January 10th, 2018
Customer service at case study – Customer Service and Organizational Outcomes
One spectrum of studies relates various customer service aspects to the levels of customer satisfaction. Customer satisfaction is a critical antecedent to establishing strong relationships with the customer, which lead to heightened loyalty thus beneficial outcomes such as increasing psychological barriers to switch to competitors, and encouraging evaluation of new product offerings from the company (Barnes, 2003; Bhattacharya & Sen, 2003). Accordingly, customer satisfaction is a critical aspect ensuring sustained performance for organizations.
One study that links customer satisfaction to customer service aspects, assessed the effect of wait-times in the supermarket on customer satisfaction levels. This study by Tom and Lucey (1995) evaluated “whether customers’ perceptions of the causes for longer than expected or shorter than expected waits affect their satisfaction with the store personnel and the store” (p. 22). To assess such an effect, the study was guided by five questions. Firstly, the study evaluated whether shorter-than-expected wait times were associated with a more positive effect on the customer satisfaction than longer-than-expected wait times (Tom & Lucey, 1995, p.22). Secondly, the study assessed whether customers were more satisfied if they perceived such shorter-than-expected wait times to be under the control of the entity as compared with their perception of such gains to be beyond the organization’s control (Tom & Lucey, 1995, p.22). Thirdly, the study assessed whether customers would be more satisfied if they perceived the factor resulting in positive disconfirmation (shorter-than-expected wait times), to have been stable (likely to continue existence) as compared to their perception of such factors to be unpredictable occurrences (Tom & Lucey, 1995, p.22). Fourthly, the study compared customer satisfaction in case of longer-than-expected wait times, based on perception of such delay to be under the store’s control, and when they perceive such delays to be beyond the store’s control (Tom & Lucey, 1995, p.22). Finally, the study compared customer satisfaction when customers perceived the factors leading to negative disconfirmation (longer-than-expected wait times), to be stable or unpredictable occurrences (Tom & Lucey, 1995, p.22).
The study results had critical implications to entities such as Wal-Mart, where customer complaints abound about the wait-time they have to undergo to receive required services from the stores (CustomerAffairs.com, 2011). Firstly, customers positive disconfirmation (shorter-than-expected wait times) increased customer satisfaction as compared to negative disconfirmation (longer-than-expected wait times) (Tom & Lucey, 1995). For positive disconfirmation, the perception of the contributing factors to be under the organization’s control and to be stable resulted in higher satisfaction levels, when compared with perceptions of such factors as being beyond the organization’s control and being unpredictable events, respectively (Tom & Lucey, 1995). With respect to negative disconfirmation (longer-than-expected wait times), the extent of dissatisfaction that arose, was found to be moderated by the perception of the contributing factors as either being under the control of the organization or beyond its control. Where the factors were perceived to be under the organizations control, dissatisfaction arising from negative disconfirmation was heightened but not when customers perceived such factors to be beyond the organization’s control (Tom & Lucey, 1995). Such observations have also been supported by another study, which found out that customers would be more likely to shop and promote (through word-of-mouth) stores where they expected to wait for the lowest period to be served (Grewal, Baker, Levy & Voss, 2003). A different study on a related mission also finds out that customer’s attitudes towards returning for purchase in a particular store are influenced by experiences of shopping in the store, which are in-turn affected customer loyalty (Meyer, 2008). Accordingly, effective customer service that reduces the wait-times for the customer is vital in increasing customer satisfaction and thus their loyalty.
Following such identified importance of effective customer services, another spectrum of studies focuses on the factors that lead to better customer services and those that act as a barrier. One study for instance evaluates the factors that make service a competitive advantage for the entity. In this paper by Berry (2009), five factors that help entities to compete effectively with services are discussed. Top among these is ensuring the hiring of the right talent and creating ways to retain such employees within the organization. While comparing Costco to Wal-Mart’s Sam’s club, Cascio (2006) argues out that the difference that has ensured that Costco succeeds where Wal-Mart is failing has been contributed partly by its human resource practices. Whereas the practice at Costco is argued to be oriented towards “turning over inventory faster than people”, that at Wal-Mart is argued to result in a considerably higher employee turnover (p. 28). Such human resource practices are reinforced by class actions that claim discrimination of employees (Liptalk & Greenhouse, 2010), as well as contributions in the internet and news articles that depict mistreatment of employees (ConsumerAffairs.com, 2011; “Mixing politics and Wal-Mart”, 2008). Accordingly, Wal-Mart could have the right approaches towards recruitment, but its talent management capabilities seem to affect the retention and motivation of employees to engage in service-boosting activities.
Other aspects that Berry (2009) notes as pillars that make service a competitive advantage for the company include reliability of the service and pleasant surprises to the customers that are offered in a respectful manner. Service reliability involves the design of systems that can offer a basis for the customers to trust the entity to deliver the promise it gives them. To design such reliability, Berry (2009) notes that the entity should approach it from a customer perspective that evaluates questions such as how the service may be simplified without adulterating the value offered to the customers, offering customer support on using the service and the areas that are susceptible to failure in the system (p. 313).
With respect to using pleasant surprises to compete, Berry (2009) observes that to exceed customer expectations, customers should be treated to pleasant surprises more often, and that such would require the interaction of providers with consumers, in an occasion that could form to strengthen the perception of the entity by the customers. An example of this for instance has been highlighted with the positive disconfirmation in respect to wait times in stores (Tom & Lucey, 1995). Other pillars of achieving competitive excellence using services, as noted by Berry (2009) are ensuring convenience for the customers (e.g. offering variety and creating stores that are spacious to enhance movement), and having benchmarks against which to evaluate ones competitive rating so as to foster improvement.
Another study that expounds on the need to have benchmarks for evaluating customer service delivery was provided by Macaulay and Cook (1994b). According to this study performance management is the critical aspect that ensures organization improve the value of their service to the customer. By understanding performance management perspectives, Macaulay and Cook (1994b) argue that customer service managers would be better placed to build motivation and commitment within their team members effectively. Additionally, according to the study, performance management helps the managers “measure, review and reward performance” (Macaulay & Cook, 1994b, p.3). Through its definition of performance management, the paper reinforces the important of having motivated employees to ensure effective service delivery. Performance management, as represented in the paper, allows team members to know what is expected of them individually and as a team, how such members are doing against the expectations, what the following course of action would be and the assistance each of them needs to perform better (Macaulay & Cook, 1994b). Farner, Luthans and Sommer (2001) also argue out the importance of process management while noting the need to effectuate internal customer service (service to other employees) so that such other employees may offer better services for the customer.
Following the perspectives highlighted, Macaulay and Cook (1994a) discuss the challenges that could lead to the collapse of customer service initiatives instituted by the organization. Firstly among these is the lack of management support for initiatives that have been established. In their study arguing for performance management, Macaulay and cook (1994b) reinforce the importance of management commitment in ensuring that performance management initiatives established function effectively. Secondly, customer service initiatives could fail out of a fading initial enthusiasm where evidence of their impact is not observable (Macaulay & Cook, 1994a). Similarly, when the initiative is perceived as the responsibility of only the front staff (those involved in direct interactions with the customer), it could fail due to lack of support for such from staff from other customers (Macaulay & Cook, 1994a; Farne, et al., 2001). Other aspects that lead to the failure of customer service initiatives include disregard of customer perceptions when forming such programs, failure to consider system transformations that would support the new initiatives, and focusing solely on skill training while not taking into account the required initiatives to change employee attitude and behavior (Macaulay & Cook, 1994a; Cascio, 2006; Berry, 2009). Evaluating such challenges, employees training accompanied with the establishment of an environment that brings about motivation, appear core aspects that would better customer service provision in entities such as Wal-Mart. Go to part 4 here.