LV Thạc sỹ_Customer satisfaction for brokerage service at VNS securities company

1 ACKNOWLEDGEMENT A work of this nature could not have been produced without assistant of some sort I wish to therefore acknowledge a few people and institution that helped in realization of this research work First and foremost, I extend my gratitude to PhD … Last but not least, I would like to express my deep gratitude to my family who provide continuous supports to me during my learning process and the course of this research study ABREVIATIONS VNSC: VNS Securities Company HNX: Hanoi Stock Exchange SERVQUAL: Service Quality SSI: Saigon Securities Incorporate SERVPERF: Service Performance HoabinhSC: Hoa Binh Securities Company PSI: Petrol Securities Company FPTS: FPT Securities Company SHS: Saigon – Hanoi Securities Company LIST OF FIGURES LIST OF TABLES Table 4.1 Correlations matrix showing relationship amongst the various variables 39 Table 4.2: Model Summary(b) .40 Table 4.3: ANOVA(b) 40 Table 4.4: Coefficients(a) 41 TABLE OF CONTENT EXECUTIVE SUMMARY Customer satisfaction is increasingly recognized as a main pillar for success in the business environment and also the key to survive It is necessary for the company to satisfy customer in order to capture market share and improve profitability In other word, customer satisfaction helps the company to keep current customer and attract more clients Thanks to that, the company’s profit may increase The objectives of this research are to overview VNS Securities Company’s brokerage service, investigate customer satisfaction on brokerage service and find out what factors affecting to customer satisfaction and give recommendations and solutions to improve customer satisfaction on VNSC’s brokerage service The search methodology is divided into two main parts In the first part, literature review of the satisfaction and attributes affecting satisfaction was conducted in order to get better understanding of customer management and apply an appropriate customer satisfaction measurement model in the case of VNS In the second part, data for analysis is collected through two sources: primary data from in depthinterview and survey; secondary data from newspaper, internet, VNSC’s internal reports In depth-interview was conducted with some customers and staffs from brokerage department As for customer survey, a questionnaire was designed and sent out to sample of 200 respondents in Hanoi The quantitative analysis was taken by applying SERVPERF model Excel and SPSS software packages were used as the tool for statistical analysis Result of quantitative and qualitative analyses are interesting and useful for improving customer satisfaction in VNSC’s brokerage service Main findings are as below: - Customer satisfaction was mainly affected by five component of service quality In which responsiveness has the highest impact (0.328), next was reliability (0.305) The lowest effect was assurance component (0.153) Empathy and tangible also were concerned by customers with beta coefficient of 0.253 and 0.156 respectively - Customers felt satisfied with only reliability component (4.18) and gave neutral marks for other ones It meant that they were not really satisfied with tangible, responsiveness, assurance and empathy - Total customer satisfaction at the company’s brokerage service was not high (3.83) Due to some the following reasons:  The company’s equipments and facilities are not really modern  The company has not enough equipment to serve investors  Employees not wear uniform when dealing with customers  Website’s information is insufficient and not updated  Extra services have no difference and not meet customers’ requirements  Employees are lack of working skills and not really good at communication Moreover, they not have enough professional knowledge to consult customers  According to analyzed results, the author gave some recommendations for the company to solve its problems - Improve professional qualification and soft skills of staffs through training courses - Periodic assessment on staffs, changing the way of recruitment, etc - Other recommendations include restructure the Company, recruitment, apply ISO The recommendations help the company survive the competition, retain customers and in the long run increase profitability Chapter INTRODUCTION 1.1 Rationale Brokerage service plays a very important role for any securities company, especially with small and medium securities companies, when their main activity is brokerage service Fee from this activity brings main income for the companies and makes up to 50% or more for turnover of the companies VNS is a medium size company, with total charter capital of 160 billions Vietnam Dong Like other small and medium securities companies, turnover from brokerage service hold a large proportion in the Company’s income According to the data from Accounting Department over last years, turnover from this activity contributed up to 60% to the Company’s turnover In other word, it is the main force brings the main profit for the Company Besides, customers can assess the Company via quality of brokerage service through some activities such as investment consultancy, serving attitude of brokers, information system for trading online… Moreover, the competiveness in Vietnam stock market is more and more severe In 2000, the number of securities companies was 5, and this number has risen every year, but in slow pace in period from 2000 to 2005, just 14 companies at the end of 2005 with total amount of trading accounts about 31,316 accounts Until the end of 2006, with exploration of Vietnam stock market, State Securities Commission of Vietnam received much more application for establishing securities company The result was the numbers of companies has risen up to 64 in 2007 and currently is more than 100 Due to the high level of competition, VNS Company is losing existing customers to their rivals as the result of successful attempts to entice customers away thanks to their better service quality At the same time, dissatisfaction drives customers away and the fact is that 20% of the Company’s customers are leaving each year 10 This is really a considerable number It reflects that service quality of VNSC has not met the expectation of customers Therefore it is necessary for the Company to improve its service quality especially in brokerage service to satisfy customers much more since satisfying the customers not only help VNSC keep current customers, but also help the Company draw potential customers due to word-of-mouth advertising from current customers Those customers are really happy with service quality of the company will tell others, so when someone has an intention to open an account, he or she will think of the company With the important roles of satisfying customers in both creating loyalty and drawing new customers in order to create profits for the Company, I have decided to choose the topic “Customer satisfaction for Brokerage service at VNS Securities Company” 1.2 Objectives VNSC as has recently faced more and more difficulties in attracting new customers as well as keep current customers due to growing competition from rivals who give preferential policies and better condition for customers Moreover, the Company is confronting with the fact that high proportion of customers leaving each year Therefore, this research is carried out to analyze the current practices to satisfy VNSC’s customers, the factors that effect customer satisfaction and to find out solutions to raise more satisfaction for creating customer loyalty The specific objectives of the thesis are as followed:  Finding dimensions that affect customer satisfaction  Analysis and assess the customer satisfaction on VNSC’s brokerage service  Recommendations in order to improve customer satisfaction for the Company 48 Figure 4.9: Empathy Attributes Source: surveyed by author Empathy in this research for VNSC includes factors: Give customers individual attention, seminar in investment consulting for customers, create good conditions for customers and understand the customers' specific needs The Company are performing well at only attribute “seminar” In last years, VNSC also has made a lot of efforts to organize weekly seminar about the market securities for investors The purposes of seminar is to provide information, knowledge to investor and give some judgments in stock market to help customers make investment decision better, also to attract customers for The company and to calm down old investor’s nerves In contrast, it can be seen from the figure that, the Company does not pay attention adequately to customers as well as not understand their needs The company has not given any present or even congratulation message for customers in some special occasions as New Year, their birthday It is really not good in building a good image in customers’ mind 49 4.3 Evaluate overall customer satisfaction on VNSC’s brokerage service Figure 4.10 Satisfaction measurement Source: Surveyed by author Overall, customer satisfaction at the company’s brokerage service is not high (3.83) Due to five components of service quality of VNSC Securities Company which have strong correlation with total satisfaction, was not highly appreciated Except tangible dimension had customer satisfaction mean of over 4, reliability dimension had mean of 4.0, all remainder components had means of little higher than average value (3.0) It meant that customers quite satisfied with the company’s tangible facilities, they also believed in the company’s law obedience, VNSC and its employees would have not done anything that might affect their benefit In general, there was a mismatch between service quality the Company provided and service quality the customers preferred The implication here is that there is a need for management to take a look at strategies that emphasise service delivery as it relates to relationship issues since the research shows through the correlations On other hand, responsiveness dimension is the most critical component in service quality The company score well in responsiveness has customers with high satisfaction compared with the satisfaction of customers whose companies focuses more on empathy or tangibility In other words, customers who perceive the 50 company’s staffs to be responsibility (giving service quickly, willing to help customers ) tend to be more satisfied than those who perceive the company to be investing more in tangibles Put another way, providing customers with quick service is more important than providing a well-decorated business environment to the customer Hence in order to retain customers, there is the need to focus on the most important drivers of customer satisfaction 4.4 Summary 4.4.1 Achievements As a result of research, some below attributes were highly evaluated by customers: - Facilities for VNSC’s employees: customers felt that the Company equipped quite adequately facilities for its staffs It meant employees had enough facilities for working, therefore, they could serve customer better - In reliability dimension, customer gave good assessment on three attributes: right inform (4.07), inform changing (4.06) and especially satisfied with “insist on error – free record” attribute (4.82) It meant customers found that their transaction in VNSC was accuracy and safety The company also informed timely when there were changes in implementing contracts Moreover, customers nearly completely agreed that VNSC always ensured their actual securities and cash balance accounts 4.4.2 Shortcomings According to research, the Company, although, had gained some successes in fulfilling customers’ need, it had some below shortcomings: - Tangible attributes: clients were almost satisfied with these attributes They considered VNSC’s head office was not well and professional decorated Equipment was not modern; Employees’ style of wearing did not express professionalism, customer implied that the Company’s brokers did not wear uniform and personal tag when dealing with them Moreover, facilities and 51 equipments for investors were not enough Website was lack of information, even out of dated information, interface did not really catch attention - Assurance attributes: all these attributes did not fulfill customers’ requirements Customers responded that VNSC’s brokers did not have ability to realize their needs, yet; working skills were quite weak that sometime made them felt not confident; employees were not always courteous with customers and did not have good knowledge enough to consult investors when they needed - Reliability attributes: customers did not really believe in brokers’ professional ethnic They also felt that the Company’s employees were not totally sincere interest in solving customer’s problems - Responsiveness attributes: all these attribute had means under It mean that customers Customers saw that the Company’s employees did not serve them quickly, not always willing to help them or quite busy to response to their requests Moreover, VNSC did not supply much extra services/ - Empathy attributes: customers felt the Company was not empathetic with them Therefore, they were not satisfied with all these atributes 4.4.3 Reasons for dissatisfaction on VNSC’s brokerage service From analysis results, it can be summarized some of reasons that make customer dissatisfied as below: Tangible attributes - The company’s equipments and facilities are not really modern - The company has not enough equipment to serve investors - Employees not wear uniform when dealing with customers - Website’s information is insufficient and not updated 52 Assurance attributes - Employees are lack of working skills and not really good at communication Moreover, they not have enough professional knowledge to consult customers Reliability attributes - Brokers sometime give wrong-time and inaccurate orders - The Company’s employees sometime delay in solving customers’ problems Responsiveness attributes - Extra services have no difference and not meet customers’ requirements - Employee’s style of serving is not really professional, quite idle and slow Empathy attributes - Staffs have not deeply understood customer’s need and their difficulties - The company does not really pay attention to customers and take care of them well 53 Chapter RECOMMENDATION TO IMPROVE CUSTOMER SATISFACTION ON VNSC’S BROKERAGE SERVICE The previous chapters have revealed a number of problems that VNS Securitie Company is currently facing Although, data collected from financial statement of the Company shows that the Company are gaining better and better result in term of revenue and profitability It does not mean that the Company fulfill requirement of customers better and better, this may because other conditions as the recover of economics and securities market those advantages will sooner or later diminish, if the Company can not give a good or perfect service, customer may leave for other companies As the result, in order to make customers feel satisfied with purpose of keeping or alluring more customers, increasing competiveness , the company should apply some solutions to address these problems In this chapter, the author suggest a set of solutions that to help the Company to solve the problems that it is currently confronting with 5.1 The VNS’s Development Strategy - Develop business by continuing to improve and expand the Company’s branch and agency network - Emphasize on expanding customers, especially foreign customers through improving the quality of investment advisory services, establishment - Ensure in providing information and investment advice to customers more professionally - Training and developing the human resources to be more professional and efficient to meet the requirements of integration and the ability to face with the fiercely competitive environment 54 - Create a clear difference from rivals based on differences in service quality and customer serving attitude 5.2 Recommendations to improve customer satisfaction on VNSC’s brokerage service 5.2.1 Improving assurance, reliability, responsiveness As analysts, assurance of the Company represented by working skills, communication skill, having good knowledge to advice the clients of staffs in brokerage department Reliability can be expressed through professional ethnics, non-violation of clients’ account Almost these items are derived from human resource There, the first solution that the author wants to mention here is to professionalize its human resources by below method  Training: The Management board should pay attention more to training system of the Company Regularly organizing training programs as effective communication skill course that help the staff improving their skills in direct communication or via phone Also, the Company should send or request staffs attending professional courses as securities law of Vietnam, securities analysis at Securities Research and Training Center, that help them have better knowledge in the field Seminars and other outdoor training activities should also be held in order to enhance relationship between staffs of all divisions, team work ability and foster creativeness of staffs  Periodically assessment: The managers should request employees to make an assessment on themselves at least once a year Beside, the managers have their own valuation of junior staffs Base on this assessment, board of managers can know more about qualification and competence of each staff and assign duties for staffs more suitable  Recruitment: The Company should have more recruitment policy Just employ candidates, who can meet requirements of the Company, try to limit employ by relationship 55  Treatment policy: give attractive treatment policy to allure good employees Also give preferential treatment to staffs who take care of the customers better or have more strict policy to whom violating the regulations relevant to revealing customers’ information, using illegally customers’ account  Uniform: The Company must require its staffs wearing uniform when making transaction with customers, and have clear regulations about this issue Anyone who does not follow the rules will be fined 5.2.2 Improving empathy The empathy is shown by giving customer individual care and attention, the best conditions Securities may give investors, having employees who give customer personal attention, understand customers’ need To this works well, the Company should collect information from its customer to built customer database that support for both customer segmentation and giving suitable policy for serving customer And to collect more information from customers, beside base data collected from opening account request form, the company should: Set up information desk to collect and handing customer’s problem and collect more information from them Continuously investigated the customer’s need, customers’ idea and their complaints about inconveniences come from the company as well From collected data, the Company need to segment customer into classes, maybe as below:  VIP customer – can be considered as Diamond class Their trading fee is above VND 150 million per year  Closed customers – can be considered as Golden Class Their trading fee is above VND 100 million per year  General customers – can be considered as Silver Class Their trading fee is under VND 100 million per year 56 Base on above criteria, the company can apply an appropriate level of customer care for each class 57  With silver class:  Provide general market information, the company assessment, send daily via email  Provide update information about the company such as promotion campaign, new service of the Company  Send greeting card on their birthday, New Year (by e-card or post card with specially design for the Company)  Apply a accumulated score program (example, with trading fee up to million per month will receive a gift worth of 100 thousand or direct transfer their VND bonus to their bank account)  With Golden class:  Other than interests like Silver Class received, Golden Class will have more interest by following:  Receive specialized market analysis from the Company, investment consultant and assessment about potential and risk of stocks  Received Golden Card, which customers will have some discount when use service of the company partners like: Restaurant, Spa, Travel (the Company must corporate with some partners to issue this card)  Receive gift or cash worth of VND 200 – 300 thousand on their birthday or New Year event  Receive discount for trading fee  With Diamond Class:  Other than interests like Golden Class received, Diamond Class will have more interests by following:  Receive special care from senior brokers of the Company 58  Receive gift or cash worth of VND 300 – 500 thousand on their birthday or New Year event  Be invited to Customer Conference organized by the Company (once a year in Hanoi) 5.2.3 Improve Tangibles First of all, the Company should hire a designing consultant that helps the company in arranging and decorating trading floor as well as working space Regarding technology, the Company should upgrade more its current IT system in order to improve the effectiveness of its website and to establish a comprehensive data and document system that all staffs can easily to access As research in this thesis and referring to other securities company, it is easy to realize the important affection of technology in service quality and ability of providing new service Currently, a large number of securities companies have the latest IT system with many remarkable features that support the customer better and help them to trading online faster And thank to this competitive advantage, they are attracting a lot of customer of others securities companies Because of ability to loosing customers, the Company must try more in upgrading IT system that help in improving the speed of ordering for customers In addition, although website of the Company has been upgraded in recently, information in the website is still quite poor and not update Therefore, the Company should recruit a staff, who will responsible for managing information on the website to ensure that information is update constantly and consistent in performance 5.2.4 Other recommendations  Restructuring: The Company may enter in cooperation or joint venture with well known securities firms in the world to acquire technology as well as management experiences 59  Applying ISO 9001-2000: In Vietnam, customers are more and more interested in quality of products or services and require the quality is at the highest level They want to be met their demands at presents as well as in the future By getting Certificate of quality management system ISO 9001 – 2000, the Company will satisfy the demand of customers through accomplishing principles, include: - Focusing on customers - Provide leadership - Involve the people - Use a process approach - Take a system approach - Encourage continual improvement - Get facts before deciding - And last, work with suppliers Applying ISO 9001-2000 Certificate will help the company maintain the quality of services competitive advantage the other companies in a hard environment as now 60 SUMMARY Improving customer satisfaction in securities company in general and in brokerage service in particular is really an important task If the Company makes customers satisfied, they might be more loyalty with the Company Moreover, making customers satisfied meant that the Company has created a good image in their mind that helps the Company in seeking and attracting more new customers The research examples the level of customer satisfaction on brokerage service of VNS Company The empirical results show five dimensions affecting to customer satisfaction include tangible, reliability, assurance, responsiveness and empathy Means of these dimensions except reliability (4.1) are from 3.49 to 3.95 It meant that customers were not satisfied with the Company’s service Consequently, level of satisfaction on the Company’s brokerage service is not high From the result, it can be seen that responsiveness have the highest impact on customer satisfaction, next is reliability, empathy, tangible and the lowest impact dimension is assurance The company want to improve customer satisfaction, it is necessary for them to put priority on responsiveness, then reliability With purpose of being one of top 10 best securities company in Vietnam Stock market, it is essential for managers of the company to seriously examine their service quality and customer management system In addition, they must also consider that their performance measures now have to place a value on better responsiveness to customer needs These measures and changes can be expensive in terms of employee time and effort but the managers of the Company have to find out the ways to overcome 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Evaluate overall customer satisfaction on VNSC’s brokerage service Figure 4.10 Satisfaction measurement Source: Surveyed by author Overall, customer satisfaction at the company? ??s brokerage service. .. dimensions that affect customer satisfaction  Analysis and assess the customer satisfaction on VNSC’s brokerage service  Recommendations in order to improve customer satisfaction for the Company. .. overview the company? ??s brokerage service Chapter 4: Customer Satisfaction at VNS? ??s Brokerage Service Figure out factors that make the customer feel satisfied based on attributes of service quality