The Valued Nature Of Customer Care Commerce Essay
Customer care, customer retention, excellent customer service delivery, exceeding customer expectations are all key areas that pave way to any business success (Macaulay and Cook, 1994)
As competition has become a global phenomenon, most companies need to develop strategies other than competing on price alone in order to remain in business. Most service industries rely on excellent customer care strategies to standout from their competitors (Cook, 2008). Top quality customer service can effectively be achieved by an organisation by improvising measures to improve services provided to its customers through the provision of excellent service delivery exceeding customer’s expectation (Bergeron, 2002).
According to Galbreath and Rogers (1999) 98 per cent of unsatisfied customers source for an alternative competitor without filing any complaint while (Bove and Johnson, 2000) pointed that “totally satisfied” customers are six times more likely to patronise a company's products as compared to merely just-satisfied customers. In addition, a 5 per cent decrease in customer defection can result in an overall profit increase from 30 to 85 per cent.
As also described by Drucker and Levitt (1992) the main aim of all businesses is the ability to acquire and retain customers. It will cost a business twice as much to attract new customers into their business as it does to retain the already existing customers.
Therefore, one of the most effective service delivery procedures lies on management’s ability to design strategies that will enable the organisation gain competitive advantage over rival firms in the business environment (De Wit and Meyer, 2004).
2.0 LITERATURE REVIEW
A number of on-going debates on what measures organisations can adopt in order to improve the provision of services to its clients remains the focal point in setting strategic missions and visions statements in today’s emerging organisations (Mintzberg, H. et al. 1998).
In this regard, a number of academic literature in the strategic management field have shown various competitive and non-competitive strategic and operational models suitable for organisations to enable them gain competitive edge over their competitors.
One of these strategies is that of Michael Porter who is regarded as one of the most important theorist who came up with the positioning model. Porter (1985) competitive strategy emphasises that “competitive strategy not only responds to the environment but also attempts to shape the environment’’. In his work, he argued that competition is being driven by five forces in the external environment, which collectively determine the returns of firms in an industry; these are the entry of new competitors, the threat of substitutes, the bargaining power of buyers, rivalry among competitors, and the bargaining power of suppliers. In sustaining a competitive position in the business environment, Porter (1985) further came up with various strategies which he pointed that embarking on these three generic strategies enable a firm sustain its competitive standpoint over rival firms. These strategies are; differentiation strategy which aims having unique products or services over other firms, whereas cost leadership strategy aims at having quality products at relatively lower costs in the firm’s line of business. And additionally the focus strategy which enables a firm to streamline its production or services to a particular area were other rival firms have not ventured. Porter (1985) further emphasized in his work that, “The goal of competitive strategy for a business unit in an industry is to find a position in the industry where the company can best defend itself against these competitive forces or can influence them in its favour…The key strategy is to delve below the surface and analyse the sources of each.’’ (Porter, 1998, pp.4). Thus, a firm focusing on low-cost production in line with product differentiation can effectively deliver quality service to customers.
Similarly, Barney (1991) strategy, which is also known as the resource-based view which showed that a firm’s competitive advantage is sustained by improving its internal resources. He argued that Porter’s positioning model concentrated on firm’s external environment and its impact performance which he agreed that it clarified ours views on external competitive environment. However, Barney (1991) diversified and came up with the resource-view model that examines how empowering a firm’s internal resources can help attain competitive advantage. He categorized the firm’s resources into; human capital, organizational resources and physical capital resources which (Barney, 1991) further classified into; the firm’s attributes, assets, knowledge, information, capabilities and organisational processes. Therefore, enhancing these resources will however enhance the firm’s efficiency thus outperforming competition in the business environment and thus these strategies inevitably differentiates firm’s resources and makes them difficult to imitate which in essence help firms enhance its efficiency as well as effectiveness (Barney, 1991).
Prahalad and Hamel (1990) argued that an organisation can attain and sustain competitive advantage through its Core Competence. From their opinion, an organisation’s real source of competitive advantage could be found in management’s ability to combine corporate technology and production skills into competences that will empower individuals business to adapt quickly to emerging opportunities (as cited in De Wit and Meyer, 2004). Also developing the core competence will enable an organization to bind quality as a core competence in delivering customer service, and hence attain and sustain competitive advantage.
On the other hand, (Kim and Mauborgne, 1999) argued that non competitive strategies also enable firms to attain competitive edge. Their strategies were not on a production or resource based economy but on a knowledge-based economy. They came up with the ‘value-innovation’ strategy which makes a firm standout due to new services they offer and with this competition becomes irrelevant. Kim and Mauborgne (1999) stressed that imitating other firms is no challenge but becoming innovative by designing new products in which the perceived unique.
Even with these strategies of designed to enhance the quality of service in order to become more competent, there are still possibilities of some gaps in an organisation’s service. This is because these organizations fail to spot whether the service they provide is what customers actually expect from them or even try to exceed customer expectation (Zeithaml, Berry and Parasuraman, 1990) which hence results to slight or no improvement in level of patronage. In order, to spot and correct these gaps between the customer-perceived quality deficiencies, (Parasuraman, Zeithamel, and Berry, 1988) came up with a five dimension service quality measuring tool ‘SERVQUAL’ which has a set of the 5 important dimensions of quality based on customer rankings. The Servqual also involves a set of 5 gaps which shows the difference between customers’ expectations and perceptions (Parasuraman, Zeithamel, and Berry, 1988).
Source: Fedoroff (UNDATED): Comparing Service Quality Performance With Customer Service Quality Needs: Explanation of Servqual Methodology of Zeithhaml, Parasuraman and Berry (1988) http://www.12manage.com/methods-zeithaml-servqual.html (accessed 30-04-2009)
According to Parasuraman et al. (1988), the ability for organisations to identify these gaps in their services and measure the actions needed to improve their services and exceeding customer expectations by delivering excellent services will invariably enhance the organisational performance in the competitive environment.
In order to benchmark performance and remain in business, these academic theorists have provided key strategies in which if appropriately combined and adopted by organisations will go to greater height in achieving desired targets.
2.1 STRATEGY CHOICE:
In this research, Porter’s (1985:1998) competitive strategy in line with Parasuraman et al. (1988:1990) Servqual gap model will be used in this research to explore the gaps in the services Aso savings and Loans Plc render to their customers and ways to improve the provision of quality service to its customers.
2.2 RESEARCH QUESTION
An Exploration of Improving the Provision of Quality Customer Service in Mortgage Institutions, A Case study of Aso Savings and Loans Plc, Nigeria.
2.3 RESEARCH OBJECTIVES
To investigate the service packages this organisation offers to its customers that make them remain loyal patrons
Explain the thought behind the provision of quality customer services in mortgage institutions.
To explore the strategies this organisation is using to improve customer service in other to make them more competitive
To use appropriate research methods to collect data through interview and recommend appropriate measures to fill the gaps of the research findings.
3.0 METHODOLOGY OF RESEARCH
Saunders et al. (2007) defined research methodology as a method adopted for research which is based on the area of investigation as well as the research philosophy.
3.1 Philosophy of Research
According to Saunders et al. (2007, pp.101), the phrase “research philosophy invariably relates to the nature of knowledge as well as the development of knowledge. Therefore given the research question, this researcher seeks to explore and understand the steps of improving customer services using the socio-constructionism approach.
As pointed by Easterby-Smith et al. (2008) there are two key research philosophies the positivism and socio-constructionism which are backed with the ontological and epistemological assumptions. The ontological assumption from the socio-constructionism view, believes that reality is not objective and it’s based on peoples perception of the world (Easterby-smith et al, 2008). Furthermore, Saunders et al. (2007) points that social interaction among social actors is a continual process hence should be reviewed and revised from time to time. Therefore in this research the social-constructionist view is being used as the philosophical stance of this research in order to identify the gaps in services provided by Aso to its customers through social interaction between the service provider and customers. Unlike the positivist view which its ontological assumption argues “the reality we make about nature of reality is objective and external’’ (Seddighi, 2008). On the hand, the epistemological assumption from the socio-contructionist approach shows that “reality is subjective and it is socially constructed and given meaning by people and its best explored through a clear focus on the ways people make sense of the world via the medium of language’’ (Seddighi, 2008). Hence, this approach gives value to people’s experience in the social environment. This approach will enable the researcher gain peoples perception on customer service (Saunders et al., 2007) and further seek ways to improve these services to over and above their expectations.
3.2 Research Approach
There are to basic approaches in an academic research, inductive and deductive approach. According to Saunders et al. (2007) the inductive approach emphasizes on “a more flexible structure to permit changes of research emphasis as the progresses by gaining an understanding of the meanings humans attach to events’’. The inductive research is based on individual human perception therefore the researcher is less concerned with generalization as data is mainly qualitative (Easterby-Smith et al., 2008; Saunders et al., 2007). Unlike the deductive research which focuses on scientific principles and transforming theories into sufficient data size so as to generalize conclusions (Saunders et al., 2007).
In this research, inductive approach is will be adopted to explore, investigate and analyse how high quality customer service can be achieved, improved and delivered. Consequently, qualitative data gathered through interview will be interpreted to answer the research question and attain the research objectives (Easterby-Smith et al., 2008)
3.3 Research Strategy
Saunders et al. (2007 p. 610) pointed, “Research strategy is general plan of how the researcher will go about answering the research question. It will contain clear objectives, specify the sources from which you intend to collect data and consider the constraints you will inevitably have”.
The strategy to be adopted in conduct this research will be based on a Case Study of a mortgage institution, Aso Savings and Loans Plc, Nigeria. This study being a qualitative research will be based on people’s opinions. Thus, this shows that the researcher has a general overview of how to carry out this study.
3.4 Data Collection Method and Procedure
As earlier stated, a qualitative approach by means of interview will be used as the research instrument to collect primary data. This method allows the researcher gets a direct response to questions in the research subject area given that the sample size from interview is considerably small. Interviews will be conducted physically as well as over the telephone.
In conducting this research, the researcher will use interview as means of data collection. The interview will be conducted in semi-structured way, with this data will be collected in a more structured way than the usual qualitative research (Saunders et al., 2007). Consequently, the researcher will send the sample of the interview questions (Saunders, et al., 2007) to Aso Savings and Loans, Plc prior to the interview and then subsequently arrange the interviews date and time most suitable for the interviewees. During the interview session, the will researcher sought for permission from the interviewees to make notes of their responses and details provided and to audiotape the entire interview. This interview procedure is based on the interpretivist philosophy adopted by (Saunders et al, 2007) which provides a scope for the interviewer to explore the responses where additional information is required, as the question will be open-ended and will be conducted physically.
The researcher selected interviewees from Aso Savings and Loans Plc employees in Nigeria who are the in position to aid the researcher in answering the research question and meet the research objectives. The employees to be interviewed are:
Managing Director/Chief Executive Officer (MD/CEO) of the company:
The MD/CEO of Aso was selected because as an experienced financial analyst who has been in the Finance and Investment Advisory and Privatisation Services for over eighteen years has view on the customer service and intended mission on how to improve the provision of services rendered to customers.
Head of the Products and Market (P & M) Division
The Head P&M division oversees Mortgage, Commercial, Retail and Consumer Banking activities of the bank. Therefore will offer information on whether the products offered to customer are the appropriate ones and the marketing mix the bank is using to improve on these products given the growing competition in the market.
Head of Service Quality Management (SQM) Unit:
The head SQM overseas customer complaints reports, therefore the head SQM will knows the gaps in services offered to customers who are the social actors and knows theirs views, perceptions on what they expect and what they receive.
Business Manager (BM)
The BM handles the activities in branch assigned to and therefore knows the challenges faced incase of server and system downtime during business hours and how this affects customer perception of Aso’s service.
Frontline Customer Service Officer (CSO).
This officer has direct interface with customers and is in charge of opening accounts, handling customer complaints and identifying irregularities in their mortgages and regular accounts hence will know the lapses in the organisations service as regards customer expectations.
In addition, secondary data obtained from company’s website, customer service theories and journals, reports, magazine articles and newspapers will be used to support analysis of data collated. The use of secondary data will aid the researcher in structuring a clear picture of the company and the environment where it operates (Saunders et al. 2007).
3.5 Semi-Structured Interview Questions
What kind of customer feedbacks do you receive about the type of products and quality of service you offer?
Given today’s competitive business environment, how does this organisation benchmark against other emerging Microfinance Savings and Loans organisations?
How does Aso reward exceptional CSOs especially those highly recommended by customers?
Question one aims at exploring customer ratings and perceptions on the quality of services offered to them and if the product choices are what customers expect as well as the right ones. As Parasuraman, Zeithamel, and Berry (1988) argued on services that organisations offer whether they are in line with what customers expect or even below expectation or above customer expectations.
Question two is used to find out the strategic measures this organisation is using to benchmark competition in the external business environment which is in line with Porter’s (1985) positioning model which focuses on how the external environment responds and operates. And also to analyse the organisation’s core competence which Prahalad and Hamel (1990) pointed that its the responsibility of the management of the organisation to combine corporate technology and production skills into competences that will empower individuals business to adapt quickly to emerging opportunities.
Question three explores the organisational policy on employee motivation. It seeks to find out the value of organisation’s resources and how employees are encouraged to deliver quality service especially those at the frontline who are the ‘face of the organisation’ hence define front ownership. This evolved from Barney’s (1991) resource-view model which argued that a firm’s resources helps attain competitive advantage as well as customer perceptions on staffs that offer service to them (Zeithaml, Berry and Parasuraman, 1990).
3.6 Ethical Issues
The researcher will consider the University policy Statement on Ethics in Research and Consultancy as a guide and abided by the guidelines and procedures for students undertaking Postgraduate research and dissertations. In addition, all interviewees will be sent a letter of consent that will inform them the details as well as the purpose of research, which their response letter duly signed sent will show their approval and willingness to participate in this research
However, a copy of the research after completion will be sent to Aso Savings and Loans Plc to prove the authentic use of data collected. This is for the researcher to show he/she has considered moral issues (Seddighi, 2008) which are very important in all academic research and therefore have complied with the ethics policy laid down by the University of Sunderland since the research will involve both individuals and organisations.
4.0 Data Analysis
Seddighi (2008, p. 66) pointed that in order to analyse qualitative data the researcher needs to reorganize his/her data systematically for a rigorous and systematic analysis.
In essence, the researcher will organise the information collected from the reviewed strategic and operational management literatures and interviews responses into transcripts and secondary data into meaningful parts or categories. In order to critically analyze both primary and secondary data, the researcher will therefore simplify and summarise data gathered into: Categorisation; Unitising data; Recognising relationships in order to draw, examine and verify if relationships exist between variables and further draw conclusions that will enabled the researcher to answer the research question/objectives. (Saunders et al., 2007).
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