CHAPTER 2

 

 

Chapter 2

 

Review of Related Literature

 

This part of the paper consists of various related literature and studies about consumer services in online processes. It includes articles (both published and unpublished materials), books as well as internet sources. There is a plethora of literature in foreign texts than in local scene. But it does not undermine the possibility of the development of online services as a tool of electronic commerce in the country.

 

A.     Related Literature

1.      Foreign

 

Wireless Telephone

One important article that is related to the subject is entitled Engaging Customers Across All Touch Points published by Blue Martini Software, Inc. This paper explores the emerging strategies that leading retailers are pursuing in order to better serve their customers. Working with many prominent retailers, Blue Martini Software has observed five key customer-facing strategies: integrating new touch points, offering personalization, increasing campaign precision, accelerating market-testing, and analyzing customer data. For their efforts, retailers are reaping rewards in terms of market share, wallet share, and reduced marketing costs. Furthermore, retailers have been able to implement these strategies cost-effectively by deploying eCRM applications from Blue Martini Software. A similar theme is projected in an article entitled The Third Generation of Mobile Services by AU-System. The emergence of the third generation (3G) of mobile services, devices, and networks means that the connected society is here, together with its ubiquitous online services. The architecture and technology to create this vision are already standardized. Products and networks are underway and the different players in the value network are beginning to see their business opportunities. Operators can now benefit from making the Internet and all its e-services completely mobile, broadband, and even multi-access. Service and content providers can make use of these new market channels with yet unexplored features for customer interaction. This white paper presents an overview of critical business and technology aspects for operators and service providers with or without 3G frequency spectrum that currently struggle with the question of how to move their business over to a 3G basis. Online customers generally have higher expectations for Customer Service than they receive. There are a number of forces at work in the market’s new dynamics:

• Many of the Web users are new to this medium, which increases the significance of good design and clear organization. Online Web designers can no longer assume that their customers will be Web-and computer-savvy. Customers will frequently need help and if they can't find or receive it promptly it means abandoned carts and lost revenue.

• Experienced Web customers are also more demanding. The entry into the Internet marketplace of established brick-and-mortar establishments, with their experience-honed customer service departments and policies, has helped to raise the bar for customers' expectations of online service and fulfillment.

• Sites willing to invest in the necessary software have already started to gain ground using various data-mining techniques to find out not only more about their customers and what they want to buy, but also when and how they are most likely to buy.

And, perhaps most importantly, what will convince them to return.

 

 

 

2.      Local

 

Internet Banking

Among the industries that have embraced the Internet as a medium of business is the banking industry.  Internet banking has become the "next big thing" in the Philippine financial industry as more consumers discover its conveniences and its huge impact on their work and lifestyles.   At the same time, more and more businesses are interconnected to a global financial network such that a firm without an online presence is deemed a "dinosaur" of sorts in today's fast-paced business environment.  People with access to computers from either their homes or offices, or even from an Internet cafe find that the ease in use of online banking affords them the luxury of extra time and energy for other pursuits. A positive addition to the industry is the strong growth of mobile phone subscribers in the Philippines. Banks have included a "mobile banking channel" where people can access various online services, from basic account inquiries to credit card inquiries, even through their cellular phones.   Admittedly, some people still prefer the warmth of human contact despite the comforts offered by banking online. Another drawback of the industry is the low Internet penetration in the country. Still this new bank service is proving immense popular among the youth and the career and professional working class. Customer service, meanwhile, is becoming an important resource in today's new age of technology. It is a viable option in mainstream commerce where access in Internet becomes the name of the game. There are a lot of industries that are now resorting to Web for services to clients. It is the fastest and most economical way to facilitate transactions. Wireless telephones, on the other hand, are the most effective way to communicate. They transcend space and time making every transaction more easier and more faster.

The main advantage of Internet banking is its 24/7 availability. Night or day, or even during weekends, people can transact business with their banks by simply visiting an Internet branch on the Web. Transactions can ideally be executed and confirmed quickly although not always instantaneously. Processing time of online transactions is roughly the same to that of transactions via the banks' Automated Teller Machines (ATMs).   While the web-based services vary from one bank to another, most offer basic transactions such as account inquiries, bill payments, and fund transfers among various accounts. More advanced systems are online, too, and these allow clients to trade stocks or purchase mutual funds, among others.  Banks maintain web sites that allow accountholders to register online. Information on accountholders is required to ensure banks that they are dealing with a legitimate bank client. All data are kept confidential and online transactions are protected from potential hackers via firewalls and other security controls. For some banks, customers are given proprietary software that could be installed on their computers. The software allows accountholders to do work mostly off-line then connect to the Internet later to complete their transactions.  The Bank of the Philippine Islands, for instance, uses a client-based software called Quicken to allow customers to manage their various accounts with the bank.

Internet banking services in the Philippines was introduced some time between 1999 and 2001. It was however, only in 2001 that customer take-up increased. BPI receives around 100 enrollments a day for its Internet banking services. With over 700 branches nationwide, the bank aims to hit 100,000 regular users by the end of 2001. Right now, they have at least 50,000 regular users going online to conduct so-called "menial transactions" such as bills payment, account inquiries, and fund transfers.   BPI's most frequently used online services are account inquiries and bills payment. As of July 2001, the local bank has recorded an average of 80,000 monthly transactions for account inquiries, and 17,000 transactions for bills payment. Other popular transactions done online include fund transfers and credit card inquiries.   For its part, Unionbank of the Philippines says that around 25 percent of its retail customers use the bank's online facilities. Popular services include account inquiries, bills payment, and pre-paid card reload. The bank says that it has now a total of 140,000 "cyber-account" holders. Geegee Bautista, head of strategic innovations of United Coconut Planters Bank (UCPB), shares that Internet banking allows banks to reduce "service time" allotted to customers. "We try to avoid queues in branches because this has an impact on customer satisfaction," she says, She admits though that the number of Internet service customers is not yet that significant but the current rate of adoption among its half-a-million depositors is high. "People, especially those in the provinces, still insist on going to a branch," Bautista notes. For BPI, Internet banking is a means of cutting down on cost of operations, and not just delivering convenience to customers. BPI notes that every transaction done over-the-counter costs 25 pesos on the average. Over the telephone, the cost drops to 6 pesos. But via the Internet, the cost dips further to 3 pesos per transaction. "Face-to-face transactions with banks would eventually be meant for loans and other transactions requiring the presence of a person," predicts Mary Ann Tolentino, assistant vice president for Internet banking, Bank of the Philippine Islands. Rosario Tan, vice president and head of marketing department of UCPB, adds that online banking is "really our way of off-loading transactions from the branches to other channels such as the Internet."

She also notes, however, that having a presence on the Web is a "value-added service to our clients."

The wide acceptance of Internet banking is currently hampered by the poor Internet penetration in the Philippines. As a mainly low-bandwidth territory, the country's financial institutions cannot offer the same high-speed access that can be found in developed countries such as Singapore or Hong Kong. 

"The biggest challenge for Internet banking right now is telecommunications. The ratio of telephone lines per Filipino is still one of the lowest in the world," said Edwin Bautista, executive vice president and marketing director, Unionbank of the Philippines. Still, he believes the interest among local customers is high. "If there are large universal banks which are not making financial services available online, then they are not listening to their customers' needs for convenient and flexible access to their services," he says.

  But there are challenges as well in terms of changing the whole culture of banking. Filipinos in general are conservative bank users and still want to be issued physical receipts for every transaction. There is also the human element, the warmth of contact that comes when a client has a long-standing relationship with a bank.  "It takes a while for people to accept online transactions. But once they're hooked, they don't turn back," says , head of cash management and electronic banking of Equitable PCI Bank.  In terms of overall acceptance of Internet banking, the Philippines is up there with Asia but below levels seen in the United States and Europe, according to Lara   Still, there is no denying that online banking is here to stay. It is already changing how people interact with banks, and how banks respond to the demand of consumers for faster and better products and services.

            Internet banking in the Philippines appears to be in a state of relative infancy. However, given the great strides in telecommunications infrastructure, in computer and Internet usage, and the increased mobility of the work force, more bank clients are expected to move into online banking. It is a lifestyle choice that a good number of Filipinos have come to appreciate.

            Internet banking, like the telecommunications industry is just one of the industries benefiting from e-commerce.  This article describes Internet banking in the same way this study will describe the usefulness and user-friendliness of the Smart website.  Their differences will lie in the specific industries being  studied.

 

The Philippine Experience In Information Technology

In a local literature entitled Philippines Responding to the Challenge of the Digitized Society Janette Toral says that the field of Information Technology (IT) increasingly widens as doors of opportunities are continuously being opened. The Philippines and the rest of the world will have to change its way of doing business as Internet and e-commerce developments diversify.

The author is also optimistic on e-commerce as exemplified in several lawas passed in the Philippines. Recognizing the importance and vast potential of Internet, e-commerce, and electronic transactions in the country, the government and private sector accelerated its implementation with the passage of Republic Act 8792, or the Electronic Commerce Law last June 14, 2000. Efforts for its passage started as early as 1992 with the Electronic Evidence Act. The E-Commerce Law defines Philippines policy on electronic transactions to enable the country’s players and consumers to actively participate in electronic trade. The law provides: 1) legal recognition of electronic documents, electronic data messages, and electronic signatures; 2) guidelines for retention and storage of documents in electronic form; 3) recognition and validity of electronic contracts; 3) guidelines for use of transport documents in carriage of goods; 4) a 2-year mandate for government to have the capability to transact its business electronically; 5) the directive for the Department of Trade and Industry to function as the country’s e-commerce authority; 6) the penalties to crimes such as hacking, cracking, and piracy offenses.

The similarity of this study to this article is that e-commerce is the main subject being studied, specifically the assessment of the website.  However, the differences lie in the scope and the aspects to be measured.

 

B.     Related Studies

 

1.      Foreign

 

Online Customer Service

 There are a number of foreign studies in customer service in the e-commerce industry.

 (2000) investigated the individual and incremental predictive validity of cognitive ability, personality, and integrity using composite and expanded job performance criteria. Based on a sample of 152 incumbent Customer Service Managers, results indicated that cognitive ability and personality correlated with both composite and expanded performance criteria. Results indicated that the personality factor of agreeableness was a robust predictor across all five-job performance criteria, outperforming its cognitive ability, conscientiousness, and integrity counterparts. In addition, agreeableness achieved incremental validity over cognitive ability for one of the criteria. The findings of this study have substantial theoretical and practical implications, and avenues of future research are suggested.

 (1996) identified the need to reduce product delivery
lead time for all Motorola Information Systems Group (ISG) products and specifically a new product - the cable data modem.. In his study, he examines this problem and presents a methodology for achieving customer satisfaction
through improving the product delivery function. As the research for this thesis was completed at ISG, examples and lessons horn this study will be presented in support of the methodology.  The foundation for this methodology is the concept of a Product Delivery Service System.  The Product Delivery Service System is a way of looking at the entire order fulfillment cycle, time
when the customer places an order until the product is delivered, as a customer service to be managed and improved. More importantly, the methodology presents a way to tailor the service to the needs of its primary customers by providing a framework for segmenting groups of service customers. By segmenting the potential customers of the product delivery service, it is
argued in this thesis that the service designer will be able to choose the target customers for the service, and will be able to focus on meeting the needs of those customers in the most effective manner possible.

 (2001) provides a framework for aligning operations with customer service requirements in a capital equipment refurbishment business. Product refurbishment involves recovering the product from customers, returning the product back to new or adequate condition and selling it back to the customer or in a secondary market. The thesis applies the framework to a refurbishment business line in a capital equipment company. The business line refurbishes a module of customer equipment. The thesis begins with a method to evaluate the customer service performance of an operation using multiple service models. Next, methods to realign the manufacturing and supply chain operations to meet service requirements are provided. Specifically, the thesis provides an overview for designing an appropriate supply chain network with special consideration to the unique features of an after-sales business. The thesis describes cycle time reduction efforts in the company. Capacity needs for the refurbishment business were analyzed using a queuing model and an appropriate capacity planning strategy is identified. Warranties and service contracts can be used to drive customer behavior toward a lowest cost solution for both customers and the company.  Methods to identify an appropriate warranty strategy are described. For service excellence, technology must be a continuous focus. The thesis provides a technical evaluation of a sub-assembly molding process. In this process, a thin layer of silicone polymer is applied to an aluminum substrate. Means to automate the process are explored. Finally, barriers to implementing a service strategy in a capital equipment company are also discussed.

  As for Internet usage, Morgan (2001) studies the Internet as a tool for enrollment among graduate students at the University of Central Florida (UCF).  As part of its continuing effort to obtain feedback, the Office of Graduate Studies posted two online surveys during the fall of 2001. A “Student” Survey was posted to 1,252 students who had been admitted and enrolled in a graduate program at UCF, and an “Applicant” survey was made available to 1,337 students who had been accepted but did not enroll at UCF. The purpose of these surveys was to determine how potential students obtained information about UCF’s graduate programs, the reasons they decided to attend (or not attend) UCF, and their perceptions about the admissions process. Overall, a total of 1,107 (a 43% return rate) survey responses (558 Student Surveys and 549 Applicant Surveys) were received.  The survey responses indicate that students heavily utilized the Internet as a source of information. A total of 450 respondents (41%) indicated that they learned about UCF’s graduate programs via the Internet, and an additional 265 (24%) indicated that they had used one of the Internet graduate guide websites (e.g., petersons.com and graduateguide.com). These findings highlight the importance of the Internet as a source of information about UCF's programs.

            The usefulness and user-friendliness of a website contribute highly to the quality of customer service.  That will be the focus of this study.  Just like how the UCF used the Internet as an enrollment tool, this study will also use the Internet as a business tool for Smart Telecommunications.

 

Strong Customer Service

Today's competitive business environment puts a premium on customer service and its importance cannot just be ignored.           

 (2000) enumerate the principles that govern strong customer service.  First, strong customer services systems are a driving force in the best companies. Second, a strong connection exists between loyal employees and loyal customers. Customer loyalty is ingrained into the culture of the best companies. The connection flows from employee training and retention and customer loyalty and retention. Third, retention is a priority as is the concept of the lifetime customer. Companies driven by Customer Service and Customer Loyalty are driven by retention and the long-term view of profitability. The typical business experiences a rate of customer turnover at about 20 to 25%. If a company retains 5% of the customers that it might lose, profitability might go up anywhere from 30-85% dependent on the industry. It costs five to six times as much to attract a new customer as it does to retain one.  Fourth, communications is critical to the customer service process as world class customer satisfaction requires frequent communication with customers, employees and competitors. Communications and marketing must be one on one; the process should be supported by materials and technology. The communications function demands change. Fifth, CEOs of the best companies are visible in articulating customer service; they take seriously customer service messages.   Sixth, the economic implications of customer loyalty are strong; the correlation between market share and profitability is clear. The data shows repeatedly the rationale that customer retention and services growth are aligned. Good customer service increases corporate profitability.  Seventh, the impact of technology for business service is substantial particularly with maintaining personalized data on each customer. Eighth, winning customer service companies monitor data and use it to build one-on-one customer relationships. Today each customer is considered unique. Ninth, winners are companies that develop a "proprietary, customer-interaction process." Tenth, best practices companies insure they can prove a strong tie between branding and bonding. Consumer bonding is characteristic of the lifetime customer. Eleventh, every functional department is affected, not just a customer service division. Twelfth, the best companies demand a "laser beam focus" for customer value. They share goals, invest in training, teach customer service and invest in incentives. Strong performance and loyalty are reinforced through recognition and rewards. 

IBM, a world leader in computer services presents two case studies on the Internet as a tool for doing business. 

The first is about Bancolombia, the largest private bank in Colombia, a merger of two banks, Banco Industrial Colombiano (BIC) and Banco de Colombia..  The bank rapidly needed to discover a way to better serve its more than 1.3 million customers.  The new bank had 344 branches and more than 800 ATM machines.   IBM helped Bancolombia quickly create a virtual banking mall online. Utilizing the power of the Internet, customers can visit a "virtual branch" to perform in minutes most of the tasks that would ordinarily require a trip to a physical branch office. And, because it's tied to the existing call center, no additional staffing was needed for personalized customer assistance. This "virtual branch" would serve a new Web-only customer base and also function as an information site for the rest of Bancolombia's customers.  Leveraging BIC's existing Lotus Notes and Domino infrastructure, IBM created a "banking mall" using IBM Net.Commerce PRO with IBM DB2 Universal Database for Windows NT. At the mall, virtual-branch customers can open accounts, order checks, apply for credit and debit cards or perform any other transaction that would normally be conducted at a bank branch. Together with Lotus Consulting, IBM integrated the Web site with the bank's back-end workflow systems. This has enabled the virtual branch to deliver on its promise of two-hour application approval, a 98% faster process than traditional mail approval, which took as long as ten days. Launched precisely on the appointed date, the virtual branch is attracting many busy professionals who prefer the convenience of the online-only service. In its first five months, the virtual branch signed on twice as many customers as it had planned for in the entire year. Additionally, 30,000 traditional Bancolombia branch customers use the site to access their account information, and that number is expected to reach 50,000 by the end of the year.

Despite the growing user base, Ballesteros and her colleague haven't required any additional staff to manage the virtual branch. With existing Lotus Notes clients providing an intuitive interface to the virtual branch, the bank's product managers are handling the Web site administration with little training. Likewise, the call center representatives are using their existing skills and applications to handle online customer support for the virtual branch.  With such an efficient use of resources, the cost of operating the virtual branch is negligible compared with a brick-and-mortar branch. The cost of an average transaction through a physical branch is $2, but, through the virtual branch it's 10¢, a 95% saving.

Based on revenue from 100 new virtual-branch customers per month, and the cost savings associated with serving those customers, the bank expects to recoup its initial investment in the virtual branch in one to two years.

Another unique case is that of WingspanBank.com, an Internet-only bank that offers all of the products of a bricks-and-mortar financial establishment, the added convenience of innovative, consumer-driven offerings available 24 hours a day, all supported by a customer care center. The customer-focused online banking environment had to combine technology and the Internet with a convenient, seamless and secure delivery system. Integral to its offering, the Bank also required a customized call center that would provide around-the-clock support.  Between 1998 and 2000, International Data Corporation statistics imply a "twelve-fold increase" in the provision of online banking services. With the services it offers, WingspanBank.com is quickly becoming a customer favorite and industry leader in this rapidly evolving and increasingly competitive online business. IBM helped deliver Web hosting services, develop back-office processes, procure and deliver hardware platforms, install and manage the core network infrastructure. IBM's solutions allowed WingspanBank.com to manage its cost infrastructure and provide enhanced value to our consumers. The bank can handle increased volumes because it runs on IBM's RS/6000 and Netfinity 7000 servers that protect the customer experience. Stored data forms create customer profiles, making it easy for visitors to track and manage their finances. The site's feedback option enables quick analysis, response and resolution to consumer issues. Call center input is captured and becomes part of a knowledge base that enhances the customer experience. Personalization software mines data on customers and can be leveraged to cross-sell other products and services.

The dynamic nature of e-commerce requires the ability to rapidly deliver new content and features, while readily adapting to increased volume. Large-scale financial portals require more sophisticated functionality than most current Internet solutions. IBM Global Services drew from a wealth of e-business experience to meet these needs by:

1.) Assisting WingspanBank.com in defining its technical architecture and requirements

2.) Supporting rigorous pre-launch testing of key information technology systems

3.) Providing crucial stress-testing capabilities across all components

IBM also developed the process specifications and training materials for the Call Center, helping the site reach a new level of quality in its service and support. WingspanBank.com used "best-in-its-class" partners to create a highly scalable, full-service, customer-driven banking site. The site is hosted by IBM and runs on IBM's RS/6000 and Netfinity servers. The RS/6000 family of servers utilizes IBM's microprocessor, storage, and system technology advances, providing a secure, reliable service, which quickly adapts to customers' changing needs. This service is helping WingspanBank.com build customer loyalty and increased interest in the site. The award-winning IBM Netfinity family of servers accommodates businesses of all sizes, providing quality that is among the best in the industry. This high level of quality begins with the IBM Netfinity Integrated Product Development (IPD) teams. The teams include design, development, systems testing, manufacturing and service-planning components. Once the site is launched, IBM's support extends through its Business Partners to provide ongoing warranty, support and service. IBM's end-to-end solutions provide the performance, value and technology necessary to assist in WingspanBank.com's continued innovation and ongoing success in its industry

Shopping is another growth area for Internet commerce.  More customers shopped online this holiday season, but they were met with substandard service by Internet retailers. Online-only retailers struggled to respond to customer service e-mails quickly this holiday season as reported by Jupiter Media Metrix, a leading New York-based Internet consultancy.  According to its figures, Jupiter said only 30 percent of online retailers resolved customer e-mail queries within six hours. It was a slight improvement over a 27 percent rate during the 2000 holiday shopping season, but still an unacceptable performance.  The implications of unsatisfying online service remain particularly harsh.  While more Internet-only retailers (33 percent) responded to customer service e-mails within six hours than off-line retailers (28 percent), Web-based retailers were less responsive overall.  According to Jupiter, 40 percent of Internet retailers took more than three days to answer customer e-mails, if they did at all, compared with 28 percent of real-world retailers. Jupiter analysts recommend that online retailers look into beefing up their customer service centers and invest in automated customer e-mail systems.  The findings are based on surveys of 250 leading US retailers. Online retailers have been reporting an increase in Internet shopping during the Christmas holiday shopping season.

With it will be billions of dollars of shareholders' money. Once considered among the safest bets for investors, shares of long-distance companies have fallen sharply since the late 1990s. AT&T, for instance, closed Thursday at $ 13.49--down from $ 49.18 just three years ago--on the New York Stock Exchange. And WorldCom's Thursday close of $ 3.53 on Nasdaq is well off its 1999 price of $ 61.99.

The problem for traditional long-distance companies is that the market they once had all to themselves is being bombarded by new competitors such as wireless firms, Internet upstarts and cable providers. Even local phone companies such as SBC Pacific Bell, which for years were excluded from the market by law, are winning regulatory approval to offer long-distance services.

At the same time, the prices that long-distance companies can charge to the customers they have managed to hang on to have been falling steadily and now amount to just pennies a minute. That, in turn, helped kill the mind-set that spending time on the phone was a luxury that must be regulated by an egg timer.

These case studies on shopping and on banks show the potential of the Internet as a means to get more customers.  That is the similarity of these case studies to this study.  They differ however on the scope and focus as this study will assess primarily the user-friendliness and usefulness of the Smart Communications website.

 

Customer Service

 (2001) came up with a customer satisfaction index for a restaurant that asks people to rate their experience. This index has descriptive metrics. It is focused on obtaining a picture of the customer’s satisfaction or dissatisfaction at a general level and specifically does not address what is in the performer’s control.

Item	Customer Experience Scale
	Very bad	Bad	No comment	Good	Very good
Service
Cost
Food
Atmosphere
Location

 

            In contrast, the customer satisfaction index below shows functional metrics. This is because the first four items are about the behaviors that we assume will impact customer satisfaction. A functional metric is always in the performers’ control. The fifth metric is descriptive because it targets the customer’s overall experience with the wait person.

To know if a company offers good customer services, it is important to be able to quantify and qualify the service.  That is why metrics have become a very important aspect of organizational management. In an effort to know what is happening in an organization, company leaders mandate measure of all sorts. A general mandate for metrics usually results in a mass measurement effort that yields a lot of data and little useful information. The end result is a collection of haphazard measures instead of a measurement system.

Customer Satisfaction Index for Table #1	Yes	No	N/A
He/she kept my water glass filled
He/she made eye contact with me when speaking
He/she smiled when taking orders or serving
He/she was accessible when I needed something
I would recommend this wait staff member to other customers
What could I have done to make your experience outstanding?

 

   (2001) pointed out that in a measurement system for processes in which humans are involved, two general categories of metrics exist, results and behavioral measures.  In most organizations, results are the primary focus. For example, typical HR measures include turnover, absenteeism, and cost of benefits, all of which are result measures. Another important characteristic of a measurement system is that the result and behavioral measures are correlated and aligned with the mission of the organization.  This prevents the collection of useless data.

 

 

 

 

           

 

 

 

 

           

 

 

 

Figure 1

Conceptual Framework for Measuring Customer Service

(2001)

 

A third characteristic is that the metrics are descriptive and functional, rather than just descriptive. For example, many organizations collect data on turnover at the level of counting loss of employees over a period of time. This information is descriptive of the problem. To make this data functional, periodic behavioral measures need to be collected also, such as those for assessing the organizational culture and the extent to which it promotes employee loyalty. By correlating the behavioral measure with the result measure, the metrics now constitute a system that yields data useful for decision-making and action.

While all measures provide some descriptive information, the critical determinant of the value of a metric is its usefulness. Where metrics related to human performance are concerned, a measure is most useful if it exists within a system of correlated result and behavioral measures. An assessment of a company’s existing metrics will reveal whether a measurement system exists, and if not, what result and behavioral measures are missing.   There are two types of customer service metrics, descriptive and functional. A descriptive metric indicates what the customer thinks about service, for example, whether it was good or bad. .  In this case, the descriptive metrics to be measured are the following: Available Information, User-Friendliness, and Relevant Services Offered.   A functional metric measures the occurrences of those events that we assume are responsible for customer satisfaction and loyalty.  In the case of Smart Communications Philippines, the functional metrics are Buddy and Gold. 

However, metrics has to be organized into an integrated set of measures that correlate with each other is at the heart of designing a measurement system.  Such a measurement system will give us the information required to continuously improve our behaviors, policies, procedures, processes, and systems to positively impact customer satisfaction and loyalty.          A behavioral approach to measurement will yield descriptive and functional customer-focused metrics. It is important to have both types of metrics because the correlation between them indicates whether the focus of functional metrics is having the desired impact on the descriptive metric(s) for customer satisfaction and loyalty.

The conceptual framework will help measure the functional and descriptive variables through the age, gender, educational background, civil status, occupation and personal income and other information provided by the website’s users. The descriptive variables will contain the efforts exerted by the company, in this context, the Smart Wireless Telephone Company with regards to its on-line customer service.  Business recipe will be viable factors that consist of the company's business idea and strategy in combination with the conditions in the chosen business environment.  The strength of the business recipe is e.g. decided by how well a company differentiates itself in its business environment or how well its on-line customer service effective compared with others.

Meanwhile, the functional variable corresponds to the Network to measure the relevance of services offered by the website of Smart Telecommunications. For this study, this Network will constitute of sub-networks that are of significant importance for the future profitability of Smart Telecommunications such as recruitment, sales, competence and research and development.  These variables are represented through the services offered by Smart Wireless Telecommunications in its on-line services as listed in the Statement of the Problem.  The strength of these relationships that this study will try to predict decides the efficiency of the networks.

            Even though the tool used for this study is the Internet website, it is still important to gauge how the website appeals to the Smart subscriber and if it is useful to them.