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Procedia Economics and Finance 11 (2014) 289 305
Abstract
The Direct to Home industry has emerged as the key driver for the Indian entertainment industry. In October 2011 the
Government announced implementation of a phase-wise digitization programme of pay TV services throughout the country. The
Indian Direct to Home industry is expected to grow by 50% in 2016. A few challenges faced by the Direct to Home Industry are
low Average Revenue per user (ARPU), high customer acquisition costs and high churn rate.
DTH Service Providers consider superior service experience as the key differentiator that will help them acquire new customers
and manage churn as well. Currently there is no standard available in the India market for DTH service providers to quantify and
improve its customer experience. Hence the objective of this paper is to formulate various constructs that helps to understand the
impact of different service attributes on customer experience for Direct to home customers using business intelligence tools.
2014 Elsevier B.V. This is an open access article under the CC BY-NC-ND license
2013 The Authors. Published by Elsevier B.V.
(http://creativecommons.org/licenses/by-nc-nd/3.0/).
Selection and/or
Institute
of of
Management
Studies.
Selection
and/or peer-review
peer-reviewunder
underresponsibility
responsibilityofofSymbiosis
Symbiosis
Institute
Management
Studies.
Keywords: Customer Experience, KANOs quadrants, Hub & Spoke, Satisfaction Loyalty Grid., BI tools
* Corresponding author.
E-mail address:sjoshi@sitm.ac.in
2212-5671 2014 Elsevier B.V. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/3.0/).
Selection and/or peer-review under responsibility of Symbiosis Institute of Management Studies.
doi:10.1016/S2212-5671(14)00197-X
290
Sujata Joshi et al. / Procedia Economics and Finance 11 (2014) 289 305
1. Introduction
India is the third largest TV market after the US and China with 155 million subscriber households in 2012, TV
signals in India are currently distributed in analogue as well as in digital and terrestrial formats. Most cable
operators in the country are providing analogue TV service while all DTH operators are providing a digital TV
service. The government of India amended the Cable Television Networks (Regulation) Act in October 2011 to
announce implementation of a phase-wise digitization programme of pay TV services throughout the country and
hope for complete digitalization by end of 2014. The main reasons driving the growth of Direct to Home services
are the progress in technology, increased overall value proposition, and simplified yet enhanced consumer's
television viewing experience. Another important catalyst for growth of DTH is customer service since it is a key
differentiator between the DTH players and the unorganized service providers. A few challenges faced by the Direct
to Home Industry are low Average Revenue per user (ARPU), high customer acquisition costs and high churn rate.
DTH Service Providers consider superior service experience as the key differentiator that will help them acquire
new customers and manage churn as well. Currently the rate of churn for the DTH industry is 14-16%. Thus, it is
essential to develop effective methods to retain the existing customers which include two major steps. One is to
manage the customer experience and second is to generate service value for the customers. Customer experience is
defined as the sum of all experiences that a customer has at every touch-point of the customer-company relationship.
It is an intentional effort on the part of the company to develop and maintain good experience which is differentiated
from the competition, consistent at every touch point and most importantly valued by the customer. Currently there
is no standard available in the India market for DTH service providers to quantify and improve its customer
experience. Hence the objective of this paper is to formulate various constructs that help to understand the impact of
different service attributes on customer experience for Direct to home customers using business intelligence tools.
This solution can be used to enhance the quality of service, deliver better service experience to the customers. This
in turn will influence customers loyalty for their brands as well as have a positive impact on their intent to spend
and recommend the brand.
2. Methodology
Exploratory interviews were conducted on 440 customers in order to define the important attributes that affect the
customer experience for Direct to Home Service customers.
Statistical tests like crosstabs, correlations, binary logistic regression and cluster analysis were performed to help
carry out the analysis. This analysis helped to model the KANOs quadrants, Hub & Spoke. A descriptive analysis
on the intent to spend, recommend and overall experience was carried out to compute a loyalty score for the
customers.
Sujata Joshi et al. / Procedia Economics and Finance 11 (2014) 289 305
291
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Sujata Joshi et al. / Procedia Economics and Finance 11 (2014) 289 305
Thus the present study adds to the body of knowledge by analysing the constructs that help understand churn,
complaint handling, & customer behavioural patterns for DTH services. The research helps to analyse service
attributes that enhance customer experience for DTH services. It also gives insights on how better experience
impacts customer behavioural patterns: intent to spend, recommend the brand and analyze churn behaviour. Finally
it was observed from the research that vulnerable customers do become loyal after receiving better service
experience.
5. Conceptual framework and Analytical Constructs:
Three major analytical constructs were considered for the purpose of this study, the Kanos model, Hub & Spoke
Analysis, Satisfaction-Loyalty Grid:
The analytical constructs i.e. KANOs model & Satisfaction Loyalty Grid has been implemented with reference to
an article, Adding Value to CSM: The Kano Model by Michael Lieberman for the World Advertising Research
Centre.
They are explained as below.
5.1. KANOs model implementation:
Kano analysis is, in principle, a measure of the importance of the features to the customer, and the performance
of the business. The KANOs Grid is formulated taking into consideration the stated importance of service
attribute as responded by the customer & the derived importance that is the correlation between overall
experience of the customer & the service statements.
It defines the service parameters in the following way:Must bes:- The service attributes without which the experience is incomplete
Satisfiers: - The attributes of high stated importance formulating the key drivers of service experience.
Indifference: - The attributes of least importance to customer can form minor areas of opportunity
Exciters: - The unexpected parameters which invariably increase the service experience
5.2. Hub & Spoke Analysis:
This area of analysis helps to quantify the customer behavioural patterns with respect to a unit increase in the
customer experience index score. The statistical technique used is Binary Logistic regression which indicates
the exponential increase or decrease in the key business drivers.
5.3. Formulating the Satisfaction-Loyalty Grid:
Sujata Joshi et al. / Procedia Economics and Finance 11 (2014) 289 305
The grid segregates the customers into four major segments based on Individual satisfaction levels i.e. thee
measure of customer experience index & Loyalty score i.e. defined as the average score of overall experience,
intent to recommend & intent to purchase more. It demarcates the following customer segments:
Switchers: - Customers having high satisfaction scores but are equally likely to churnn
Antagonists: - This segment probably has had bad experience with the DTH provider
The shift in customer behavioural pattern i.e. a shift towards brand loyalty is observed by carrying out Cluster
analysis. The predictors to observe customer movement were customer experience score, overall experience,
monthly spend, recharges per year & people referred.
Figure 1: Satisfaction-Loyalty Grid
6. Formation of Hypothesis
The review of literature gave deeper insights into the attributes or parameters affecting customer experience for
DTH services. For hypotheses formulation in this study researcher has considered:
H1 = Parameters like Advertisements, regular payment alerts, trustworthiness, variety of channels packages
have different levels of impact on the overall customer experience
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Sujata Joshi et al. / Procedia Economics and Finance 11 (2014) 289 305
7. Research Methodology:
7.1. Research Design
This study aims to build an outline to enhance customer experience for the DTH service providers. The study takes
into account certain analytical constructs, implemented with the help of business intelligence tools, SPSS &
Microsoft Excel.
Figure 2: (Hypothesis: Input-Statistical Constructs; Output-Enhancement of CE)
Sujata Joshi et al. / Procedia Economics and Finance 11 (2014) 289 305
Section A: consisted of questions related to service attributes. The importance and performance of these
attributes were determined on a scale of 1-7. An additional question was asked to be able to quantify the
overall experience of the customer on the same scale.
Section B: consisted of questions used for the segmentation analysis of the customers. Data on their
monthly spend, intent to spend, intent to recommend and intent to churn was captured. Additional
information related to the use of additional services and interactive services were also captured.
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296
Sujata Joshi et al. / Procedia Economics and Finance 11 (2014) 289 305
2) Understand the impact of a better experience on customer behavioural patterns. The construct used was Hub &
Spoke analysis.
3) Observe customer behaviour: A shift towards brand loyalty. The construct used was formulating a Satisfaction
Loyalty Grid.
The analytical tools and techniques involved, give various predictive measures to formulate business strategies &
decisions such as improving customer delight, enriching the customer experience most of all retaining customers &
improving loyalty & customer base.
PLANNING TO CHANGE
Yes
97
97
22%
No
o
343
78%
Figure 4: Reasons to switch (% & No.)
REASONS TO CHANGE
Moving to Other
Location
5
5%
Others
6
6%
Blanks
1
1%
Bad Experience
18
19%
Price
22
23%
For Better
Services/Offers
45
46%
Note: -The analytical constructs i.e. KANOs model & Satisfaction Loyalty Grid has been implemented with
reference to an article, Adding Value to CSM: The Kano Model by Michael Lieberman for the World Advertising
Research Centre.
Sujata Joshi et al. / Procedia Economics and Finance 11 (2014) 289 305
Customers
ISSUE OF COMPLAINTS
120
100
80
60
40
20
0
Series1
111
39
34
28
24
23
Signal
Issues
Billing/
Rechar
ge
Issues
Service
Activati
on/
Deactiv
ation
Produc
t/Offer
s Issue
Relocat
ion
Service
Issues
Payme
nt
Issues
111
39
34
28
24
23
297
298
Sujata Joshi et al. / Procedia Economics and Finance 11 (2014) 289 305
7.80
7.60
7.40
7.20
7.00
6.80
6.60
80.00%
70.00%
61.54%
6
61
1 54 60.00%
59 38% 59.09%
59.38%
59 09% 5
59.09%
%
50.00%
43.75%
43
4
75%
%
40.00%
35
35.
35.0
5.00%
00%
00
00%
%
25.00%
25.
25
2
5.00%
5.
5
.00 30.00%
27.27%
27
27.
2
7.2
..27
27
2
27%
7%
23
23.9
23.96
3
3.96
3.96%
.96%
96
9
96%
6%
6
% 1
23
2
3
3.3
3.33
..33
3
33%
33
3% 2
3%
20.00%
18.81%
18
8
8.8
..8
.81
81%
8
81
1%
1
%
18.18%
18
1
8..18
.1
1
18
18%
8%
8
%
12.50%
1
25
50
50%
0%
10.00%
0.00%
More
Rs.
Rs.
Less
Rs. 15K- Rs. 30K- Rs. 50Kthan Rs.
6000than Rs. 300030K
50K
80K
80000
15000
6000
3000
75
75.25%
75.2
75.
75
CEI
7.13
7.03
7.36
7.17
7.08
7.71
7.49
Average CEI
7.35
7.35
7.35
7.35
7.35
7.35
7.35
59.09%
59.09%
35.00%
43.75%
75.25%
61.54%
Planning to Change%
27.27%
18.18%
23.33%
23.96%
18.81%
25.00%
12.50%
% of Customers
ACEI Score
ADDITIONAL SERVICES
Telemarke
ting, 2.27
%
Social
Networkin
in
n
g, 11.82%
2%
%
IInteractiv
i
e
Games, 6.
59%
EE-Commerc
rcc
e, 7.27%
DVR, 19.
09%
IInternet,
Inte
Inter
t
3
2
2.05%
3D
Channel
s, 4.09%
ADD-ON SERVICES
Parental
Lock, 7.
73%
Video
On
De
Demand
De
,9
9.55%
Active
Acti
Active
ti
tive
iive
ve
e
Content
, 1.14%
Active
Movies,
12.95%
This study thus provides a solution not only to manage customers trust for their brand, but also provide insights on
Sujata Joshi et al. / Procedia Economics and Finance 11 (2014) 289 305
which other opportunities to explore and enhance upon the quality of service.
Part 2: OUTCOME OF STATISTICAL ANALYSIS (Part 2)
1)
KANOs Analysis
The distribution of various parameters into various segments of the grid is arrived at by creating a plot between (Xaxis as Stated Importance; Y-axis as Derived Importance). The following table indicates the Stated Importance &
the Derived Importance values. The derived importance is arrived at by performing a cross-tab correlation between
the overall experiences of the customer with the 25 service attributes considered.
Parameters
Advertisements
Promotions
Plans & offers
Pricing is value
Trustworthy operator
Variety off Channel Packages
I feel valued customer
First time installation
Activation of first time services
Behaviour of installation staff
Picture & Audio Quality
Continued Service in heavy rains
User Friendly equipment
Experience of change in service
Experience in Relocation of services
Dealers are widely spread
Experience at Outlets
Interactive website
Customer Helpline easy Access
Helpline staff are polite & courteous
Queries solved efficiently & quickly
Maintenance & Repair Options
Accurate (Fair) Charge deduction
Regular payment alerts
Recharge Flexibility
Stated Importance
0.71
0.74
0.81
0.81
0.81
0.83
0.74
0.79
0.82
0.80
0.84
0.79
0.79
0.77
0.77
0.78
0.74
0.77
0.79
0.81
0.80
0.81
0.81
0.78
0.82
Derived Importance
0.15
0.22
0.20
0.27
0.31
0.01
0.25
0.12
0.20
0.23
0.31
0.26
0.23
0.22
0.17
0.31
0.20
0.18
0.15
0.26
0.21
0.27
0.22
0.27
0.30
Table 1: Service Parameters with corresponding Values of Stated & Derived Importance
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300
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The Performance Attributes i.e. trustworthy operator, picture & audio quality, recharge flexibility,
behaviour of customer care staff has a concentrated impact on customer experience & business
performance.
Parameters like promotions; value to the customers ®ular payment alerts provide additional satisfaction
& add to the surprise factor to the customers & make the customers more loyal to the brand.
The Must Be Attributes, like Accurate billing, plans and offers, channel packages are the compulsory
requirements of customers. They must provide a higher level of experience or else would result into
dissatisfaction & thus churn in the system.
Interactive website, Relocation of service, Advertisements may have an impact on decision making but do
not add up the experience.
Sujata Joshi et al. / Procedia Economics and Finance 11 (2014) 289 305
Managerial Implications:
Customer experience can be enhanced by winning customer trust & providing value for services.
2)
This analysis helps to study the impact of enhancing the customer experience by 1 unit onto the key business
drivers. The statistical technique, Binary Logistic Regression, is used to evaluate relationships between a
dichotomous dependent variable and metric or dichotomous independent variables. It is used to estimate the
probability that an event, forming part of the defined groups, will occur in accordance to the change in the
independent variable.
Hence the following table depicts the incidence of change in the behavioural patterns by enriching the customer
experience by 1 unit. The positive sign indicates an increase in intention to recommend, purchase & spend, while the
negative sign indicates a decrease in intent to churn & reduced complaints.
Intent to Recommend
+1.050 times
Intent to Purchase
+1.217 times
-1.023 times
+1.254 times
-0.068 times
301
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Sujata Joshi et al. / Procedia Economics and Finance 11 (2014) 289 305
Managerial Implications: Enhancement in customer experience will result into following:Unit Increase in CEI
Chances of Recommendation
Less Customer Churn
Spend More for better services
Less complaints raised
Purchase more services
3)
Effects on business
Satisfaction-Loyalty Grid
The grid divides the customers into various segments & is arrived at by a plot between (X-axis being loyalty score &
Y-axis being the individual experience index scores). The Loyalty score is the simple average of responses to three
major questions, the overall experience, the intention to recommend, & the intent to purchase more. The satisfaction
scores are arrived at by applying the weighted average technique on the importance & performance scores obtained
on the 25 service statements.
Sujata Joshi et al. / Procedia Economics and Finance 11 (2014) 289 305
CUSTOMER CATEGORIES
Antagonists
113
26%
Champions
185
42%
SSwitchers
witchers
itchers
it
itchers
chers
h
hers
42
9%
Captives
C
Ca
Cap
apt
100
23%
303
304
Sujata Joshi et al. / Procedia Economics and Finance 11 (2014) 289 305
Sample size -- The number of the units of analysis was small. Open to more advanced & wider data
collection.
Availability of data -- Reliable & sufficient data from the DTH service providers will give a more clear
understanding of the trends in the services & experiences.
Limited Demographics -- The study was limited to students, professional & employees, only in Pune area.
An increase in sample size & varied demographics would provide a more heterogeneous sample.
Rural coverage -- The rural areas have not been covered & would formulate a wider scope for future
research.
Sujata Joshi et al. / Procedia Economics and Finance 11 (2014) 289 305
The survey & analysis can be completed on a larger scale to include more customer & industry insights.
This tested study can further be applied to other telecom verticals such as broadband & mobile.
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