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XIV. INTRODUCTION
To survive in highly competitive markets, organizations need to provide
goods and services that yield highly satisfied and loyal customer. When
customers are satisfied, they are more likely to return to those who helped the,
while dissatisfied customers are more likely to go elsewhere. The retention of
very loyal customers is key to organizational survival (John & Sasser, 1995).
Thus, organizations are challenged to create demand for their products and
services through outstanding customer support. To attain sustained excellent
external customer support requires internal systems that are aligned to serve the
external customer, with each internal subsystem adding value to others within
the organization who are dependent of its, as though the other subsystems were
its customers.
Customer service satisfaction is an important issue for organization.
However, it appears that achieving satisfaction is often the end goal, as evidenced
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by the emphasis on customer satisfaction surveys. This report proposes that this
focus is due to the assumption that satisfied customers are loyal customers and
thus high levels of satisfaction will lead to increase sales. As a result of this
assumption, customer satisfaction is often used as a proxy for loyalty and other
outcomes. The researchers empirically demonstrated that satisfaction is not the
same as attitudinal loyalty and that there are instances where satisfaction does
not result in loyalty. A sample was selected due to the relevance of satisfaction
and attitudes in settings of high risk where a high level of decision making is
involved. By comparing and contrasting John Lewis Partnership, well-known as
brilliant customer service brand and WH Smith which just gotten the lowest
rating in customer satisfaction, we will find out the important of customer
service and how to improve it continuously.
II. JOHN LEWIS CASE STUDY
2.1 John Lewis fact file
John Lewis Partnership
Established: 1864
John Lewis Partnership is one of the UK’s top ten retail business with 26
John Lewis department stores and 183 Waitrose supermarkets. It is also the
country’s largest employee co-operative, with over 68,000 employees. The
Partnership aims to ensure that everyone who works for it enjoys the experience
of ownership, by sharing in the profits, by having access to information and by
sharing in decision making.
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The Partnership believes that the commitment of Partners to the business
is a unique source of competitive advantage which has underpinned 75 year of
profitable growth and a reputation amongst customers and suppliers
unparalleled in the UK retail industry. The company’s record of performance
testifies to the robustness of the vision of its founder John Spedan Lewis, to
create a company dedicated to the happiness f the staff through their worthwhile,
secure and satisfying employment in a successful business.
The Partnership Board of John Lewis is Partnership plc comprises thirteen
member – the Chairman, the non-executive Deputy Chairman, five member
nominated by the Chairman, five member nominated by the Partnership Council,
the elected body which represents all the members of the Partnership and a
further non-executive director.
2.2 John Lewis’ Customer Service
John Lewis are very well known for their brilliant customer service. To
provide the best possible choice, value and service for customers, John Lewis
always finds opportunities to listen to them carefully and acting quickly if they’ve
got something wrong. Besides, they also have many Partners who have worked
for the business for many years. Their partners are interested in their jobs, and
have excellent product knowledge that help John Lewis providing customer
service better and better.
John Lewis provides services, which are available to the customers there
are:
The John Lewis account card – this helps customers do all their
shopping on the account card and pay for it later. This allows the
customer to pay off the payments from the purchase slowly in small
or large payment. The advantage to the store is records are kept on
purchases in order to target the customer with promotions.
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Gift Wrap Service – The store also offers a wrapping service for
presents/gifts which have been bought, but a charge may be made
for customers willing to have their purchase made from the store
wrapped if the purchase is under £20 than their competitors will be
a charge.
28 days money guarantee – John Lewis offers this to customer who
are not happy with the production and wish to exchange or a
refund, you will be entitled to this service within 28 days.
Customer service is important to John Lewis, this is because to attract and
also bring back customers in order for the business to succeed.
Internal and external customer
In the John Lewis store, the internal and external customers are seen to be
as the internal are the employees in the business e.g. the staff. The external are
the customers who use the store for shopping etc. The (internal customer’s)
employees in John Lewis are to provide a good service to the external customers.
The roles and expectation may include all the managers to co-operate with each
other, in order to make a good service for the external customer. The employers
are responsible to providing good customer service shown by the store customer
service standards.
As John Lewis sees itself, there are 4 key elements that have created
success of them in keeping customer satisfaction
Recognition for Partners
- Being recognized in multiple customer satisfaction surveys and
awards.
- In 2010, Johnlewis.com was named Best Online Retailer in an
annual survey by consumer magazine.
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- John Lewis’s partnership card™ credit card has also been
recognized as the top UK credit card.
Acting on customers’ feedback
- Listen carefully to what customers tell and acting quickly if
they’ve got something wrong.
- In addition, they introduced name badges selling Partners to
make customer service more personal.
Building accessible shops and services
- Ensuring all customers can access the products by integrating
the principles of accessibility into the design, construction and
operation, aiming to meet each customer’s individual needs,
whether they need assistance due to hearing, sight or mobility
issues
- Improving accessibility by taking reasonable steps to make it
easier for disable people to access their buildings.
Offering value
- John Lewis “Never Knowingly Undersold”: Offering a wide range
of great-quality products, which are fairly priced and supported
by excellent service.
- Waitrose’s “Price Commitment”: is the promise to bring
customers quality food that is honestly priced and represents
excellent value. Waitrose is committed to keeping prices for
customers as low as possible, but not at any cost.
III. WH SMITH - BAD PRACTICE OF CUSTOMER SERVICE
3.1Company Overview
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WH Smith plc (known colloquially as Smith's) is a British retailer, best
known for its chain of high street, railway
station, airport, hospital andmotorway service station shops
selling books, stationery, magazines, newspapers and entertainment products. Its
headquarters are in Swindon,Wiltshire, England. Smith's is listed on the London
Stock Exchange and is a constituent of the FTSE 250 Index. It has been innovative
over the course of its history, being the first chain store company in the world
and was responsible for the creation of the ISBN book catalogue system. In
1792, Henry Walton Smith and his wife Anna established the business as a news
vendor in Little Grosvenor Street, London. After their deaths, the business -
valued in 1812 at £1,280 (about £72185 in 2012, adjusted by inflation) was
taken over by their youngest son William Henry Smith, and in 1846 the firm
became WH Smith & Son when his only son, also William Henry, became a
partner. The firm took advantage of the railway boom by opening newsstands
on railway stations, starting with Euston in 1848. In 1950 starting with Euston in
1848. In 1850, the firm opened depots
in Birmingham, Manchester and Liverpool. It also ran a circulating
library service, 1860-1961. The younger WH Smith used the success of the firm
as a springboard into politics, becoming an MPin 1868 and serving as a minister
in several Conservative governments.
After the death of WH Smith the younger, his widow was created Viscountess
Hambleden in her own right; their son inherited the business from his father and
the Viscountcy from his mother. After the death of the second Viscount in 1928,
the business was reconstituted as a limited company, in which his son, the third
Viscount, owned all the ordinary shares. On the death of the third Viscount in
1948, the death duties were so severe that a public holding company had to be
formed and shares sold to W H Smith staff and the public. A younger brother of
the third Viscount remained chairman until 1972, but the Smith family's control
slipped away, and the last family member left the board in 1996
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3.2Analysis of the causes for bad practice of customer service
3.2.1 Bad customer service practice at WH Smith
Leading high street chain WH Smith has found itself bottom of the high
street customer satisfaction league table, despite pre-tax profits reaching £69m
at the end of February.
Consumer campaigners Which? announced the chain as one of the lowest
ranking shops on the high street, followed closely by the Orange and T-Mobile
merger EE. Over 11,000 consumers responded to the survey, and their answers
demonstrated a 51 per cent overall satisfaction rate with the store.
US chains scored comparatively higher and Apple topped the list, receiving
an overall satisfaction score of 85 per cent. In the survey, WH Smith's stores
were branded “messy” and “expensive”, whereas the US giant was praised by
customers for its “unique look and feel” and “great customer service.”
Respondents were asked how satisfied they were after their most recent
visits to over 100 high street stores and if they would recommend it to a friend.
Shoppers were also asked to rate stores in terms of price, range, product quality,
service and store environment during their last visit there.
A spokesperson for Which? said: “Consumers want to support their local
stores, but not at any price, so whether they are chains or independent we hope
shops do the right thing to keep their customers and hold back the decline of the
high street.”
WH Smith described the survey as unrepresentative of the 12 million
customers who pass through their stores each week. A spokesperson added:
“Customers vote with their feet, as evidenced by our continuing strong
performance and the number of new stores that we are opening in the UK this
year to support the UK high street.”
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3.2.2 Causes of the bad customer service
Customer service is an extra service providing to the customers to stay
ahead of the competitors. Providing good customer service means more
customers and profit. Customer service plays an important part of the marketing
mix, serving to attract new customers and reinforcing brand loyalty among
existing customer.
WH Smith’s objective is to be the UK consumer’s first choice for food and
meet its customer’s needs effectively and thereby provide shareholders with
good, sustainable financial returns, and to create outstanding shopping
environment. This means they would like to grow and have good customer
service. Also to ensure all colleagues have opportunities to develop their abilities
and are well rewarded for their contribution to the success of the business.
However, its policy is not to work with its suppliers fairly, not recognizing the
mutual benefit of satisfying customers’ needs. It also does not aim to fulfill its
responsibilities to the communities and environments in which it operates.
Their mission is to serve customers the best quality and choice to meet
their everyday shopping needs. In the past, WH Smith did this very well by
proving good behave in customer service. Nowadays, it seems like going down.
- Checkout queues: Customers always spend waiting time at the
checkout. Many of their store colleagues are not multi-skilled and
so, at busy time, they cannot serve customer quickly.
- Special offers: It is no longer special offer items that disappear very
quickly from the shelves as it did.
- Complaints/refund policy: WH Smith interacts with complaint of
customer slowly. It lead to there are more and more complaints
from customer to corporate service.
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Getting hold of WH Smith’s customer service policy was very difficult. It is
can seen that WH Smith follows Acts to have better services for their customers.
For example they have a Complaint/Refund policy, which says “We consider all
complaints sympathetically. Unfortunately, most cannot be dealt with quickly in
store by refund, with proof of purchase, or by replacement, to the complete
satisfaction of customers.
3.3Recommendations on how to improve WH Smith customer
service satisfaction
The importance of perceived value
Two important aspects of overall service quality are core and relational
quality. Core quality centers on the basis service contracted for or promised.
Relational quality concerns the way in which the services is delivered. However,
service customers may be satisfied with what is delivered (the core) and how it is
delivered (the relational) but may still not feel they have got their money’s
worth. Customers are mindful of the costs of obtaining a service and costs matter
in relation to satisfaction. McDougall and Levesque seek to put perceived value
the results or benefits customers receive in relation to the price paid and other
cost associated with purchase into the equation. By establishing the role of
perceived value, decisions designed to improve customer satisfaction should be
more effective.
The scope for price increases
The more important perceived value is to overall satisfaction, and hence to
loyalty and switching, the more influence price changes may have on the client’s
future intentions to purchase a service. Conversely, the more important core
quality is relative to perceived value, the larger the potential price increase
available when core quality is improved.
Finally, McDougall and Levesque conclude that it is essential that WH
Smith managers meet customer expectations for service score. The basic promise
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or implicit contract must be delivered, as it is a significant driver of customer
satisfaction, which is directly related to future purchase intentions.
Strategies to increase the effectiveness of customer services
It’s a renowned truth that no business can survive without customers. In
the verge of extreme competition and economic slowdown, it is important for an
organization to work closely with your customers to make sure the service or
product that it provides is as close to their requirements as possible and up to
the desired standards.
Face-to-face negotiations with customers
This is the most intimidating and absolutely terrifying part of interacting
with a customer. If an individual us not trained to handle a customer and to
effectively deal with him in difficult situation, it can prove to be a pretty
disturbing experience. To make things further difficult, it does get easier
overtime. In case of products or service in which organizations do not get in
touch with the customers directly, they should hire a team to keep in touch with
the customers to measure their responses.
It has been proven through experience that a client finds it easier to
narrate to and work with somebody they have actually met in person, rather than
a voice on the phone or someone communication through an email. While
meeting with the customers, it is important for the employees of an organization
to remains calm, assertive and most importantly, take time to get the necessary
information from them such as what are their needs with respect to a product or
service. It is widely believed that if a potential client spends most of his or her
time talking, there is a high probability of making a sale and forming a long-term
relationship with him or her (Nicholls et at, 1998).
Quickly respond to customer’s queries
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This is very true in case of every business, no matter how complex the
product is or how difficult it is to response to the customer on time. The
annoyance experienced by a customer while waiting for a response, which has
gone late, can be well imagined. It might not always be useful to deal with all
customers’ queries within a very short span of time but it is advisable to at least
inform them about the receipt of the query and inform them about the expected
delay in response. Even a single call to let the customer know that the message is
received and he or she will be contacted as soon as possible will serve the
purpose. Even if the organization is not able to solve a problem within the
desired period of time, it is better to let the customer the staff is working on his
or her problem (Oliver, 1990).
Keep a friendly attitude
It is very essential to be friendly, considerate and to make the clients feel
as if they are like friends to the organization and that the organization is always
there to help them out and solve their problems. At times, the employees will feel
that they should treat the clients with as harshness as possible and completely
ignore to their unusual demands but the firms should train its employees to
remain polite and friendly. It is very important that the employees keep a
friendly and polite attitude so that they can respond to organization client’s
desires and needs with their best level of capabilities and remain polite and
courteous all the time (Nicholls et al, 1998).
Define a clear and concise policy for customer service
Such tactics may not seem very important in the beginning nor do they
appear to give any benefit in the short-term. However, a clearly defined WH
Smith’s customer service policy is going to save a considerable level of time and
effort of the organization in the long run, which in turn will definitely lead to the
maximum utilization of organization’s resources and improved profitability.
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The WH Smith’s customer service policy should define as to how the
customer should get the best level of service or product do if he has a problem. If
they’re not satisfied with any aspect of an organization’s customer service, there
should be some way to let them complaint and inform the management about the
problem.
The most irritating experience for a client is to be passed from person to
person, or not knowing to whom to turn to. It is therefore the responsibility of
the management to make sure they know exactly what to do to resolve the
problem and to give the utmost importance to their queries and complaints.
IV. RECOMMENDATION
Managerial implications
A key benefit of holding data on satisfaction and attitudinal loyalty is to
identify the different relationship between satisfaction and attitudinal loyalty of
each customer. While aggregate scores can be interesting, they can mask extreme
variations (i.e. highly dissatisfied scores reduce highly satisfied scores and vice
versa). Given that B2B organization have fewer customers than B2C, the
satisfaction and attitudinal loyalty scores for each individual customer can be
obtained and given meaning. If customers have high satisfaction and attitudinal
loyalty, the question is: “Why are not they intending to repurchase if they are
satisfied?” Conversely, customers with low satisfaction and high attitudinal
loyalty are potentially vulnerable to competitors’ offers that appear more
satisfying.
Thus, knowledge of the attitudes and behaviors of individual customers
can be used to inform marketing strategies and specific sales management tactics
aimed at strengthening the customer-supplier relationship, building trust and
increasing profitability. Many managers today use satisfaction surveys as end in
itself, almost as a proxy for loyalty, which is often more difficult to measure. This
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substitution effect implies an assumption that satisfaction and loyalty are so
closely related that loyalty can be strongly inferred from the satisfaction rating.
However, as demonstrated in this research, satisfaction and loyalty are not the
same, and in some cases satisfaction does not predict loyalty (consider banks
where customer are highly dissatisfied yet remain loyal). This suggests that WH
Smith marketing managers need to test both customer satisfaction and loyalty
levels because high levels of satisfaction do not always translate into high levels
of attitudinal loyalty.
Most satisfaction surveys used in business do not distinguish between
emotion-driven and evaluative-base satisfaction, and thus the results may not be
capturing a true satisfaction rating. The evaluative-based satisfaction measures
used in this study could be used by managers where the disconfirmation
paradigm is an antecedent of satisfaction such as utilitarian or functional type
services (e.g. motor vehicle repairs, garden maintenance and fireplace cleaning),
or where customers cognitively reviews the purchase process.
V. CONCLUSION
Customers are the most important thing for an organization. Without
customers the organization would just not be exist. They are simply the natural
resource upon which the success of any organization depends. Hence, businesses
need to attract more and more customers. In order to do this, it is essential for
organization to keep good customer services satisfaction.
To survive in highly competitive markets, organizations need to provide
goods and services that yield highly satisfied and loyal customers. When
customers are satisfied, they are more likely to return to those who helped the,
while dissatisfied customers are more likely to go elsewhere. Thus, organizations
are challenged to create demand for their products and services through
outstanding customer support.
14. 14
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