LV Thạc sỹ_Customer satisfaction and retention at Seabornes hanoi branch fedex agent

i ACKNOWLEDGMENTS I would like to express my deepest gratitude to my supervisor, Doctor … Throughout the whole process of developing this thesis, I have always received his excellent guidance and valuable comments for improvements the study I express my sincere thanks to teachers and staffs of NEU Business School, they have given me useful knowledge, support and good conditions all procession of study I would also like to thank to customers of Seabornes and DHL, who have been using expressing service of the two companies and I have never forgot to send thanks to my colleagues They have given me data to finish the thesis Many thanks to my classmates at E-BBA1 for help and useful discussion And last but not least, I would like to express my deepest gratitude to my parents for their encouragement and support throughout my study ii TABLE OF CONTENT EXECUTIVE SUMMARY CHAPTER I INTRODUCTION 1.1 Rationale .3 1.2 Research Objectives 1.3 Research questions: 1.4 Research Methodology .5 1.4.1 Research Process 1.4.2 Data Collection 1.5 Research Scope 1.6 Research structure CHAPTER II THEORETICAL FRAMEWORK OF CUSTOMER SATISFACTION AND RETENTION 2.1 Loyalty business model 2.2 Factors of the loyalty customer retention 2.3 Industrial customer satisfaction 10 2.3.1 Business to Business (B2B) satisfaction 10 2.3.2 Service Quality Dimensions: .10 CHAPTER III .13 CURRENT CUSTOMER SATISFACTION AND RETENTION 13 OF SEABORNES HANOI BRANCH – FEDEX AGENT .13 3.1 Overview of Seabornes and its business 13 3.2 Factors of current customer retention at Seabornes Hanoi Branch 16 3.2.1 Value from services of Seabornes (PRICE): .16 3.2.2 Product uniqueness and suitability: 17 3.2.3 Loyalty mechanisms: 18 3.2.4 Ease availability 21 3.2.5 Exit barrier 23 3.2.6 Delivered quality of services versus customer expectation and customer service 23 3.3 Summary of weaknesses 39 CHAPTER IV .45 RECOMMENDATION TO IMPROVE CUSTOMER SATISFACTION AND RETENTION FOR SEABORNES – FEDEX AGENT 45 4.1 Orientation of company about Customer Satisfaction and Retention until 2020 .45 4.2 Recommendation for improving Customer Satisfaction and Retention 46 4.2.1 Improving the service quality 46 4.2.2 Human resource quality improvement 48 4.2.3 Applying customer satisfaction measurement (CSM) of its performance 49 4.2.4 Strengthen communication with customers 50 4.2.5 Strengthening call center to better serve customers 51 iii CONCLUSION .52 LIST OF FIGURES Figure 2-1: Virtuous Circle Figure 2-2: The Perception – Importance Grid Model 12 Figure 3-3: Score Chart .27 Figure 3-4: The Mean Gap Scores by five dimensions 28 Figure 3-5: Quadrant for Perception - Importance Chart .28 Figure 3-6: Quadrant for Perception – Importance for DHL .38 iv LIST OF TABLES Table 3-1: Three class of business customer group 14 Table 3-2: Seabornes Performance 15 Table 3-3: Seabornes’s Privilege Program 19 Table 3-4: The INDSAT - IMP Score 25 Table 3-5: The Mean Score 27 Table 3-6: The INDSAT – IMP Score for DHL 36 Table 3-7: The Mean Score for DHL 38 EXECUTIVE SUMMARY Seabornes Co Ltd is one of representative agent of FedEx in Viet Nam which does business in the expressing service In the recent time, Seabornes has suffered from continuous customer leave and dissatisfied Therefore, it must take into action immediately or all customers will come over to its formidable competitors: DHL, UPS, and TNT Established in 1996, Seabornes has been awarded as one of the leading International Freight Forwarders in Vietnam, and effectively managed by professional people who have been in the managerial positions in the International Freight Forwarding Industry for decades Seabornes is always committed to providing clients the most reliable and cutting-edge services Their services include Seafreight, Airfreight, Multimodal transport, Customs brokerage, CFS Warehousing, Packing, Cargoes consolidation, Project cargoes handling, Personal effects and Household removal With the goal of becoming a leading expressing service provider in Vietnam, Seabornes has always focused on being innovative and customer-friendly Furthermore, doing business in service industry means customers always take the priority; henceforth, Seabornes considers customer factor as the main sources for the prosperity and sustainable development In this thesis, the author study Seabornes’s customer satisfaction and retention based on Industrial Satisfaction (INDSAT) of Homburg, C., Rudolph, B., International/Industrial Marketing and Purchasing Group (IMP) (Woo, K., Ennew, C.T., 2005) and loyalty business model of Robert C Blattberg, Gary Getz, and Jacquelyn S Thomas, regarding customer retention to seven factors and Jill Griffin ‘s “7 stages to grow loyal customers” With the scope of the thesis, the author determined these following objectives: - Systemizing the theoretical background of customer satisfaction and retention to support the assessment of Seabornes – FedEx‘s customer retention - Reviewing the current situation Searbones – FedEx in and their doings for customer retention and satisfaction - Analyzing the situation of customer satisfaction at Seabornes using INDSAT and IMP’s dimensions - Finding out and evaluating factors which impact on customer satisfaction - Suggesting possible organizational and economical solutions for Seabornes – FedEx to earn and keep loyal customers The recommendations will be developed in the base of improving service quality, lower price and increase after-sale service A survey was carried out with 100 enterprises using services of Seabornes and DHL-VNPT Key findings of the survey indicated that: - Physical evidence is not trustworthy enough - The customers dissatisfied with company’s ability to provide service as promised - Complaints Handling is not good enough, both at professional and time aspect - Customers did not feel secure with both Seabornes service and order processing procedure in term of the safety of the content of cargoes (goods) - There is urgent need in improving communication skills for call-centers’ staff and feedback system (both internal and external) - Customers want more financial reports (for new or prolonging contracts) and up to date service charge rates (extra fee for petroleum, change in international charge rates) monthly or quarterly in both offers, brochures and on the website - Customers want diversified services from Seabornes also include prepurchasing, after-sale - The retention activities are not effective The author, then, recommended some suggestions for improving these shortcomings above, specifically, by improving the service quality, the mechanism to keep and build customers’ loyalty, human resource quality Furthermore, applying customer satisfaction measurement (CSM) in quality of service could be worthy to be considered in order to have a reasonable system of criteria to evaluate company performance And to help the customer relationship management system to be efficient, Seabornes should strengthen communication with customers as well, says, to get useful yet honest feedback In conclusion, it’s crucial to make some change in the management system, especially the organization to fulfill the hole made of missing a proper responsible department, the author, hence, took the liberty to propose a slight change of Seabornes’s organization structure, call center in particular CHAPTER I INTRODUCTION 1.1 Rationale Seabornes – FedEx customers are divided into main groups: business customer (platinum, gold, silver), personal one and new one In this thesis, the author only focused on analyzing the current customer retention policies of Seabornes, followed by factors, and measuring organizational customers’ satisfaction with the aid of Industry satisfaction (INDSAT) and International/Industrial Marketing and Purchasing Group (IMP) dimensions The detailed figures were taken from customers’ point of view (expectation) and the reality (perception), hence deciding the importance of each items for proper priority and improvement The loyalty of customer is classified basing on the length of the contract, the volume of the packages and the frequency The organizational business group contains almost foreigner enterprises (normally FDI) who work in manufacturing industry such as: Foxcon, Fineline Steel, Samsung, and Sony… The usual goods to ship by this group are samples of components, fabrics, machineries and documents; due to the important of their function, these goods are taxed very high and inspected carefully by custom officer, therefore the earnings from them are great However, during the recent years, there was an ominous sign in Seabornes’s performance: the volume of shipment come from this group of customer had seriously decreased by 2.5%, equivalent to 14,800 packages in one year (from June 2011 to June 2012), comparing to the increase of 9.9% in 2010-2011 and 10.1% in 2009-2010; as the result, Seabornes – FedEx had suffered a significant loss of revenue equal to 6% from 14% in 2011 The operating income in dollar changed from 101,000$ in 2011/2010 to 32,000$ indicated a crucial problem in Seabornes – FedEx performance, required the board of management to act immediately After a survey on customer satisfaction and internal conversations made with department’s people in command, the author found out that the problems lying in both technical services (what is provided) and functional services (how the services were provided) With the portion of 61% of dissatisfied customers on functional services, this aspect, therefore, was decided to take the first in line for improvement It’s seemed that the dimensions of time (orders handling), price (products/services), interaction with customers (interact with internal staff and sales force) should be taken into serious consideration Other while, customers of Seabornes now are expecting more to be provided, which means there are more value-added services need to be added in company’s list, for instance, container packing (FCL: full container load and LCL: less than a container load) and terminal handling center might them well In shorts, the thesis has tried to find out the most relevant actions to solve the current shortcomings Seabornes now is facing in organizational customer retention strategies and improving their satisfaction 1.2 Research Objectives The main objectives of the research are: - Systemizing the theoretical background of customer retention Reviewing the current express service markets, Seabornes – FedEx services and the ways they satisfy customers Analyzing the situation of customer satisfaction at Seabornes Finding out and evaluating factors which impact on customer satisfaction Suggesting possible organizational and economical solutions for Seabornes – FedEx to earn and keep loyal customers 1.3 Research questions: The thesis attempts to answer these following questions: - What dimensions/items influence Seabornes’s organizational customer satisfaction? - What is the importance of each item and how it relates to customers’ reaction? - How could Seabornes improve its identified shortcomings based on the current resources of the company? 1.4 Research Methodology 1.4.1 Research Process Theoretical Framework Secondary data In-dept Interview Seabornes Current Situation Recommendation for Improvement Survey Trends and Development Plan 1.4.2 Data Collection Secondary Data The secondary data was retrieved from previous researches to choose the most suitable tools, probably, to evaluate customer satisfaction level in Seabornes The other information was from company’s documents for the author to have an overview of Seabornes’s operation, especially financial reports to grasp the present standing of firm The sources of secondary data were: - Academic journals, articles on customer satisfaction and customer retention FedEx and Seabornes annual report 2010 – 2012 Previous market researches of express market Seabornes’s customer satisfaction evaluation report Primary Data In-dept interview: The author conducts depth interview with Director, Chief of Inbound section and Chief of Courier section, and staffs working at Storage section, Customer Delay Notification (CDN) department, and Station Agent section of Seabornes Besides, the author also conducted informal interviews with DHL and VNPT staffs and managers Survey: The author conducted a survey with sample of Seabornes present and former customers The questionnaires were sent to 50 enterprises using FedEx services and 50 enterprises using DHL services by email Surveyed enterprises were selected based on the customers list in Hanoi (Ba Dinh, Cau Giay, Dong Da, Hai Ba Trung, Hoan Kiem, Hoang Mai and Thanh Xuan District), Hai Phong (City and Do Son industrial park) and Bac Ninh (Tu Son and Tien Son industrial park) In Hanoi and Hai Phong city, the survey focused on small and medium enterprises, while big corporation and manufacturing company are almost located in the industrial parks 1.5 Research Scope - Contents: This thesis studies the customer retention at Seabornes – FedEx in Hanoi branch Time: The questionnaire surveys were conducted in 2012 Place: surveyed enterprises located in Hanoi (Ba Dinh, Cau Giay, Dong Da, Hai Ba Trung, Hoan Kiem, Hoang Mai and Thanh Xuan District), Hai Phong (City and Do Son industrial park) and Bac Ninh (Tu Son and Tien Son industrial park) 1.6 Research structure The thesis was structured into four main chapters - Chapter 1: Introduction - Chapter 2: Theoretical framework - Chapter 3: Current customer satisfaction and retention of Seabornes Hanoi branch – FedEx agent - Chapter 4: Recommendation on customer satisfaction and retention at Seabornes Hanoi branch – FedEx agent 51 4.2.5 Strengthening call center to better serve customers The call center is the place where customers get information about company and conversely, company wants to get customers feedback Seabornes Hanoi branch’s call center now has only staffs and half of them also work for CDN team which is rather weak structure and the workload is heavy Seabornes, hence, should hire more (at least 1) to deal with the new channels that mentioned above With the weight of approximately tons of goods per day (about 300 cargoes), each staff at call center has to take care of 75 cargoes for maximum If each cargo customer takes minutes for complaining, asking for instructions or getting consultancy for packages, the total working hours will be 6.25 out of common hours However, with the help of online system and internet, the number of average cargo for each staff could be diminished by a half, and significantly that two staff can afford to reply 100 complaints and questions by mail based on the FAQs Also the more detailed information about price list, procedures and instructions posted on the website can help the staff answers satisfy customers as well as indirectly reduce the rate of complaints by providing customers knowledge However, for the staffs serve customers better, a vigorous training on working process must be taken to boost the productivity of this section 52 CONCLUSION In this study, the author has combined models: SERVQUAL, INDSAT and IMP to pick out dimensions in evaluating organizational customer perceived and expected service quality, then pointed out the important shortcomings in Seabornes’ performance that must be overcome timely In expressing service, which has unique characteristics different from other services, organizational customers’ satisfaction is influenced by not only perceived service but the B2B relationship as well The author, hence, chose 18 specific items to demonstrate the special traits of this service in meeting organizational customers’ demand, after that, particularly estimated the importance of each item in an order for sequenced improvement Through surveys and interviews, the author found out that the retention strategies at Seabornes are weak and ineffective out of factors affect customer retention were proved to have some problems, except “uniqueness of products/services” and “easy availability”, which needs a thorough change on all over the system in order to retain big, loyal organizational customers, especially on the “privilege program” and “exit barrier” In conclusion, the author suggested some recommendations to improve the service quality, human resources quality, strengthen the internal and external communication channels The main activities focused mostly on the trainings which aim to raise the capability of staffs 53 SUPERVISOR’S COMMENTS ON E-BBA FINAL THESIS Student name: Supervisor Title of the final thesis: CUSTOMER SATISFACTION AND RETENTION AT SEABORNES HANOI BRANCH – FEDEX AGENT Date: 8/1/2013 Comments Rational of the research: Speed and quality are considered as competitive weapon in providing express services In this study the author applies appropriate theories and models of industrial customer satisfaction to assess customer satisfaction and retention at Seabornes Hanoi branch is necessary and significant Contents and structure of the thesis: There are three main chapters in the thesis beside executive summary, introduction and appendices In chapter two, the author reviews theoretical background of customer satisfaction and retention In chapter three, the author presents main studied results of customer satisfaction and retention at Seabornes Hanoi branch assessment In the chapter four, the author gives recommendations for improving customer satisfaction and retention at Seabornes Hanoi branch The thesis has a logical and suitable structure Student shows that he understands operation of express services and has ability to apply relevant knowledge into analyzing and solving practical business issues Applicability of the thesis: The thesis results are specific and useful for Seabornes Hanoi branch to take appropriate measures to better satisfy their customers Writing styles: Good, suitable professional research writing styles Supervisor’s signature 54 55 REFERENCES VIETNAMESE Hoang Thi Tuyet Mai (2011), “Customer retention at Viettel mobile in Hanoi”, master of business administration thesis Retrieved from “Chuyển phát nhanh tăng tốc” (14/09/2009) http://nhipcaudautu.vn/article.aspx?id=2536-chuyen-phat-nhanh-tang-toc Retrieved from “DN ngoại “đốt nóng” thị trường bưu Việt” (08/07/2012) http://www.tapchibcvt.gov.vn/News/PrintView.aspx?ID=26208 Retrieved from “FedEx Corporation” http://chuyenphatnhanh.info/fedex.html ENGLISH Austen, V., Herbst, U., Bertels, V (2011), Industrial Marketing Management, “When 3+3 does not equal 5+1—New insights into the measurement of industrial customer satisfaction” Chakrapani, C (1998), “How to Measure Service Quality & Customer Satisfaction: The Informal Guide for Tools and Techniques” p207-273D Flint, D.J., Blocker, C.P., Boutin Jr., P.J (2010), Industrial Marketing Management, “Customer value anticipation, customer satisfaction and loyalty: An empirical examination” Hagman, J., Sjöberg, E (2012), “The effects of beneficial attributes on satisfaction and loyalty in a B2B goods setting” Homburga, C., Rudolph, B (1999), “Customer satisfaction in industrial markets: dimensional and multiple role issue” Jill G (1995), Customer Loyalty Philip K (2000), Marketing Management Robert C B., Gary G., Jacquelyn S T., “Customer Equity: Building and Managing Relationships As Valuable Assets”, Harvard Business School Press Dr Shahin, A., “SERVQUAL and Model of Service Quality Gaps:A Framework for Determining and Prioritizing Critical Factors in Delivering Quality Services” 10 Woo, K., Ennew, C.T (2004), “Measuring business-to-business professional service quality and its consequences” 56 APPENDICES Appendix Questions for in-dept interview - What you think about customer retention strategies that Seabornes – FedEx is conducting? - Can you tell more about the expectation trend and figure in near future? - Have you examined your competitors thoroughly? If yes, what have you found about their doings? - What are the strength and weakness (of your sector) of your current service in comparison with the competitors? - Are there any possible solutions for better customer retention that you had thought of? 57 Appendix FedEx Customers Questionnaires Thank you so much for your help, I would like to know your expectations and perceptions about Seabornes – FedEx agent service quality Your help is very important to finish my thesis Respondent: Company name: Position: Telephone Number Email Address Based on your experience form using Seabornes – FedEx service, please indicate: On the left side, please show the extent to Seabornes – FedEx service quality which you expect On the right side, I would like to have your rate of current service quality, which you have perceived 1: the services meet any of the expectation or low perception 2: the services meet few expectations or quite low perception 3: the services meet average expectation or average perception 4: the services meet some expectations or quite high perception 5: the services meet every expectation or high perception Expectation Perception SERVICES DIMENSION Price/value relationship Service is provide as promised Equipments (conveyor belt, trolley, wheelbarrow, cart, motorbikes, vans…) Related information provided (instructions, price lists, brochures) 58 FINANCIAL EXCHANGE DIMENSION Accurate Taxation Financial reports exchange timely ORDERS HANDLING DIMENSION Reliability of order processing In time COMPLAINT HANDLING DIMENSION When problem occurs, provider responds to customer’s requests readily and quickly 10 Willingness of employee to help customers 11 Customers contact supporters easily INTERACTION WITH INTERNAL STAFF DIMENSION 12 Enthusiasm of employee when working 13 Employee explains to customer enthusiastically and politely 14 Call-service staffs listen to customer’s complaint and demonstrate understanding and concern INTERACT WITH SALESPEOPLE DIMENSION 15 Making the effort to know customers and their needs 16 Making customer feel insurance when buying service 17 The knowledge of salespeople of the services (range and usage condition) 59 18 Willingness to sharing individual information with customers Thank so much for your help! 60 Appendix DHL Customers Questionnaires Thank you so much for your help, I would like to know your expectations and perceptions about DHL - VNPT service quality Your help is very important to finish my thesis Respondent: Company name: Position: Telephone Number Email Address Based on your experience form using DHL - VNPT service, please indicate: On the left side, please show the extent to DHL - VNPT service quality which you expect On the right side, I would like to have your rate of current service quality, which you have perceived 1: the services meet any of the expectation or low perception 2: the services meet few expectations or quite low perception 3: the services meet average expectation or average perception 4: the services meet some expectations or quite high perception 5: the services meet every expectation or high perception Expectation Perception SERVICES DIMENSION Price/value relationship Service is provide as promised Equipments (conveyor belt, trolley, wheelbarrow, cart, motorbikes, vans…) Related information provided (instructions, price lists, brochures) FINANCIAL EXCHANGE 61 DIMENSION Accurate Taxation Financial reports exchange timely ORDERS HANDLING DIMENSION Reliability of order processing In time COMPLAINT HANDLING DIMENSION When problem occurs, provider responds to customer’s requests readily and quickly 10 Willingness of employee to help customers 11 Customers contact supporters easily INTERACTION WITH INTERNAL STAFF DIMENSION 12 Enthusiasm of employee when working 13 Employee explains to customer enthusiastically and politely 14 Call-service staffs listen to customer’s complaint and demonstrate understanding and concern INTERACT WITH SALESPEOPLE DIMENSION 15 Making the effort to know customers and their needs 16 Making customer feel insurance when buying service 17 The knowledge of salespeople of the services (range and usage condition) 62 18 Willingness to sharing individual information with customers Thank so much for your help! 63 Appendix 4: FedEx Pricelist FedEx Express Standard List Rates: FedEx International Economy Freight Rates Effective 1/2/2012 FedEx International Economy Freight Rates: Door-to-Door (DTD) Viet Nam Weight 151-999 lbs $6.59 1000+ lbs $5.94 Minimum Charge $995.10 FedEx International Economy Freight Rates: Drop-Off (DRP), Hold-atLocation (HAL), and Drop-Off and Hold-at-Location (DAH) Effective 1/2/2012 Weight 151-999 lbs $6.34 1000+ lbs $5.69 Minimum Charge $957.35 FedEx Express Standard List Rates: FedEx International Priority Freight Rates Effective 1/2/2012 FedEx International Priority Freight Rates: Door-to-Door (DTD) Viet Nam Weight 151-999 lbs $10.65 1000+ lbs $9.70 Minimum Charge $995.10 FedEx International Priority Freight Rates: Drop-Off (DRP), Hold-atLocation (HAL), and Drop-Off and Hold-at-Location (DAH) Effective 1/2/2012 Weight 151-999 lbs $10.40 1000+ lbs $9.45 Minimum Charge $957.35 FedEx Express U.S Standard List Rates: FedEx International Premium Freight Effective 1/2/2012 Weight 0-99 lbs $10.50 100-1,100 lbs $10.40 64 1,101 + lbs Minimum Charge $9.45 $43.00 65 Appendix 5: DHL price list Maximum recommended weight & size Viet Nam 1-5 Working days £34.95 £49.95 £54.95 £75.95 £135.95 £169.95 £199.95 Less than 0.5kg Between 0.5 kg and kg Between kg and kg Between kg and kg Between kg and 10 kg Between 10 kg and 20 kg Between 20 kg and 31 kg Incremental charge per 0.5 kg for volumetric weight exceeding 31.5 kg £45.95 £51.95 £59.95 £76.95 £129.95 £199.95 £254.95 £8.25 ... Current customer satisfaction and retention of Seabornes Hanoi branch – FedEx agent - Chapter 4: Recommendation on customer satisfaction and retention at Seabornes Hanoi branch – FedEx agent CHAPTER... CUSTOMER SATISFACTION AND RETENTION 13 OF SEABORNES HANOI BRANCH – FEDEX AGENT .13 3.1 Overview of Seabornes and its business 13 3.2 Factors of current customer retention at Seabornes. .. Freight Rates: Door-to-Door (DTD), FedEx International Priority Freight Rates: Drop-Off (DRP), Hold -at- Location (HAL), and Drop-Off and Hold -at- Location (DAH) and FedEx Express U.S Standard List Rates: