Keeping Customers at the Center of Your Business

Customer satisfaction is the vital sign that acts like a pulse to the health of the rest of the organization. Companies that keep their customers in focus win over the long run. Ensuring that policies & procedures, training, recruitment, facilities and resources are focused on customer satisfaction is important for sustainability.

All businesses are in the business of serving customers. How many cars would sell if they didn’t serve the needs of their customer? Would it be any different for a spa or vacation? Companies that make the mistake of not running their daily operations with the customer in focus eventually start seeing the errors of their ways through poor customer retention and sales. 

Policies & Procedures: The internal mechanisms and operations should ensure every activity is focused on the customer. 

Training: Training should seek to ensure quality completion of jobs and friendly customer interactions; it should set the standard for employees. 

Recruitment: The right kind of personality should be sought after in all recruitment decisions. 

Facilities: All organizations should be designed around the needs of their customer through décor, functionality, and proper use of space. 

Resources: Reinvesting in value producing products and services. Resources should not be wasted on activities not in alignment with strategic initiatives

Why are Customer Service and Trust Important for Customer Retention?

Abundance by Dr. M. Abel

Service is an important component of customer retention, business development, and improved product sales. Companies that fail to develop customer service also fail to develop trust with their customers which mean they may lose a lifetime of patronage. Research by Webber, et. al. (2012) discusses provider service orientation and how this predicted cognitive trust much more than customer agreeableness. 

Trust is the root of all commerce and relationships. Cognitive trust is grounded in the perception of another’s reliability, dependability and competence (McAllister, 1995). The way in which customers view customer service representatives is important for the retention of those customers. 

Let us assume for a moment that you have a problem with a product and bring it forward to a customer service representative. When the representative doesn’t appear to understand the problem, doesn’t follow through on company promises, and makes a number of mistakes within the service process that trust will dissipate. 

We all have experienced these types of situations from time-to-time. You have a problem, can’t get it resolved, and the customer service representative has no idea what to do. The implication is that the poor performance of the representative also changes the perception of the company and their products. The representative actually does represent the company in the customer’s mind. 

Strong customer service is a “predisposition to provide superior service through responsiveness, courtesy, and genuine desire to satisfy customer needs” (Bettencourt, et. al, 2001). This requires a level of listening and understanding the options available to meet that customer’s needs. When staff are undertrained, not knowledgeable or indifferent they fail to fulfill their function at an adequate level. 

The study found that trust is built when customers go above and beyond the call of duty to service the customer. Their personality has a direct impact on how the customer perceives both the services offered and the service representative they are talking with. Ensuring positive demeanor that is focused on the customer and having the competence to meet that need is important for customer retention and future sales. 

McAllister, D. (1995). Affect- and cognition-based trust as foundations for interpersonal cooperation in organizations. Academy of Management Journal, 38, 24–59.

Webber, et. al. (2012). Personality and trust fosters service quality. Journal of Business Psychology, 27

Staffing, Waiting, and Analyzing as Three Aspects of Customer Service

Proper staffing, customer comfort, and operational effectiveness is important for creating strong service delivery. With proper staffing organizations can covered needed service and production aspects of running the business. All operations should have in mind the customer needs as they are going to be purchasing the products and services. This requires the ability to move customers efficiently and quickly throughout the organization without reducing the potential for future purchases. Likewise, the method of effectively improving slow spots in service and operations can be found using a critical path map or analysis.

Projection and Staffing:

Management has the responsibility to ensure that workers are covering the required volume of production in order to meet demand. The scheduling of the workers is an important function of management and can lead to all types of efficiencies or inefficiencies in labor costs. To do this well managers often project or forecast demand. It is possible to create efficiencies in scheduling using a formula:

The sum of half hour increments times (number of operators required minus the number of operators assigned in a period). It is beneficial to see the staff scheduling formula below.

The purpose of such a formula is to reduce the amount of waste in schedules as often seen in organizations that suffer from higher labor costs. The more efficient a manager can project need and schedule accordingly the less cost to the product or service and more profit that can be made. However, one doesn’t need to get this complex to have strong staffing. Staffing is primarily concerned with effective coverage despite the methodology.

The key is to balance the need for full-time and part-time employees in order to ensure that all of the needs of the organization are being met. Part-time workers come with advantages in terms of cost but are also limited in their knowledge and commitment to the organization. Therefore, full-time workers often make up a larger percentage of the employees due to their institutional and career knowledge. 

Waiting Lines:

Waiting lines create problems for companies. As people wait they become annoyed by the inactivity. This inactivity not only reduces the perceived quality of the service but it stops customers from shopping, buying products, or browsing which leads to higher sales. It also holds up organizations that could better put their time toward serving other customers. A number of methods can be used to deal with the frustration of waiting in line (Fitzsimmons & Fitzsimmons, 2010):

Animate: Keep waiting fun.

Discriminate: Offer preferred services

Automate:  Simple problems and questions can be automated.

Obfuscate: Reduce the perception of wait time. 

Critical Path Method:

The critical path method offers an opportunity to determine the start and finish times for certain projects. It also may be used to determine the activities and paths of services and customer actions. The basics of the path method are (Armstrong-Wright, 1969):

1.)    A list of all activities required to complete a project. 

2.)    The time that each task takes to complete 

3.)    The relationships between the activities. 

When outlined it is possible to use such methods to determine the amount of time, resources, and staffing needed for activities. It provides for a mental schematic for people who want to see how customers are moving and areas where there may be regular service delays. For example, if an analysis has shown that consistent service delays are occurring at a particular node it may be necessary to adjust, divert, or offer additional support to the path. 

Armstrong-Wright, MICE, A. T. Critical Path Method: Introduction and Practice. Longman Group LTD, London, 1969

Fitzsimmons, J. & Fitzsimmons, M. (2011). Service Management: Operations, Strategy, Information Technology (Seventh Edition). NY: McGraw-Hill. 

Creating Customer Loyalty through Technology Implementation

We are now in the service economy and should learn better on how to integrate technology within the e-commerce world. Considering the explosion in online marketing and service management it is possible to understand the growth in online service research. Understanding how customers view the value of such services is important for overall improvement.

Service quality is important for customers who desire to perceive the value of their purchases worth more than the effort and cost of buying the product. When this perception of service quality is high such customers will often reward organizations with higher levels of loyalty. Research has supported the concept that customer loyalties are based in this service quality (Gefen, 2002).

New technologies have created the age of e-commerce. This technology has developed fundamental differences in the way people interact and conduct business with customers. More importantly, it also changes the way in which individuals perceive customer value, how they obtain information, and the very nature of economic exchange.

Customers are not only making investments in the product but also the company. When a customer spends their time and resources trying to obtain a product or service they are causing customer sacrifice (Brandy et. al., 2005). It is this sacrifice that makes its way into the subjective evaluation of comparative worth.

Through social exchange theory people can better understand the process of comparative exchanges that both companies and customers make. Understanding the online goal directed behavior and exchange of time and effort toward products helps to understand how to provide such services (Zeithaml, et al. 2002). Doing so will better help organizations align their services to the customer’s needs thereby adjusting the perception of this exchange into a more positive one.  

A study conducted by Xu, Benbasat, and Cenfetelli (2011) analyzed service quality, sacrifice, service outcome, and customer loyalty related to products. Participants helped a friend shop for a laptop based upon a number of defined criteria.  A total of 128 subjects with various backgrounds were used within the study to provide diversity of perspective. The researchers desired to define the relationship between online service and purchases of products.

Results:  

-Service quality and customer sacrifice influenced perceived service outcome.

-The effectiveness of service dimensions is influenced by the customers’ product knowledge.

-Support for Social Exchange Theory indicates that if customers feel that their service quality and service outcomes were beneficial they will reciprocate with future purchases and loyalty.

-Customer sacrifice (time and effort) is relative to the quality of the product.

-Customers with high product knowledge are influenced by lower customer sacrifice versus service quality.

-Websites with live help reduces the perceive customer sacrifice factor and raises perceptions of positive quality experience.

Analysis: 

As e-commerce grows as a preferred method of conducting business it is important for organizations to improve their overall understandings associated with customer relationships. Creating higher levels of virtual platforms that foster, versus hinder, customer search preferences can lead to increased sales. In addition, limiting the amount of customer sacrifice required by offering quick methods of communicating with representatives can also raise overall satisfaction levels.  It is through weighing and balancing the use of modern technologies that can we create higher levels of positive customer perception and loyalty.

Author: Dr. Murad Abel

Brady, M., Knight, G., Cronin, J. , Tomas, G., Hult, M., & Keillor, B. (2005). Removing the contextual lens: a multinational, multi-setting comparison of service evaluation models,

Journal of Retailing, 81(3), 215–230.

Gefen, D. (2002). Customer loyalty in e-commerce. Journal of the Association for Information

Systems, 3(1), 27–51.

Zeithaml, V. A., Parasuraman, A., & Malhotra, A. (2002). Service quality delivery through web sites: acritical review of extant knowledge. Journal of the Academy of Marketing Science, 30(4),

362–375.

Xu, J., Benbasat, I., & Cenfentelli, R. (2011). The effects of service and customer product knowledge on online customer loyalty. Journal of the Association of the Information Systems, 12 (11).