Customer Satisfaction, Commitment and Customer Loyalty of Omantel

Introduction

Omantel is the first-ever telecom company that was established in Oman. The telecom company specializes in delivering telecom services to its customers. In addition, Omantel has developed itself as a crucial international hub by acquiring ten submarine cables within Oman (Omantel Press Release, 2019). As suggested by Leninkumar (2017), aggressive competition within the telecom industry has pressurized companies to find a competitive edge and sustainability in the market. The best way to do so is to invest in customer loyalty programs. The research established by Ngo and Nguyen (2016) depicts that customer satisfaction is found to have a significant influence on customer loyalty. Omantel recognizes the importance of loyal customers and thus expands on loyalty programs. The telecom company has improved its loyalty program called ‘Makasib’, and according to this improvisation, customers can redeem Makasib points for electronic vouchers. The points are then used for the promotional discounts of gadgets like tablets and smartphones. Mr Rawas, Manager Loyalty and Communication Management at Omantel, claims that upon using the internet, fixed-line and mobile services offered by Omantel, customers have an exciting opportunity to earn unlimited loyalty points. The loyalty points can then be used for discounts on many products purchased at Omantel outlets (Muscat, 2017). This essay explains the relationship between customer satisfaction, commitment and loyalty in the context of Omantel Telecommunications Company.

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Discussion

Although customer loyalty should not be interpreted as a distinct construct from customer satisfaction, researchers suggest that a conceptual overlapping occurs between the behavioural loyalty such as positive word of mouth and attitudinal loyalty (Watson, Beck, Henderson & Palmatier, 2015). Other than loyalty, customer satisfaction is also positively associated with customer commitment. Loyal customers are the ones who are satisfied with a market offering and make repeated purchases and show behavioural loyalty by spreading positive word of mouth regarding it (Umashankar, Bhagwat and Kumar, 2017). Companies have now started to invest heavily in ensuring customer loyalty. Similarly, Omantel also tries to do so by expanding its loyalty programmes and understands that it is also crucial to select effective mechanisms and techniques to measure customer loyalty.

The research established by Mellens, Dekimpe and Steenkamp (1996) shows that a critical aspect of loyalty programmes is the ‘decision-making unit’. Brand loyalty is described by the purchase behaviour of a decision-making unit which could be a household, a firm or a person, indicating that the decision-making unit does not necessarily have to be the actual buyer. This means that even though a decision is made mostly by one person of a household, other family members do have a direct or indirect say in the decision-making process. Along the same lines, the switching behaviour of customers is often associated with this marketing concept. Hence, as different family members have diverse needs, a company must consider the diversifying needs of a household to ensure brand loyalty (Tabaku and Zerellari, 2015). Omantel recognizes the importance of this marketing concept and thus offers numerous rewards in its loyalty programmes in an attempt to cater to these varying needs. The many rewards offered by Makasib loyalty programme are bill discounts, international minutes, cash vouchers, data usage and free on-net minutes (Zawya, 2013).

Another type of satisfaction is referred to as transaction-specific satisfaction which also has a positive and direct relationship with loyalty (Bodett, 2008). This type of customer satisfaction suggests that repurchasing decisions are directly influenced by transaction-specific satisfaction, mainly when the last transaction has led to exceptional performance. The marketing model depicting such a relationship is referred to as the ‘Mediation model’ (Nyadzayo and Khajehzadeh, 2016). According to this model, even if a customer has experienced dissatisfaction from a previous transaction, he or she will still return to the same service provider. Correspondingly, this is because the overall satisfaction is found to play a mediating role between attitudinal loyalty and transaction-specific satisfaction (Gao & Lai, 2015). Thus, negative reviews on one reward offered by the ‘Makasib’ loyalty program do not guarantee overall dissatisfaction. The dissatisfaction of a loyal customer on ‘bill discounts’ reward of the Makasib loyalty program does not lead to customer disloyalty. Correspondingly, this is because overall satisfaction gained through transaction-specific satisfaction of the other four rewards of the Makasib programme act as a moderator.

Research has revealed that the gap model of the service quality, also referred to as the customer satisfaction framework, has a close association with customer loyalty (Bowen & Chen, 2001). The model shows a gap between the expected service and perceived service. The researchers explained that companies build loyal customers by taking help from the gap model. Along the same lines, Bacal (2020) claims that customer satisfaction increases as the gap between the expected and perceived service decreases and vice versa. Omantel, upon realizing the significance of a lesser gap, continuously revises its loyalty programmes. The telecom company has recently initiated the e-vouchers in its Makasib loyalty programme, which allows the customers of Omantel to attain higher points at a faster rate. The expansion in the benefits is done so that the gap between the expected service and perceived service decreases. The Makasib programme now has a wide range of valuable options so that the requirements and expectations of customers are met better. Consequently, this eventually leads to customer satisfaction which translates into customer loyalty.

Intense competition in the telecommunications industry in Oman is resulting in shifting loyalties of the customers (Atluri, Dietz & Henke, 2017). Therefore, telecom companies around the world are focusing on improving the service quality to ensure customer loyalty, which is the primary factor that allows the attainment of a competitive edge over the competitors (Ashraf, Ilyas, Imtiaz & Tahir, 2017). The SERVQUAL model is an effective marketing tool used by businesses to capture and evaluate the service quality experienced by consumers. Such a model is useful in determining the shortcomings within a service or product which can be improved over time. The focus of the SERVQUAL model is on the needs of customers. The research established by Belwal and Amireh (2018) reveals that out of five SERVQUAL dimensions known as reliability, assurance, empathy, responsiveness, and tangibles, assurance and reliability dimensions have a positive relationship with the attitudinal loyalty. Correspondingly, this is because the assurance and reliability dimensions of the SERVQUAL models have a strong influence on the loyalty of telecom customers of Omantel. Moreover, the study also claims that the other three dimensions of the SERVQUAL model named as tangibles, empathy and responsiveness have a direct relationship on behavioural loyalty of the telecom customers. Behavioural loyalty is effective in preventing customers from switching their telecom brands in the long-term. Hence, it can be deduced that telecommunication companies that wish to secure better longitudinal and behavioural loyalty of customers in the long-term must focus on all five dimensions of the SERVQUAL model.

The research generated by Kaura, Prasad and Sharma (2015) shows that the significance of loyal customers can never be overrated. Similarly, the above analysis suggests that loyal customers are crucial for the success of an organization, and this loyalty is a product of customer satisfaction. The evaluation of Omantel reveals that the company is already investing in ensuring customer satisfaction and loyalty. However, the organization has room for improvement and thus, recommendations for building customer satisfaction, loyalty and commitment are discussed below.

Omantel must focus on the five dimensions of SERVQUAL to improve customer loyalty. As per the research conducted by Devesh (2019), the reliability dimension of the SERVQUAL model can be increased by positive word-of-mouth of the customers regarding the services of Omantel. Mystery shopping is also a relatively prominent and effective marketing technique of measuring service quality. Therefore, Omantel can hire an undercover customer or agent to hire its services, rewards and benefits on the dimensions of the SERVQUAL model. Another way of measuring customer loyalty could be post-service ratings (Vogus & McClelland, 2016). Omantel can ask the customers to share explanatory feedback with the telecom company right after the service is delivered. Correspondingly, this will help the company in pinpointing the discrepancy areas and improve their service quality and eventually, customer loyalty (Morgan & Govender, 2017).

Follow-up survey is another marketing technique sent in the form of Google forms etc. Customers who have a fresh experience of Omantel’s services and products can be asked to fill the follow-up survey and help the telecom company in improving customer loyalty and satisfaction. Social media monitoring in the present time can also help Omantel in identifying the areas of improvement. Customers often give feedback on the website in the FAQ section (Okwunma, 2019). All these marketing practices can aid Omantel and other such companies in reducing the gap between the expected service quality and perceived service quality (Paul, Mittal & Srivastav, 2016).

Similarly, one of the most useful ways of establishing loyal customers is to benchmark scores for the services that would enhance customer loyalty (Zhang, Wang & Wang, 2016). This technique allows companies to pinpoint the most effective practices with the help of continuous comparisons which are then selected as performance goals. Hence, Omantel can use this technique to increase customer loyalty. The telecom company must identify the score of customers who would return to the company over and over again. These scores of the loyal Omantel customers can then be used as the benchmarking goals in ensuring additional loyalty.

Researchers Rundle-Thiele and Bennett (2001) in their loyalty approaches and their application on different markets show that to enhance customer loyalty, companies must be able to interpret varying market types. Markets in which various companies operate are different from one and another. The nature of these markets shows that the measures and techniques used to capture loyalty must be distinctive for different markets due to varying levels of involvement, switching and risks costs associated with them. Therefore, marketing practitioners must adopt distinct loyalty techniques for these markets. Omantel belongs to the telecom sector where the market is unstable, and customers have several options to choose from, such as Etisalat, Saudi Telecom, Sawa, Thuraya, Zain, MTN Group, NOORSAT, Telcom, Kalaam and many more (Globe Newswire, 2020). Hence, the switching costs are low as all these telecom companies heavily invest in generating customer loyalty through numerous benefits and rewards. Therefore, Omantel must research the market dynamics before selecting loyalty measures.

Figure 1: Strategies to be used by Omantel to enhance customer loyalty, satisfaction and commitment

Conclusion

Relationship between a company and its customers is a central aspect of the relational marketing approach. Companies have now understood that attracting new customers is costly than retaining the existing ones. Customer loyalty and customer satisfaction are two marketing concepts that have gained increasing popularity in theory and practice. The mediation model links the transaction-specific satisfaction to customer loyalty through a mediator called ‘overall satisfaction’. The above analysis reveals that loyal customers are the less price-sensitive ones, make repeat purchases and buy additional products and services from the company they are loyal to. Moreover, customer loyalty is found to be positively related to customer satisfaction. Amidst increasing and fierce competition, companies have intensified their efforts in ensuring customer loyalty because acquiring new customers is costly for organizations than retaining the current ones. Omantel understands the significance of customer loyalty on profitability and has expanded its loyalty programme Makasib. Recommendations for measuring the customer loyalty are also provided. Omantel can use benchmarking and SERVQUAL marketing model in decreasing the gap between the expected service quality and perceived service quality. In addition, Omantel must take help from the ‘mediation model’ and focus on the overall satisfaction of the customers to improve the customer loyalty.

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