Mastering Metrics 38460063 p2b4d

Mastering Metrics (2201)

hip Number: 38460063

ASSIGNMENT/PROJECT FRONT SHEET CIM hip Number:

38460063 MASTERING METRICS (2201)

Module Title:

DIPLOMA IN PROFESSIONAL MARKETING

Level Accredited Study Centre:

SIMON PAGE, ACCRA GHANA

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To: The Head of Marketing Management From: Customer Information Manager Subject: A review of Opportunity Savings and Loans Company Ltd (OISL) measuring and classification of customers/s and the utilisation of the different range of marketing metrics to understand customer behaviour. Date: 29th June, 2016

This report contains a review of understanding customers in relation to customer retention and or customer loyalty. It comprises the evaluation of the various types of customer metrics and the classification of OISL’s customer base and its effectiveness towards the development of targeted range of marketing activity and the application customer data in of customer loyalty and or retention. Finally, a briefing paper is prepared for the summarisation and recommendations of an effective and best way to evaluate and retain a customer with the analysis of how a metric strategic decision making and the preposition of some sources of data and future metrics for OISL.

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TABLE OF CONTENTS 1.0 UNDERSTANDING AND CLASSIFICATION OF CUSTOMERS…………………………………………………………………...........5 1.1 Key Metrics That Could Be Used For Customer Retention and Customer Loyalty Evaluation within OISL………………………………………………………………………………….………………………………………………………………………..5 1.1.1 Customer Satisfaction……………………………………………………………………………………………………………………...5 1.1.2 Customer retention rate…………………………………………………………………………………………………………………..5 1.1.3 Churn Rate……………………………………………………………………………………………………………………………………..…5 1.1.4 The Net Promoter Score (NPS)…………………………………………………………………………………………………….…...5 1.2 HOW OISL CAN BENEFIT FROM UNDERSTAND CUSTOMERS WITH THE IDENTIFIED METRICS………..……………..6 1.3 OISL’S EVALUATION OF CUSTOMER CLASSIFICATION PROCESSES…………………………………………………….…….........6 1.3.1 Starting-Out Consumers ………………………………………………………………………………………..…………………………7 1.3.2 Dual Earnings with No Kids (DEWNK): ……………………………………………………………………………….……….......7 1.3.3 First Time Home Buyers: ………………………………………………………………………………………………………..………..7 1.3.4 Established Households ……………………………………………………………………………………………………….………….7 2.0……………………………………………………………………………………………………………………………………………………………..…..……8 2.1 ANALYSIS AND PRESENTATION OF RESULT FOR THE APPLICATION OF MARKETING METRICS FOR CUSTOMER RETENTION/LOYALTY…………………………………………………………………………………………………….............8 2.2 MARKETING DASHBOARD…………………………………………………………………………………………………….……………..……….10 2.2.1 Reasons for Using Pie Chart and Bar Graph as a Graphical representation tool……………………………........11 2.3 PRIORITIZED METRICS SUITABLE FOR CUSTOMER LOYALTY PROGRAMME IMPLEMENTATION AT OISL....................................................................................................................................................................12 2.3.1 Net Promoter Score (NPS) 2.3.2 Customer Satisfaction and Retention rate…………………………………………………………………………………….…12 3.0 BRIEFING PAPER: CUSTOMER EVALUATION……………………………………………………………………………………………….14 3.1 BACKGROUND INFORMATION/ABSTRACT……………………………………………………………………………………………………14 3.1.1 Aim .........................................................................................................................................................14 3.2 ANALYSIS………………………………………………………………………………………………………………………………………….………….14 3.2.1 SWOT Analysis of Opportunity Savings and Loans Company (OISL) ……….………………………...................14 3.3 MARKETING OBJECTIVE……………………………………………………….……………………………………………………………..........14 3.4 PLANNED/STRATEGIC OPTIONS FOR OISL ……………………………………………………………………………….………………...15 3.4.1 Ansoff Matrix Growth and Branding Strategy…………………………………………………………………………….…..15 3.5 IMPLEMENTATION…………………………………………………………………………………………………………………….…………..15 3.5.1 Tactics for Marketing Mix……………………………………………………………………………………………..……….……..…...15 3.6 CONTROL ………………………………………………………………………………………………………………………………..………...….16 3.7 RECOMMENDATION: SOURCES OF DATA FOR CUSTOMER RETENTION/ CUSTOMER LOYALTY EVALUATION………………………………………………………………………………………………………………………………..………….………….15 3.7.1 Surveys and Interview (mail, telephone, and in-person) or repeat visits ( sheets)………..............16 3.7.2 Published Electronic Sources (web logs, general website, e-journals, and social media)….………………..16 3.7.3 Published Printed Sources (magazines/newspaper, government publications and policies, books and reports)………………………………………………………………………………………………………………………..….17 3.8 RECOMMENDATIONS OF SOME FUTURE METRICS……………………………………………………………………….……………….17 3.8.1 Product and Pricing Metrics…………………………………………………………………………………………………………..….17 3.8.2 Promotional and Social Media Metrics…………………………………………………………………………………….…………17 3|Page


3.8.3 3.8.4


Conversion Rate……………………………………………………………………………………………………………………….……..17 Brand Metrics………………………………………………………………………………………………………………………………….17

3.9 CONCLUSION………………………………………………………………………………………………………………………………………….....17 4.0 ORGANIZATION SUMMARY………………………………………………………………………………………………………..……………..18 5.0 APPENDICES……………………………………………………………………………………………………………………………………..………..19 5.1 APPENDIX 1: Formula for Calculating Some Marketing Metrics………………………..………………………….……….…..19 5.2 APPENDIX 2: Evaluation of marketing metrics…………………………………………………………………………………………..…20 6.0 REFERENCES……………………………………………………………………………………………………………………………...........………..21

List of Tables Table 1: NPS of OISL Customer base Evaluation…………………………………………………………………………….……………….....8 Table 2: Churn and Retention rate…………………………………………………………………………………………………….……..………14 Table 3: SWOT Analysis

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1.0 UNDERSTANDING AND CLASSIFICATION OF CUSTOMERS 1.1 Key Metrics That Could Be Used For Customer Retention and Customer Loyalty Evaluation within OISL Marketing metrics have gained popularity over the years due to its significant role in the measuring and collection of marketing data in order to make effective marketing decisions for the determination of lifetime value and tracking customer retention rates and or customer loyalty among other factors. A metric can be defined as a ‘measuring system that quantifies a trend, dynamic or characteristic’ (Farris et al., 2009:1). Given the increasing value of intangible assets, it is clear that marketing investments and the resulting assets (brands, customers, and channels) play an important role in determining a company’s performance and financial value. In a speech in South Africa in 1890 Mahatma Gandhi said this in relation to who a customer is: “A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption of our work. He is the purpose of it. He is not an outsider of our business. He is part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us the opportunity to do so.” Apart from the importance of tracking revenue, Opportunity International Savings and Loans Limited (OISL) can complement its efforts by evaluating customer retention and loyalty, with the following key metrics as discussed below: 1.1.1 Customer Satisfaction: Customer satisfaction is directly linked to customer expectations. Revenue will not last if customers are dissatisfied; this metric indicates how long customers stay with an organization over a given period of time, it also helps understand what products meet customers’ needs. OISL could do a survey to find out how satisfied customers are on key elements of the customer service, time taken for the disbursement of loans etc., the higher the customer satisfaction rates the higher the loyalty rates will be for OISL as a satisfied customer will stay and also broadcast its services. 1.1.2 Customer retention rate: This metric indicates how long customers stay with an organization over a given period of time (Appendix 1). Fred Reichheld, author of ‘The Loyalty Effect’, says that a 5% increase in customer retention can lead to a 25-100% increase in profit for any organization (loyaltyrules.com). It is very important for any marketer to retain customers as well as to attract them as it less expensive keeping existing clients. Customer retention can be measured using secondary facts such as frequency with which a customer purchases OISL’s products or services. This involves the use of a strong customer information istration. 1.1.3 Churn Rate: Churn is the rate at which an organization loses customers (Appendix 1). Churn is measured because it’s a possible indicator of customer dissatisfaction, cheaper or better offers from the competition, or more successful sales and marketing by a competitor (Licata, 2014).Since customer experience is very important to customer retention in the world of small businesses. OISL can track churn rate by taking all the customers it lose during a time frame, such as a month, and divide it by the total number of customers it had at the beginning of the month, excluding new sales from that month. 1.1.4 The Net Promoter Score (NPS): NPS assesses to what extent a respondent would recommend a certain company, product or service to his friends, relatives or colleagues (Appendix 1). This metrics 5|Page



recognizes that measuring customer satisfaction is not adequate, OISL must understand how loyal their customers are in order to better gauge how happy they are. The NPS score gives OISL a good indication of how many customers are advocates. There are three groups of NPS: “Promoters” are loyal customers who recommends companies to friends (scores of 9 and 10). “ives” are satisfied but unenthusiastic customers who can be easily wooed by the competition (scores of 7 and 8). “Detractors” are unhappy customers who are ‘at risk’ and spread the majority of the bad word of mouth (scores 6 and below).

1.2. HOW OISL CAN UNDERSTAND CUSTOMERS WITH THE IDENTIFIED METRICS Reichheld (2004) suggested that Customer satisfaction plays significant role within any Organization. Not only is it the leading indicator to measure customer loyalty, identify unhappy customers, reduce churn and increase revenue; It is also a key point of differentiation that helps you to attract new customers in competitive business environments. In connection with the above the following marketing metrics discussed are with its significant: Customer Satisfaction and Retention rate provides monitoring of dedicated customers and lost customers. Monitoring repeat business will help OISL understand how important their product or service is for their customer base. This helps OISL to know the preferences of the different segments of its customers by monitoring which customers are using or patronizing different service offerings of OISL’s business with their level of satisfaction. Some researchers have argued that customers should be treated as renewable resource (Dreze and Bonfrer 2005). OISL’s Customers who buy throughout its offerings are perhaps the company’s most important customers to focus on for its retention strategies. Churn metrics assist in risk reduction by determining with remedies why customers are leaving a company. Cancellations and returns are comparable to churn. According to Lyon (2010), if an organization does not know how much customers it’s losing, it won’t be able to understand how much new customers it will require to stay out of the red. According to a customer satisfaction article by Beard (2008), price is not the main reason for customer churn; It is actually due to the overall poor quality of customer service; hence by measuring and tracking churn rate, OISL can track issues and areas of discontent and dissatisfaction amongst its customers. Also studying churn rate might provide patterns in of which customers frequently leave. It also help track activities and products of competitors that are making customers leave giving an indication of the customer needs OISL is yet to meet.

Net Promoter Score can assist OISL track its customer segments, geographic units or functional groups with the goals of creating more promoters and fewer detractors. Net Promoter Score systems ask customers the reasons for their ratings using an unstructured, open-ended question. This provides employees throughout the organization the opportunity to hear comments from customers every day in their own words. In view of the fact that OISL can track customer’s happiness using NPS from one survey period to the next, OISL can be able to see if the strategies it is implementing have improved customer satisfaction or had a negative impact. For example, OISL can use to determine if customers will return or not and how loyal they are to the company’s brand. 1.3 OISL’S EVALUATION OF CUSTOMER CLASSIFICATION PROCESSES OISL having established a commanding market share within the microfinance industry of Ghana with different range of products and services offerings, and since customers have different reasons for purchasing, different habits as customers, different values, and different reasons why they are loyal. 6|Page



These differences go beyond customer demographics. When evaluating potential market opportunities and customers, OISL’s classification process is based on what the company understands of customers with common characteristics such as Demographic (i.e., Age, Income, Geographic, and Occupation), Psychographic (i.e., Brand Preferences, Lifestyle, Service Preferences, and Influenced by Peers) among others. As Microfinance Company, providing financial services and or products, OISL have four processes by which it currently uses to classify its customers, as discussed below the concept of the family life cycle is used. Family life cycle is the stages that an individual typically goes through over time in their life as they move in/out of relationship and probably start a family. 1.3.1 Starting-Out Consumers: This group of customers, while generally providing a very low profit contribution for OISL, they do provide some potential to be migrated into a medium-value customer of the company with competitive and customer friendly programs and services or products. This section consists of patrons who are usually grown-up youth who are starting-out on their vocation. At this phase of their life, their only need is comparatively simple monetary products, such as savings and ‘Susu’ and possibly a credit card. The challenge OISL faces with this classification is the ability to convince these risk adverse customers to be willing to place most or all of their financial business with the company. 1.3.2 Dual Earnings/income with No Kids (DEWNK): This segment of OISL customer base consists of two group, that’s customer who are engaged or married and perhaps in a serious relationship. This group of consumers craves to save more money, looking for short-term investments and borrowing larger amounts to probably acquire a car or go on a major holiday. At this stage of their life, there are no children in the relationship which means the couple can continue to rent without the emotional pressure to purchase a house. This classification process has been very effective for OISL due to its ability to track and woo couples without children for its services and unique tailored products. 1.3.3 First Time Home Buyers: It is when people are about to start a family that their financial needs significantly change, indeed many of their regular purchases also change significantly. This lifecycle change is quite important for OISL as the young family is usually more motivated to purchase a home, which will transform the customer from being a low value customer to a medium or high value customer through one large loan transaction. This process is less effective due to the high interest rate on home loans 1.3.4 Established Households: The established Households section has grown-up kids and typically has its parents working. At this phase of their lives, some wealth are being established and their needs typically shift from loans and mortgages to savings and investment s and perhaps even share investments and possibly business loans. These family life cycle classification processes used by OISL is highly effective for helping determine appropriate marketing strategies for each target market. For instance, starting-out customers typically require relationship marketing tactics, Dual Earnings with No Kids (DEWNK) segments can be pursued with special offers.

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2.0 2.1 ANALYSIS AND PRESENTATION OF RESULT FOR THE APPLICATION OF MARKETING METRICS FOR CUSTOMER RETENTION/LOYALTY Having identified range of metrics that could be used to evaluate customers of OISL, the focus will now be on the application of these metrics in order for effective classification of OISL’s customers, for the purpose of customer retention and or customer loyalty. Naturally, a company cannot perfectly predict the cash flows associated with an individual customer, but it can calculate the expected value of the cash flows (adjusting for risk) associated with an individual customer conditional on the customer’s characteristics, the company’s planned marketing actions and environmental factors(Hogan et al. 2002). In connection with the customer classification processes of OISL, the most retained customers of OISL are those who fall between the category of Medium- worth Customers and High- worth Customers. The application of Net Promoter Score recommendation question has played a major role in classifying OISL’s customer base in of customer retention. Considering some of the products range of OISL, for example Savings Products, (i.e. Agro Saver for farmers, current for businessmen and women, and Susu Deposit for petty traders), Loan Products (Home loans for individuals who want to own a house, Edufund for students who need financial assistant, group loans and business loan for entrepreneurs) and other services such as Opportunity Mobile Bank to meet the dynamic needs of the various identify segments of the OISL customer base has been able to capture the various segment of the market with the following level of satisfaction using a scale of 0-10 to answer a single question: Are you likely to recommend OISL and its products to others? In order to ascertain the loyalty level of the company’s customers, respondents of the OISL are classify as follows with data collected from 960 respondents about a year ago: Table 1: NPS of OISL Customer base Evaluation NPS Promoters ives Detractors

Starting-Out e.g. (Students) 14.3% 8.5% 5.3%

Dual Earnings/Income with No Kids 11.9% 17.3% 5%

First Time Home Buyers 6.8% 3.9% 2.7

Established Families 9.8% 11.7% 5.8

Total 39.8% 41.4% 18.8%

The following analysis are presented in lieu of the above table 1. Promoters (score 9-10) are trustworthy and satisfied customer who share their unflinching relationship with the company and are willing to recommend the brand of OISL to others where the need be. 39.8% of OISL’s customer base happens to be its promoters of which 14.3% are Starting-Out Consumers, 11.9% Dual Earnings with No Kids Customers, 6.8% First Time Home Buyers and 9.8% of which are Established Families. According data acknowledged, most of OISL’s promoters are determine to remain loyal to the company, due to the ability of the company to meet their satisfaction level. For instance, according to OISL’s Performance Review Report of 2015, due to the low interest rate on loans, OISL’s loan clients increased from 57,865 in December 2011 to 72,608 in December 2014, an increase of 14,743(opportunity.com) Loan clients as a result promoters’ satisfaction and positive word of mouth. ives (score 7-8), are 41.4% of OISL customers are pleased and satisfied with OISL however, unimpressed customers who are susceptible to competitive offerings. Despite being satisfied with OISL’s products, they easily get influence by other service offerings of competitors. This group of people are made up of 8.5% of Starting-Out Customers e.g. (Students), 17.3% of Dual Earnings with No Kids 8|Page



Customers and 3.9% are first time home buyers who need special attention and loyalty program in order to reduce the churn rate and 11.7% of Established Households/families. Being able to predict churn within specific segments is not enough if OISL cannot determine marketing offers that should be delivered to each individual customer. OISL need to be far more precise and make it offers very targeted and personalized to see a sizable reduction in churn. Detractors (score 0-6) are the 18.8% of dissatisfied and unhappy customers of OISL can also be grouped into 5.3% starting-out consumers, 5% Dual Earnings with No Kids, 2.7% of first time home buyers and 5.8% of Established families phase are detractors who may damage the trade name and hinder growth through negative word-of-mouth as communicated via a survey conducted and collected from an outsource company. Table 2: Churn and Retention rate Customer Classification/segment Starting-Out Dual Earnings with No Kids (DEWNK): First Time Home Buyers Established Households/Families Total

Churn Rate 0.4% 6.6% 3.7% 4.4% 15.1%

Retention Rate 31% 21% 9% 13% 74%

Customer Satisfaction and Retention rate: It costs significantly more to acquire new customers than retain existing ones and it costs far more to re-acquire defected customers. From table 2, the total churn rate recorded in OISL for the past three years is 18.60% comprising of 0.4% students’ churn rate, 6.6% Farmers and 11.6% businessmen churn rate. The ability to track customer sentiment will give OISL early indicators into customer service issues or pricing issues. It will also allow OISL to be proactive in improving the customer experience, their engagement with the brand, and saves significant downstream costs and revenues loss. OISL can gauge customer retention rates on monthly, quarterly or annually. A customer retention rate is a great indicator of customer loyalty and effectiveness of customer service. As shown it table 2, the total retention rate is 66% showing a significant gain for OISL in of its ability of retaining customers.

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PROMOTERS

IVES

Starting-Out Customer

DETRACTORS Dual Earnings with No Kids

6.60%

0.40%

20 18 16 14 12 10 8 6 4 2 0

CHURN RATES FOR OISL

0.40%

Net Promoter Score for OISL

OISL'S AVERAGE YEARLY CHURN RATE %

2.2 MARKETING DASHBOARD FOR OISL ON MARKETING METRICS

Medium Low-Worth Starting-out Level Customers Consumers Customers, (Students) eg. Farmers Implied average Customer life Yrs

0.40%

6.60%

0.40%

AVERAGE YEARLY CHURN RATES = ( BEGINNING CUSTOMERS + GROSS CUSTOMER ADDS) OPPORTUNITY INTERNATIONAL SAVINGS & LOANS COMPANY (OISL)

First Time Home Buyes

OISL Cumulative Retention rate Starting-Out Consumers

9, 15%

31, 51% 21, 34%

Active Profitable Customers

Dual Earnings with No Kids (DEWNK)

20% First Time Home Buyers

Information from the pie chart has three portions which represent Starting-Out Consumers - 15%, Dual Earnings with No Kids - 34% and First Time Home Buyers - 15% of the retention rate recorded in the past 3 years now

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CUSTOMER LIFETIME VALUE OF OISL

20%

60%

Very Active Profitable customers

Incative Nonprofitable Customers



2.2.1 Reasons for Using the Above Graphical representation tool 2.2.2 Pie Charts are used in this presentation because it helps to:     

Show every data group in a frequency distribution Show comparative numbers or quantities of multiple categories Analysis a large data set in visual form Clarify trends better than do tables Simply implicit due to widespread use in business and the media



A pie chart for example gives a graphic description of the share sizes per individual segment

2.2.3 Bar Graph   

It's easy to compare sets of data between different collections at a glance. The association of the data between the x and y axes is easy to see. They are effective in presenting trends or changes over time

2.3 PRIORITIZED METRICS SUITABLE FOR CUSTOMER LOYALTY PROGRAMME IMPLEMENTATION AT OISL Using available marketing metrics data, OISL can predict its customer retention level and customer loyalty as well as which customers are likely to churn in the near term and can then design efforts to retain them. It’s important to know how each churn reduction effort will affect other parts of the organization. “Customer loyalty is the degree to which customers experience positive feelings for and engage in positive behaviors toward a company/brand” Bob Hayes (2013). Although there are so many metrics for measuring loyalty, the following, metrics are best suited for OISL in helping it to run an effective loyalty program 2.3.1 Net Promoter Score (NPS) According to (Sanghi, 2016), Net Promoter Score is the industry-wide standard metric to track customer loyalty. Hence the inability of any company to track this metric is likely to be kept in the dark about customer expectations and needs. To avoid all this from happening, here are some reasons OISL should be tracking its NPS a.

Net Promoter Score will give OISL an indication of who their ive customers are, this should help OISL to create a loyalty program that is targeted at moving the ive into loyal enthusiasts, also a measure of the percentage promoters in the course of the loyalty campaign will give an idea as to whether or not the campaign is successful so you need to make the connection between the metric and how the metric helps in structuring and running an effective loyalty program. For instance, if OISL’s NPS is 61, but its industry average is 70, it implies that, comparative to its competition, OISL have work to do. Likewise, if OISL score is 70, but all its competitors have scores in the low 60s, then, that implies that OISL rating pretty high with customers. Finding out about OISL’s NPS is one of the best ways to indicate long-term company growth.

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b. The NPS scheme is easy to use and connected with improved business growth The illustration assessment question is created around one idea, whether OISL’s customers like the establishment enough to endorse it. NPS investigation questions seek to understand why individuals or consumers would recommend/would not recommend a company’s brand. NPS also helps drive business growth as the company becomes more focused on improving the score. Being able to identified customers who are willing to recommend OISL’s brand will help it develop loyalty program around this segment so as to push for the company’s brand through positive word-of-mouth.

c. The increasing usage of social media, negative remark can spread very hurriedly. This can lead to substantial harm to OISL brand. Aside the NPS exposing the level of customer satisfaction and who loyal customers are, it also echoes their directly. When customers recognize that OISL are getting their complaints, they might be less likely to take their frustrations to social media. Hence using NPS as a metric to ascertain the level of customer satisfaction via social media in connection to developing loyalty program can be effective if well monitored and managed to know why customers do what they do. 2.3.2 Customer Satisfaction and Retention rate Customer retention is extremely significant for growing a sustainable business. According to the Harvard Business School, increasing customer retention rates by 5 percent increases profits by 25 percent to 95 percent (helpscout.net) Customer retention metric provides an indication of a customer’s states of satisfaction in connection to what products and or services customers patronized frequently and so as to tailor a loyalty program of which its rewards will be towards their delights in order to encourage customers to participate in OISL loyalty program. in addition, an enhanced customer retention rate as a result of an implementation of a loyalty program may point to a successful loyal programme Customer Retention is the drive which inspires an organization’s marketing/selling in order to decrease buyer defections. Effective customer retention metrics is one of the most appropriate metrics for OISL to use because customer satisfaction and retention starts with the first an organization has with a customer and continues throughout the entire lifetime of a relationship, hence a well satisfied customer will continue to do business with OISL should they be provided with their required needs. Generating customer loyalty places ‘Client worth rather than exploiting profits and shareholder value at the center of business strategy’. Customer retention metrics is more than giving the customer what they expect, it’s about exceeding their expectations so that they become loyal advocates for your brand. OISL has over the years increase its customers base with significant programs, It's more important for OISL to collect satisfaction data early and often by using several sources of data (existing customers, former customers and 3rd party reports) and different points in time to understand how its product or service is perceived. Measuring the difference in customer retention between database and non-database is one of the best ways to determine if your loyalty program is effective. Ensuring 12 | P a g e



that a client is satisfied with every point of interaction is a process that leads to customer retention and loyalty. However, OISL may face some challenges applying these metrics because data obtained using some metrics could be insufficient and not adequate for OISL to take decisions based on that. There may also be analysis Paralysis and inaccurate Data that could hinder the implementation of some of the metrics effectively.

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3.0 BRIEFING PAPER TITLE: CUSTOMER EVALUATION PREPARED BY: JEROME ADZAH DATE: 24TH JUNE, 2O16 3.1 BACKGROUND INFORMATION/ABSTRACT The use of marketing metric plays a very fundamental role in exploring measures of customer lifetime value, satisfaction, awareness, attitude, and usage major factors in the decision-making process by which customers select one brand over another. Davis’ (2014) describes that Marketing plans must align with overall corporate business strategy while also providing specific information about customer needs. In strategic decision making, marketing metric are simply a standard of measurements to determine whether an organization is progressing or weakening in its efforts. 3.1.1 Aim a) To examine how metric can strategic decision in OISL for Customer retention and loyalty b) To recommend at least three alternative sources of data for customer retention and or loyalty c) To propose future metrics for an informed decision making 3.2 ANALYSIS 3.2.1 SWOT Analysis of Opportunity Savings and Loans Company (OISL): SWOT analysis is used to evaluate situation of OISL because it helps identify if the OISL is healthy or not, so as to develop strategies for both the external and internal growth of the company. Table 3: SWOT Analysis Location of Factor

Favourable

Unfavourable

Strengths Weaknesses 1. Well dedicated and highly skilled and 1. Undifferentiated products motivated employees with competitors Internal

External

2. Customer focus with commitment and 2. Slow adoptability to change faster approval of loan with local board 3. Bureaucratic organizational 3. Corporate Social Responsibility (CSR) culture projects Opportunities Threats 1. Increasing living standards of customers 1. Intense competition can be seen as a sign of optimistic future. 2. Lawsuits against the company 2. Growing number of people saving and 3. Currency fluctuations applying for loans

3.3 MARKETING OBJECTIVE: To become a trusted and secure financial advisor with an increase in customer retention rate by 10% by the end of March 2019. 14 | P a g e



3.4 PLANNED/STRATEGIC OPTIONS FOR OISL 3.4.1 Ansoff Matrix Growth and Branding Strategy: This strategy includes an attempt to retain existing customers and to expand market share within existing industries, either by selling more product to and services established customers or by finding new customers within these markets – typically by adapting the ‘Promotion’ element of the Marketing Mix. Product Development (Existing Market, New Product): With a limited number of products and service offerings by OISL, the company can develop new products for existing markets .For instance, OISL would need to improve both product quality, levels of service with an additional modification to OISL’s range of products and services such as the Savings Products, Loan Products and Other Services such as Opportunity Biometric Identification, Opportunity Mobile Bank, and etc. Market Penetration (Existing Market, Existing Product): OISL with its current reputation within the microfinance industry can utilize market penetration on an annual basis by creating an association between OISL and Trade Union Cooperation (TUC) day and farmers’ day through its Corporate Social Responsibilities (CSR), which can helped boost sales during the period. Corporate Communications and Public Relations Strategy: This strategy ensures that there is a steady flow of positive, brand-strengthening stories circulated around the media to build strong links between the OISL and the public. The public relations function ranges from, Press relations, Product publicity, Public affairs, Special events, company magazines/newsletters; audiovisual materials, corporate identity materials (i.e., including logos and signage etc). 3.5 IMPLEMENTATION: In order for OISL to shape and deliver on its brand by maximizing customer satisfaction and increasing the company’s market share the following implementation tactics will be observe: 3.5.1 Tactics for Marketing Mix Product: OISL offers mainly banking services, but there are many financial products which it can offers along with banking. Introduction of additional products and or services such as Family Wealth , Car Loans, Risk management and business loan among others can be employed. Place: OISL’s delivery need not to be limited through ATMs or branches, but also has to expand through an excellent net-banking service, phone banking, mobile banking and SMS banking. OISL will ensure that it has a presence so that it can concentrate on its huge commercial clientele along with being present for its retail clients. Promotion: OISL should attempts to communicate with the customer through quality assurance of the products, colorful packages, written messages, pictures and symbols, attractive ambience and efficient salesmanship. OISL have to communicate with their existing customer as well as potential customer about what they are doing and what they are planning to do in near future through Personal selling, word of mouth promotion, ment, PR and direct marketing. For example, event and Television Sponsorship of Social and Entrepreneurial programs; adverts will be placed throughout the vantage social centres such as stadium, major roads and streets and the market centres using billboards, vendor posters and promotion items (i.e., cart umbrella and point-of-sales displays, will be distributed to supermarkets and other vendors with onsite service delivery of opening s and processing registration for savings and loans).

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People: Improve on customers services by training both top management staff and subordinates to be customer-centric. People are a common factor in every service. Good people mean good performance for an effective service delivery. Bad performers deliver bad services, that is why it also essential that OISL equip their employees to be well skilled, motivated and train to deliver their very best in of productivity. 3.6 CONTROL: To scrutinize the effectiveness and the application of these metrics, it is necessary for OISL to compare its actual performance with plan objectives. To facilitate this analysis, the following monitoring and Control procedures should be developed for the various activities required to bring OISL’s marketing objectives to fruition. These procedures include, but must not be limited, the following: A project management concept will be used to evaluate the implementation of the marketing plan by establishing time requirements, human resource needs, and financial or budgetary expenditures. A standardized reporting form i.e., Monthly report, Quarterly report and Annual Report will be developed and provided by the marketing director after the initial implementation phase. 3.7 RECOMMENDATION: SOURCES OF DATA FOR CUSTOMER RETENTION/ CUSTOMER LOYALTY EVALUATION Any business establishment’s routine activities are full of data. Data can be facts, images, or sounds that could or could not be relevant or useful for a particular task. The following examples demonstrate the varied sources of data that can be used to track customer retention and or customer loyalty among other performance indicators. 3.7.1 Surveys and Interview (mail, telephone, and in-person) or repeat visits ( sheets): Interview and surveys typically entail several questions that have structured response categories and may include some that are open-ended. The survey may be istered through the mail, telephone, on-line, or by personal interview. Surveying is the preferred method of data collection for a researcher who wants to obtain a small amount of information from a large number of subjects. For OISL to be efficient with its strategies by applying marketing metrics to further evaluate the company’s customer retention and or customer loyalty, it is highly recommended that the OISL use surveys and interviews by engaging customers, suppliers, competitors, salespersons and other shareholders for an effective marketing decision by determining the level of customer satisfaction for an effective loyalty program. The strengths of any interview process are the ability to get large amounts of data, the ability to gather a wide variety of information, the ability to obtain immediate follow-up and clarification. The limitations and weaknesses of interviewing include the ability to obtain cooperation from the interview subjects to properly convey the interview topics, the ability to obtain truthful responses and the increased difficulty of recording and classifying non-standard responses among other challenges. 3.7.2 Published Electronic Sources (web logs, general website, e-journals, and social media): Weblog material by well-known professional researchers writing within their field may be usable as a source of data although it may not reliable. For instance, consumers complain via social media through the webbased consumers’ opinion platform (e.g., opinions.com, Facebook, twitter, etc.), the internet enables customers to share their opinions on, and experiences with, goods and services with a multitude of other consumers. The wealth of information available online to a marketer can be use to enhance marketing strategies. For instance, Facebook has the largest number of social community giving its APIs (application program interface) a high value among social media marketers.

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3.7.3 Published Printed Sources (magazines/newspaper, government publications and policies, books and reports): Journals, magazines, and newspapers are serial publications that are published on an ongoing basis. For instance the regulatory authorities in Ghana such as Bank of Ghana (BoF), National Communication among others provides the platform where consumers send their complaints for appropriate sanctions which is the communicated via the newspapers. Government publications are an essential source of data, policy documents and reports to ascertain the changing behaviours of consumers and action policies to protect both businesses and individual customers. 3.8 RECOMMENDATIONS OF SOME FUTURE METRICS Below are some metrics that OISL must consider for tracking in the future for effective decision making towards customer related issues. These metrics will help guide OISL to improved customer loyalty and greater market share among others. 3.8.1 Product and Pricing Metrics; prices play a vital function for customer satisfaction and profitability, particularly in the current situation characterize by cost pressure and changing customer expectations, pricing is therefore of particular importance to both consumers and business. It presents microfinance companies and banks with challenges, but at the same time opportunities for an effective sales and marketing. Prices for bank products play a central role in the consideration to switch banks. The application of product and pricing metric is very paramount for the future growth of OISL since customers recognize pricing as an area where they seek to see improvements and regard these as a suitable means of increasing satisfaction with OISL. 3.8.2 Promotional and Social Media Metrics; emerging of social media makes measuring a company’s promotional activities in the social world to appear as blurred, and marketers’ information struggling to demonstrate the impact on their businesses of their social media efforts. If OISL apply its marketing effort with promotional and social media metrics, the company will be in a better position to increase its loyalty rate and customer service. 3.8.3 Conversion Rate; the conversion rate is the percentage of prospective customers who observes an organization’s offer and subsequently purchases a product. The application of this metric helps to understand how much is being spend on customer s before they are finally converted. 3.8.4 Brand Metrics: Kohler et al. (1999) described a brand as “a name, term, sign, symbol or design, or a combination of these, that identifies the goods or services of one seller or group of sellers and differentiates them from the competition”. Brand metric could help provide OISL with an understanding of the complexities of brand valuation. Brand image and position is an example of a brand metric. This is measured as the customers’ perception of the brand compared with that of competitors. Being able to understand customers’ behaviour towards a brand is obviously important when considering the changes to the product or brand proposition. 3.9 CONCLUSION Although, these marketing metrics are great for tracking the success of specific marketing programs, customer behaviour and content promotion campaigns, a very thoughtful and a well structure strategies be put in place to execute the metrics. This metrics are also ive in evaluating the performance of each marketing channel and tracking progress toward any organization’s marketing objectives. With the application of the right metrics and a good method for tracking them, OISL will be in a better position to understand what's working and what is not working for a customer retention and or loyalty rate of the company. 17 | P a g e



4.0 Organization Summary Opportunity International Savings & Loans Limited (OISL) Type of Organization Opportunity International Savings and Loans Limited (OISL) is a Ghanaian based profit making non-bank financial institution licensed by the Central Bank of Ghana (BoG) in June 2004. OISL is a Limited Liability Company. Size of Organization At year-end 2005, OISL stated capital stood at GH¢ 2.8 million (US$3.1 million) and 496 employees with fortunes of a low turnover rate (3.9%). OISL is a member of the Opportunity International Network-a global coalition of organizations dedicated to providing opportunities to people in less developed countries. The Network is made up of forty seven (47) partners in the world. As at September 2014, the institution has about 400,000 clients of whom 78,000 are loan clients. With a loan portfolio of nearly GHS 75, 100.00, OISL is one of the largest savings and loans companies in the Ghanaian economy. It has won several awards including Best Social Performance management. OISL offer is among the smallest initial loan sizes of any formal financial institution in Ghana. A four month loan from OISL can start at only GH¢ 70 ($77). Products and Service With its mission of providing financial solutions and training to micro and small entrepreneurs, the company deals in the following range of products namely; Savings Products, (i.e. Agro Saver , current , and Susu Deposit), Loan Products (Home loans, church loans, Edufund, group loans and business loan) and other services such as Opportunity Mobile Bank. Customer Base The customer base for OISL comprises of both mainly 79% B2C-focused (hairdressers, dressmakers, beauticians, farmers, traders, individuals, etc.) and 21% B2B focused (Small & Medium-Scale businesses). OISL serves a variety of clients, mainly women, who are engaged in sectors such as trading, services, small scale manufacturing, and agriculture ASME small and medium enterprises. Competitors OISL’s main competitors are Best Point Savings and Loans Ltd (BPSL), Bayport Financial Service, Beige Capital, Ideal Finance, AFB another Microfinance company engaged in similar services of providing financial services. Minor competitors of OISL are over 216 ed Non-banking financial services in the Ghanaian financial industry, examples are Advans Ghana, ASA savings and Loans Company Limited, among others.

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5.0 APPENDICES 5.1 APPENDIX 1: Formula for Calculating Some Marketing Metrics 1. Net Promoter Score

2. Churn Rate

3. Customer Lifetime Value (CVL)

4. Retention Rate

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5.2 APPENDIX 2: EVALUATION OF MARKETING METRICS Table 3: Evaluation of marketing metrics Metric Advantages Customer Aids in racking changes in Satisfaction as it enables it OISL to focus on customer trends through regularly scheduled online surveys or email surveys, and receive instant customer .

Shortcomings Because of insecurity of releasing private information, customers are hesitant in giving out information that may lead to more junk email and unwanted calls

Retention

It helps: Improve revenue Lower customer acquisition costs Increased referrals

It demands continuous engagement and loyalty programmes to retain existing clients

Net Promoter Score (NPS):

Easy to measure over time, giving your on-going updates of your customer loyalty levels

NPS does not communicate management teams what's working and what needs change. It says little about what motivates individual purchasing choices.

Churn rates

Churn rate has a direct impact on the ability to grow a company and helps in tracking changes in churn rate so as to identify if what a company is doing is improving customer churn or having a negative impact.

Customer churn is difficult to predict accurately.

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Appraisal It takes continuous effort to maintain high customer satisfaction levels. As markets shrink, companies are scrambling to boost customer satisfaction and keep their current customers rather than devoting additional resources to chase potential new customers Although it is less expensive to keep existing customers than to acquire new customers, it is recommended that an organization provide all the necessary resources needed to make existing customers happy so as to stay loyal. Companies are encouraged to follow the recommend question with an open-ended request for soliciting the reasons for a customer's rating of that company or product. It is also calculated based on responses to a single question: How likely is it that you would recommend our company and its products to colleagues? Churn rate can be minimized by creating obstacles which discourage customers to change suppliers (contractual binding periods, use of proprietary technology, value-added services, unique business models, etc.), or through retention activities such as loyalty programs.



6.0 REFERENCES AMBLER, T. (2003) Marketing and the Bottom Line. Harlow: Prentice Hall Bendle, N., Farris, P., Pfeifer, P., & Reibstein, D. (2010). Metrics That Matter to Marketing Managers. Marketing Journal of Research and Management, January, 5-10. Beard, R. (2013). Customer Satisfaction Metrics: 6 Metrics You Need To Be TrackingCustomer Satisfaction. [Online] Available at: http://blog.clientheartbeat.com/customer-satisfaction-metrics-6-metrics-youneed-to-be-tracking (Accessed: 27 April. 2016). CIM (2014) Mastering Metrics: CIM Diploma in Professional Marketing: Official Module Guide. Maidenhead: CIM. Fao Corporate document repository, 2014. Data Collection Methods. [Online] Available at: https://www.fao.org[Accessed (12 June. 2016). Gupta, S. and Zeithamli (2004) Customer Metrics and Their Impact on Financial Performance. New York. HAMANSU, S. M. (online) `http://knol.google.com

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KOTLER, P. and KELLER, K. (2006) Marketing Management. 12th Ed. New Jersey: Prentice Hall. KOTLER, P. et al. (2008) Principles of Marketing. 5th Ed. Harlow. Pearson Education Limited. R., (1985), “Consumer choice criteria in retail bank selection”, International Journal of Bank Marketing, Vol. 3, No 2, pp. 64-75. Sanghi, M. (2016) ‘10 Reasons Why Your Business Should Be Tracking Net Promoter Score’, Cloud Cherry, 13 January. Available at: www.getcloudcherry.com (Accessed: 01 June 2016). Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld (2106). ‘Net Promoter Score’ The Leading Growth Indicator’. Available at: www.netpromoter.com (Accessed: 07 June 2016). Sinha, S. (2012) ‘Market Segmentation Example for www.segmentationstudyguide.com (Accessed: 22 June 2016).

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Bank’.

[Online]

Available

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