Factors affecting the utilization centerin customer service by firms in vietnam market

UNIVERSITY OF ECONOMICS HO CHI MINH CITY INTERNATIONAL SCHOOL OF BUSINESS NGUYEN QUOC VIEN FACTORS AFFECTING THE UTILIZATION OF CALL CENTERIN CUSTOMER SERVICE BY FIRMS IN VIETNAM MARKET MASTER OF BUSINESS (Honours) Ho Chi Minh City - year 2014 UNIVERSITY OF ECONOMICS HO CHI MINH CITY INTERNATIONAL SCHOOL OF BUSINESS NGUYEN QUOC VIEN FACTORS AFFECTING THE UTILIZATION OF CALL CENTERIN CUSTOMER SERVICE BY FIRMS IN VIETNAM MARKET ID: 22110079 MASTER OF BUSINESS (Honours) SUPERVISOR: Dr ĐINH THAI HOANG Ho Chi Minh City - year 2014 ACKNOWLEDGEMENT During the process of writing my thesis, I had coped with difficulties and obstacle that I could not anticipate The pressure of daily work seems to make me give up my study However, thanks to the encouraging of my supervisor, Dr Dinh Thai Hoang, I was received a great will to overcome step by step the difficulties I own my deepest gratitude to my supervisor, Dr Dinh Thai Hoang, who with his wide research experience, guided me to complete this topic Without his continuous support, encouragement, and enthusiasm, this research would hardly have been completed I am indebted to Dr Nguyen Dinh Tho for his immeasurable amount of teaching and guidance during the research design course I would like to thank Ms Thai Thi Thu Giang, my friend at University of Economics Ho Chi Minh City, who introduced me the MBUS course at ISB and encouraged me to go to the end of the course I also express my warmest gratitude to my professors at ISB, University of Economics Ho Chi Minh City for their teaching and guidance during my MBUS course I wish to thank warmly my classmates who showed their teamwork spirit and willingness to help each other to complete our theses Finally, this thesis is dedicated to my beloved parent and daughter who understand, encourage, and sympathize with me especially in making the convenient environment during my work of this dissertation ABSTRACT This thesis aims to investigate the factors that affect the utilization of call center in customer service by firms in Vietnam, especially in Ho Chi Minh City – a biggest and dynamic center business of Vietnam Many Vietnamese firms are using the call center as a tool for their customer service channel; however, the benefits that Vietnamese customer orientation firms or broader the orientation market firms gain from its customer focus or market focus through call center system either directly or indirectly remain unknown The study uses quantitative research method with the sample size of 230 enterprises including firms are utilizing the call center for their own, firms are using the call center outsourcing service and firms have hotline number to serve their customers The reliability, convergent and discriminant validity of scales was tested by Cronbach’s Alpha coefficient and exploratory factor analysis then regression analysis was done to find out the correlation between the concepts in the theoretical model This study finds that the key concepts in the technology acceptance model (TAM), perceived ease of use of the call center, cannot be used to predict call center utilization by organizations Other concepts: perceived usefulness of call center, market orientation and service innovation are predictors of call center utilization Learning orientation facilitates market orientation, perceived usefulness and perceived ease of use of the call center by Vietnamese firms The result of this research assist in identifying keys factors that lead Vietnamese firms to adopt using the call center as a tool to take care, retain their customers and develop market in globalization stage; moreover, this study shows that both large enterprises and SME also gain the benefits from using call center by choosing the right form of call center investment; owning a call center or using call center outsourcing Keywords: Call center utilization, market orientation, learning orientation, contact center in Vietnam CONTENTS ACKNOWLEDGEMENT ABSTRACT LIST OF TABLES AND FIGURES CHAPTER 1: INTRODUCTION 1.1 Contact center introduction 1.2 Research background 1.3 Research problem .8 1.4 Research objective .9 1.5 Thesis structure 10 CHAPTER 2: LITERATURE REVIEW & HYPOTHESES 11 2.1 Technology Acceptance Model – TAM .11 2.2 TAM and contact center utilization 12 2.3 Market and learning orientations and intention to adopt call center system .15 2.4 Service innovation and call center utilization .18 CHAPTER 3: RESEARCH METHOD 21 3.1 Measurement .21 3.2 Quality study .23 3.3 The sample 24 3.4 Data collection, purifying and coding data 24 CHAPTER 4: DATA ANALYSIS AND RESULTS 26 4.1 Descriptive statistics 26 4.2 Reliability statistic 28 4.2.1 Market Orientation Cronbach’s Alpha .28 a Customer orientation 28 b Competitor orientation 29 c interfunctional coordinator .30 4.2.2 Learning orientation Cronbach’s Alpha .31 a Commitment to learning 31 b Shared vision 32 c Open mindedness 33 4.2.3 Perceived usefulness of call center 33 4.2.4 Perceived easy to use call center 34 4.2.5 Service Innovation .35 4.3 Exploratory Factor Analysis (EFA) 36 4.3.1 EFA of Market orientation concept 36 4.3.2 EFA of Learning orientation 37 4.3.3 EFA of Perceived usefulness, Perceived ease of use and Service innovation 39 4.4 Correlations analysis 41 4.5 Regression Analysis 42 4.6 Discussion 50 CHAPTER 5: CONCLUSION 54 5.1 Management implication 55 5.2 Limitation and directions for future research 56 REFERENCE .58 APPENDIX 1: Research process 65 APPENDIX 2: Scale Items 66 APPENDIX 3: Scale Items refinement 69 APPENDIX 4: Factor analysis .72 APPENDIX 5: Regression analysis .75 APPENDIX 6: The result of qualitative survey 77 LIST OF TABLES AND FIGURES Figure 1: Theory of reasoned action 11 Figure 2: Original technology acceptance model 12 Figure 3: A conceptual model of call center utilization .19 Figure 4: Model regression results 49 Table -5: Cronbach’s Alpha of three components in Market orientation concept 31 Table-10: Cronbach’s Alpha of three components in Learning orientation concept .33 Table-28: Correlations (see appendix 4) 74 Table-45: The summary of verifying hypothesis in conceptual model 49 CHAPTER 1: INTRODUCTION 1.1 Contact center introduction Nowadays, people regularly receive calls or messages from the customer service center of telecommunication companies, banks, insurance organizations, hospitals, transportation companies, game online companies and consumer firms… or even calls for telesales and telemarketing The question is how they can make a lot of calls; send a hundreds of messages at the same time to their customers, how they can remember all the customer numbers and detail of each transaction That is a call center; thus, what is the call center? As defined by North American Quitline Consortium (NAQC), call center is a place where contacts are made and received It is often the “front door” to a business and is the place where most crucial customer interactions take place Therefore, its effective and efficient operation is a key ingredient to the overall success of any organization (NAQC, 2010) There are five main operational functions in any type of call center: workforce management, quality management, technology management, report and communications and financial management Call centers provide a single contact for customers who may try to reach a company via multiple channels: e-mail, Web chat, fax, and phone, short message service (SMS) or VoIP (voice over Internet protocol) Call centers, often called contact centers to reflect the multiple points of access, provide staff with consistent information throughout an integrated system; the term call center is used interchangeably with contact center These centers capture data from across the enterprise and consolidate customer-related information into a central database This integration improves the customer's interaction and satisfaction and enhances the efficiency of the business operation (Duane Sharp, 2003) Large organizations such as telecommunication companies, insurance and financial firms may choose to outsource its call center services, as a professional call center will be able to provide the systems and trained workforce to provide quality service to customers 1.2 Research background Vietnam's economic growth rate has been among the highest in the Asia Pacific region in recent years 2010, 2011, 2012, 2013 respectively 6.4%, 6.2%, 5.2%, 5.2% Growth in services eased to 5.9%, this sector still made the largest contribution to GDP growth, at 2.5 percentage points (Dominic Mellor, Chu Hong Minh, and Nguyen Luu Thuc Phuong, 2014) With customer service becoming a key focus in Asia Pacific, Vietnam is improving customer relationships for the purpose of greater loyalty, brand recall, and profitability Adopting using the call center or call center service is one of the best ways to improve the customer satisfaction and customer relationship by firms in Vietnam, that’s because there’s a growth in call center in recent years According to Dao Thi Minh Thao, a research associate in the ICT Practice at Frost & Sullivan APAC, this effort is leading to an impressive growth in Vietnam’s contact center industry that was estimated to be worth $4.2 million in 2011 and is expected to reach $11.4 million in 2018, with a growth rate of 15 percent Most contact center projects in Vietnam are deployed by banks, financial institutions, and telco service providers These sectors require a high level of customer care; large seat numbers are needed to always be available to serve customers She also commented that “for further growth and success, small and middle-sized enterprises (SME) should look forward to more efficient contact center application adoption to align these trends for the future Emerging global vendors in providing suitable solutions also need to offer more customized solutions and effective marketing activities at more affordable price” (Donna Jeremiah, 2012) Realizing the potential and advantages of call center, many researches on call center and its effectiveness were taken Most of them focus on the advantages such as customer satisfaction in using and outsourcing call center and service quality in call center operation In researches indicating the advantages of call center, application of the technologies involved in call center operations can play a key role in accessing more customers, and in providing better quality services especially where additional or extended services become available (Walker and Craig-Lees, 1998) However, call center is a new form of technology in Vietnam; it has just developed in recent years when firms think of customer There is almost no theoretical research for this type of service technology; thus this is an opportunity for this study 1.3 Research problem In Vietnam, it’s easy to realize call center is used by most of banks, financial and insurance firms, telecommunication companies, hospitals, transportation companies, game online companies and consumer firms… What are the motivations that lead the firms choosing the call center as tool for customer service channel? The fact is that there is no previous studies mention the evolution of the call center, analyzing the technologies that have contributed to its growth, providing guidelines for the development and implementation of a call center as well as the management of the facility, and the role of human factors that can make a call center a successful operation Especially, there is no empirical research on what factors effecting the utilization of call center in customer service by firms in Vietnam Vietnamese firms just remark the benefits and advantages of using call center through the trend of customer care service what the other big companies did to retain their customers; however, these benefits must be deeply based on the orientation of each organization The question as regards how Vietnamese customer orientation service firm (large or small firm) or broader how the Vietnamese orientation market firm (large or small firm) benefits from its (4) Our business objectives are driven by customer satisfaction (5) We pay close attention to after-sales service (6) We respond quickly to customer needs (7) We rapidly adapt our products in response to customers’ needs Competitor orientation (8) In our firm, our sales people share information about competitors (9) We respond rapidly to competitor actions (10) Top management regularly discuss competitors’ strengths and weaknesses (11) Customers are targeted when we have an opportunity for competitive advantage Inter-functional coordination (12) Our top managers from each business function regularly visit customers (13) Business functions within our firm are integrated to serve our target market needs (14) Our managers understand how employees can contribute to customers’ value (15) We share resources with other business units Learning orientation Commitment to learning (1) Managers basically agree that our firm’s ability to learn is the key to our competitive advantage (2) The basic values of our firm include learning as a key to improvement (3) In our firm, employee learning is an investment, not an expense (4) Learning in our firm is seen as a key commodity necessary to guarantee organizational Survival Shared vision (5) There is a commonality of purpose in our firm 67 (6) There is total agreement on our organizational vision across all levels, functions, and divisions (7) All employees are committed to the goals of our firm (8) Employees view themselves as partners in charting the direction of our firm Open-mindedness (9) We are not afraid to reflect critically on the shared assumptions we have made about our markets (10) Personnel in our firm realize that the very way they perceive the marketplace must be continually questioned (11) We always collectively question our own biases about the way we interpret market information Service innovation (1) Innovation is readily accepted in program/project management (2) Our firm’s top management gives special emphasis to service innovation (3) Our firm constantly seeks new ways to better service our customers (4) Our firm is able to change/modify our current service approaches to meet special requirements from customers (5) Compared to our competition, our firm is able to come up with new service offerings Call Center Utilization (1) Times per week the firm receives calls from customers, makes calls to customers, sends or receives e-mail related to customers service activities (2) Hours per week the firm uses the Call center or customer database application or Customer Relationship Management (CRM) application to search for historical customer information 68 Appendix Scale Items refinement Perceived usefulness of the call center (1) By using the call center our firm would obtain information about the existing customer in database more easily (2) By using the call center our firm would obtain information about existing customers and serve them more quickly (3) By using the call center our firm would obtain customer care service more cheaply (4) By using the call center our firm would contact suppliers, customers, and distributors in markets more easily (5) By using the call center, our firm would find it more effective in making customer service decisions (6) Overall, our firm would consider that the call center is useful for conducting service business activities Perceived ease of use of the call center (1) Learning to use the call center would be easy for our firm (2) Our firm would find it easy to use the call center to search for information about particular customers (3) Our firm would find it easy to use the call center to communicate with organizations in the markets (4) Overall, our firm would find it easy to use the call center Market orientation Customer orientation (1) We closely monitor and assess our level of commitment in serving customers’ needs (2) Business strategies are driven by the goal of increasing customer value (3) Our competitive advantage is based on understanding customers’ needs 69 (4) Our business objectives are driven by customer satisfaction (5) We pay close attention to after-sales service (6) We respond quickly to customer needs Competitor orientation (7) In our firm, our sales people share information about competitors (8) We respond rapidly to competitor actions (9) Top management regularly discuss competitors’ strengths and weaknesses Inter-functional coordination (10) Business functions within our firm are integrated to serve our target market needs (11) Our managers understand how employees can contribute to customers’ value (12) We share resources with other business units Learning orientation Commitment to learning (1) Managers basically agree that our firm’s ability to learn is the key to our competitive advantage (2) In our firm, employee learning is an investment, not an expense (3) Learning in our firm is seen as a key commodity necessary to guarantee organizational survival Shared vision (4) There is a commonality of purpose in our firm (5) There is total agreement on our organizational vision across all levels, functions, and divisions (6) All employees are committed to the goals of our firm 70 Open-mindedness (7) Personnel in our firm realize that the very way they perceive the marketplace must be continually questioned (8) We always collectively question our own biases about the way we interpret market information Service innovation (1) Innovation is readily accepted in program/project management (2) Our firm’s top management gives special emphasis to service innovation (3) Our firm constantly seeks new ways to better service our customers (4) Our firm is able to change/modify our current service approaches to meet special requirements from customers (5) Compared to our competition, our firm is able to come up with new service offerings Call Center Utilization (1) How many hours per week the firm uses contact center services such as telephone, email, customer database application to solve the customer’s problems and perform telemarketing, telesales? 71 Component Appendix Factor analysis Initial Eigenvalues Cumulative % Total % of Variance Cumulativ e% 4.411 40.101 40.101 4.411 40.101 2.308 20.979 61.080 2.308 20.979 1.160 10.545 71.625 1.160 10.545 679 6.169 77.794 518 4.707 82.501 464 4.218 86.718 391 3.550 90.268 339 3.078 93.347 293 2.663 96.010 10 245 2.231 98.240 11 194 1.760 100.000 Extraction Method: Principal Component Analysis 40.101 61.080 71.625 3.995 2.435 1.449 36.317 22.138 13.170 36.317 58.455 71.625 Component Cumulativ e% Rotation Sums of Squared Loadings % of Variance Total % of Variance Table-17: Total Variance Explained Extraction Sums of Squared Loadings Initial Eigenvalues Total % of Variance Total Table-20: Total Variance Explained Extraction Sums of Squared Loadings Cumulative % Total % of Cumulative Variance % 2.597 37.100 37.100 2.597 37.100 1.607 22.951 60.051 1.607 22.951 1.262 18.023 78.074 1.262 18.023 527 7.534 85.608 440 6.292 91.900 307 4.384 96.284 260 3.716 100.000 Extraction Method: Principal Component Analysis 37.100 60.051 78.074 Rotation Sums of Squared Loadings Total 2.370 1.628 1.467 % of Cumulative Variance % 33.859 23.254 20.962 33.859 57.113 78.074 72 Component Initial Eigenvalues Table-23: Total Variance Explained Extraction Sums of Squared Loadings % of Variance Cumulative % 4.556 35.042 35.042 4.556 35.042 2.361 18.161 53.204 2.361 18.161 1.922 14.782 67.986 1.922 14.782 816 6.274 74.260 555 4.267 78.527 518 3.985 82.512 450 3.460 85.972 411 3.159 89.131 334 2.568 91.699 10 315 2.424 94.122 11 306 2.353 96.475 12 246 1.890 98.365 13 213 1.635 100.000 Extraction Method: Principal Component Analysis 35.042 53.204 67.986 Total % of Cumulative Variance % Total Rotation Sums of Squared Loadings Total 3.542 2.793 2.503 % of Cumulative Variance % 27.250 21.484 19.252 27.250 48.734 67.986 73 Table-28: Correlations F_UTILI ZATION F_LEARN _ORI Pearson 770** Correlation F_UTILIZA Sig (2.000 TION tailed) N 204 204 Pearson 770** Correlation F_LEARN_ Sig (2.000 ORI tailed) N 204 204 Pearson 179* 498** Correlation F_EASYTO Sig (2.011 000 USE tailed) N 204 204 Pearson 563** 597** Correlation F_USEFUL Sig (2.000 000 NESS tailed) N 204 204 Pearson 687** 593** Correlation F_MARKE Sig (2.000 000 T_ORI tailed) N 204 204 Pearson 261** 245** Correlation F_SERVIC Sig (2.000 000 E_INNO tailed) N 204 204 ** Correlation is significant at the 0.01 level (2-tailed) * Correlation is significant at the 0.05 level (2-tailed) F_EASY TOUSE F_USEFUL NESS F_MARK ET_ORI F_SERVICE _INNO 179* 563** 687** 261** 011 000 000 000 204 204 204 204 498** 597** 593** 245** 000 000 000 000 204 204 204 204 314** 142* 245** 000 043 000 204 204 204 204 314** 674** 187** 000 007 000 204 204 204 204 142* 674** 192** 043 000 204 204 204 204 245** 187** 192** 000 007 006 204 204 204 006 204 74 Appendix Regression analysis 5.1 H8 regression model Collinearity Diagnosticsa Model Dimension Eigenvalue Condition Index Variance Proportions (Constant) 1.982 1.000 018 10.619 a Dependent Variable: F_MARKET_ORI F_LEARN_ORI 01 99 01 99 5.2 H3, H4, H6 regression model Collinearity Diagnosticsa Condition Model Dimension Eigenvalue Index (Constant) 3.941 1.000 032 11.108 018 14.913 009 20.974 a Dependent Variable: F_USEFULNESS 00 01 65 33 Variance Proportions F_LEARN F_MARKET _ORI _ORI 00 00 00 19 38 01 62 80 F_EASY TOUSE 00 61 00 39 5.3 H7 regression model Collinearity Diagnosticsa Model Dimension Eigenvalue Condition Index 1.982 018 a Dependent Variable: F_EASYTOUSE 1.000 10.619 Variance Proportions (Constant) 01 99 F_LEARN_ORI 01 99 75 5.4 H1, H2, H5, H9 regression model Collinearity Diagnosticsa Variance Proportions Model Dimension Eigen value 1 4.875 062 035 018 009 Condition Index (Constant) F_MAR KET_ORI F_USE FULNESS F_EASY TOUSE F_SERVIC E_INNO 1.000 8.845 11.792 16.354 23.023 00 01 00 63 36 00 02 08 01 89 00 04 06 36 55 00 01 72 11 16 00 93 04 03 00 76 Appendix The result of qualitative survey Questions in qualitative survey for refining the scale measured: - Question 1: According to your experience, which of the items in the survey sheet are necessary for testing the conceptual variable need to be observed? Y: If that is a necessary item; N: It’s not necessary - Question 2: Is it necessary to add more other items that you think suitable for testing the conceptual variable need to be observed? Y: If necessary; N: If not necessary - Question 3: Are there any items that have the same meaning? Please give your idea to amend The result of qualitative survey No Scales items Question Y I N % Question Total Perceived usefulness of the call center By using the call center our firm would obtain information about the existing customer in database more easily By using the call center our firm would obtain information about existing customers and serve them more quickly By using the call center our firm would obtain customer care service more cheaply By using the call center our firm would contact suppliers, customers, and distributors in markets more easily By using the call center, our firm would find it more effective in making customer service decisions Overall, our firm would consider that the call center is useful for conducting service business activities 80 10 10 100 10 70 10 90 10 10 100 10 10 100 10 Question Y N % Total Y N % Total 10 100 10 10 100 10 77 II Perceived ease of use of the call center Learning to use the call center would be easy for our firm Our firm would find it easy to use the call center to search for information about particular customers 80 10 10 100 10 Our firm would find it easy to use the call center to communicate with organizations in the markets Overall, our firm would find it easy to use the call center Market orientation Customer orientation 90 10 10 100 10 10 We closely monitor and assess our level of commitment in serving customers’ needs 10 100 10 11 Business strategies are driven by the goal of increasing customer value 90 10 10 100 10 10 100 10 10 100 80 10 10 20 10 90 10 90 10 10 III 12 13 14 15 16 17 18 Our competitive advantage is based on understanding customers’ needs Our business objectives are driven by customer satisfaction We pay close attention to after-sales service We respond quickly to customer needs We rapidly adapt our products in response to customers’ needs Competitor orientation In our firm, our sales people share information about competitors We respond rapidly to competitor actions 10 100 10 10 100 10 10 100 10 10 100 10 78 19 20 21 22 23 24 IV 25 Top management regularly discuss competitors’ strengths and weaknesses Customers are targeted when we have an opportunity for competitive advantage Inter-functional coordination Our top managers from each business function regularly visit customers Business functions within our firm are integrated to serve our target market needs Our managers understand how employees can contribute to customers’ value We share resources with other business units Learning orientation Commitment to learning Managers basically agree that our firm’s ability to learn is the key to our competitive advantage 90 10 20 10 20 10 10 100 10 90 10 90 10 10 10 100 10 26 The basic values of our firm include learning as a key to improvement 30 10 27 In our firm, employee learning is an investment, not an expense 90 10 10 100 10 90 10 10 100 10 10 100 10 30 10 28 29 30 31 32 33 Learning in our firm is seen as a key commodity necessary to guarantee organizational survival Shared vision There is a commonality of purpose in our firm There is total agreement on our organizational vision across all levels, functions, and divisions All employees are committed to the goals of our firm Employees view themselves as partners in charting the direction of our firm 100 10 10 100 10 79 34 Open-mindedness We are not afraid to reflect critically on the shared assumptions we have made about our markets 30 10 35 Personnel in our firm realize that the very way they perceive the marketplace must be continually questioned 10 100 10 36 We always collectively question our own biases about the way we interpret market information 80 10 V 37 Service innovation Innovation is readily accepted in program/project management 90 10 38 Our firm’s top management gives special emphasis to service innovation 10 100 10 39 Our firm constantly seeks new ways to better service our customers 90 10 40 Our firm is able to change/modify our current service approaches to meet special requirements from customers 80 10 90 10 41 VI Compared to our competition, our firm is able to come up with new service offerings Call Center Utilization 42 Times per week the firm receives calls from customers, makes calls to customers, sends or receives e-mail related to customers service activities 10 100 10 43 Hours per week the firm uses the Call center or customer database application or Customer Relationship Management (CRM) application to search for historical customer information 80 10 10 100 10 10 100 10 10 100 10 90 10 80 81 ... ECONOMICS HO CHI MINH CITY INTERNATIONAL SCHOOL OF BUSINESS NGUYEN QUOC VIEN FACTORS AFFECTING THE UTILIZATION OF CALL CENTERIN CUSTOMER SERVICE BY FIRMS IN VIETNAM MARKET ID: 22110079... Minh City is the major business centre of Vietnam; therefore, firms in Ho Chi Minh City were chosen to survey The sampling frame was based on a list of firms involved in services firms including... enterprises including firms are utilizing the call center for their own, firms are using the call center outsourcing service and firms have hotline number to serve their customers The reliability,