Case study: Managing Customer Quality Service
Case study: Managing Customer Quality Service
There are number of reasons show the difference of LCV between these two stores.
First of all, when people go in a shop, they look for what they want, and then the first important consideration comes up from their mind is the PRICE.
Price is the amount of money that charged for a product or service. In reality, people like comparing prices on the same brand of product from different shops to find out which one can meet their budget.
In the case study, Laura spends more amount of money in the second newsagent each week is probably because of its price is higher than the other one.
However, “Price alone rarely provides a long-term competitive advantage.” (Jacques Horovitz 1990, p.30) This statement emphasises even if a business sells its products at a lower price, but in the long run, the business may still not compete against the other businesses because today’s customers want more psychological needs rather than cheap price, and they are increasingly difficult to satisfy. This statement also leads to the next point.
Lastly, the element that goes after price would be QUALITY SERVICE. Nowadays, the quality of service is usually twice as important as price and it has become a major factor in many purchase decisions. For example, one day I went to a coffee shop to buy a cup of coffee, the assistant kept talking on her phone so I stood there for about three minutes and waited, but she still ignored me, therefore I rather went to Gloria Jeans to buy an expensive cup of coffee instead of standing there and wasting my time.
“Service comes from people, not companies.” (Catherine Devrye 2000, p.8) This statement indicated that service only exists in human experience. If we cannot provide quality service to our existing customers, they may hide from their dissatisfaction with service; but if customers dissatisfied with their first experience are almost always lost customers.
So, Laura prefers to go to the second newsagent which may cost more but she paid for what she wanted and it is worth because she can have Chris’s friendly smile and kindly greeting.
Thus, the difference in price and the level of service quality in business can lead to a difference in LCV of each store.
Q2) How would you rate the level of service provided by the two newsagents? Why?I would give two out of 5 of the service provided by the first newsagent because in the article it says ” The owner never appears to recognise her.”, which indicates that the owner has no interaction or communication with customers and this also shows that he does not concentrate on the service he should provide. Despite, the store has a large range of goods and is well laid out and clean, but the owner doesn’t treasure this as an opportunity to attract more new customers. On the contrary, he provides bad service or even no service to customers which may due to people start leaving his business and work for his competitors.
For the new newsagent, I would rate four out of 5 to the service it provides to its customers because the owner, Chris, greeted Laura with a smile and asked if she needs any help. This is a good example of good quality service. “Service goes beyond friendliness or kindness.” (Jacques Horovitz 1990, p.3) So, by asking questions and listening carefully to the answers can make customers feel that they are not by themselves, they got someone to look after and finally they enjoy going in there.
Moreover, Chris understands the concept of treating customers as long-term appreciating asset, will help to build image and trust of her store and hence to attract more new customers and increase their loyalty.
Q3) Although Laura shopped at the first newsagent regularly, was she loyal? Do you think the first newsagent confused “satisfaction” or even “nowhere else to go” with loyalty? Why is this dangerous for a business? How would you advise the first newsagent to proceed if she is to retain her customer base? In your answer, include a discussion on meeting the psychological needs of customers.
Although Laura shopped at the first newsagent regularly but she was not loyal to the business.
I think the first newsagent confused the concept of both “satisfaction” and “nowhere else to go” with loyalty. Satisfaction is a form of attitude that contributes to customers. “Customer satisfaction is the ultimate objective of every business: not to supply, not to sell, not to service, but to satisfy the needs that drive customers to do business.” (Mack Hanan / Peter Karp 1991, xi) Every business needs to generate some level of customer satisfaction in order to increase loyalty. Otherwise, no satisfied customers, it would have no business. Unlike satisfaction, “loyalty can be defined in term of buying behaviour.” (Jill Griffin 1995, p.31) A loyal customer is the one who makes regular repeat purchases, has a specific bias about what and who to from and generates “word-of-mouth”.
It is dangerous for a business because the owner who might assume the customers keep coming back because he satisfied their wants and they are loyal, but in fact they are nowhere else to go. Besides, if a new and the same type of business opens in the same area, it can be a disaster, new challenge and obstacle to the existing business because people always like to try new things and new businesses always generate attractive promotions to attract new customers such as discounts, join member for free or free gift etc.
As a result, it can cause the existing business starts losing its regular customers because of poor customer service or higher price in products. Eventually it leads to a loss in sales and profits, reputation and cost a lot of time to reform and attract new customers.
There are many ways to retain customer base in the first newsagent.
Firstly, there is a simple way to learn about customer satisfaction in your business which is to conduct a satisfaction survey. A satisfaction survey is an important tool for business to collect customers’ opinions and points of view, and it also gives the insight of what most customers want and expect. Therefore, the questions in the survey need to focus on the various aspects of quality and customer service. Once the survey results are collected, it is necessary to analyse and identify each one of them and finally applies to the newsagent where it is necessary,Secondly, the owner in the first newsagent needs to generate more interactions with her customers because talking to your customers is a good chance to build up their loyalty and understand more about their wants. “Customers are not loyal to products.” (Mack Hanan / Peter Karp 1991, p.155)
Customers are loyal to your service. If you can provide good quality service and satisfy their wants, they can become your loyal customers. Meanwhile, the owner needs to meet customer’s psychological needs such as to greet customers with a smile on your face and ask if they need any help in particular, because some people are scared or shy to ask questions. So that, by asking questions and listening carefully to the answers would make customers feel you understand what they ask for, and you are looking after them in order to satisfy their wants.
Lastly, the owner should search for some special touches with her customers regularly such as discounts, longer working hours, join member for free or free gifts. That will help the business to stand out from the crowd because customers always want you to take an extra step to please them.
Thus, by conducting a satisfaction survey, meeting customer’s psychological needs and providing special touches with customers will help the first newsagent to retain its customer bas and hence to increase revenue, loyalty and reputation of the newsagent.
Q4) What opportunities are there in a newsagency to provide sensational moments of truth?There are number of opportunities to provide sensational moments of truth in a newsagent.
The aisles are clear of debris.
Customers always receive correct change.
Customers wait in a queue less than three minutes.
The person at the checkout is efficient.
All staffs greet customers with a smile, have a small talk and customise goodbye to customers.
Goods that customers want are stocked and attractively displayed.