Problem Diagnosis Memo

Subject: Economics
Type: Cause and Effect Essay
Pages: 5
Word count: 1258
Topics: Consumerism, Management, Marketing

Increasing Rates of Customer Dissatisfaction

I appreciate your concern for the increasing rates of customer dissatisfaction in the company. Our department has raised similar concerns to the main office severally, but the situation has not changed as such. This, according to me has been either due to inadequate information on the subject or that the main office has been quite busy especially with the planned expansion. However, I find no need to take so much concern about expansion when the current customers are dissatisfied. Consequently, I am willing to perform further research on the dissatisfaction and focus on offering alternative solutions and recommendation. The purpose of this memo, therefore, is to explore the problem and highlight symptoms, possible causes and the preliminary solutions based on the initial research. It is expected that the report will form a firm basis for further exploration of the related research and inform you on the expectation of the main research.

Symptoms of the Problem

Over the last three years the organization has engaged in extensive expansion within the current environment and as a result attracted more customers. This has increased the customer base by over 56% in the last two years, which has also translated into improved revenues and a major competitive advantage. However, in the last few months, a different trend has been witnessed. Customer dissatisfaction has been noted especially regarding the number of customers who are returning to our stores for more services.

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According to management research, there are several symptoms of customer dissatisfaction that can be seen. First, there is increased voicing of complaints by the customer on issues that the company ought to observe and rectify (Kursunluoglu, 2014). This has been witnessed in this organization with an upsurge of negative reviews not only on the online platform but also from the suggestion/complaints boxes around the premises. This is indicative of reduced customer satisfaction. The second symptoms that we can directly relate to are the refusal to respond to email reviews and surveys as mentioned in an earlier meeting. The organization has been holding an annual survey on the service delivery to the customers in August and September. This year, however, there was very low response rate. Of the 500 online surveys forwarded to the customers, only about 120 were returned within the specified time. Others came back late, blank, and over 15o of them did not respond at all despite having responded to the survey in the previous years. Lack of response indicates lack of interest and unwillingness to engage and assist.

In addition to the above symptoms, we have also noted that most of the customers who frequent the hospital are more focused on redeeming their loyalty points for goods and services rather than accumulating them for our annual offers. This indicates lack of trust with the institution and the desire to move away from the company (Lervik, Witell, & Gustafsson, 2014). It is quite disheartening to see a loyal customer turn down discount and offers and even to hear them comparing the institution with some of the competitors. These symptoms are quite evident in everyday practice in the company and do not indicate a healthy business environment. The symptoms depict a deeper problem in the customer base that needs to be explored and evaluated to identify possible solutions.

Causes of the Problem

Reduced customer satisfaction in the institution has been brought about by the reduced focus on client-centered business communication and service delivery. Like in any business entity, the institution has been challenged by the growing need to automate services to reduce the need for the human workforce (Martínez, & Rodríguez del Bosque, 2013). The automation has focused on customer service greatly in such a way that the interaction that previously existed between the customer and the servers is no longer there. The connection, therefore, has been lost and most of the customer in the region value interaction and relationship more than the speedy service delivery ensured by the automation.

With automation, therefore, the company has significantly lost its ability to interact one-on-one with the customers. The feeling of being neglected, ignored or even disregarded has resulted in the dissatisfaction levels that are currently identified.

Effects of the Problem

The organization and success of its mission depend directly on the customer service levels and the revenue that is created by the interaction between the service provider and the customers (Khan, 2012). With reduced customer satisfaction, there is the danger that the organization will fail to meet its short-term and long-term goals. At present, the number of customers being served in the organization daily has reduced by 13% in the previous two months and by 19% in the last two-month period. Consequently, the revenue from local sales has reduced by 8.9% according to the recent monthly statistics posted by the finance department. In as much as this may also have been impacted by the prevailing economic conditions and political situation, the other symptoms of the problem indicate that the effects are large as a result of the customers’ dissatisfaction.

Alternative Remedies

To solve this problem, the management needs to urgently focus on the customer satisfaction factors that are missing with the automation. The following remedies are recommended;

First, the organization should re-organize the service delivery system to make it semi-automated rather than fully automated. This will ensure that those customers who desire to have a physical interaction with the service provider will have that option while those who are okay with the automated system can still use the computerized services. This will make the loyal customers feel valued and change the perception of the automation from that offering a barrier to that offering an option to service.

Secondly, the organization may also decide to hire more staff into the service delivery areas who will be tasked with the responsibility of guiding the customers through the automated system to avoid hitches and also allow the necessary interactions.

Thirdly, the organization should focus on re-promoting its position through advertisement to change the overall picture. Praising the automated system as a move towards the future will assist change the public opinion on the same.

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Reduction in customer satisfaction arises from failures or miscalculations within the organization and may be demonstrated by customers who are unwilling to help, complaining and unreachable. Such dissatisfaction reduces the sales and affect the social and economic environment of the workplace (Flint, Blocker & Boutin, 2011). In the institution, this has led to the net loss of about $13,000 in just three months. This is quite significant, and solutions must be sought to solve the problem. These solutions may include abandoning of restructuring the automated systems and increasing the customer-provider interaction. However, the success of the solution must be based on comprehensive research data that I am willing to provide to achieve the necessary success.

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  1. Flint, D. J., Blocker, C. P., & Boutin, P. J. (2011). Customer value anticipation, customer satisfaction and loyalty: An empirical examination. Industrial Marketing Management, 40(2), 219–230.
  2. Khan, I. (2012). Impact of customers satisfaction and customers retention on customer loyalty. International Journal of Scientific & Technology Research, 1(2), 106–110.
  3. Kursunluoglu, E. (2014). Shopping centre customer service: creating customer satisfaction and loyalty. Marketing Intelligence & Planning, 32(4), 528–548.
  4. Lervik Olsen, L., Witell, L., & Gustafsson, A. (2014). Turning customer satisfaction measurements into action. Journal of Service Management, 25(4), 556–571.
  5. Martínez, P., & Rodríguez del Bosque, I. (2013). CSR and customer loyalty: The roles of trust, customer identification with the company and satisfaction. International Journal of Hospitality Management, 35, 89–99.
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