Effects Of Internal Communication On Customer Retention At Coles, Australia

Project objective

The purpose of this paper is to present a research proposal studying the effects of internal communication on customer retention at Coles, Australia. The success of any organization would depend on a number of factors, including internal and external communications (Stegaroiu & Talal, 2014). It is commonly assumed that only external communications, or communications with the stakeholder of the organization would affect customer retention; however, it must also be ascertained that the quality of internal communications, that is communication between the various members of the organization would have a direct impact on the customer satisfaction levels and consequently on customer retention (Quirke, 2017). The following paper attempts to study the effects of internal communication on customer retention by posing a hypothesis and carrying out a literature review of the same. Also, a research methodology has also been provided in the proposal so as to establish the process of arriving at said hypothesis.

Coles Australia or Coles Supermarkets, Australia was founded in the year 1914 in Melbourne by a man named George Coles. Today, it is one of the leading names in retail, customer services and supermarket industry. There are over 800 supermarkets under the Coles banner across Australia, with over 100,000 employees working under them. Along with another company named Woolworths, Coles hold more than eighty per cent of the supermarket industry in Australia (“Coles Supermarkets”, 2018). As a matter of fact, Coles recently launched an online supermarket which has garnered international attention as well.

The purpose of this research proposal is to highlight the effects that internal communication within an organization can have on customer retention. Through such a research proposal, the proposal would also study the internal communication strategy followed by Coles Australia and its repercussions as far as customer satisfaction or customer loyalty is concerned. By means of such research, the researcher wants to study the significance of internal communications in ensuring efficient business communications, both internal and external.

This research proposal aims to throw light on the effects of internal communications on the customer retention at Coles. It has been found that the internal communications of a company has a direct impact on the way operations are carried out within the organization; such communication would include communication between supervisors and the subordinates, between the board of members and the employees and so on. Inter organizational communication or communication within the various facets of the organization would affect the way employees carry out their functions and responsibilities, which is bound to affect their productivity and performance levels (Mishra, Boynton & Mishra, 2014). As is well known, the more efficient an employee, the better the customer satisfaction levels. This means that with effective communication within the organization, the productivity levels of the employees would increase and that would enhance customer satisfaction as well. By improving customer satisfaction, the company would be inculcating a sense of brand loyalty, which results in customer retention.

Project scope

Internal communication, or IC, as it is known in common parlance, refers to the process of communication that exists between the various members or participants involved in an organization. As far as internal communication within an organization is concerned, its scope and function would include producing and delivery of messages to and from the management of the company, facilitating a two dimensional dialogue or communication between the management and the employees and enhancing the communication skills of all the members of the organization. The term, “communication” originates from Latin and originally meant “sharing” or “to share.” This means that communication is a concept that would require collaboration or coordination between two or more people. It can also be defined as the process of exchanging certain information between the receiver and the sender. Communication, with regards to an organization could be of two types – internal and external. While external communication refers to the communication with the customers, internal communication would refer to the communication amidst the employees of the organization (Wright, 2016). As a matter of fact, advancement of technology and the discovery of new modes of communication, like electronic media (emails, intranet, online newsletters et cetera) have completely revolutionized the field of internal communication (Huang, Baptista & Galliers, 2013). It is a well known fact that employees are the primary assets of any organization and that no company would be able to function effectively without support of the employees; this is where internal communication comes into being (Men & Stacks, 2014). Such communication would ensure that relevant knowledge and information is shared to all the members of the organization and also enables them to speak their own minds (Constantin & Baias, 2015). It must be remembered that the business world today is changing at a startling rate, resulting in restructuring, downsizing and outsourcing – this has increased the need for internal communications. Moreover, internal communication has a crucial role to play in order to facilitate better relationships between the organizational leaders and their subordinates and in order to better manage the skills of employees (Bedarkar & Pandita, 2014).

It has also been found that internal communication, especially internal corporate communication, would pave the way for employee engagement and commitment; as a direct consequence, commitment would also lead to enhanced performance levels, which eventually leads to the success of the business as a whole (Karanges, 2014). Internal communication is instrumental in ensuring favorable management within an organization. Effective internal communication in an organization would affect decrease the rate of turnover with respect to the employees and also increase market premiums. In addition, it would increase shareholder returns and enhance employee engagement (Jacobs, Yu & Chavez, 2016). The basis of internal communication is the principle that while small, insignificant organizational decisions can be taken by the management alone, big decisions which may include restructuring or change management would have to be taken in accordance with the employees, so as to invite their cooperation. To put it simply, internal communication may be defined as strategically managing relationships and interactions between the various stakeholders of an organization, which would include a number of dimensions like internal line manager communications, inter team communication, communication between peers, internal project communications and internal corporate communications (Men, 2014).

Literature review

The importance of customers to an organization cannot be reiterated; they are the most important stakeholders of an organization and can make determine its success or failure in the market (Hennig-Thurau & Hansen, 2013). A good and loyal customer would affect the revenue generation of a company, due to repeated purchases and cross buying behaviors exhibited by the customer. It is obvious that any organization would invest in exploring newer markets and strive to lure in more customers; however, it is equally important to ensure that due attention is being paid to existing customers as well (Weinstein, 2016). As a matter of fact, existing customers who have proved their loyalty to the brand would be more valuable to a company than new customers. The term “retention” refers to the way a company employs certain policies and methods to retain their customer base for a prolonged period of time (Kumar & Reinartz, 2018). In the case of customer satisfaction and relationship management, customer retention rates along with metrics to measure the same, would play a crucial role (Khodakarami & Chan, 2014). Research shows that at any given organization, existing customers account for more than seventy five per cent of the sales. More often than not, companies tend to invest more in attracting newer target markets; but these companies fail to ignore the fact the appealing to a whole new customer base would involve more management action along with costly marketing strategies (Goetsch & Davis, 2014). Moreover, it is estimated that attracting newer customers would cost at least six times more.

As a result, customer retention today has emerged as the one the most important areas of emphasis in management and marketing. Development of individual customer portfolios, specialized marketing mixes for existing customers and modifications to the customer service are some actors that could pave the way for healthy and harmonious relationships with the customer (Fullerton, 2014). While referring to customer retention, usually behavioral patterns of the customer are referred to; it implies the tendency of a customer to return to a specific organization and also the willingness to promote the organization and recommend it to their friends and acquaintances (Harris & Daunt, 2013). In an age where a customer would not hesitate to think twice before switching brands, customer retention refers to the way a customer chooses to stick to or be loyal to a particular organization (Hill & Alexander, 2017). The concept of customer loyalty refers to the way a customer would prefer to prove their loyalty to a specific brand instead of switching to their competitors. Customer loyalty can be defined as the measurement of success of the company’s ability to maintain efficient customer relationships and management of such relationships. The whole purpose of customer relationship management is to ensure fruitful outcomes of customer interactions. If a customer is loyal to a particular brand, he or she would voluntarily choose to stick to a particular brand; such a customer would be termed as brand loyal. This also means that a customer who is loyal to the brand would continue to enrich his or her relationship with the company through repeated purchases.

The concept of customer retention

There has been extensive research into how organizational operations can affect the way a customer perceives a brand. The formula is simple – when an organization is able to work to its fullest capacity, with each employee putting his or her best foot forward, the productivity levels are expected to soar through the roof. In a service organization, high levels of productivity from all the departments of the organization would ensure that customer service is enhanced; as has been mentioned in the previous section, a customer should be the most important asset of an organization – the central point of focus around which all their business strategies would be devised. By elevating the levels of customer service, customer satisfaction level is expected to increase; a customer who is satisfied is twice as more likely to return to the organization or avail a particular service repeatedly (Haji, 2014). Earlier, most companies simply paid heed to customer satisfaction because of the prevalent notion that one could ignore employee engagement as long as the customers were satisfied. However, it must be emphasized that an organization is like a puzzle with a number of intricate pieces – the employees. Communication is the framework that would connect the pieces through actionable and impactful steps so as to pave the way for positive relationships in the workplace (Men, 2015). Consequently, this is expected to increase the performance level of the organization as a whole. Effective internal communications would also empower the employees to work according to the business goals and abide by the customer satisfaction strategy; also, it would open up lines of communication channels between the management and the employee, which would trigger a harmonious working environment (Du Preez & Bendixen, 2015).

The primary question for the research study is as follows:

• How can internal communications within Coles, Australia affect customer retention?

The secondary questions represent the sub categories which would aid the progress of primary research. They are as follows:

• What is the internal communication strategy of Coles, Australia?
• What is the rate of customer retention at Coles, Australia?
• How have internal communications affected customer satisfaction and retention at Coles, Australia?

The purpose of research methodology is to outline the process of collecting requisite data without which the research project would be incomplete; the research design and methodology would help in leading the research project in a desired direction, towards the aforementioned research questions. A mixed design of research would be used by the researcher. This means that the researcher would employ both qualitative and quantitative research to arrive at a conclusion regarding the impacts of internal communication strategies on customer retention (Creswell & Creswell, 2017). It is important to incorporate both a quantitative and qualitative analysis to understand the factors that affect customer retention and internal communication in an organization; such integrated research methodologies would yield accurate and exact results in the research study (Morse, 2016).

First and foremost, it is important to conduct a qualitative research on the factors that affect customer retention and its link to internal communications within an organization (Silverman, 2015). This will be done in the form of an interview. The researcher will be expected to carry out a face to face interview of at least fifteen employees within the organization to study the internal communication strategy in Coles. The purpose of such interview would be to understand the modes of communication prevalent in the organization, the leadership styles demonstrated by the team leaders, the attitude of the employees and the management; it would also be important to analyze if the employees feel free in opening up to their peers or supervisors and if they are able to voice their opinions. The results from these interviews would then be accumulated and analyzed to study the employee engagement rates and that would be compared with their level of performance. Secondly, the researcher would also be carrying out interviews of fifteen long term customers of Coles, to study the factors affecting customer retention. The data obtained from these interviews would be used to analyze how internal communication has affected customer satisfaction levels and whether customers would be willing to return to Coles or recommend the brand to their friends.

Quantitative research will also be conducted by the researcher; this would be done in the form of an online survey (Treiman, 2014). Around 150 customers of Coles, Australia would be asked to take part in the online survey which would consist of certain close ended questions that would require customers to answer in yes or no. The questions would range from duration of their association with the brand to more detailed questions to identify their behavioral patterns which affect customer retention; similarly, the survey would include questions on customer service to analyze the customer’s perspective of the quality of service offered by the brand. The purpose of such research is to understand the buying patterns of the customers, the factors that affect loyalty and how enhanced employee engagement has improved customer satisfaction.

However, it must be asserted that there are certain limitations which could pose as a hindrance during the research project. One, the research project focuses only on the implications of internal communication on customer satisfaction and retention; yet, it ignores the other aspects of customer service which could affect customer loyalty. Two, the data would be collected through interviews and online surveys. Both methods involve subjective data, which may or may not be entirely credible; thus, the research outcome (not obtained through scientific methods) would not be completely reliable. Thus, it is the responsibility of the researcher to integrate the limitations with the available data in order to advocate the desired outcome, as far as research findings are concerned.

TASK	DURATION
SELECTION OF TOPIC	1ST WEEK
CREATING LAYOUT	1ST AND 2ND WEEK
LITERATURE REVIEW	3RD WEEK
DATA COLLECTION FROM PRIMARY AND SECONDARY SOURCES	4TH AND 5TH WEEK
DATA ANALYSIS AND INTERPRETATION	6TH WEEK
FINDINGS OF RESEARCH	6TH WEEK
CONCLUSION	7TH WEEK
RESEARCH CLOSURE	7TH WEEK

Conclusion:

To conclude, it can be said that the purpose of the research proposal is to understand the effects of internal communication on customer satisfaction and consequently on customer retention. Internal communication within Coles would refer to the way interactions are carried out within the various departments of the supermarket and between the employees working there. There has been extensive research into the impacts of internal communication on employee engagement; the way an employee perceives his or her workplace would have a profound influence on the way he performs at work. The research study poses the hypothesis that strong communication in the workplace would improve the level of performance of the employee which would then positively affect the customer retention of Coles. To affirm the hypothesis, data would be obtained through qualitative and quantitative methods so as to provide accurate results.

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