The Interconnection Between Customer Service and Business Success

Subject: Management
Pages: 4
Words: 1271
Reading time:
5 min
Study level: Bachelor

Abstract

The following paper examines the interconnection between customer service, customer satisfaction, organizational efficiency, and employee commitment. A critical review of academic literature surrounding the subject of customer service and satisfaction has demonstrated that there is a link between the two concepts. The paper investigated the positive relationship between profitability and customer loyalty. The primary methods of improving the quality of customer service and thus increasing the number of loyal customers are identified.

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Introduction

The goal of all organizations is to provide quality customer service from the initial to the final interaction. Quality customer service is meant to ensure customer satisfaction, maintain customer loyalty, and increase return customer numbers, leading to increased business and profits. In order to maintain quality customer service, organizations should have trained customer service providers. Employees should go through the training to ensure they understand expectations and know how to handle customers appropriately. An organization’s profitability is determined dramatically by its ability to provide a quality relationship between customer service and satisfaction and real-time training and support from management, which will directly influence a company’s success. The relationship between customer satisfaction and customer service can ensure a company’s future success.

Literature Review

Customer satisfaction serves as a contributing factor to organizational outcomes depending on the quality of customer service delivery. Some of the concepts associated with customer satisfaction include customer loyalty and customer commitment (Conway & Briner, 2015). Both of them have a direct impact on organizational performance, affecting consumer intentions to re-purchase or recommend a certain product or brand (Ou et al., 2011; Seto-Pamies, 2011). Step-Pamies (2012) further adds that customer loyalty reduces operational costs since “the costs of sales, marketing and set-up can be amortized over the whole period of their [loyal customers’] relationship with the company” (p. 1257). The quality of customer service provided to the business’ clientele depends greatly on employees, particularly their motivation, commitment, and job satisfaction. In order to ensure all of the aforementioned factors remain high, organizations have to provide the staff with incentives and personal growth opportunities (Kurdi et al., 2020; Rodriguez & Walters, 2017). As for meeting the needs of customers, companies are tasked with collecting feedback from consumers and integrating such data into strategic decision-making.

How and Why Customer Service Is Important

In order to determine exactly how and why customer service affects organizations, it is first important to examine the link between customer service and customer satisfaction. The latter is “a critical intervening variable between organizational characteristics and practices, employee attitudes, their customer service behavior and organizational outcomes” (Conway & Briner, 2015, p. 2039). Thus, customer satisfaction is directly connected to retention, loyalty, and a company’s financial outcomes as a result. Customer service behavior plays an integral role in ensuring the proper management of resources for the highest rates of customer satisfaction. Thus, since customer satisfaction is a contributing factor to profits, and customer service lays the foundation for customer satisfaction, customer service is interconnected with organizational profitability.

Furthermore, customer satisfaction is a guarantee of commitment, which, in turn, creates an emotional link between a business and a consumer. Research demonstrates that customer commitment has a direct positive impact on customer loyalty (Ou et al., 2011). Based on the aforementioned statements, customer satisfaction is thus a variable affecting customer loyalty. The term “customer loyalty” is used to refer to “a held commitment to re-buy or re-patronize a preferred product consistently in the future,” according to Ou et al. (2011). Customer loyalty has proven to be exceptionally beneficial to organizations. It contributes directly to the customer’s repurchasing intention, makes them more resistant to critics of the product or the brand overall, decreases the risk of customer defection. In addition, loyal clientele may serve as brand ambassadors promoting the company through word-of-mouth recommendations to friends, colleagues, or neighbors (Seto-Pamies, 2012). Since customer loyalty generates profits and benefits the business in more ways than one, it is crucial to ensure there is constant growth in the number of loyal customers. Organizations can achieve it by investing in customer service quality.

The Impact of Customer Service on Company Profits

Customer service quality is an exceptionally important concept for organizations to grasp. Seto-Pamies (2012) clarifies that businesses express much interest in evaluating and improving the quality of their customer service “because of the relationship between service quality, customer satisfaction and the customer’s future behavioral intentions” (p. 1260). All of the aforementioned aspects play a key role in profitability since the higher the satisfaction and commitment, the better the company’s performance. A direct link between employee organizational commitment and customer satisfaction is attributed to, for the most part, the quality of customer service delivery. Conway and Briner (2015) argue that “organizational commitment and job satisfaction are the most common and organizational commitment is arguably a more appropriate predictor of customer service performance” (p. 2040). This is largely due to the close link between commitment and motivation.

There are two primary ways how to ensure that the quality of customer service provided by the business is high. The first approach lies in training and incentives. Education and development initiatives ensure that employees understand expectations and requirements set out for them. As for incentives, they serve as an efficient strategy for the staff to recognize their work is of value. Kurdi et al. (2020) argue that organizations have to monitor and assess the needs of their employees in order to meet and even exceed them. They add that “intrinsic and extrinsic rewards are considered predeterminants of employee satisfaction” (Kurdi et al., 2020, p. 3562). Therefore, there is an indirect link between incentives and customer satisfaction with employee satisfaction connecting the two.

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The second approach focuses on directly influencing employee satisfaction. A worker who takes pride in what they are doing and genuinely enjoys it is more efficient than the one who does not. Providing the staff with opportunities for training and development, not only professional but personal, has many benefits. Rodriguez and Walters (2017) note that “by providing core proficiencies and structure throughout the employee training and development process, it increased the probability for individuals to effectively deliver the mission” (p. 207). Thus, it is evident that training and development strategies are of immense benefit both to the individual worker and to the organization as a whole.

Methods for Measuring Customer Satisfaction and Developing Ways to Improve

Assessment of customer needs is integral for organizational success. This allows companies to consider the intricacies of customer service and employee commitment while implementing initiatives targeted at responding to customer demands and providing clientele with personalized experiences. Collecting such data allows businesses to examine feedback from consumers, both positive and negative, which they then utilize to create positive changes and improve the services they provide. Some of the most common methods to do that is through client portals, surveys, questionnaires, social media, and customer feedback assessment sessions. Following the collection of data, the company’s management must invest resources in efforts to ensure the incorporation is feedback into the business’ operations, including product development, marketing, and customer relations. Gathering and analyzing customer input is the most effective way for organizations to improve the quality of the service they provide to purchasers. Customer needs and expectations have to be a priority when crafting short- and long-term organizational strategies. Data serves as evidence, which should be the basis of developing objectives and making decisions in relation to customer service.

Conclusion

Customer service is crucial for any successful organization and can determine success or failure. Organizations with excellent customer service generally have trained, committed, happy employees and continuously make sales. These qualities ensure customer satisfaction and, in turn, company success.

References

Conway, N., & Briner, R. B. (2015). Unit-level linkages between employee commitment to the organization, customer service delivery and customer satisfaction. The International Journal of Human Resource Management, 26(16), 2039–2061.

Kurdi, B., Alshurideh, M., & Alnaser, A. (2020). The impact of employee satisfaction on customer satisfaction: Theoretical and empirical underpinning. Management Science Letters, 10(15), 3561–3570.

Ou, W., Shih, C., Chen, C., & Wang, K. (2011). Relationships among customer loyalty programs, service quality, relationship quality and loyalty. Chinese Management Studies, 5(2), 194–206.

Rodriguez, J., & Walters, W. (2017). The importance of training and development in employee performance and evaluation. Worldwide Journal of Multidisciplinary Research and Development, 3(10), 206–212. Web.

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Setó-Pamies, D. (2012). Customer loyalty to service providers: examining the role of service quality, customer satisfaction and trust. Total Quality Management & Business Excellence, 23(11-12), 1257–1271.