Service excellence to drive success in telecoms franchises

The intense battle between rival South African mobile brands to win customers is quickly shifting towards customer service, and the cellular franchises that succeed will be determined largely by the level of service excellence that customers experience.

This is the view of Thabiso Ramasike, Head of Franchising at Standard Bank, who says the near-saturation of the local market has driven competition in the industry to unprecedented high levels.

Aspirant franchisees in the telecoms sector need to understand these dynamics before venturing into the multi-billion-rand mobile franchise sector, says Mr Ramasike.

He says while in the past industry players did not have to do much to attract customers, now with mobile phone penetration reaching high levels in South Africa the fight is intensifying. As a result of increasing competition, industry players are now being forced to take the franchise model very seriously.

Whereas in the past franchisees in the mobile franchise sector tended to be people who ran their businesses on a part time basis, major cell phone brands are now insisting on getting on board only prospective entrepreneurs that understand, and are serious, about the business.

Mr Ramasike says that all brands are trying to attract the prospective franchisees with the “right entrepreneurial profile”, who understand the mobile phone business environment and are customer-oriented.

He says the business environment has become more competitive to the extent that difficult-to-achieve differentiators such as service excellence will become key for both franchisors and franchisees as the client centricity becomes the new benchmark.

“There is a great need to improve levels of standardisation of service and customer experience, so that whatever experience a customer in Sandton has is exactly the same as what they would get in Soweto,” he says.

“The different cell phone brands are beefing up their franchises as they try to improve and standardise the experience of customers. Some have been auditing their franchises in order to find gaps in terms of customer service, and franchisees who will make the cut are those that can prove that they can make a difference.”

Mr Ramasike says it is also crucial for franchisees to understand the mobile phone usage behaviour of customers where their businesses are located.

“In certain areas, consumers prefer prepaid products while in other areas customers find contracts more attractive and suitable. So franchisees need to understand these market dynamics so there is a relationship between what they offer and what the customers really want.”

“The mobile phone franchise business itself is not that complicated. Prospective franchisees must understand that this is a customer-oriented business and that they will need to have good customer relationship skills to survive the competition that is emerging as a crucial differentiator in the market.”

The mobile phone sector is one of the five sectors that Standard Bank believes needs financial, entrepreneurial and mentoring support in order to improve the success rate of franchisees and growth in employment opportunities. Food retail, fast-foods, restaurants and fuel are the other four sectors with strong franchising and job creation potential, and in which Standard Bank is closely involved.

“Cell phone banking provides huge prospects for growth for the sector, and Standard Bank is already playing a leading role in that space. The provision of data services is another area where new growth is going to come for mobile phone operators.”

Press Release from Thabiso Ramasike, Head of Franchising at Standard Bank

Magna Carta Public Relations Pty Ltd