The Role of Customer Relationship Management on Performance of Water Utilities in Tanzania: A Case of Tanga Urban Water Supply and Sanitation Authority
Rashid Shabani Mwinjuma
ADM. NO: 221080018/T.16
A Dissertation Submitted in Partial Fulfillment of the Requirements for Award of the Degree of Master of Business Administration (MBA) of Mzumbe University
CERTIFICATIONWe, the undersigned, certify that we have read and hereby recommend for acceptance by the Mzumbe University, a dissertation entitled The Role of Customer Relationship Management on Performance of Water Utilities in Tanzania: A Case of Tanga Urban Water Supply and Sanitation Authority, in partial/fulfillment of the requirements for award of the degree of Master of Business Administration of Mzumbe University.
Accepted for the Board of School of Business
DECLARATIONI, Rashid Shabani Mwinjuma, declare that this thesis is my own original work and that it has not been presented and will not be presented to any other university for a similar or any other degree award.
This dissertation is a copyright material protected under the Berne Convention, the Copyright Act 1999 and other international and national enactments, in that behalf, on intellectual property. It may not be reproduced by any means in full or in part, except for short extracts in fair dealings, for research or private study, critical scholarly review or discourse with an acknowledgement, without the written permission of Mzumbe University, on behalf of the author.
AcknowledgementI take this opportunity to extend my special gratitude to my Supervisor Dr. Emmanuel Chao for his guidance, encouragement and patience in reading, correcting, re-reading and refining this work. Above all I thank God for good health and for getting me at this far.
DedicationI dedicate this dissertation to my lovely wife Aziza Mussa for encouragement, Management of Tanga UWASA as my employer for financial support and my parents for their love, concern, support, sacrifice and interest inspired me to achieve this goal.
AbstractThe study examined the Role of customer relationship management on performance of water utilities in Tanzania: A Case of Tanga Urban Water supply and Sanitation Authority. It had four specific objectives which are to examine strategies used by Tanga Urban Water supply and Sanitation Authority in enhancing customer relationship, to assess the contribution of customer relationship management in the effectiveness of Tanga Urban Water supply and Sanitation Authority, to assess perception of customers served by Tanga Urban Water supply and Sanitation Authority on services provided by the Authority and to examine challenges faced by Tanga Urban Water supply and Sanitation Authority in implementation of customer relationship management. The study used a case study design from which probability and non-probability sampling was used to sample 81 respondents from TANGA UWASA. Primary and secondary data were collected using questionnaires, interviews, observation and documentary review. It was found that TANGA UWASA uses various strategies to enhance customer relationship management which include integration of technologies such as online platforms to reach customers and other traditional ways like the use of suggestion boxes. Customer relationship management contributes towards effectiveness of TANGA UWASA through increasing in revenue generation and cost reduction. This was supported by 80.2 % of the respondents. 19.2% disagreed that customer relationship management contributes towards organizational effectiveness. On perception of customers on quality of services offered by TANGA UWASA 67% of the customers rated the services as above acceptable which includes good, excellent and exceptional. Criteria used to assess quality service include reliability, assurance, empathy, and responsiveness. Several challenges affect effective implementation of customer relationship management at TANGA UWASA. They include presence of untrained personnel in customer relationship management, presence of limited budget, technological challenges, bureaucracy and customer insufficient knowledge on their basic right. The study offers various recommendations in order to improve customer relationship management.
Table of contents TOC o “1-4” h z u CERTIFICATION PAGEREF _Toc523142388 h iDECLARATION PAGEREF _Toc523142389 h iiCOPYRIGHT PAGEREF _Toc523142390 h iiiAcknowledgement PAGEREF _Toc523142391 h ivDedication PAGEREF _Toc523142392 h vAbstract PAGEREF _Toc523142393 h viTable of contents PAGEREF _Toc523142394 h viiList of Tables PAGEREF _Toc523142395 h xiNo table of figures entries found.List of Figures PAGEREF _Toc523142396 h xiList of Figures PAGEREF _Toc523142397 h xiiList of Abbreviations PAGEREF _Toc523142398 h xiiiCHAPTER ONE PAGEREF _Toc523142399 h 1INTRODUTION PAGEREF _Toc523142400 h 11.1Introduction PAGEREF _Toc523142401 h 11.2Background of the study PAGEREF _Toc523142402 h 11.3Statement of the Problem PAGEREF _Toc523142403 h 21.4Main objective PAGEREF _Toc523142404 h 31.4.1Specific Objectives PAGEREF _Toc523142405 h 31.5Research Questions PAGEREF _Toc523142406 h 31.6Significance of the Study PAGEREF _Toc523142407 h 4CHAPTER TWO PAGEREF _Toc523142408 h 5LITERATURE REVIEW PAGEREF _Toc523142409 h 52.1Introduction PAGEREF _Toc523142410 h 52.2Conceptual definitions PAGEREF _Toc523142411 h 52.2.1Customer PAGEREF _Toc523142415 h 188.8.131.52Types of customers PAGEREF _Toc523142416 h 5I.Internal customers PAGEREF _Toc523142417 h 5II. External customers PAGEREF _Toc523142418 h 62.2.2Customer Satisfaction PAGEREF _Toc523142419 h 62.2.3Customer Relationship Management PAGEREF _Toc523142420 h 62.2.4Customer Care PAGEREF _Toc523142421 h 62.2.5Customer Satisfaction PAGEREF _Toc523142422 h 72.2.6Customer Retention PAGEREF _Toc523142423 h 72.2.7Customer Complaints PAGEREF _Toc523142424 h 82.2.8How to handle customer complaints PAGEREF _Toc523142425 h 82.3Benefits of Customer Relationship Management PAGEREF _Toc523142426 h 92.4The seven elements of service marketing mix PAGEREF _Toc523142427 h 102.5Challenges of Implementing CRM PAGEREF _Toc523142428 h 122.6Negative Theory PAGEREF _Toc523142429 h 132.7The Stakeholders’ Theory PAGEREF _Toc523142430 h 132.8Empirical Review PAGEREF _Toc523142431 h 142.9Conceptual Framework PAGEREF _Toc523142432 h 17CHAPTER THREE PAGEREF _Toc523142433 h 18RESEARCH METHODOLOGY PAGEREF _Toc523142434 h 183.1Introduction PAGEREF _Toc523142436 h 183.2Research Design PAGEREF _Toc523142437 h 183.3Population PAGEREF _Toc523142438 h 183.4Sampling techniques and Simple size PAGEREF _Toc523142439 h 183.4.1Probability sampling technique PAGEREF _Toc523142440 h 183.4.2Non-probability Sampling Technique PAGEREF _Toc523142441 h 193.4.3Sample Size PAGEREF _Toc523142442 h 193.5Sources of Data PAGEREF _Toc523142443 h 203.6Data collection tools PAGEREF _Toc523142444 h 203.6.1Questionnaires PAGEREF _Toc523142445 h 203.6.2Interview PAGEREF _Toc523142446 h 203.6.3Documentary Review PAGEREF _Toc523142447 h 203.6.4Observation PAGEREF _Toc523142448 h 213.7Data Analysis and Presentation PAGEREF _Toc523142449 h 21CHAPTER FOUR PAGEREF _Toc523142450 h 22FINDINGS AND DISCUSSION PAGEREF _Toc523142451 h 224.1Introduction PAGEREF _Toc523142453 h 224.2Profile of the Respondents PAGEREF _Toc523142454 h 224.2.1Gender PAGEREF _Toc523142455 h 224.2.2Age PAGEREF _Toc523142456 h 224.2.3Marital Status PAGEREF _Toc523142457 h 234.2.4Education Level PAGEREF _Toc523142458 h 234.2.5Working Experience PAGEREF _Toc523142459 h 244.3Organizational Strategies and Customer Relationship Management PAGEREF _Toc523142460 h 254.4Customer Relationship Management and Organizational Effectiveness PAGEREF _Toc523142461 h 294.5Customers’ Perception on Service Quality PAGEREF _Toc523142462 h 324.6Customers’ Perception on Responsiveness PAGEREF _Toc523142463 h 354.7Challenges in implementation of customer relationship management PAGEREF _Toc523142464 h 364.7.1Untrained personnel PAGEREF _Toc523142465 h 364.7.2Limited budget PAGEREF _Toc523142466 h 374.7.3Technological challenge PAGEREF _Toc523142467 h 384.7.4Bureaucracy PAGEREF _Toc523142468 h 384.7.5Customers’ insufficient knowledge on their rights PAGEREF _Toc523142469 h 38CHAPTER FIVE PAGEREF _Toc523142470 h 40SUMMARY, CONCLUSION AND RECOMMENDATIONS PAGEREF _Toc523142471 h 405.1Introduction PAGEREF _Toc523142473 h 405.2Summary PAGEREF _Toc523142474 h 405.3Conclusion PAGEREF _Toc523142475 h 405.4Recommendations PAGEREF _Toc523142476 h 41REFERENCES PAGEREF _Toc523142477 h 42APPENDENCES PAGEREF _Toc523142478 h 46QUESTIONNAIRE PAGEREF _Toc523142479 h 46INTERVIEW GUIDE PAGEREF _Toc523142480 h 50
List of Tables TOC h z c “Table” Table 3.01: Sample size PAGEREF _Toc523145274 h 19Table 401: Age of Respondents PAGEREF _Toc523145275 h 23Table 402: Respondents’ Working Experience PAGEREF _Toc523145276 h 25Table 403: Organizational Strategies on Customer Relationship Management at TANGA UWASA PAGEREF _Toc523145277 h 28Table 404: Table 4.4: Customer Relationship Management and organizational Effectiveness PAGEREF _Toc523145278 h 32Table 405: Customers’ Perception on Service PAGEREF _Toc523145279 h 36Table 46: Table 4.6 Challenges facing Customer Relationship Management PAGEREF _Toc523145280 h 39
List of Figures TOC h z c “Figure” Figure 201: Stages involved when dealing with customer complaints PAGEREF _Toc523144291 h 9Figure 202: Conceptual Framework, source: Researcher’s own construct. PAGEREF _Toc523144292 h 17Figure 401: Respondents Education Level PAGEREF _Toc523144293 h 24Figure 402: One of suggestion boxes at TANGA UWASA PAGEREF _Toc523144294 h 26Figure 403: Customers’ Perception on Reliability PAGEREF _Toc523144295 h 33Figure 404: Customers’ Perception Assurance PAGEREF _Toc523144296 h 33Figure 505: Customers’ Perception of Empathy PAGEREF _Toc523144297 h 34Figure 46: Customers’ Perception on responsivenes PAGEREF _Toc523144298 h 35
List of AbbreviationsCRM ………………………………. Customer Relationship Management
TANGA UWASA ……………………………… Tanga Urban Water supply and Sanitation Authority
UWSA ………………………………. Urban Water supply and Sanitation Authority
URT ……………………………….. United Republic of Tanzania
CHAPTER ONEINTRODUTIONIntroductionThis chapter presents an overview of the study. It offers the background to the study, statement of the problem, research objectives, research questions, scope and significance of the study.
Background of the studyWater is a shared common resource fundamental to life and in sustaining the environment and plays a central role in the social and economic development of Tanzania. It touches all spheres of life including domestic, agriculture, livestock, fisheries, wildlife, industry, energy, recreation and other social and economic activities. Water is vital for sustainable socio-economic development as a strategic primary input playing a pivotal role in poverty alleviation through enhancing food security, domestic hygienic security, hydropower, industrial development, mining, navigation, and the environment for sustenance of ecosystems (URT, 2010). The historical background of water in Tanzania dates back to the 1930s when water supply was confined to urban areas and farming settlements owned by settlers.
To address the urban bias in water service provision, the government proclaimed in 1971 a 20 years Rural Water Supply Program that aimed to provide access to adequate, safe and dependable at supply within a walking distance 400 meters to each household (Doering, 2005) The first National Water Policy, adopted in 1991, was the start of a long process of reforms to address the shortcomings of the previous system and build donor confidence. User charges were introduced along with the establishment of urban utilities, designed to be self-financing. This included an ultimately unsuccessful attempt at introducing private sector participation to the running of Dar es Salaam’s water supply in 2003 (WSP, 2011).
The Rapid Water Resources Assessment Study (1994) underscored the need for putting in place an integrated approach to water resources management through customer relationship and thus led to the commencement of implementation of this approach in the priority river basins of Pangani and Rufiji (URT, 2010). All the Urban Water and Sanitation Authorities (UWSAs) at the end of 1997 recorded substantial losses and were unable to meet their recurrent expenditure costs. By 2000, significant improvements particularly in revenue collection were recorded. An overall improvement of 74% across all UWSAs was seen as the result of the World Bank financial support which assisted the government to execute Urban Sector Rehabilitation Programme (URT, 2001).
The review of the National Water Policy of 1991 led to the National Water Policy (2002) and later Water Resource Management Act of 2009 which rectified the previous policy shortfalls. The policy took a new approach which can be said to encompass three elements: (i) comprehensiveness to capture multi-sector and multi objective planning as well as indirect and cumulative aspects, (ii) subsidiary to shift planning, decision and management processes closer to the beneficiaries, and (iii) economic effectiveness to ensure that public as well as private investments reflect water scarcity, equity and incentives for rational use of water (Arvidson & Nordstrom, 2006). To shift planning, decision and management closer to the beneficiaries implies bringing customers closer to the service providers who are the water utilities which bring to attention customer relationship management which is one of the most important issues in performance of any business from a commercial perspective. The Water Supply and Sanitation Act of 2009 establishes a series of efficiency measures with which the service provision authorities should comply including commercializing urban water supply and sanitation authorities, depending on their commercial viability (Garcia-valinas & Miquel-florensa, 2012).
Statement of the ProblemOne of the requirements of competitiveness is the ability of the organizations to adjust themselves with the customer needs quickly (Alipour & Mohamadi, 2011). Customer relationship management has been a drive of performance to many organisations. It is a well-conceived business strategy with long-term outcomes that maximise profitability, revenue, and customer satisfaction by organising around customer segments, fostering customer satisfying actions and implementing customer centric processes. (Chandran, 2014).
In order to improve performance of water utilities Namaliya (2017) suggested integration of customer relationship management in organization strategies which includes involving and understanding customers’ needs and expectations. The ways that stakeholders participate in water resources management differ and can have wide-ranging environmental, political, social and economic consequence (Butler ; Adamowski, 2015). Sufficient and clear incentives for participation are critical to the success and sustainability and perhaps more than any other single factor (Subramanian et al.1997). Ostrom (1990) suggested a set of conditions that commonly could influence outcomes of government structure in customer relationship management among those the number of decision makers, their similarities of interests, and the presence of participants with assets or other leadership. The interests of assessing the performance of water management through customer relationship increased connections with decision makers and water conflict resolution (Lalika et al. 2015).
However, studies done on performance of water utilities in Tanzania such as AFD (2001); Kimey (2008); Mcharo (2011); and Thomas, Holbro, ; Young (2013) have not sufficiently explored the role of customer relationship management in performance of water utilities and hence this study aimed to bridge this empirical gap.
Main objectiveThe main objective of this study was to assess the role of customer relationship management on performance of water utilities in Tanzania.
Specific ObjectivesTo examine strategies used by Tanga Urban Water supply and Sanitation Authority in enhancing customer relationship.
To assess the contribution of customer relationship management in the effectiveness of Tanga Urban Water supply and Sanitation Authority
To assess perception of customers served by Tanga Urban Water supply and Sanitation Authority on services provided by the Authority
To examine challenges faced by Tanga Urban Water supply and Sanitation Authority in implementation of customer relationship management
Research QuestionsThe study aimed at addressing the following research questions;
How effective are the strategies used Tanga Urban Water supply and Sanitation Authority in enhancing customer relationship?
How does customer relationship management contributes towards effectiveness of Tanga Urban Water supply and Sanitation Authority?
How do customers served by Tanga Urban Water supply and Sanitation Authority perceive services provided by the Authority?
What are the challenges faced by Tanga Urban Water supply and Sanitation Authority in implementation of customer relationship management?
Significance of the StudyThe study may help Tanga Urban Water Supply and Sanitary Authority and other Water Utilities in Tanzania to understand the role that Customer Relationship Management plays in performance of their organizations. The study has unfolded challenges that Water utilities face in customer relationship management and hence offers recommendations to deal with them for effective and efficient functioning of their organizations.
Additionally, this study has added knowledge in the existing body of knowledge and hence is helpful to researchers who will wish to do study in the topic understudy. Moreover, policy makers may find a useful document for formulating effective policies that may enable organizations to handle well their customers and in turn improve performance of water utilities in Tanzania.
CHAPTER TWOLITERATURE REVIEWIntroductionThis chapter presents a review of written materials relating to the topic understudy. The chapter offers definitions of various concepts, review of theories and empirical studies relating to the topic.
Conceptual definitionsCustomerA customer is any person or organisation who might have interest in buying, or has bought products or services from a company (Tanner, 2017). Customers are the reason why businesses exist. While many individuals going into business think first and foremost in terms of profits and earnings, and are motivated by these factors, without having a good customer base or established needs and wants for their product or service ideas, operating a business would be impossible (McFarlane, 2013). Kotler (1991) defined customers as individuals, groups, companies with demand of goods or services from another part. Peels (1978) defined a customer to mean a person whom you delivering services depend upon the type of business; a customer is called a client, a buyer, a patron or a shopper. Customers are the ones who justify the existence of all organisations weather small or big, profit or non-profit. Lucas (2000) emphasized that, “without the customer there is no reason for any organisation to exist”.
Types of customersCustomers are of two types in any kind of organization namely internal and external customers.
I.Internal customersLucas (2000) observed that, many people in the work place will tell you that they do not have customers. They are wrong. Any one in an organisation has customers, they may not be traditional customers to buy or use our products or services, and instead, they are internal customers who are coworkers, employees of work within the same organisation. A dictionary of business and management (2006) defines internal customer to mean a unit, division or individual employee who is the recipient of materials, products, information, or services from another unit in the same organisation.
II. External customersExternal customers are the current or potential clients or customers. They are those who actively seek out, research and buy, rent or lease products or services offered by your institution. They refer to individuals, groups, departments, or organizations that acquire goods or services from another part. As far as this study is concerned the study focused on external customers only.
Customer SatisfactionCustomer satisfaction is a common term used in marketing that determines how products or services supplied by a company meet or surpass a customer’s expectations. Customer satisfaction is important because it offers marketers and owners of business with a metric that they can use to manage and improve their businesses (Irigat & Mohannad, 2017).
Customer Relationship ManagementCustomer relationship management involves management of an organization’s interactions with its customers through analysis of customer history data with the aim of enhancing business relationships with the organization’s clients in order to improve customer retention rates (Vera & Caruana, 2012).
Customer CareNeedham et al, (1996) defined customer care as collective, pro active approach to resolving potential problems before they occur. It attempts to anticipate problems and deal with them before they happen. “Prevention is better than cure” is the motto we should work by. Note that the definition specifies that this is a “collective” approach, in other words everyone needs to be involved, from the directors to menial staff, and it is to have efforts.
Customer care involves putting systems in place to maximize your customers’ satisfaction with your business.
Customer service is the provision of service to customers before, during and after purchase.
According to Turban et al, (2002), customer service is a succession of actions designed to enhance the level of customer’s satisfaction- that is, the feeling that a product or service has met the customer expectation.
Simply, customer service is anything we do for customers which enhances experience of customers. Customers have different ideas as to what they expect from customer interaction. The service provider must get to understand his or her customers, and work hard to provide them with excellent customer services.
Customer SatisfactionCustomer satisfaction is the overall feeling of contentment with a customer interaction. Customer satisfaction recognizes the difference between customer expectation and perceptions.
Harris EK (1996) said our task is reducing as much of the customer experience, while also offering current information and helping in solving problems for the customers. Satisfaction is afterthought. The customer may think back on what she or he experienced, and realize how pleasant or unpleasant it was.
Customer RetentionCustomer retention implies an on-going attempt to satisfy and keep current customers actively involved in a business. The importance of keeping current customers has been known for a very long time. Interestingly, even though managers understand this fact, few have created an active approach for keeping customers. Most businesses are focused on finding new customers, not on maintaining the current ones (Erickson, 2010).
Existing customers have an important value. They understand how our company approaches business. Existing customers know us and our policies. They are familiar with our products and services. They will not tolerate a decline in our quality, but they will consider new products and services more easily.
Our existing internal customers are especially important. We must work to maintain our internal customer relationship. Internal customers are frequently taken for granted. Because internal customers are the people that we work with it is difficult and sometimes impossible to find new internal customers. Internal customers may not be able to stop doing business with us but they can become difficult to work with. Anything that unifies internal customers can have a positive effect on the success of a business (Franklin, 2012).
Customer ComplaintsCustomers make decisions about doing business with your organisation based on how they feel they have been treated by it. The slightest offence or disappointment at any time may make the customer go elsewhere the next time he or she wants the product or service your organisation provides.
If you do not respond to a customer who has a problem in a manner that satisfies the customer, the result may be a complaint. (Woods, Hebron, & Bradley, 2005)
Boswell (2009) defined customer complaint as any expression of dissatisfaction by a customer or potential customer about service delivery by a company or its agents, and/or about company or industry policy.
Barlow& Moller (2008) said that, in simplest way complaints are statements about expectations that have not been met. They are also, and perhaps more importantly, opportunities for an organisation to reconnect with customers by fixing service or product break down.
2.2.8 Objectives of CRM
The most prominent objectives of using the methods of Customer Relationship Management are as follows:
Improving Customer Satisfaction
Customer Relationship Management facilitated customer satisfaction since satisfied customers tend remains loyal to the business and they keep on spreading good word-of-mouth. This can be accomplished through fostering customer engagement via social networking sites, surveys, interactive blogs, and various mobile platforms.
Expanding the Customer Base
Customer Relationship Management not only manages the existing customers but also creates knowledge for prospective customers who are yet to convert. It facilitated in creating and managing a huge customer’s base that leads to profits continuity, even for a seasonal business.
Enhancement of Business Sales
Customer Relationship Management methods can be used in closing more deals, increasing in sales, improving forecast accuracy, and suggestion selling. Customer Relationship Management helps to create new sales opportunities and thus helping in increasing revenues of business.
Improving in Workforce Productivity
A Customer Relationship Management system can facilitate organized manners of working for sales and managing sales staff. The sales staff can access customer’s contact information, follow up via emails or social media, managing tasks, and tracking performance of salesperson. The salespersons can deal with the customer inquiries speedily and resolving their problems as well.
How to handle customer complaintsNeedham D. (1999) et al suggests the following strategies in handling complaints;
Make it easy to make contact by having a free customer service telephone number
Ask for complaints, actively seeking them through questionnaires and randomly speaking to customers
Listen to customers and explore the ideas customers may have about solutions
Act quickly with a positive attitude towards solving problems
Replace defective products/improve services quickly and take steps to prevent this from recurring.
Recognize feedback through gifts and prizes.
Figure 2 STYLEREF 1 s 0 SEQ Figure * ARABIC s 1 1: Stages involved when dealing with customer complaintsComments
Can warn you about a problem
The next step is to identify the problem
Then take action to solve it
Source: Woods A., Hebron &Bradley (2005) Page 147
Benefits of Customer Relationship ManagementNaveen and Venkataramana (2014) identified several benefits of CRM as outlined below;
It allows organisations not only to retain customers, but enables more effective marketing, create opportunity for cross selling and open up the possibility of rapid introduction of new brands and products.
Improvement of ratings in regard to customer satisfaction
Reducing administration costs on general sales and marketing
Identification and targeting the most profitable customer and obtaining a deeper knowledge about them and products or services they need.
Increasing ability to manage marketing campaigns with objectives that clear.
increasing market share from customer relationships
Decreasing expenses associating with promotion and marketing
Improving channel efficiency
Reducing expenses relating to online self-service
Increasing repeat business revenues from customized,
Customization of online experience, and
Maximizing lifetime profit per client
The seven elements of service marketing mixChandran (2014) identified seven elements of service marketing;
The product dimension of a service is mainly intangible. Therefore, service marketers need to identify, define, and illustrate what the service entails that it may require tangible manifests. Many services are custom designed products and the product dimension will be heavily dependent upon the human touch, on how it is delivered and perceived. The service elements of the product are also very important.
The pricing element is very closely associated with the perception of quality. Customers’ perception of quality may be different and the intangible nature of the service product will make it difficult to evaluate. Thus, service costing tends to be difficult and inaccurate. In quoting prices, some companies try to meet competition, some firms attempt to use standard costing, and a few others attempt to negotiate with the customers. Flexible pricing seems much more in vogue in the marketing of services than in the marketing of goods.
The promotion dimension of the marketing mix is very closely related to the product characteristics. In the case of services, the focus is on promoting an image. Since services cannot be stored, the promotion message communicated through advertisement, sales promotion, publicity, public relations, and personal selling needs to focus on spreading as well as creating demand.
The place or distribution channels for services, in certain ways, are a ‘virtual’ concept. There is mostly no tangible distribution system. Yet, due to the fact that services are performed, there must be a conducive environment. Therefore, the location becomes vital. Channels of distribution for services are direct and short, that is from the principals / intermediaries to the consumers.
Management of people is part and parcel of the service marketing mix. There are many players or individuals involved in delivering services. The problem of service industry lies in inseparability of the production, and thus the satisfaction of not only the client, but also the service provider and contact employee becomes very important. Managing this element of the marketing mix some direction requires to be offered to the considerably right selection, orientation, and training of employees and how to manage and communicate with the various levels of employees and management.
The aspect of process of the service marketing mix is related to the way in that the service is offered to the client. ‘How the service is offered?’ is the key question. The policies and procedures that ensure an satisfying service is the main focus while addressing this aspect. An ‘eye for detail’ is what service marketers must consider while considering this aspect.
7. Physical Evidence
Physical evidence is closely associated with the place and distribution of the marketing mix. This is extremely important for services as the offerings are delivered in a physical 105 environment or site, which may include a building, lighting, paint, colour, ambience, customer orientation, queues, crowding, noise, interest stimulation, and participation. Physical evidence acts as a symbol for the customer to evaluate the nature and value of the service. It will contribute to enhancing the ‘brand’ and ‘reputation’.
Challenges of Implementing CRM
Pokharel (2011) identified ten challenges many organizations face while implementing CRM which are summarized as the followings:
Securing sponsorship of management
Quality of data of the customers
Aligning issue (Aligning people with processes)
Unavailability of skilled personnel
Understanding the right time for the customer needs
Using customer data more intelligently
Incorporation of customer data with customer preferences
The use of right technologies
Real time data cross channels of customers
Having 360- degree view of clients
Organizations have been facing so many challenges in putting in place an effective customer relationship management one being lack of sufficient knowledge on the importance of CRM in organization and hence it has been taken for granted (Grant, 2013). As it was observed by Dimallo (2014) organizations especially those owned by the government have been reluctant to train their staff on issues relating to CRM due to a perceived belied that they are not made for making profit hence not bothering about looking for a bigger market share.
Poor technology in some companies have been also affecting the link between clients and their service providers and hence affecting customer satisfaction and retention. It has been observed that firms especially in developing countries do not have data bases to keep and offer them information pertaining the customers they serve (Grant, 2013). From this observation it can be concluded that some firms do not take CRM seriously yet it is one of very important factors for business success. Patel et al (2013) contradicts the above observation by explaining that although technology has been considered a challenge in looking for, storing and retrieving customer information yet possession of your customer information can be done using various traditional ways including keeping of records using manual facilities such as books. They further insisted that it requires seriousness and concern rather than possession of advanced technology.
Lack of integrated strategies on CRM has been mentioned by McMahan (2015) as another challenge facing CRM. He observed that CRM has been treated by some organizations as an activity of one department or unit and not something that has to be implemented by the organizations as whole. From this observation it is clearly seen that for CRM to be effective and efficient there is a need to make it participative from the begging of CRM strategy formulation and implementation.
It has been suggested by Georges (2016) that CRM should be an organizational agenda that involve all line managers and obtain support from top management and all the stakeholders. In other words, CRM has to be owned by each and every stakeholder of the business.
2.6. Technology and Customer Relationship
Technology is one of essential tools to facilitate effective Customer Relationship Management. In the context of Customer Relationship Management, initiatives which need improvement and applicability of IT are shown in table 2.1
Table 2.1: Initiatives which need improvement and IT applicability
Initiatives to improve Importance of Requirements of customer IT to initiative relationship-management system
Targeting of profitable customers Very high Introducing propensity modeling-for example, rule-based systems to improve capture of most important customer variables
Ability to deal with follow-up contacts High Create campaign library with history of offers made to targeted customers; make available on-line to call-center agents
Convenience of response High Enable response through convenient channels such as e-mail or, for mobile-phone users, Short Message Service (SMS)
Delivery of offer High Automate delivery of successive messages to customers who have not yet responded
Presentation of offer Low Introduce sales scripts for call-center agents; support systems that help customize scripts by customer segment
Attractiveness of offers none NIL
Source: Srivastava (2012)
2.7. Costs of ineffective CRM
It is believed that CRM is very important to success of any organization. From this sense, not having effective CRM will make an organization to suffer. Georges (2016) highlighted several costs that an organization may face due to presence of ineffective CRM including poor corporate image and decline of a market share. He insisted that, one of best ways of attracting and retaining customers in any business is through possession of a positive corporate image. Customers are always honesty about their experience with any organization, good or service offered hence it is important that firms ensure that customers are satisfied. A customer who complains to one complains to all and having customers who complain is a sign of existence of poor customer relationships. To maintain a positive corporate image organizations have to ensure that there is effective CRM programs in place.
In regard to decline in a market share; one of things that may happen to an organization when there is poor customer relationship management is decision of customers to switch to other service providers. In a competitive environment it is very risk for a firm to lose even a single client because it has so many implications including financial success or failure of the firm.
Negative TheoryNegative theory was initially put into the consumer satisfaction literature by Anderson (1994). The theory argues that when expectations of customers are strongly held, clients will respond negatively to any dissatisfaction. Therefore, dissatisfaction will happen if perceived performance is less than customer’s expectations or if perceived performance is above customer’s expectations (Aigbavboa ; Thwala, 2013). According to Tatikonda (2013) profit is an outcome of customer satisfaction. Customer satisfaction is the result of the functions and characteristics of a product or service as perceived and valued by clients. Value and quality of services are the result of the effectiveness and efficiency of internal processes, employee knowledge and skills, and how customer relations are handled. This implies that organizations have to ensure that customers are satisfied if they want to a superior organizational performance hence customer relationship management is crucial.
The Stakeholders’ TheoryThis theory states that organizations do not exist only to maximize shareholders value but to also protect the interest of variety of stakeholders whose negative reactions may adversely affect the going concern of the establishment. These stakeholders are: customers, suppliers, employees, host communities, creditors/lenders and even the government (Omodero, Onyinyechi & zubike (2016). This is a practical theory since all organizations have to manage various stakeholders – whether they are good at managing them is another issue. According to Harrison, Freeman, & Abreu (2015) it is efficient since stakeholders which are treated well tend to reciprocate with positive attitudes and behaviors towards the firms, such as’
sharing valuable information, purchasing more products or services (clients);
providing tax breaks or other incentives (communities);
providing better financial terms (financiers);
buying more stock (shareholders);
working hard and remaining loyal to the company, even during difficult times (employees)
This theory reflect much on customer relationship management taking into consideration that customers are one of important stakeholders in any business. In this regard, it is important to maintain a positive relationship between organizations and their customers. Organizations that tend to value all their stakeholders have a competitive advantage over those that do not.
Empirical ReviewShavazi and Mashabaki (2013) attempted to examine the association between customer relationship management and firm performance of Iranian banks. The study concluded that customer relationship management is associated to bank performance. The study recommended that bank management have to understand who the valuable potential customer, type of service is and product they need, reasons the customer connects to rivals, how they can retain losing customers, how the valuable customers can be attracted to increase their performance. They also should try to have a long term relationship with their current customers, trying to persuade them to use from another service of the bank, notice to customer complaint and try solving their problems as soon as they observed, to persuade customers to have right information about the products or service and referring new customesr to the bank.. Another study was done by Malkami and Nazarian (2016) which studied the effect of customer relationship management on firm performance found that customer relationship management can significantly and statistically have effect on the financial, competitive and service performance of firms. Therefore, the financial, competitive and service performance of firms would be improved beside the increase in CRM.
Okeke (2016) studied effect of customer relationship management on performance of selected airlines operating in Akanu ibiam International Airport in Enugu state in Nigeria. The findings indicated that High quality services to a great extent positively affected customer satisfactions (r = .876: F= 141.376: t 15.784, p ; .05). Customer services positively affected profitability (r = 0.915: F= 220.941: t=1.037, p ; .05). Information technology significantly related to employee performance (r =.796 p ; .05) and knowledge creation positively related to productivity of airline operators (r =.898, p ; 0.05) in Akanu lbiam international Airport Enugu state, Nigeria. The study concluded that customer relationship management has the capacity to influence organizational profitability, employee performance, customer satisfaction, goal attainment and productivity of Airlines. The study recommended that airline managers should design strategies to improve service quality such as meeting clients desired service levels, improving the quality of in-flight meals offered, providing visually appealing facilities, offering free check-in and boarding. Further, the study recommended airlines operators should render customer services of world class standards to its stakeholders and should ensured the use of modern technology in its operations. Moreover, knowledge creation, sharing, utilization and storage should be explored by organizations as it could enhance productivity.
Kapologwe (2013) examined the impact of customer relationship management on performance of banks in Tanzania. The study found a positive and significant path between a superior customer relationship management capability and organizational performance. As a result, superior customer relationship management capability is positively linked with human analytics and business architecture. However, results suggested the impact of IT infrastructure on superior CRM capability is indirect and fully mediated by human analytics and business architecture. Another Tanzania based research was done by Bartholome (2013). The study studied customer relationship management strategies adopted by tourist hotels In Dar Es Salaam. The study found that the successful customer relationship management strategies can shorten the distance between clients and the firm, contributing to firm success from customer loyalty, superior service, better information collection, and organizational learning the hotel industry will retain and maintain the clients. The study recommended that there is need to implement customer relationship management since in achieving the full potential of customer relationship management is the major role of each tourist hotel in Dar es salaam because it benefits the hotels in improving profitability, reducing advertising costs, gaining competitive advantage and retaining more customers.
The study of Amoako, Arthur, Bandoh and Katah (2011) was done to determine the impact of Customer Relationship Management on customer loyalty in the hotel industry in Ghana. The study was conducted at the Golden Tulip hotel, Accra. The study objectives included to determine if customer relationship management has an impact on customer loyalty, to determine whether the practice of effective customer relationship management CRM in firms can lead to a long or short term financial impact, to assess the extent or degree to which effective customer relationship management leads to customer satisfaction and to assess if the services provided by the hotel meets the needs and wants of clients. Questionnaires were administered to both individuals and corporate customers of the hotel and the result of this was analyzed. The results showed that 46.3% of the respondents were females whilst 53.3% were males. Most of the respondents had heard about the hotel from newspaper advertisements (40%) and referrals from people who had used the hotel (30%). 80% of the respondents were willing to refer to the services of the hotel to other people whilst 90% of them were satisfied with the services at the hotel. The accommodation and catering facilities were mostly patronized. The perception among respondents about the hotel was good since they gave a positive review of the services. Most of the respondents agreed that they would come back to the hotel. The corporate customers were also satisfied with the services provided at the hotel with 20% having used the hotel for up to 4 years. The corporate clients said they would use the facility again, thus, customer loyalty existed among these clients as well as, the individual clients.
Ryals (2005) in his research demonstrated that the implementation of customer relationship management activities deliver greater profits. The lifetime values of customers in two longitudinal case studies revealed that customer management strategies change with respect to the value of the customer. Hence customer relationship management works and a reasonably straightforward analysis of the value of the customer can make a big difference. Here the concept of customer relationship management brings better performance of the organization through appropriate measurement and management of customer relationships. The comprehensive revenue and cost data specific to individual customers or customer segments results the firms to adjust their customer relationship management strategies. The contribution of this article is to show that the association existing between the customer revenues and values are sufficiently high suggesting that the value of customer majorly determines the amount of revenue it generates which again can’t be generalized as it might be company specific or more specifically to industry related with financial services. Payne and Frow (2006) examined customer relationship management from the perspective of formulating and implementing strategy. They proposed a model that deals with both customer relationship management strategy and implementation. They critically identified four components of successful customer relationship management programme i.e. customer relationship management readiness assessment; customer relationship management change management; customer relationship management project management; and employee engagement and examined these components with five key cross functional customer relationship management process which are strategy development, value creation, multi channel integration, information management and performance assessment. Further the effect of customer relationship management is studied simultaneously with innovation and firm performance. The result shows the positive impact of customer relationship management towards organization performance, a finding which is consistent with previous research (Hooley et al., 2005). Kolis & Jirinova (2013) described in their research a link between customer relationship management and company’s financial performance. Four key dimensions of customer relationship management – customer satisfaction, loyalty, value and equity were taken into consideration to undergo this research. Each dimension is tested for correlation with financial performance indicators which described how effectively the company transforms sales into profit, was chosen as the main financial performance indicator. Cengiz (2010) in his working paper reviewed and studied on the importance of measuring customer satisfaction. It has evolved through the study that customer satisfaction in this competitive market is must and measuring it is not specially a onetime process. It will eventually leads to consecutive processes to attain success. The satisfaction will play a vital role in customer expectations and can create a customized marketing mix.
Conceptual FrameworkA conceptual framework means a network, or “a plane,” of interlinked concepts that together provide a comprehensive understanding of a phenomenon or phenomena. In regard to this study Deonata (2013) identified three basic areas of customer relationship in any organization namely information gathering, needs identification and an ability of organization to meet and sometimes exceed customers’ expectations. Through these three elements customer satisfaction may be realized and help the organization to perform. According to Rajesh (2012) organizational performance is an ability of an organization to reach her intended goals using optimal amount of resources.
Customer Information Gathering
Customer Needs/Expectations Identification
Meeting Customer Expectations
Independent variables Dependent variable
Figure 2 STYLEREF 1 s 0 SEQ Figure * ARABIC s 1 2: Conceptual Framework, source: Researcher’s own construct.CHAPTER THREERESEARCH METHODOLOGYIntroductionThis chapter presents the approach that was used to achieve research objectives. It contains the research design, sampling techniques, population, sampling techniques, data collection tools and data analysis.
Research DesignMacMillan and Schumacher (2001:166) defined research design to mean a plan for selection of subjects, research sites, and data collection procedures to answer the research question(s). The main function of a research design is to explain how one will find answers to the research questions. The research design sets out the specific details of an enquiry (Kumar, 2011). In this study a case study design was used. A case study selects a small geographical area or a very limited number of individuals as the subjects of study (Zainal, 2007). A case study was selected because it would enable a researcher to closely examine the data within a specific context. Tanga Urban Water supply and Sanitation Authority was used as a case study to represent other utilities for generalization.
PopulationPolit and Hungler (1999) defined population as an aggregate or totality of all the objects, subjects or members that conform to a set of specifications. TANGA UWASA staff and customers were collectively considered as a population of this study.
Sampling techniques and Simple sizeThe researcher used both probability and non-probability sampling technique
Probability sampling techniqueWith probability sampling, a researcher can specify the probability of an element’s (participant’s) being included in the sample. In this technique a purposive and stratified sampling technique were applied. In a purposive sampling technique the primary consideration in purposive sampling is your judgment as to who can provide the best information to achieve the objectives of your study (Kumar, 2011). A purposive sampling technique was used to sample Head of Units at Tanga Urban Water supply and Sanitation Authority.
In stratified sampling, the population is partitioned into regions or strata, and a sample is selected by some design within each stratum (Thompson, 2012). This technique was used to sample members of each department so us to attain representation in the sample.
Non-probability Sampling TechniqueWith non-probability sampling, there is no way of estimating the probability of an element’s being included in a sample. In this technique, convenience sampling technique was used. Convenience sampling (also known as Haphazard Sampling or Accidental Sampling) is a type of non-probability or nonrandom sampling where members of the target population that meet certain practical criteria, such as easy accessibility, geographical proximity, availability at a given time, or the willingness to participate are included for the purpose of the study (Dornyei, 2007). This technique was used to sample customers of Tanga Urban Water supply and Sanitation Authority. The technique was selected due to the fact that customers’ accessibility depended on their visit to the TANGA UWASA.
Sample SizeThe sample size that was used for data collection was 81 respondents drawn from employees and customers of TANGA UWASA.Table 3.1 Sample
S/N Stratum Number of subjects Sample
1 MD Office 9 3
2 Technical Department 67 21
3 Finance Department 16 5
4 Commercial Department 49 15
5 Human Resource Department 21 7
6 Customers 30
Sources of DataThe study used both primary and secondary data sources. Primary data means information collected by a researcher freshly from the sources while secondary data are data that have been collected and documented by other writers or researchers (Morgan, 2013). In this study primary data involved data collected from customers and employees of TANGA UWASA while secondary data was obtained from documented sources specifically reports.
Data collection toolsThis study will make use of questionnaires, interviews, observation and documentary review as data collection tools.
QuestionnairesThe questionnaire is a well established tool within social science research for gathering information on participant social characteristics, present and past behaviour, standards of behaviour or attitudes and their beliefs and reasons for action with respect to the topic under investigation (Bulmer, 2004). To be specific a self-administered questionnaire was used in this study. A self-administered questionnaire (SAQ) means a questionnaire that has been prepared specifically to be completed by a respondent without intervention of the researchers (e.g. an interviewer) collecting the data (Lavrakas, 2008). This tool was used to collect data from both employees and customers of TANGA UWASA.
InterviewThe interview method of collection data involves presentation of oral-verbal stimuli and reply in terms of oral-verbal respondents (Kothari, 2004). Interview was used in collecting data from Heads of Departments, customers and other employees as well. The method was selected to enable the researcher to grasp more information from the respondents since the method allows a researcher to brobe and gives a chance to a respondent to clarify issues in detail.
Documentary ReviewDocumentary review refers to an analysis of information done by a researcher from documented materials (Mosa, 2012). The researcher looked for data from various documented sources sepcifically reports.
ObservationObservation is a method or tool of data collection in which researchers observe (through sense organs i.e. eyes, ears, skin, tongue and nose) within a specific research field. It is sometimes referred to as an unobtrusive method (Creswell, 2007). The researcher used this tool because it enables to capture events and observe situation as they appear at a particular moment of data collection. Through this tool a researcher was able to see how customer relationship management is exercised at TANGA UWASA.
Data Analysis and PresentationData analysis is the process of bringing order, structure and meaning to the mass of collected data. Both qualitative and quantitative data analysis were used in this study. Qualitative data analysis is the classification and interpretation of linguistic (or visual) material to make statements about implicit and explicit dimensions and structures of meaning-making in the material and what is represented in it. Meaning-making can refer to subjective or social meanings. Qualitative data analysis also is applied to discover and describe issues in the field or structures and processes in routines and practices (Flick, 2013). Quantitative data analysis involves analyzing data which can be put into categories, measured, or ranked such as length, weight, age, cost, rating scales, etc (Truman, 2011).
Data analysis was done using two computerized programs which are SPSS Version 21 and Microsoft Excel. The analyzed data are presented in chapter four using various modes such as frequencies, tables, figures and charts to facilitate easy understanding of the material.
CHAPTER FOURFINDINGS AND DISCUSSIONIntroductionThis chapter presents the findings of the study and provides a discussion basing on the findings obtained from the field.
Profile of the RespondentsCategorically, the study involved two types of respondents for data collection. They include 51 employees on one side and 30 customers of the other sides.
GenderGenerally the study comprised 32 males which made a total of 40% of the whole respondents while the remaining respondents were 49 that made a total of 60%. It is well known that in some circumstances gender may influence opinion on something hence it was very important to have representation of both genders in the study to find responses from both genders. However, the number of females was higher comparing to those of males due to the fact that female employees and customers are larger in number comparing to their counterpart.
Figure 4.0: Gender of Respondents
Source: Field Data, 2018
AgeThe study also sought to identify age of respondents at TANGA UWASA in order to check representation of each age group in the study for inclusion. Respondents of age ranging from 18-28 years were 35 (43.2%), from 29-39 years were 17 (21%), from 40 to 50 years were 15 (18.5%), from 51 to 61 years were 11 (13.6%) and those who are above 61 years of age were only 3 which is 3.7 % of the whole respondents. Table 4.1 summarizes age of the whole respondents participated in this study to provide the needed information to realize the research objectives.
Table 4 STYLEREF 1 s 0 SEQ Table * ARABIC s 1 1: Age of RespondentsTable 4.1: Age of Respondents
S/N Age Group (Years) Number of respondents Percentage (%)
1 18-28 35 43.2
2 29-39 17 21
3 40-50 15 18.5
4 51-61 11 13.6
5 Above 61 3 3.7
7 Total 81 100
Source: Field data. 2018
Marital StatusThe study also sought to identify whether a respondent was married or single during data collection. It was found that 47 (58%) were married and the remaining 34 (42%) were single. It can be noticed that more of the study’s respondents were married and this can be associated with the fact that all the study’s respondents were 18 years of age and above which implies that they are permissible by the Law to get married.
Figure 4.1: Marital Status
Source: Field Data, 2018
Education LevelThe study asked the respondents to identify their highest education level through questionnaires they filled. It was found that candidates with primary education were 11, with certificate were also 11, those with diploma were 24, with bachelor’s degree were 28, with postgraduate diploma were 4 and master’s degree were 3 respondents. The respondents are dominated with those holding a bachelor degree. Having a bigger number of respondents with high level of education implies that their responses are reliable due to the fact that they are more knowledgeable as far as a formal education is concerned. However, the study included even those with comparatively lower education level to have responses from a diverse group of responses. Figure 4.1 illustrates the distribution of education level all the respondents using histograms.
Figure 4 SEQ Figure * ARABIC s 1 1: Respondents Education Level
Source: Field Data, 2018
Working ExperienceEmployees working with TANGA UWASA were asked to identify their working experience. This was very important for this study in order to identify for how long they have been dealing with customers since the study focused on customer relationship. It was found that 2 employees had working experience bello2 two years, five (5) employees between 1 and 2 years, 4 employees between 2 and 4 years, seven (7) employees between 5 and 8 years while 12 employees had more than 8 years of working experience. Table 4.2 offers a summary of respondents’ working experience;
Table 4 STYLEREF 1 s 0 SEQ Table * ARABIC s 1 2: Respondents’ Working ExperienceWorking experience Number of Employees
Bellow 1 Year 2
Between 1 and 2 years 5
Between 2 and 4 years 4
Between 4 and 8 years 7
More than 8 years 12
Source: Primary Data, 2018
Organizational Strategies and Customer Relationship ManagementOne of objectives of this study was to examine strategies used by Tanga Urban Water supply and Sanitation Authority in enhancing customer relationship. Respondents were asked to say whether TANGA UWASA has special strategies aiming at improving customer relationship. Out of 81 respondents 63 (78%) said yes there are while 18 (22%) said no.
Figure 4.2 Opinions on Presence of CRM Strategies
Source: Field Data, 2018
Further, the study wished to know whether TANGA UWASA has a special mechanism of searching for complaints from customers so that they can deal with them. In responding to this, 52 respondents (64%) agreed that there is a special mechanism while 29 respondents (36%) disagreed.
Figure 4.3:Opinion on Presence of Special Mechanism for Complaints Searching
Source: Field data, 2018
In the interview with employees of TANGA UWASA it was found that the organization has been finding best ways of identifying and dealing with customers’ complaints. One of the employees had this to say;
“here what we do is making sure that we create a conducive environment for our customers to say what they feel about our services. Our customers know what to do when they want to complain. If they can’t come here at the office they know our phone number, our website and even our social media pages where they may access us, additionally we have suggestion boxes where they can write anything concerning our services and products we offer”
The study observed presence of suggestion boxes at TANGA UWASA which implies that the organization is keen to get complaints and suggestions from her customers. The further wished to see whether management regularly checks the boxes to see if there are any suggestions or complaints from customers. It came to be known that before the end of the working day management collects papers found in the suggestion boxes for further actions. Daily clearance of suggestion boxes has been recommended by Grant (2013) who said that leaving customers’ suggestions not cleared for more than a day shows lack of seriousness in dealing with the most important stakeholders in organizations. Figure 4.2 shows one of suggestion boxes at TANGA UWASA.
Figure 44: One of suggestion boxes at TANGA UWASA
Source: Field data, 2018
Additionally, one of TANGA UWASA customers who were interviewed raised a concern on the other channels used for reaching TANGA UWASA. He commented that,
“there is no problem with using a cell phone to reach them but social media platforms are not friendly to those who do not have devices to access the pages but also they are not interested in social media. Many people here don’t even know if there are those social media pages”
The study further sought to determine if customers can easily reach TANGA UWASA management and lodge complaints. It was found that, 49 respondents (60%) agreed while 32 respondents (40%) disagreed.
Figure 4.5: Opinions on Accessibility of Management
Source: Field Data, 2018
One of the respondents interviewed commented,
“it is generally easy to lodge complaints to the organization but specifically speaking reaching the management has been somehow difficulty because how busy top managers are comparing with the rest. The truth is sometimes you need to reach their top boss not any employee and when you do so the first question is whether your issue in private or official and if it is official you are supposed to say it to the personal secretary which is inappropriate in some cases because some complaints are supposed to be handled in a confidential manner”
Respondents were asked to say if TANGA UWASA responds to customers’ complaints on time. The study found that 44 respondents (54%) agreed and 37 respondents (46%) disagreed. The researcher further wished to observe how the complaints are handled. It was found that some complaints do not get quick response because they should wait for decisions to be made in scheduled meetings.
4.6: Opinions on whether there is on time response on complaints
Source: Field Data, 2018
Respondents were also asked to say if TANGA UWASA value customers’ suggestions. The study found that 55 respondents (68%) agreed while 26 respondents (32%) disagreed. The researcher observed weekly reports that identified complaints and suggestions of TANGA UWASA customers. In these reports TANGA UWASA provided way forward on dealing with complaints and implementing the suggestions. This shows the high level of commitment of TANGA UWASA towards their customers although insufficient resources have been hindering implementations of some customers’ challenges.
4.7: Opinions on Whether Customer complaints are valued
Source: Field Data, 2018
Training has been one of important tools in customer relationship management. This study assessed if employees at TANGA UWASA are regularly trained on customer relationship management. Respondents had different opinions on this, 22 respondents (27%) said yes while 59 respondents (73%) disagreed. It was found that training on customer relationship management is not provided sufficiently to make employees for effective in managing their customers. It was observed that a limited budget has been a challenge towards employee training. For many years training has been one of best ways of increasing and maintaining effectiveness and efficiency in many organizational operations (Armstrong, 2007).
Figure 4.9: opinions on whether there are regular training
Source: Field Data, 2018
This signifies that TANGA UWASA has to make sure more regular training programs are designed and implemented effectively to help improving performance in the area of customer relationship management.
Table 4.3 summarizes responses on strategies used by Tanga Urban Water supply and Sanitation Authority in enhancing customer relationship.
Table 4 STYLEREF 1 s 0 SEQ Table * ARABIC s 1 3: Organizational Strategies on Customer Relationship Management at TANGA UWASAStatement Yes (%) No (%)
TANGA UWASA has special strategies aiming at improving customer relationship 63(77.7%) 18 (22.3%)
TANGA UWASA has a special mechanism of searching for complaints from customers 52(64.2%) 29(35.8%)
TANGA UWASA customers can easily lodge their complaints to TANGA UWASA Management 49 (60.5%) 32(39.5%)
TANGA UWASA responds to customers’ complaints on time 37(45.7%) 44(54.3%)
TANGA UWASA value customers’ suggestions 55(67.9%) 26(32.1%)
Employees at TANGA UWASA are regularly trained on customer relationship management 22(27.2%) 59(72.8%)
Source: Field data, 2018
Customer Relationship Management and Organizational EffectivenessAnother objective of this study was to assess the contribution of customer relationship management in the effectiveness of Tanga Urban Water supply and Sanitation Authority.
The study sought to find out whether customer relationship management helps to improve services provided by TANGA UWASA. It was found that 65 respondents (80%) agreed and 16 respondents disagreed (20%). Responses from interviews conducted show that respondents strongly believes that there is a strong relationship between effective customer relationship management and organizational effectiveness.
Figure 4.10: CRM helps in improving services
One of the respondents insisted that,
“through customer relationship management is where you can find out what your customers want and this will eventually help you improve your products basing on customers’ expectations. Since TANGA UWASA exists because of customers, when you offer excellent services then you have justified why you exist and this one of important goals of any organization, making customers happy”
The researcher observed that customers find the organization responsible when their expectations are met and irresponsible when they are not. This implies that organizations are obligated to ensure that customers have position evaluation towards them in order to win customers’ loyalty.
The study further investigated to see if customer relationship management helps in generating revenue for the organization. An interview with one employees of TANGA UWASA vividly proved the relationship. It was found that if customers are happy they tend to be loyal to the organization and hence be willing to pay their bills on time and even being ambassadors to other prospective customers.
“working with TANGA UWASA for more than five years have taught me a very big lesson. Happy customers are good marketers of any product; they can speak on behalf of the organization to others. Other people are not connected to our water channels because they perceive the costs to be very high and hence unaffordable but sometimes they come here and confess that someone we served told them the actual costs and they found it to be affordable contrary to their expectations. But the truth is, if you don’t manage well your relationships with your customers they won’t say anything about your products and if they do they will speak negatively”
These findings are consistent with what was found in the questionnaires. It was found that 62 respondents (77%) agreed that customer relationship management helps in revenue generation while 19 respondents (23%) disagreed.
Figure 4:11. Opinions on whether CRM helps in generating revenue
Source: Field Data, 2018
These findings somewhat support those of Omodero, Onyinyechi and zubike (2016) which studied the relationship between customer relationship management and profitability of money deposit banks in Nigeria from 2006 to 2015. Ten banks out of twenty one functioning banks were selected for the study. The result indicated that customer relationship management has a significant relationship with the total revenue of banks with little or no impact. Since the impact on total revenue is not much, its relationship with profit after tax is not significant while the impact is negative. The study therefore concluded that if banks can give more attention to customer relationship management, the revenue base (income from customers) will have a boost and operating overhead will not absorb all the income. As a result, there will be enough retained profit to pool back (reinvest) into the business. Another study whose findings are consistent with these is of Shavazi and Mashabaki (2013) attempted to examine the relationship between customer relationship management and organizational performance of Iranian banks. The study concluded that customer relationship management is linked to bank performance. The study recommended that bank management should understand who is the valuable potential customer, what kind of service and product they need, why the customer connects to competitors, how they can retain losing customers, how they can attract valuable customer to increase their performance
This study also assessed whether customer relationship management at TANGA UWASA makes customers loyal to the Authority. The study found that 51 respondents (63%) agreed while 30 respondents (37%) disagreed.
Figure 4.12: CRM and Customer Loyalty
Source: Field Data, 2018
One of the customers interviewed had this to say,
“I will only be loyal if I am treated well by the service providers. Apparently, I think I am oneof loyal customers because my quarrels are handled well and on time. I was once unhappy with the authority when it took me four hours just to get confirm my water bills”
This implies that loyal customers are made, it depends on how they are treated by the organization hence organizations should strive to ensure that they can handle well relationships with their customers.
In determining whether customer relationship management helps TANGA UWASA to implement its strategic plan 48 respondents (59%) agreed customer relationship management helps in implementing a strategic plan while 33 respondents (41%) disagreed.
Figure 4.13: opinion on a statement “CRM helps in implementing a strategic plan
Source: Field Data, 2018.
One of TANGA UWASA employees had this to say,
“any organization depends on customers so is the implementation of strategic plan. The main focus of strategic plans is to meet organizational goals one being meeting customers’ expectations. This shows that customer relationship management is very important in the implementation of a strategic plan. TANGA UWASA customers are very one of important stakeholders in a successful implementation of our strategic plan”
The findings entails that since customer relationship is crucial in implementation of a strategic plan at TANGA UWASA, their needs are supposed to be considered from initial stages of strategic plan preparation up to implementation stages.
The study also investigated whether customer relationship management at TANGA UWASA contributes towards customer satisfaction. The study found out that 60 respondents (74%) agreed and 21 respondents (26%) disagreed.
Figure 4.14: CRM contributes towards customer satisfaction
Source: Field Data, 2018
Despite these positive findings one of respondents interviewed made the following remarks
“Success or failure of any business depends on whether customers are satisfied or not.
Many water utilities tend to think that they is no substitute of services they offer but there is. There are organizations and even individuals who sometimes decide to drill their own water sources so if they are not satisfied with services offered by these water utilities they may go for another option.”
Table 4.4 shows a summary of responses on Customer Relationship Management and organizational Effectiveness
Table 4 STYLEREF 1 s 0 SEQ Table * ARABIC s 1 4: Table 4.4: Customer Relationship Management and organizational EffectivenessS/N Statement Yes No
1 Customer relationship management helps to improve services provided by TANGA UWASA 65(80.2%) 16(19.8%)
2 Customer relationship management at TANGA UWASA helps revenue generation at TANGA UWASA 62(76.5%) 19(23.5%)
3 Customer relationship management at TANGA UWASA makes customers loyal to the Authority 51(63%) 30 (37%)
4 Customer relationship management helps TANGA UWASA to implement its strategic plan 48(59.3%) 33(40.7%)
5 Customer relationship management at TANGA UWASA contributes towards customer satisfaction 60 (74.1%) 21 (25.9%)
Source: Field Data, 2018
Customers’ Perception on Service QualityAnother objective of this study was to assess customers’ perception on service quality. Four criteria were used to assess service quality which includes reliability, assurance, empathy and responsiveness. Customers were asked to rate each criteria on the scale of poor, acceptable good, excellent and exceptional.
On reliability 4 customers (13.3%) rated it as poor, 8 customers (26.7%) rated it as acceptable, 10 customers (33.3%) rated it as good, 7 customers (23.3%) rated it as excellent and 1(3.3%) customer rated it as exceptional. It can be concluded that service quality at TANGA UWASA is reliable since 59.9% of all the respondents (customers) rated it from good to exceptional while only 41.9% rated it bellow good i.e poor and acceptable.
Figure 4 SEQ Figure * ARABIC s 1 3: Customers’ Perception on Reliability
Source: Field data, 2018
On assurance 2 respondents (6.7%) rated it as poor, 8 (26.7%) rated it as acceptable, 11(36.7%) rated it as good, 8 respondents (26.7%) rated it as excellent and one respondent rated it as exceptional. Customers generally are in favour of service assurance at TANGA UWASA since 66.7% rated it above acceptable i.e. good, excellent and exceptional.
Figure 4 STYLEREF 1 s 0 SEQ Figure * ARABIC s 1 4: Customers’ Perception Assurance
Source: Field data, 2018
In rating empathy 4 customers (13.3%) rated it as poor, 3 customers (10%) rated it as acceptable, 19 respondents (63.3%) rated it as good, 3 respondents (105) rated it as excellent and no one (0%) rated it as exceptional. Generally, customers consider empathy to be above acceptable by 73.3% of the all respondents.
Figure 5 SEQ Figure * ARABIC s 1 5: Customers’ Perception of Empathy
Source: Field Data, 2018
In responsiveness 3 customers (10%) rated the service quality as poor, 7 customers (23.3%) rated it as acceptable, 15 respondents (50%) rated it as good, 4 respondents (13.3%) rated it as excellent and 1 respondent (3.3%) rated it as exceptional. In general, 66.6% of all the customers found responsiveness at TANGA UWASA to be above acceptable.
Customers’ Perception on ResponsivenessFigure 4 SEQ Figure * ARABIC s 1 6: Customers’ Perception on responsiveness.
Source: Field Data, 2018
By considering all four criteria used to assess customers’ perception towards quality of services offered by TANGA UWASA 11% of the respondents consider the service as poor, 21.7% considered it as acceptable, 46% considered as good, 18.3% considered it as excellent and 2.7% considered it as exceptional. It can be generally considered that perception of customers is good since 67% of the customers rated their services above an acceptable level (good, excellent and exceptional). Yet TANGA UWASA has to ensure that service quality is improved to meet and exceed expectation of the remaining 33% who rated the service quality bellow good i.e. acceptable and poor.
Table 4 STYLEREF 1 s 0 SEQ Table * ARABIC s 1 5: Customers’ Perception on Service
S/N Statement Poor Acceptable Good Excellent Exceptional
1 Reliability 4(13.3) 8(26.7) 10(33.3) 7(23.3) 1(3.3%)
2 Assurance 2(6.7%) 8(26.7%) 11(36.7%) 8(26.7%) 1(3.3%)
3 Empathy 4(13.3%) 3(10%) 19(63.3%) 3(10%) 0(0%)
4 Responsiveness 3(10%) 7(23.3%) 15 (50%) 4(13.3%) 1(3.3%)
Average 3.3 (11%) 6.5
(21.7%) 13.8 (46%) 5.5
Source: Field Data, 2018
Challenges in implementation of customer relationship managementAnother objective that this study aimed at achieving is to identify challenges facing TANGA UWASA in implementing customer relationship management.
Untrained personnelThe most frequent challenge mentioned by respondents was presence of untrained personnel on the area of customer relationship management. The challenge was mentioned 65 times (80.2%) by the respondents. In responding to the issue an officer responsible for human resource management at TANGA UWASA responded that,
“we agree that we don’t sufficient training sessions on this area due to the fact that training programmes depend on availability of funds to finance these programmes. However, we have been training to organize training programmes basing on available funds at a particular time of the year.”
In the interview that was done with one of the employees, he lamented that,
“training on customer relationship management has been biasly provided. Although we don’t have enough training programmes of this nature but people who always participate in this training are the same. It is like some of us who don’t work on help desk do not need these training but the truth is we do because in our day to day working life we meet and help customers”
Having unskilled employees on handling customers’ issues is unhealthy to any organization since customers are supposed to be handled carefully to ensure that customers’ satisfaction. The study of Bruno (2012) demonstrated the empirical evidence proving that there is direct relationship between customer satisfaction and organizational success. This entails that if TANGA UWASA needs to reach their organizational goals effectively and efficiently having regular training on customer relationship management is unavoidable.
Another challenge that was mentioned by the respondents is limited budget. This challenge was mentioned 61 times (75.3%) by the respondents. It was found that some of initiatives aiming at improving customer relationship management fail because of absence of needed funds to implement. It was observed that there are number of computer softwares that were needed to be put in place in order to improve ways of reaching customers and customers to reach the organization but having no sufficient funds limited the process.
One of the employees commented that,
“Sometimes we need financial resources in order to solve our customers’ problem but we fail to do it on time or not doing it at all because of insufficient funds, this actually affects our relationships with our customers”.
These findings are consistent with those of Wanjiku (2011) who found that most of Kenyan commercial banks fail to implement some of customer relationship strategies due to lack of financial resources to do so.
Technological challenge is another challenge facing customer relationship management at TANGA UWASA as it was identified by 45 (55.6%) respondents of the study. Organizations have been utilizing technological advancements to ensure that they maintain and improve their relationships with their customers (Nwanko, 2013). This has been the same to TANGA UWASA but some challenges have been making this less effective. The study found that some customers are not aware that there are some information that they can access through their cell phones or a website and they took trouble to visit the office something that cost their time and energy. It was also observed that some customers do not have needed devices to access some information and make online transactions.
Bureaucracy in another challenge that affects customer relationship management at TANGA UWASA; the study found that sometimes it takes too long to help customers because decisions take too long to made because of rules, regulations and unnecessary red tapes in the organization. 41 respondents (50.6%) mentioned bureaucracy as one of challenges facing customer relationship management at TANGA UWASA.
One employee commented that,
“most of our works especially in government offices are done in paper works that need approval and authorization so this sometimes causes delays and in most of the times it is beyond our capability”.
This gives a picture that having long processes in serving customers is unhealthy to effective customer relationship management. This may also lead to customer dissatisfaction and affect overall performance of an organization. It was observed by Patel (2013) that customers prefer quick responses and this is one of ways of making them loyal to any type of business.
Customers’ insufficient knowledge on their rights
Customers’ insufficient knowledge on their rights is another challenge that faced. It was noticed that some customers do not know their rights and think it is probably favour or privilege. 23 respondents (28.4%) mentioned this as one of challenges facing customer relationship management.
One of TANGA UWASA employees commented that,
“it is easier serving an employee who knows what his or her rights are. But sometimes you may find out that employees do not know. There are incidences where a customer convince you to receive money from him or her so that you can serve him or her but in real sense they are supposed to be given the service without any payment”
This implies that TANGA UWASA does not offer required information to their customers something that have to be done through various channels so that they can enjoy services offered. Information is referred to as one of powerful tools to enable effective customer relationship management because it acts as link between customers on one side and service providers on the other side (Peterson, 2015)
Table 4.6 illustrates a summary of challenges that are faced by TANGA UWASA in customer relationship management
Table 4 SEQ Table * ARABIC s 1 6: Table 4.6 Challenges facing Customer Relationship ManagementChallenge Frequency Frequency percentage
Untrained personnel 65 80.2%
Limited budget 61 75.3%
Technological challenges 45 55.6%
Bureaucracy 41 50.6%
Customers’ insufficient knowledge on their rights 23 28.4%
Source: Field data, 2018
CHAPTER FIVESUMMARY, CONCLUSION AND RECOMMENDATIONSIntroductionThis chapter presents a summary of the study and the findings. It also provides a conclusion of the study and finally the recommendations and areas for future studies.
SummaryTANGA UWASA uses various strategies to enhance customer relationship management which includes integration of technologies such as online platforms to reach customers and other traditional ways like the use of suggestion boxes. Out of 81 respondents 63 (78%) believed that there were special strategies to enhance effective customer relationship management while 18 (22%) didn’t believe so.
Customer relationship management contributes towards effectiveness of TANGA UWASA through increasing in revenue generation and cost reduction. This was supported by 80.2 % of the respondents. 19.2% disagreed that customer relationship management contributes towards organizational effectiveness.
On perception of customers on quality of services offered by TANGA UWASA 67% of the customers rated the services as above acceptable which includes good, excellent and exceptional. Criteria used to assess quality service include reliability, assurance, empathy, and responsiveness
Several challenges affect effective implementation of customer relationship management at TANGA UWASA. They include presence of untrained personnel in customer relationship management, presence of limited budget, technological challenges, bureaucracy and customer insufficient knowledge on their basic right.
ConclusionThe study concludes that customer relationship management plays a significant role on performance of water utilities in Tanzania as it was found at TANGA UWASA. Customer relationship management helps in increasing revenue generation and decreasing operational cost hence helps in profitably of the Utility. Service quality at TANGA UWASA is recommendable but there is a chance to make it better by dealing with challenges this study identified. The challenges include lack of trained personnel, insufficient budget, technological challenges, and bureaucracy and ignorance of customers on their basic rights. If customer relationship management will be taken more seriously by all organization’s member the chances of increasing customer satisfaction, customer retention, customer loyalty, corporate image and more other benefits of CRM are feasible. This will in turn increase performance of the organization in various dimensions
RecommendationsThe study recommends the following as ways of improving customer relationship management therefore to increase organizational performance of Water Utilities in Tanzania basing on the findings of this study;
Strategies on improving customer relationship management should consider all types of customers in order to make them more effective, for instance, when organizations consider the use of advanced technologies on reaching their customers they should find alternative strategies for those that cannot access the technologies
Dealing with customers’ complaints and suggestions should not take too long. Organization should decentralize considerable amount of power to their units, departments and officers to enable them to deal with them on time
Organizations’ budgets should consider implementation of customer relationship management strategies to ensure that they are effectively and efficiently implemented.
Customer relationship management training programs should be designed and seriously implemented to all employees and for them to be effectively implemented they have to be reflected in budgets and calendars of organizations
Awareness programs should be designed for customers to educate them on operations of organizations and customers’ rights through various media such as notice boards, social media, radios and TV’s.
Integration of technological tools in looking for, storing and retrieving information relating to customers
5.5 Areas for Future Studies
The scope of this study was limiting since it ended on investigating the role of CRM on performance of Water Utilities by using TANGA UWASA as a case. Although the study’s objectives were achieved yet there is a need more comprehensive studies to retest these findings in other areas to confirm the findings since other water utilities may different experience because of various variations in the actual fields.
Other studies may also consider investigating on the role of the legal framework governing water utilities on the performance of these organizations. The findings will supplement findings of this study by filling the available literature gap research
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Dear respondent, my name is Rashid Shabani Mwinjuma, a student at Mzumbe University Pursing Master of Business Administration. Kindly assist me by filling in this questionnaire with correct and relevant information. All information provided will remain confidential and it is for academic purposes only.
Choose the most appropriate answer my putting a tick beside it in a bracket provided and provide correct and relevant information where demanded.
(a)Male ( )
(b)Female ( )
(a)18-28 ( )
(b)29-39 ( )
(c)40-50 ( )
(d)51-61 ( )
(e)Above 61 ( )
(a) Single ( )
(b)Married ( )
(a)Certificate ( )
(b)Diploma ( )
(c)Bachelor Degree ( )
(d)Postgraduate Dip ( )
(e)Master’s Degree ( )
5. Work Experience (For TANGA UWASA employee)
(a) Bellow 1 Year ( )
(b) Between 1 and 2 years ( )
(c) Between 2 and 4 years ( )
(d) Between 4 and 8 years ( )
(e) More than 8 years ( )
B. Organizational Strategies and Customer Relationship Management
Statement Yes No
TANGA UWASA has special strategies aiming at improving customer relationship TANGA UWASA has a special mechanism of searching for complaints from customers TANGA UWASA customers can easily lodge their complaints to TANGA UWASA Management TANGA UWASA responds to customers’ complaints on time TANGA UWASA value customers’ suggestions Employees at TANGA UWASA are regularly trained C. Customer Relationship Management and organizational Effectiveness
Statement Yes No
1 Customer relationship management helps to improve services provided by TANGA UWASA 2 Customer relationship management at TANGA UWASA helps revenue generation at TANGA UWASA 3 Customer relationship management at TANGA UWASA makes customers loyal to the Authority 4 Customer relationship management helps TANGA UWASA to implement its strategic plan 5 Customer relationship management at TANGA UWASA contributes towards customer satisfaction D. Customers’ Perception on Service Quality
Rate the quality of services offered by TANGA UWASA by indicating the level of satisfaction against each element in the table bellow;
S/N Statement Poor Acceptable Good Excellent Exceptional
1 Reliability 2 Assurance 3 Empathy 4 Responsiveness 5 Tangibles E. Challenges facing TANGA UWASA in Customer Relationship Management
1. Mention challenges facing TANGA UWASA in Customer Relationship Management
What strategies are used at TANGA UWASA to strengthen customer relationship
Do you have a data base of information of all your customers’ details?
How does customer relationship management helps in generation of revenue?
Does CRM helps in reducing operational costs at TANGA UWASA
How does customers perceive the services you provide
Are employees regularly trained on customer relationship management and related issues
Are there any challenges that you think TANGA UWASA is facing in customer relationship management?