Effective Ways to Bridge Service Quality Gaps
Gap 1 can be closed by:
- understanding customer expectations through research, complaint analysis, customer panels
- increasing direct interactions between managers and customers to improve understanding
- improving upward and downward internal communication
For closing Gap 2 it is imperative to establish the right service quality standards by:
- communicating and reinforcing customer-oriented service standards
- providing requisite training to the managers to enable them to lead employees to deliver quality service
- rewarding managers and employees for attaining goals
- measuring performance and providing regular feedback
- establishing clear, realistic service quality goals
- ensuring that employees understand and accept goals and priorities
- Becoming receptive to new ways of doing business that overcome barriers to delivering quality service.
Gap 3 is addressed by ensuring that service performance meets standards through:
- clarifying employee roles
- ensuring that all employees understand the importance of their jobs
- providing employees with technical training
- developing innovative recruitment and retention methods to absorb the best talents and build loyalty
- training employees about interpersonal skills for dealing with difficult customers
- teaching employees about customer expectations, perceptions and problems
- eliminating role conflict among employees by involving them in the process of setting standards
- measuring employee performance and link compensation and recognition to delivery of quality service
- develop reward systems for employees
- empowering employees with decision-making along with accountability
- encouraging teamwork
- Treating customers as partial employees by clarifying their roles in service delivery, training and motivating them to perform well in their roles as co-producers.
Gap 4 is bridged by
- seeking inputs from operations personnel when new advertising programs are being created
- developing advertising that features real employees performing their jobs
- allowing service providers to preview advertisements before customers are exposed to them
- ensuring that consistent service standards are delivered across multiple locations
- identifying and explaining uncontrollable reasons for short falls in service performance
- offering customers different levels of service at different prices and explaining the distinctions
- ensuring that the communication materials reflect those service characteristics that are most important to customers in their encounters with the organization
- getting sales staff to involve operations staff in direct interaction with customers
- Managing customer expectations by informing them the possible and impossible options and the reasons.
Gap 5 can be effectively closed by minimal promise and maximum performance.
The Gap Model is an influential tool to identify the discrepancies between organization and customer perception of service quality. Once the gaps are filled, the service quality improves and synchronization can be attained between perception, expectation and satisfaction levels of the respective parties.
Customer relationship management in Hershey’s co
Customer relationship management entails all aspects of interaction that a Hershey’s co. has with its customer, whether it is sales or service-related. CRM is often thought of as a business strategy that enables businesses to:
- Understand the customer
- Retain customers through better customer experience
- Attract new customer
- Win new clients and contracts Increase profitably
- Decrease customer management costs
While the phrase customer relationship management is most commonly used to describe a business-customer relationship, however CRM systems in Hershey’s co are used in the same way to manage business contacts, clients, contract wins and sales leads.
CRM solutions provide the customer business data to help you provide services or products that customers want, providing better customer service, and cross-sell and up sell more effectively, close deals, retain current customers and understanding who the customer is.
Focusing on the relationship
Hershey’s use three steps to build customer relationships:
- determining mutually satisfying goals between organization and customers
- establishing and maintaining customer rapport
- producing positive feelings in the organization and the customers
Good CRM at Hershey’s
Viewpoint in company is:
- 'what exactly do customers want and need?' and
- 'What the organizations need to do to be able to produce and deliver it to customers?'
Customers want?
Customers want cost-effective products or services that deliver required benefits to them. (Benefits are what the products or services do for the customers.) any single product or service can deliver different benefits to different customers. It's important to look at things from the customer's perspective even at this level.
More significantly however, customers want to have their needs satisfied. Customers' needs are distinctly different to and far broader than a product or service, and the features and benefits encompassed. Customers' needs generally extend to issues far beyond the suppliers' proposition, and will often include the buying-selling process (prior to providing anything), the way that communications are handled, and the nature of the customer-supplier relationship.
Modern CRM theory refers to the idea of 'integrating the customer'. This new way of looking at the business involves integrating the customer (more precisely the customer's relevant people and processes) into all aspects of the supplier's business, and vice versa. This implies a relationship that is deeper and wider than the traditional 'arms-length' supplier-customer relationship.
The modern approach to customer relationship management is based on satisfying all of the needs - people, systems, processes, etc. - across the customer's organization, such as might be affected and benefited by the particular supply.
Generating a customer focused CRM solution
So what Hershey’s co needed to make this quantum leap of customer integration?
New way of thinking:
- change in paradigm
- change in the messages sent and received
- change in the overall culture
New way of doing things:
- processes that are capable and effective
- structures and systems that support a business centered on its customers
- connectivity (end-to-end processes) both internally and externally (e.g., with suppliers)
Customers' expectations
If Hershey’s cannot at least meet its customers' expectations it will struggle.
Ideally Hershey’s organization should exceed its customers' expectations, thereby maximizing the satisfaction of its customers, and also the credibility of its goods and services in the eyes of its customers.
Customers normally become delighted when a supplier under-promises and over-delivers. To over-promise and under-deliver is a recipe for customers to become very dissatisfied.
Rule No 1 - cannot assume that the company knows what a customer's expectations are
Rule No 2 - Customer expectations will constantly change so they must be determined on an on-going basis.
The expectations of different customers for the same product or service will vary according to:
- social and demographic factors
- economic situation
- educational standards
- competitor products
- experience
Therefore, given all these variable factors, it is no surprise that one size certainly does not fit all.
Asking the customers what is important to them. Find out why customers do business with Hershey’s. There are a wide variety of relationship drivers. For example:
- quality
- price
- product
- location
- customer service
When asking it might be discovered that some factors that perhaps never even considered, for example:
- health and safety support
- systems compatibility
- contract structure
- distribution flexibility
- technical support
- troubleshooting and problem-solving, to name just a few
CRM as a process
CRM can be regarded as a process, which has:
- identifiable inputs
- identifiable components
- identifiable characteristics, which define CRM for your organization and customer base
- capacity for improvement and evolution over time
Ryan air
Ryan air is a pioneer among LCA companies in Europe. They were the first and they are still today the most active LCA on the continent. This company is developing rapidly and has gone through very important stages. Ryan air was founded in 1985 by the Ryan family in Ireland. In 1988 and during only one year due to financial losses, the company launches a business class service and a frequent flyer club for customers, this change has meant that Ryan air has changed its generic strategy. Indeed, the company since the early 90’s pursuing a cost strategy. Ryan air now offers the lowest fares in every market, high frequency flights, moving to a single aircraft fleet type, scrapping free drinks and expensive meals on board. These decisions have significantly reduced ticket prices for customers. In order to reduce again costs, Ryan air decided also to narrow down traveling lines from 19 to 6 routes between 1990 and 1992. With this new policy the Irish firm carry over 1 million passengers in one year for the first time in 1993. On 29th May 1997 Ryan air becomes a public company for the first time with a successful flotation on the Dublin and NASDAQ (New York) Stock Exchanges. In March 1999, Ryan air accepts the delivery of five new Boeing 737-800 series aircraft. Those new aircrafts began operations from the main base at London Stansted, and their impact allowed Ryan air to operate with significantly lower seat costs and to offer much lower airfares, but with better reliability and a fantastic new customer product (www.ryanair.com).
Communication between customers and the company is always a priority. In 2000, Ryan air’s website (www.ryanair.com) became the largest booking website in Europe with more than 50.000 bookings each week. This source of information allows also customers to avail of the 31
Lowest car hire, hotel accommodation, travel insurance and rail services. At that time, Ryan air was the only LCA which developed interactive useful internet services for customers. Ryan air was in 2003 in the category “most popular brand” the fifth most searched website in the world (http://www.google.com/intl/en/press/zeitgeist2003.html). The Irish airline became also the first LCA to sponsor a program on television in order to gained more customers. The company decided to sponsor Sky news Weather reports. Following this effort in communication, 1 million people traveled for the first time in during a month with Ryan air in august 2001. According to R. O’Brian (mail communication, 15 April 2009) in order to be closer to customers, they build also the first continental base at Brussels Charleroi Airport in Belgium between 2001 and the end of 2002. In 2002, to accommodate this growth, Ryan air announced the largest ever aircraft order by an Irish airline by increasing their aircraft order with Boeing from 45 to 125 firm aircraft, with a further 125 options. The value of this order exceeds € 6 billion and signals Ryan air’s ambition to continue to be the largest LCA in Europe. Ryan air became also the number one in Europe of customer services beating all other European airlines for punctuality, fewer cancellations and least lost bags (www.ryanair.com). Meanwhile according to the company respondent “communications to customers have not stopped”. In 2004, Ryan air is named the most popular airline on the web by Google, as the website continues to be the most searched travel one in Europe. These performances continued and now more than 98% of all Ryan air bookings are made through the website and Internet customer services.
During 2005 and 2006, Ryan air used communication tools in order to try to be different from other airlines for customers. First, they made a big communication called “no fuel surcharge guarantee”. Following the statements by the respondents , this was a new communication for customers because many “full service” airlines such as British airways, Air France or Lufthansa continue even today to supplement already high fares fuel with surcharges in case of extra costs. Second, Ryan air became “The World’s Favorite Airline” because they carried more customers than British Airways and all other airline and LCA firms. Third, Ryan air was and is still the most punctual company in Europe with more than 90% of flights who arrived 32
On time and respect schedules. Many radio advertising were made with this information. Finally, in order to attract new customers, they offered 100.000 seats for 1€ for the 20th birthday of the Irish brand. From 2006 until now, a new customer service was launched. According to the respondent “This is a web check-in service giving passengers the opportunity to check-in online across Ryan air’s entire route network”. The company is also the first airline worldwide to carried more than 5 million travelers in a month and created plan for a new customer service: onboard mobile. For the moment, Ryan air has 830 low fare routes all around Europe and across 26 different European countries. They produced customer services from their 31 European bases. Ryan air employs 6.000 people and ordered in March 2009 a fleet of 181 new Boeing 737-800NG which will be delivered over the next three years. For the following business year 2009 an amount of 67 million travelers is forecasted (www.ryanair.com). Their strategy is still the same from the beginning of the 90’s. It is to firmly establish itself as the European LCA leader and continued improvement in order to attract more customers. Ryan air aims to offer low fares that generates increased passengers traffic while maintaining a continuous focus on cost-containment and operating efficiencies (Ryan air’s annual report from 2008). The key elements of their strategy are low fares, customer services, frequent point-to-point flights on short-haul routes, low operating costs, high maintaining productivity, high personnel productivity, low customers costs, airport access fees, taking again a better advantage of Internet in order to serve the customer, commitment to safety and quality maintenance, enhancement of operating results and ancillary services and focused criteria or objectives for growth (Ryan air’s annual report from 2008). Finally, the table in the appendix 02 is the progress of the whole number of customers related to the Irish company since the set up in 1985.The growth is really high between 1985 (5000 travelers) and now (More than 60 millions).
Whether the economy is great or in the pits, Hershey’s business not only needs to find good customers, but also need to know how to keep good customers.
Some facts are indisputable. When it comes to customer relations, one fact that bears the test of time has to do with the cost associated with acquiring a customer versus how much it takes to keep a customer. Some experts feel that it can cost business five, six, maybe as much as seven times to get a new customer as it takes to keep a customer once they are buying whatever the company are selling. What can Hershey’s business do to maximize its investment in customer acquisition through effective customer retention?
The following are five techniques they might consider implementing within the business processes. When it comes to customers, they are not all the same, and how you treat various sub-groups of them can spell the difference between bottom line success and failure.
Getting the Best ROI for Your Customer Retention Efforts
Happy Employees = Happy Customers: All companies have memories of interacting with unhappy, disgruntled or otherwise uncaring employees when any one is attempting to make a purchase. Even if what they are buying is something they desire, or desperately need for some time, if the interaction with the company’s representative leaves someone scratching their head, what was that purchase worth to them? And to that company in the long term?
The reality is that humans are much more likely to share how horrible the shop clerk was to our sphere of influence than how the product fulfilled our needs. has major impacts on getting clients to return to business.
Offer Quality Products and Services: Even the happiest workers are not going to be able to overcome weak offerings of poor quality products. Services which are not well thought out or implemented have very little chance of garnering repeat business. Providing top quality offerings to new and existing customers
Listening To Customers: Clients will tell volumes. Hershey’s Train employees to be interrogators (in the best possible sense, of course). Asking existing customers how they liked the purchase.
Rewarding Best Customers: Not all customers are created equal. Some will try to get the company to give them the sky for free, while others are more than happy to pay good money to be treated well. Value cannot be overrated. When companies find customers that are loyal and return over and over to the business
A little hidden secret about this tip is that happy, loyal, well-cared-for “insider” customers can be one of the best new client acquisition tools. These folks tell their friends.
Information Seeking
The experiencing of information needs may lead to purposive information seeking. Purposive information seeking resembles a problem-solving or decision-making process. The individual identifies possible sources, differentiates and chooses a few sources, locates or makes contact with them, and interacts with the sources in order to obtain the desired information. In today’s munificent information environment, how does the individual select between sources, and between information from different sources? In an economy where human attention is the scarce resource, how does an individual allocate time and energy when searching for information? An answer suggested by research is that an individual weighs the amount of effort required to use a source against the anticipated usefulness of the information from that source. At the same time, this evaluation of cost and benefit is modulated by the individual’s personal interest and motivation, and by the complexity of the task or problem at hand.
At the cognitive level, the individual would select a source that he or she perceives to have the greater probability of providing information that will be relevant, usable, and helpful. Relevance and usability may depend on information attributes such as currency, comprehensiveness, and appropriateness to the specific problem situation. In addition, the individual would be concerned with the accuracy and reliability of the source. Source and information selection would then be guided by the perception of cognitive authority and trustworthiness. Research in information seeking often groups together some or all of these source attributes under the rubric of "perceived source quality" in order to examine its effect on source use.
At the affective level, the individual’s degree of personal motivation and interest in the problem or topic would determine the amount of energy that he or she invests in information seeking. Carol Kuhlthau noted that as the information search progresses, initial feelings of uncertainty and anxiety fall as confidence rises. If a clear theme is developed to focus the search, the individual may become more highly motivated, and if the search proceeds well, there is a growing feeling of satisfaction and accomplishment. Drawing on social learning theory, Tom Wilson postulates that since a strong feeling of self-efficacy or personal mastery about using a source leads to greater source use, doubt about one’s capacity to use a source properly would conversely lead to that source not being used, even if the source might be perceived to contain relevant information.
At the situational level, the selection and use of sources is influenced by the amount of time and effort that is required to locate or contact the source, and to interact with the source to extract information. At least three different kinds of "effort" or costs may be pertinent: physical effort (e.g. to travel to source); intellectual effort (e.g. to learn a classification system or user interface); and psychological effort (e.g. to deal with an unpleasant source). These source attributes may be bundled together in a category called "perceived source accessibility." The selection of sources then depends on their perceived quality and perceived accessibility. Additionally, the complexity of the task or the uncertainty of the task environment would also influence information seeking. A complex task characterized by numerous interdependent task elements which interact unpredictably may require broader information gathering and processing. Similarly, a complex, volatile external environment may induce greater information scanning. (See Sidebar 2: Environmental Scanning by CEOs.)
Information Use
Just as there are universal categories of information needs, Brenda Dervin and Robert Taylor propose that there are eight general categories which describe how people use information. Thus, information may be used to: develop a context; understand a particular situation; know what and how to do something; get the facts about something; confirm another item of information; project future events; motivate or sustain personal involvement; and develop relationships, enhance status, reputation or personal fulfillment.
At the cognitive level, the individual’s cognitive style and preferences would impact on the processing of information. A number of classifications have been developed to differentiate personality types and cognitive preferences. The Myers-Briggs Type Indicator is a widely used instrument for classifying personality types into 16 categories. Each personality type would display distinctive preferences and modes when gathering and using information (see Sidebar 3: Cognitive Styles). Another common cognitive style variable is "field dependence." Field dependent individuals tend to respond uncritically to environmental cues, whereas field independent individuals orient themselves correctly in spite of environmental cues. Daniel Kahneman (University of British Columbia) and Amos Tversky (Stanford University) discovered that when people use information to make judgments they rely on heuristics to simplify information processing. In certain situations, these simplifications can produce errors or biases. For example, to judge whether an event belongs to a category, people rely on mental stereotypes, but they often ignore other relevant information such as the distribution of the categories in the general population. To judge the frequency or likelihood of an event, people over-rely on recent, vivid, easy-to-recall information. To estimate a quantity they make adjustments from an initial anchor or suggestion. Unfortunately the adjustments are often inadequate.
At the affective level, people avoid using information that will arouse strong, negative emotions in others or in themselves. People use information selectively to avoid embarrassment, conflict or regret; to maintain self-image; and to enhance personal status or reputation. For example, decision makers are known to positively evaluate and continue a course of action even when the available information indicates that withdrawal is necessary to reduce further losses. One psychological factor behind this "escalation of commitment" is the desire to save face. Decision makers persist because they do not want to admit to themselves that they have made an error, much less expose their mistakes to others. In organizations where error-free decision making is valued, managers may attempt to hide their mistakes or postpone their discovery. Another example is the "not-invented-here" syndrome: the tendency of a longstanding group to reject new information from outside the group. Such behavior may be a natural consequence of individuals who over time, increase order and stability in their work environments so as to reduce the amount of stress and uncertainty that they need to face. As a result, the longer the individuals’ tenure in a group, the stronger their emotional attachment to beliefs and decisions that they helped create, and the more resistant they become towards outside new ideas and information.
At the situational level, the norms and rules of the social group, profession, or organization can influence information processing and use. Irving Janis of Yale University has observed how highly cohesive groups are susceptible to "groupthink." This happens when group members seek concurrence to such an extent that they compromise the processing and use of information, choosing to ignore or undervalue information that threatens group beliefs and solidarity. Donald Schon of the MIT describes how each profession develops its own language, values, overarching theories, and role definitions. Members adopt these as frames of reference through which information is processed to describe reality, explain phenomena, and reaffirm professional identity. Edgar Schein of the Sloan School of Management defines organizational culture as a pattern of shared assumptions developed by the organization as it learns to cope with problems of external adaptation and internal integration. Because the assumptions have worked well enough, they are considered valid and are therefore taught to new members as the correct way to perceive, think and feel in relation to those problems. As a result, organizational culture develops a shared framework for people in organizations to collectively make sense of information. An important part of organizational culture is organizational politics. In a contest for influence and power, information may be used as a resource to protect vested interests or to justify preferred courses of action.
Human Information Seeking: An Integrated Model
The three processes of information needs, information seeking, and information use may be integrated into a general model of how humans seek information. As shown in Figure 2, the individual experiences information needs as she perceives gaps in her state of knowledge or her ability to make sense. The perception of information needs is shaped by cognitive, affective, and situational factors. The individual may choose to suppress this information need by for example, avoiding the problem situation, so that no information seeking ensues. Alternatively, the individual may decide to bridge this gap of knowledge or understanding through purposive information seeking. During information seeking, the selection and use of sources and information depends on perceived source accessibility, perceived source quality, task complexity, and personal interest. Information may also be received "incidentally" as a result of the individual’s habitual scanning of the media or conversations with others, even though these activities were not directed at addressing specific information needs. The outcome of information seeking is a set of noticed, selected information that is a very small proportion of the total information that is received. How this information is then processed and put to use depends on the cognitive style and preferences of the individual, the emotional responses that accompany information processing, and the social and cultural context surrounding information use. The final outcome of information use is a change in the individual’s state of knowledge, allowing the individual to make sense or take action. This in turn generates new experiences and new information needs, so that the cycle of information seeking is continuous.
Relationship Marketing develops relationships between customers and the company and it entails meeting customer's needs and gaining customer loyalty for the company. Relationship Marketing is about long term customer loyalty and TESCOs marketing function is about meeting customer needs.
Relationship Marketing assists in helping the company to:
1. achieve their objectives
2. Increase their profits
3. Increase their market share
4. Increase the number of stores worldwide
5. Gain a greater percentage of profit from overseas
Relationship Marketing is the on-going process of identifying and creating new value with individual customers and then sharing the benefits of this over a lifetime of association. It is basically creating customer loyalty.
1. Achieve their objectives
Tesco will be a growth business.
With achieving the status as a global retailer, Tesco will want to keep hold of it so their objective will be continuous. This objective focuses on increasing the market share of the business.
In September 2005, Tesco acquired a 50% share in the hymall hypermarket chain through a joint venture with tin and sin. They now operate 31 stores having opened 6 new hypermarkets. The business employs over 14000 people with over 2 million customer visits every week.
Tesco will be a bus people value more than any other.
Tesco's marketing of their club card creates awareness to the public of the benefits of shopping with Tesco. This helps build relationships with the customers. Club card allows Tesco to show their appreciation to over 11 million customers for shopping with them and they are always looking to find new ways to do this.
Tesco will have loyal committed staff.
Tesco's share in success scheme rewards eligible staff for their hard work and commitment with free Tesco shares and our staff are benefiting from £169 million from shares in success and save as you earn schemes. Their award-winning defined benefit pension scheme now has nearly 137,000 members which covers nearly 60% of staff. This year they have given cash contribution into the scheme of £200 million to strengthen its funding position.
Tesco will be a global retailer.
Business to Customer Relations in Tesco Company
- The company develops a relationship with all visitors and customers. Telling them how much they appreciate visiting company web site or buying any product.
- Solving customer complaints by being quick and friendly. The faster the company responds, the more customers feel cared.
- Lowering negative word of mouth marketing. Companies will always have customers that are dissatisfied. Tesco Company tries to please them as much as possible.
- Pleasing complaining customers. Refunding their money, giving them a discount, giving them a free gift, solving the problem quickly, etc.
- Constantly finding new ways to better product and service.
- Attracting a lot more customers by giving them clear ordering instructions. Giving them all the information they need so they can complete their order easily.
- Emailing each visitor a satisfaction questionnaire after they purchase. This will allow to improve order system, customer service, site, etc.
- Reminding visitors that employees are human not just a web site. Publishing information, a picture, a profile, etc.
- Providing a "Contact Page" on the web site. Giving visitors as many options to contact as possible. This'll add credibility to the business.
- Creating a customer focus group. Inviting ten to twenty of the most loyal customers to meet regularly.
- Inviting customers to company meetings, luncheons, workshops or seminars. Creating special events for customers like parties, barbecue's, dances etc.
- Giving visitors tons of choices so they don't get the feeling of being controlled. Offering them a variety of ways to order, contact you, navigate, etc.
- Making visitors feel good about them by giving them compliments. If they feel good they will also feel good about buying from company web site.
- Creating a long term relationship with entire customer base. Company authorities can stay in touch with them through an e-zine, with greeting cards, etc.
- Improving business by promoting customer feedback. Telling them you want their honest opinions about your business, good or bad.
- Answering all e-mail messages as quickly as possible. Nothing will lose a sale quicker than not responding to a prospect in time.
- Encouraging customers or visitors to e-mail questions about the product or web site.
- Training employees to be polite to all customers, even if they're shouting. Solving their problem quickly and it may even turn into a sale.
- Asking customers what they would like to see offered by the business in the future. This type of information can boost sales.
- Interacting with online customers on a regular basis. This'll show them the company cares about them. Could use a chat room, forum or message system.
- Trying out new technologies that make it easier to communicate with customers over the net.
- Remembering the fact that customers are always right, even if they are not. Resolving all conflicts quickly and painlessly. They are the lifeblood of the business.
by
ikram1 (student)
