Discussions and Implications of Study
There has been a direct finding that service recovery has a very strong correlation and positive relationship with customer satisfaction. This is an especially strong “wake-up” call for those in the hospitality industry to recognise that service recovery is a form of competitive strategy. Research by John Fleming and Jim Asplund indicates that engaged customers gives 1.7 times more revenue than disengaged customers and engaged customers returns a revenue gain of 3.4 times the average revenue (Brown 2007) . The understanding that future market share growth and profitability can be attributable to successful service recovery and customer satisfaction must implemented will future drive business strategies
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However, service recovery doesn't just happen. It is a systematic business process that must be designed properly and implemented in an organization. Perhaps more importantly, the organizational culture must be supportive of idea that customers are important and their voice has value.
Research has shown that customers who have had a service failure resolved quickly and properly are more loyal to a company than are customers who have never had a service failure -- significantly more loyal. Service recovery practices are a critical element in any customer loyalty program.
However, the research paper would also need to address the significance that customer satisfaction towards customer loyalty in the Malaysian context. The lower significance factor beta that between customer satisfaction and loyalty of 0.438 would mean that there are significant gaps therein. Therefore, the relationship between Malaysian hotel customer satisfaction and customer loyalty towards the Malaysian hotel operators needs to be examined further with guidance from existing
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Meanwhile, it costs an organization 6 to 15 times more to gain new customers than to sustain the existing ones (Pulman 2002; Rosenberg 1983).
However, other studies meanwhile have shown that customer satisfaction may not always be a reliable indicator for customer loyalty (Bowen and Chen 2001). Writers such as Faullant et al (2008) have advanced the thinking that corporate image have a partial mediating effect on the relationship customer satisfaction and loyalty. This would indicate somehow that there could be other variables that might be present to account for customer loyalty apart from customer satisfaction such as corporate image, service quality etc.
Further recent study have also indicated that almost 64% of the effect of customer satisfaction on Malaysian hotel customer loyalty is derived through corporate image whilst only 34% of the effect on customer loyalty is influenced directly via customer satisfaction (Cheng and Md Zabid 2013). This is in line with the relationship significance in this finding which revealed a relationship of 43.8% between customer satisfaction and customer loyalty in terms of the Malaysian hotel
The manager of baggage claims was attending his presentation and provided him with some insight on why he received the bad service during baggage claim. The manager tells him that he was forced to schedule less workers to make budget for the end of the month, which is a problem that most managers face today. Sasser believes that because there is no research being conducted on how the company is effected economically when they lose their loyal customers or the customers who have the potential to be loyal then they tend to make customer care or improvements to customer care a lower priority. If managers start considering the breakeven point they have to reach before customers actually start being profitable then they would increase their measures to improve their customer care to keep customers loyal to their business longer. Good customer service can take the slack off of a bad product. In an article Tabitha Naylor says “you see, if you have good customer service, people naturally assume you have good products” (Naylor,
The Gaps Model of Service Quality was originally developed for application in the financial service sector. The model was designed to measure components of customer satisfaction by using five dimensions of real or potential gaps in service quality of a hotel (Saleh & Ryan, 1991). The model has been applied to hotels, as well as a number of service agencies, including banking, hotels, restaurants, and healthcare. Even though the services differ greatly, the model is easily adapted to any service industry (Parasuraman, Zeithaml, & Berry, 1985).
SCHEME OF WORK AUTUMN 2016 PROGRAMME: Pearson BTEC Diploma in Hospitality Management Level 5 UNIT CODE/TITLE: HNHM 103 – Customer service UNIT LECTURER: – Veeren Gowrea WEEK DATE Week 1 Tuesday 13.00-15.00 20 Sept 2016 LO1 Understand customer service policies within business and services contexts 1.1 discuss reasons for using customer service policies Policies: policies (structure, use, focus, customer requirements/expectations, product and service knowledge, consultation, confidentiality, customer perceptions and satisfaction, monitor customer service and satisfaction, influences affecting implementation, effective communication) Week 2 27 Sept 2016 1.2 discuss the purpose of evaluating a customer service policy, indicating how this can assist future staff training and development Evaluation: purpose; sources of
The hotel industry performs within a saturated market, driven by customer loyalty and competitive pricing to stand-out. This competitive nature makes it extremely important to capitalise on strengths while improving on
Assessing the Quality and Effectiveness of Customer Service The issue of customer service has become very important to companies in competitive industries such as travel and tourism. There is not much point in spending huge sums in advertising for new customers to grow the business if the existing customers are defecting to competitors because they are not satisfied. On the other hand, a company, which has a solid base of satisfied loyal customers, will probably gain demand through personal recommendation which is the basis of a good reputation. It is clear, therefore, that good customer service which results in customer loyalty can have a direct impact on the long-term profitability of tourism enterprise.
Providing great customer service and having the ability to retain customers require consistency in delivering the anticipated services. Customer service encompasses having the ability to provide a service or product to customers by means in which it was promised. However, there are times when unforeseen circumstances may occur, resulting in customer service breakdowns. Understanding the effectiveness of customer service relations provides the assurance needed to handle complicated service related issues. A well qualified customer service representative has the acquired skill to effectively defuse a potentially damaging service related matter. Service recovery influences customer retention and improves customer satisfaction.
Effortless and friendly customer service is the service goal that any business in the hospitality industry is looking to achieve. What John showed in the story is a perfect example of this kind of service being accomplished and how well a business can flow when it is done. Not every mistake has to send the ship crashing, which it can, as long as the employees recover and make that the customers leave having the best experience that they can. This can be done by know what customer service is and how it relates to the modern hospitality industry, interpreting the key business needs for outstanding customer service by operational business types, knowing the legal accountability of a food service operation to its customers, and know trends based on historical data through using key demographic resources. Customer service is king in the modern hospitality industry, where according to many it trumps even food quality for being the most important.
Williams, P. & Naumann, E. 2011, "Customer satisfaction and business performance: a firm-level analysis", The Journal of Services Marketing, vol. 25, no. 1, pp. 20-32.
Hospitality and tourism have evolved into truly global industries are dispersed worldwide. Due to changes in lifestyle, the services offered by hospitality businesses are now considered to be necessities. Consequently, during the past decade, there has been an exponential growth in hospitality businesses to meet the demands of the growing market. Today, hospitality organizations are faced with intense competition. Hence, in the scheme of business, it has become apparent that the ultimate goal of any organization in a hyper- competitive market, is to maintain a loyal customer base. It is essential for any hospitality organization to seek opportunities to gain a competitive advantage by adopting various strategies.Thus, hospitality firms should develop proactive strategies to gain customer loyalty, as opposed to relying on pricing strategies to attract new customers. Customer-supplier relationship, and the resulting loyalty of the customer, can be assumed to be necessary prerequisites for any firm to prosper in the competitive market. Management thinker Peter Drucker (1973:79) wrote, “to satisfy the customer is the mission and purpose of every business.” Thus, for many years, business organizations have focused on customer satisfaction programs (Bhote, 1996). It is now becoming apparent that it is no longer customer satisfaction, but customer loyalty, that constitutes the dominant factor in the success of a business organization. The increasing sophistication of customers’ demands also poses a challenge to the development of customer loyalty in the service industry (Kirwin, 1992). Modern consumers demand high-quality products and services and exhibit a low tolerance for products and services of mediocre qual...
...ough quality or enough service, satisfaction will result. However, we have evidence to support that quality and service alone can not produce recurrent satisfaction. Satisfaction is a distinct and separate issue.
In the corporate world, Good name or Image is seen as a major element of an organization’s attribution alongside and included in financial performance and innovation. Image is the perception of constituencies on how an organization actually presents itself (Van Riel, 1995) in front of its audience. Literature says corporate image plays a crucial role to generate loyalty among consumers. Other than corporate image, service quality and customer satisfaction are also viewed as key drivers of customer loyalty (Lai et al., 2009) and research generally tends to consider the links
A few decades ago, businesses considered customer service as an unnecessary expense. Now, companies view it as a competitive advantage in the marketplace.
7. Implications: This study has various implications for both academician, researchers and for various service industries. For researchers it acts as a knowledge base for further studies related with this topic. For service industry the result will provide a great help in formulating various policies regarding employee satisfaction, employee loyalty, customer satisfaction and customer loyalty.
Consumers are concerned not only about a product breaking down but also about the time before service is restored, the timeliness with which service appointments are kept, the nature of dealings with service personnel, and the frequency with which service calls or repairs fail to correct outstanding problems. In those cases where problems are not immediately resolved and complaints are filed, a company’s complaint-handling procedures are also likely to affect customers’ ultimate evaluation of product and service quality.
we would be tempted to believe that is a simple, linear relation between satisfaction and loyalty. According the research of (Jones & Sasser Jr., 1995) , relation satisfaction and loyalty is different according to time and circumstances. Unless they are totally satisfied, there is always a chance you will see your customers be lured away (Jones & Sasser Jr., 1995).