
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On the other hand, I pay attention to the customers’ attitude so I apply some correlations regarding their perceptions. In table 7 there are presented the strong correlations for the sample of the customers. Despite the fact that there are strong correlations only for the Shop Managers and Sales Representatives in the South-West area, concerning the customers’ sample I find out strong correlations in both of the areas. “The level of the customer service offered by the Sales Representatives is high” correlates significantly with the statement that the “Sales Representatives are well-informed and helpful” and the “Sales Representatives are friendly, expressing the company’s expectation for high-performance.” These results are another proof that the way the Sales Representatives are informed, prepared and communicated with inside the organization is of great importance for the level of the service they demonstrate in front the customers of the company.
Table 7: Spearman’s Correlation (Customers)
High level of customer service
NEA
SR are well-informed and helpful
0.670**
SR are friendly 0.471**
SWA SWA
SR are well-informed and helpful
0.596**
SR are friendly 0.674**
General results
SR are well-informed and helpful
0.711**
SR are friendly 0.685**
**Correlation is significant at the 0.01 level (2-tailed). All correlations have a significance of 0.00.
The second proposition is that “Business communication, both inside and outside of the
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Sales Representatives to reach the high quality expectations of the company during the service encounter with customers. The more the employees are well-informed and helpful, the more the customers are satisfied with the level of the service offered and the more the company is prosperous.
Concerning the third and the fourth proposition “The service encounter represents the “moment-of-truth” – the right moment for the contact-personnel to influence the customers’ satisfaction” and “The effective communication between an organization and its customers is an important element determining the quality of the service encounter, thus the customer satisfaction”, there is a moderate correlation (only in the South-West area) which can be in support: “The level of the customer service offered by the Sales Representatives is high” and the quality of the service encounters with the Sales Representatives affects the long-term intentions towards the company.” (r = 0.442, moderate). This means that during the service encounter, it is very important how the Sales Representatives will interact with the customers and it is extremely determinative for their consequent intentions towards the company.
The fifth proposition states that “The Organizational Perception of Customer Satisfaction is influenced by the quality of the internal communication between the organizational leaders and the front-line personnel”. It has already been discussed that undoubtedly the way the Shop Managers communicate with the Sales Representatives determines the level of their preparation thus the level of satisfaction of customers. There is no strong correlation found exactly referring to the Organizational Perception of Customer Satisfaction but rather to the overall concept of customer satisfaction.
51 DISCUSSION
The first noticeable finding in this research is that there is a relationship between the internal communication process and the customer satisfaction, revealed by the survey and the consequent analysis run in the Bulgarian telecom VIVACOM. There is a significant proof that the customers’ satisfaction is influenced by the way the employees within the organization communicate and especially by the information provision process Shop Managers - Sales Representatives. It means that the main research question posed in the Introduction is answered.
Furthermore, an interesting finding is that there is a divergence of the Sales Representatives’ attitude in the North-East area and in the South-West area. In comparison with the North-East sales area, the South-West sales area is more economically developed, with higher percentage of GDP generated in the region, higher levels of job opportunities, lower levels of unemployment. Moreover, this is the region where the capital is situated; the percentage of highly-educated (Bachelor and Master Degree) individuals is higher. (Ministry of Regional Development, 2007). This could be a reason why the Sales Representatives are more positively disposed towards their work with the Shop Managers – they are better educated, more satisfied with their work.
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The way the Sales Representatives communicate with the customers is undoubtedly influenced by the internal communication. Not only do the samples of Shop Managers and Sales Representatives support this statement but also the customers’ attitude confirms it. All the customers who participate in the survey are unanimous that the quality of the service encounters with the Sales Representatives affects their long-term intentions towards the company.
Another point of the survey which reveals the unanimity of all of the respondents (in this case all three groups – Shop Managers, Sales Representatives and Customers) is concerning the training program for employees in VIVACOM. All of the respondents are ill-disposed towards the training program in the company and further participation is considered vital. Even the Sales Representatives from the South-West sales area who demonstrate positive attitude agree that further training is necessary. As the first training program is obligatory for the new-comers and it basically represents introduction to the company’s mission, vision, values, products and services, a second program can be included as a part of the training process. An interesting suggestion could be appointing a coach who will spend at least one week in the shop working with the new employees, demonstrating how to sell, how to deal with customers, how to work with the database, etc. in real not artificial environment which is definitely more effective.
