This is the case about SKY Telecoms- South Korean mobile phone company and Curled an independent social networking company site that was founded by a few college students and how they merged together to create social connectivity platform. The article talks about the failures related to localization, customer dissatisfaction, great completion in the industry, and relatively high user turnover rate. To improve Actuator networking performance and to secure user loyalty to SKY Telecoms a mobile Covered was introduced. This proved to be a success the numbers indicate the fact clearly.
The main problem that is going to be analyzed in this paper is: how to grow the company and retain the customers. The aim of the paper is to give alternative solutions to solve this problem based on the theoretical framework. This will be done by defining situational analysis, problem identification, theoretical survey, and by analyzing an article Keyword: Creating and Capturing Value in a Social Network (Sunnis Guppy & Sandman Han). Then few alternative solutions will be recommended, from which only one will be suggested as the most suitable. Authors of the paper parts:
Introduction- Devil Auxiliaries Situation analysis- Devil Auxiliaries Mind Map- Emilie Party Problem identification- Emilie Party Theoretical survey- Karri Attitudinal Article summary and questions for the exam- Valorizes Sediments and Armadas Skimpiness Evaluation of the alternatives- Valorizes Sediments and Armadas Skimpiness Suggested solution- Valorizes Sediments and Armadas Skimpiness Conclusion- Devil Auxiliaries References- All Situational Analysis TO look in to identify the problem and get a general idea Of the company s situation a SOOT analysis for SKY Telecoms Keyword was carried out.
Upon looking in to strengths of Crossword’s it is clearly visible that launching mobile Keyword app was an excellent choice. Nowadays consumers are becoming more and more technology aware and on hand applications are becoming a must have. Taking in to account the fact that the company has a wonderful field experts and is an expertise rich company, which makes Keyword a unique user experience, but also a mobile version of it also contributes to the pleasure of usage. The diverse content that is on offer there – allows the user to have their personal nymphomania and club APS.
The users are getting coked on the messenger and file sharing features that the program has on offer, this creates a user lock in, opening up an opportunity for loyalty. Another strength of this program is that is reliable. Personal information is required for registration therefore this limits the chances for fake profiles. Also all the content is classified into categories- this makes it easier to find what you are looking for in the wide spaces of the web. The main weakness that can be stumbled across in relation to Keyword is the communication restriction barrier.
The fact that the program is available only in two engages which are Korean & English makes it very limited audience service, it rules Out the possibility of contacting friends from other parts Of the world. Another weakness that can be picked up is the overload of features, which makes it difficult to work quickly with this soft program. There is an available opportunity for global expansion. Taking into account the language and regional barriers, an opportunity for expansion in to the wider horizons may be identified.
Conquering international markets is not an easy task, however knowing that the company has great experts in the field, if done right it’s mound to succeed. Also there is an opportunity available for creating a unique, functional application that would set the program apart from all the competition out there. Treats that may be facing the company are changing user attitudes and emergence of competition. Users are constantly seeking for new trends and like to be kept in the loop on the latest technologies out there.
They always seek for better, quicker and more efficient ways to interact with each other and their audiences. Therefore it is only natural that the competition in this industry is extremely high. There is always a treat that the intention will come up with a better product than yours and you will be left stranded. Therefore a constant investment in fast pacing industry and development of new products is crucial. Figure 1. 1 SOOT Analysis Problem identification After analyzing the case our group identified two main problems. First problem was related with customer saturation.
According to “Keyword” case this company was facing saturation with over 21 million users and almost 90% penetration in its target market. Second problem was that users getting tired of buying virtual items and decoration of their misinforms also many seers did not want to pay real money for virtual items. These two problems was caused by other competitors and entrance of new players in the market such as Never, Google, Youth and etc. Despite all problems the CEO Hung-Chula Jog started looking for new ways to provide value to its users and customers.
In March 2007 Keyword launched its upgraded version and later was created the new media platform. While these additional values were created they also had to decide which revenue model to use. So looking into this case we can stay that Keyword usage is declining also it needs to re- engage its customers, find a way to capture new value and growth the company. All in all the main problem could be formulated: how to grow company and customer retention? Mind Map This mind map has 3 main aspects: users, values and challenges. The Osborne user bubble consist of user satisfaction, motivation and customers segmentation.
All these aspects will help to identify customers and show how to retain clients. User satisfaction and motivation are one of the most important aspects in order to attract the sort of customers you want. According to “Commonly”case after many years of using and buying omissions, users were getting bored of this activity. These two problems reduced activity among users, according to Icy. World of the 21 million registered users, only 5-6 million users logged in 2-”3 times per week. So if company want to attract more users and motivate them it has to be done by introducing new features or new ideas.
Second bubble is capturing values which consist of mobile networking, paid items (virtual items, music) and advertising. The CEO Hung-Chug Jog was evaluating those 3 options for gaining more revenue. First option is paid items and the two largest categories of these items were virtual teems and music. These two items is expected to boost sales so company should focus of how to increase and improve system for customers. One more important thing which could bring more value is mobile networking. We all know that mobile social networking for business is going mainstream not in the future, but now.
So every company should improve their mobile network. And the last branch is advertising which has a largest growth potential. Also good advertisement has a lot of advantages such as expansion of the market, increases consumption, fights competitors and etc. The last branch is made for challenges faced by Keyword company. We defined three challenges: competition, consumption and service needed. According to case the CEO Hung-Chula JOG needed to consider how to increase consumption and what services needed for Keyword in the future- the next Namespace, Google, Amazon or a combination of these.
The last challenge faced was competitors. We all know that to be to different from competitors on the market is an important thing in ensuring wealthy future of your company. Usurer RESEARCH AND THEORY FRAMEWORK More and more companies are faced with the problem of customer retention and business growth. Customer retention is crucial to building and rowing your business. According to the Harvard Business School: increasing customer retention rates by 5 percent increases profits by 25 percent to 95 percent”. So it is very important to evaluate a loyalty strategy because it may increase a firm’s profit.
One of the main theory appropriate and topical to the case of “CCNY. Overlord: Creating and Capturing Value in a Social Network” is Managing Loyalty and Profitability (V. Kumar & Breath Raja, 2009). The main idea of this theory is to select necessary customer and then manage them by creating the profitable loyal customer. Firstly, Keyword should vivid their customers into segments based on (short-term,long-term) loyalty and (high-low) profitability. In this theory customers are segmented into four categories : butterflies, true friends, strangers, barnacles. Each loyalty segment has a different attitudes and movies.
So in managing these segments , company should use different strategies to make maximum profitability. Butterflies – customers which staying for the short time but offer high profit for the firm. They try to avoid long-term relationships, by finding better deal. The main mistake in order to managing them – invest in them. Moreover,the est.. Way to manage them is to enjoy their profit while they find the appropriate instant to stop investing in such customers. True friends customers who are satisfied with the firm’s offers,also want to have long-term relationships and can make a substantial profit.
These are the truest of loyal customers. Thus, they buy constantly and regularly. The best way to manage this segment is to create a good relationship with customers and respect their attitudes, delight them. So true friends are the most valuable customers. Strangers – customers who have a short-term relationships and provides low profit for the company. So this segment of customers is not loyal for Keyword. Transaction-oriented customers. The best way to avoid these customers is to identify them early and do not create relationship.
Barnacles- customers who offer low profit for the company ,but staying for a long time. So it is not the best choice for investments because they generate low profit. However, when they are properly managed, they can bring profit for a company. In order to do so, companies should identify where is the main problem: a small size of wallet or a small share of the wallet. Keyword should analyze which customers are deserved of retention efforts. But due to high profit and long- term relationship the most promising option for the company is true friends.
So in order to have a successful strategy,CNN. Overlord should ponder relationship marketing as a tool. Evaluation of the alternatives After we identified the problem, we thought about possible solutions. Here we provide three alternative solutions: Alternative (1) is to continue selling paid items In 2006, paid items accounted for 72% of CCNY. Overlord’s revenue. The two largest categories of these items were virtual (or digital) items, and music. Music accounted for 30% of paid items in 2006. At that time users downloaded songs to create background music for their misinforms.
The songs purchased in Keyword could only be used for background music on misinforms. Advantages of the alternative: Keyword could introduce online music shop because there is potential that people would start buy music not only for theirs misinforms background but for their self-listening. For example the popularity of music downloads was best illustrated by the success of tunes. So it would help to increase revenue. Disadvantages of alternative: Many executives felt that the item-based model had reached its potential. Many users have already lost interest in the existing digital items.
It is hard to expect much greater profitability from item sales in the future. Alternative (2) is to make Keyword available for smartness The smartness demand is growing quickly and people AR replacing computers, so Osborne started Mobile Keyword, where users could connect to their misinforms by mobile phone. Revenues from this SE;CE were shared between the mobile carrier and Keyword. By 2006, Mobile Keyword had 1. 3 million users. Advantage of alternative: More and more people are using smartness for social networks rather computers.
Users are not sitting in one place, always moving somewhere and this application would change this situation, because people could use Keyword on their way. Disadvantage of alternative: Experts believed it might be three to four years before mobile networking became mainstream because of the difficult software and poor quality of user interfaces at that time. Alternative (3) is to use more online advertising CCNY. Overlord launch advertising possibilities in their portal. But to not frighten users company invented “Happy Click’ program. This program, paid users for each month they displayed an ad on their misinforms.
Advantages of alternative: More ads means more profit for the company. Keyword pays its users Covered money, which could be used to buy digital items from Caw. Troll. Disadvantages of alternative: Company started as a “clean community’ with no ads, so it can have negative impact to customers, because too much ads on website can annoy and lead to decreased number of customers. Scientific In order to analyze this particular case the paper uses an article from The Hawthorn Press “Does relationship marketing improve customer relationship satisfaction and loyalty? “(Andrea Levering, Veronica Alexander, 2006).
The article investigates the relationship marketing (ARM) strategy of a retail bank and analyses customer relationships either they were strengthened through perceived improvements in the banking relationship or not. Moreover, article approach how customer loyalty (CLC) towards the bank is increased related with improvements in ARM. Relationship marketing ARM thus aims at increasing customer profitability while providing better services for customers. Several studies have empirically demonstrated a positive association between ARM strategies and business performance (Naiad et 1999; Paltrier and Espaliering, 2005).
Customer loyalty (CLC) is a behavioral tendency to choose one brand over all others, instead due to satisfaction with the product or service. Also, CLC stimulates a comfort, consistently shopping, greater share of wallet and feel positive about shopping experience. In addition, helps to attract consumers to well known brands instead of a competitive environment. Relationships and loyalty is important for a bank, because of keeping their current customers and maintain market share. Moreover, ARM and CLC is highly related with profitability.
Numerous studies have shown positive links between loyalty and rim profitability (Anderson et al. , 1994; Hallowed, 1996; Richened, 1 996; Sylvester and Cross, 2000). Further, relationships and loyalty from customers are more beneficial form company, because retain customers is cheaper then look for a new ones, what leads to lower costs and generate bigger profitability. Method Article investigates customer relationship satisfaction, customer-perceived improvement in the relationship during the past 4-5 years, and customer loyalty towards the POP Bank Group.
POP Bank Group, in this study internally divide customers into three segments: The age criterion is used because young customers often have not been able to reach high levels of volume, profitability, or wealth, but may have great potential for the future. ] Segment 1 Bank’s most profitable, highest priority customers, or have the highest business volume or wealth. Segment 2 Customers that have a certain volume or profitability (less than Segment 1), or are younger than 26 years old. Segment 3 Customers are at least 26 years old, have a smaller volume than the other segments and are less profitable than the other segments.
To keep relationships with Segment 1 all first line employees at the bank come responsible for a certain number Of these clients. The goal was to identify the need of costumers and to understand their future perspectives. To reach goal employees had to keep continuous contact with each customer, approximately twice per year . To remain staff active, motivated and reach objectives for this additional service company introduced bonus system. For Segment 2 company decided to contact by telephone and offer different types of long-term savings, such as mutual funds.
However, they are not offered personal appointments and no continuous contact is kept with these customers in order to map their needs. Because Segment 3 customers were generally unprofitable, bank goal was to increase the profitability or at least decrease the unprofitably. To minimize time amount spent on these customers and reduce the relationship costs, they were offered to use self-service options, such as online banking. After implementing ARM boost Strategies Company started a survey which goal was to identify changes to customer’s loyalty and satisfaction with the company?
Data was collected from a sample of 947 customers by sending questionnaire. Survey findings was not bad. Customers mostly evaluated ranging from 3. 45 to 4. 8 on a five-point scale. Unfortunately, there was no visible difference in Segment 1 and Segment 2 evaluations, despite the fact that there were much bigger efforts to make Segment 1 feel more served then Segment 2. Loyalty of Segment 1 didn’t increased. Moreover, results showed that loyalty in Segment 1 and Segment 2 depends more on current level of relationship satisfaction that on perceived relationship improvements.
In case, there are few explanations for these survey results. One possibility is that customers from different segments differently understands the meaning of what should bank do to satisfy them. Most profitable customers, like Segment 1 are likely to expect highest quality service. Moreover, its a chance that other factors may have occurred which was not included in study, such as other banks relationships, customers service involvement and open ended questions in survey may mismatch results.
The positive effects of a ARM strategy on customer-perceived relationship satisfaction and loyalty have not been confirmed in this study. Looks like, ARM strategy works for company, because results are quite high, but this strategy was insufficient to improve most important for Segment 1 targeted goals. Therefore, bank should check their strategy for possible weaknesses. On the other hand, study has number of limitations which also affect generalization. Study was made on branch of POP Bank Group in Finland.
Case bank is located in small town, what means that it could be easier to create and maintain relationships in this area then in urban settings. Suggested solution By filling solutions table we came to decision that there is no right one decision for a company in this case. Moreover, according to table we can say that probably best solution is to keep paid items and focus on developing Keyword mobile application. On the other hand, these solutions do not guarantee success for a company.
It highly depends on company future vision how they want to position them self’s and what actions will be taken by competitors. Conclusion CCNY. Overlord social network analysis was useful for enlarging knowledge. We have gained awareness on how to grow the company and retain existing customers. Gained knowledge on customers retention effect, lifetime value. Not forgetting the importance of continues improvement, investing and learning of new technologies out there, staying ahead of the competition. In other words – the racial part of moving ahead of the times and changing together with the population.