An action Plan for Customer Retention Using Distinctive Strategies of IT/IS;


A case study of exploration and production oil and gas companies


 


 


Project Background


 


Today, one of the most important business sectors in the world is the oil and gas industry, offering benefits to every individual, group of people and government sectors, given the highest commodity prices and profit of the economy tools.


Exploration and production of oil and gas have their impacts on many areas of the workforce as it will help to sustain the oil and gas industry because without oil and gas exploration and production the world would literally grind to a hall (University of Aberdeen, 2006)


Petroleum industry in the Kingdom of Saudi Arabia can be an example of competition in the petroleum industry sector, which depends primarily on the petroleum economy with oil revenue representing 90-95% total Saudi export earnings 70-80% of state revenue and around 40% of countries gross domestic product (GDP) (AL-Ghamdi & Suhail, 2006).


 


The recent increases of crude oil price have spurred and resulted in many new exploration and production which is estimated to have risen by 30% in 2006 to US$ 268 billion (Upstream, 2007).


Oil cycle starts with the acquisition (through direct negotiations or by taking part in bids) of the legal right to perform prospecting, other steps follow.


There was an evolution in oil prospecting contracts. Generally, the host state does no longer limits itself to a concession for prospecting and exploration of discovered fields, with corresponding receipt of royalties, though almost always, directly participates in the production revenues.


Choices in the area of exploration venture is assessed in the light of the possibilities and probabilities of discovering oil and gas based on certain number of fundamental geological elements (studies and surveys, knowledge of the area, evaluation of the mining risk) aside from consideration of an economic nature.


Operations on exploring oil and gas fields start with a geophysical survey which includes all operations necessary to identify any possible traps (rock reservoirs that permit the formation and storage of hydrocarbons).


To recover the trapped hydrocarbon the field has to be brought into production by drilling an optimal number of production wells and later installing the equipment necessary to free the gas and the oil from undesirable components (solid particles, water, salts, H2S gas, etc) and to separate the liquid phase of the oil form the gaseous one.  This step is called crude oil processing.


Once development has been completed, production activities begin. Through these steps the hydrocarbon components are extracted from the reservoir, treated in the processing plants and then conveyed to the market through pipelines or by tankers (Eni, 2008).


This research focuses on inbound services, which includes all the services that oil and gas industry has to supply during contract with customers.  All these can be signed in an agreement with both, either as partnership or shareholders or the oil companies will buy a block of land, and a company will start drilling wells until they reach and produce oil. The oil is then shared with the national oil company.


Inbound services allow organization to network and integrate a company’s customer services or support operation globally make the best use of company’s resources and ability to gather information (incoming) from different countries around the world (AT&T, 2008).  Through inbound services oil and gas companies can expertly handle customer support and enquiries with the knowledge agent need to meet and surpass customer expectations (Sound Solution marketing, 2008).


 


Services which can be supplied to customers are: Seismic supplies, Civil engineering to make road to the site, Mechanical engineering to make the rig ready at the site, Geologist to get information details on outcrops and else, Drilling team that includes Rigs and Mud Engineers, entire team of consultants on the Reservoir Engineering, and all other services like: Coiled Tubing, Cement, Acid units, Food supply, Water supply, Camps study group, Information Technology, Storage of Hydrocarbons, Research development, new technological, improving plant and equipment, and human capital development.


Customer in the area of exploration and production at the oil and gas companies should be seen as on-going opportunity, to better understand the rational behind this theory and to face the challenge of building customer loyalty.


Customer in exploration and production oil and gas industry are variety such as: refineries, medical centre, product manufacturing, pipeline companies, local government, whole sales petroleum product, chemical industries, gas services, selling petroleum industries, national oil companies, international oil companies, and private oil sectors.


By identifying type of customers and the inbound services which supply oil and gas companies to its customer. The Oil and Gas companies in Malaysia, for example, provides a successful program of customer retention plan and ability to retain its customer and satisfy them.


The main challenge faces the mortgage industry is the continued price sensitivity of their consumers.  As a result, the main objectives for many oil and gas companies is to employ customer retention program and development that will serve to reduce this price sensitivity, reduce the flight risk of customers, and therefore provide a competitive products and services to its customers (Davis et al., 2007).


 


 


 


 


 


 


 


 


 


 


 


 


 


 


Research problem


 


Customer retention program is an important technique to most companies because the cost of acquiring a new customer is far greater than the cost of maintaining a relationship with a current customer (Ro King, 2005).


Customer retention has a significant advantage in the form of lower prepayments, increased revenue, improved pricing on securitization (Gronroos, 1991; Covielloet et al., 2002).


New market condition sharpens competition. The number of competitor rises while at the same time the services and products available to the market differ less and less at their core. This has resulted in decreasing of customer retention and increasing costs to do business (Tariq Mouhiddin Ahmad, P. 6). Even though the level of satisfaction with customer relationship Management Implementation has not shown the best result (Abbott, 2001).


A study by Eriksson and Lofmarck (2000) shows that customer retention depends on the relationship substance built up due to interaction between the parties. The authors also give emphasis on the fact that purchasing of most services is very irregular in organizations.


The reason for irregular purchasing frequently of services is that the customer is doubtful to the needs of the services and has heterogeneous purchasing habits.


Exploration and production at oil and gas companies need to understand why customer stay or leave, what creates value for them and their profit and need to identify those customers with whom they wish to engage in a long-term relationship (Jobber, 2001). Therefore, in view of all the above mentioned reason service companies, that one of the intangible aspects of production, has not been subjected to in-depth study to explore the objectives of their plan to customer retention program and the type of benefits that the organizations undertake these study to derive them.


Many of problems within customer relationships that occur are resulted from the companies being unable to carefully analyze, such as: the customer relationship, and implement a unified way to examine the different relationship levels that take place when interacting with the customers.  Sense of details should also be a quality that the company possesses in order for the customer relationship to develop successfully.  The service supplier’s customer depends on is based on conventions that develop into different activities.  Together, these two constitute a relationship structure. By identifying the relationship structure the company can gain several advantages which can enhance the customer relationship (Storbacka & Lehtinen, 2000).


The overall purpose of this research is to increase the understanding of customer retention by using the competitive strategies of IT/IS in exploration and production business in Oil and Gas companies including solutions to problems for their relationship between the service providing companies for example, service companies of Oil and Gas industry and their customers in exploration and production oil and gas businesses.


 


Therefore, the research problem for this thesis is:


 


What are the main Establish Factors for Implementing Customer Retention Program (Plan) in Exploration and Production in the oil and gas industry?


 


 


 


 


Research Questions:


 


To reach the research purpose the following research questions are addressed:


 



  • What are the Critical Success Factors for developing customer retention plan in exploration and production in the oil and gas companies?



  •  


     


     



  • What are the specific strategies to achieve customer retention plan in exploration and production in the oil and gas companies?



  •  


     


     


     


     


     


    Demarcations


     


    The present study will specifically focus on enhancing customer retention in exploration and production in the oil and gas business by using the competitive strategies of IT/IS. Due to the above fact research, this study will be concentrating on a specific industry of exploration and production in the oil and gas that relies heavily on the customer retention plan between exploration and production in the oil and gas companies’ inbound services to their customers.


    In literature part, we will introduce theories related to customer retention and IT/IS strategies for individual and groups in exploration and production oil and gas industries to offer a clear structure to reader and to explain the proper context of the study.


     


    Respondents


     


    Customer Service Manager


    ·       Customer relationship Management.


    ·       Customer Satisfaction.


    ·       Customer loyalty.


    ·       Communication.


    ·       Customer interaction.


     




    • Customer Service Manager: is responsible to ensure the company that they work for satisfied its customer’s need, providing help and advice to customers, investigating and solving customer’s problem and handling facet-to-face enquiries from customers.




    • Customer Service Manager: has a series activity designed to enhance the level of customer satisfaction that is the feeling that a product or service has meet the customer expectation. Making commitment to learning what customers’ needs and wants and developing action plans that implement customer friendly.




    • Increasing market share and return on sales.




    • Increase sales and profit.




    • Improved employee relationships.




     


    Sales Manager




    • Evaluating the performance of sales workers.




    • Reviewing analysis of customer data.




    • Off-the-job training.




    • Involved in staff recruitment and appraisal.




    • Business planning and development.




     


     




    • Sales Manager: involved in selling products and services in return for money or other compensation, and learning how to put in place a sales management process where he can clearly define the activates.




    • Sales Manager: reviewing market analyzes helps to determine customer needs, sales volume potential and pricing schedule that will meet company goals, also representing their companies at trade association conventions and meeting to promote their products.




    • Predict the future trends affecting the business.




    • Influencing what should be trying to achieve




    • Focusing on activities to achieve results




    • Group training.




     


     



    Credit:ivythesis.typepad.com


    0 comments:

    Post a Comment

     
    Top