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In business, the most important component is the customer. The customer is the primary driver of business in many organizations because they help create sales and thus profitability allowing for companies to run their business. Because of this, many businesses employ various strategies to ensure that the customer is satisfied with the service that is given to them. They adopt the universal motto ‘the customer is always right’ to prevent upsetting their source of income. This essay is thus an analysis of the impact of bad customer service in business in order to expound upon the failures that exist in customer service alongside their remedies.
Customer Failure Definition
To begin with, this essay analyzes what customer failure is. Customer failure can be described in a myriad of ways. However, the most prevalent explanation is the failure of a business to live up to the expectations of a customer. This usually entails either performing an action or inaction on the part of a business thus aggravating a customer. Customer failures occur often especially in the service industry due to various constraints. However, they can often be mitigated or avoided altogether allowing for a better experience for customers ultimately leading to brand loyalty, profitability and a good reputation for the organization (Shin & Cassidy, 2017).
Customer Failure Example
In any industry, one of the quickest ways to unnerve a customer is to provide a product that is expired or that is of a lesser quality that what they asked for. This often comes across as a waste in the customer because they observe the product and its parent company as con artists. Company perception being an integral part to business success relies on the reputation of the quality of its products. Thus when products arrive being less than or not functioning to their optimum, the company loses a customer because often times they may not order from the same company. This is especially prevalent in online platforms where the consumer has to make a purchase on good faith based on the little information provided by the online retailer. An example of this occurrence is analyzed on EBay. This retailer is solely online and utilizes a delivery approach on customer purchases. However, there have been numerous reports of customers failing to get their products on time, getting products of lesser quality or getting defunct products in cases of electronic purchases. This has led EBay to lose customers from steep competition from Amazon which offers quality assurance to customers (Ireland, Hoskisson & Mitt, 2016).
Remedies to This Issue
One of the most comprehensive remedies in this case is to implement a verification process for the goods delivered. EBay works alongside other providers acting as a proxy to sell items on their behalf. As such, in order to rectify the rampant cases of getting products that are not quality, the company can implement a quality control system that is based on the analysis of customer feedback alongside they themselves checking the feasibility of products. This verification of products allows for the company to control the items which are being delivered allowing for a higher satisfaction rate among its customers.
Why this is the Best Course of Action
This is the best course of action for EBay as a company because to begin with, the adoption of quality control checks makes the customer increase the faith they have in the company and the products they are offering. EBay taking control of the delivery of goods allows the customer to nurture the good faith based relationship the retailer has with the customer thus bringing about more visits to the site and thus more purchases. Furthermore, the competition from other retailers such as Amazon and Alibaba mean that the company cannot afford to develop a laissez faire attitude towards business as they already lag behind in market capitalization and thus will be driven out of business if they keep losing customers due to their lack of satisfaction (Zott & Amit, 2017).
Impact of Change in the Company
Thus if EBay adopts these various fixes to their problem, the customers begin to flood back to the company due to the reintroduction of business standards that are universal. Furthermore, the change in the customer satisfaction rate leads to long term rewards. At the moment, the company is still profitable and thus, if the leak that exists were to be fixed, the company has a chance at competing with its closest rivals. The improving of customer satisfaction rates thus affects the company by having a chain reaction that witnesses the company expanding allowing for more employment opportunities and the injection of more funds into the company through investors and profits gained from sales (Teng & Wu, 2014).
In summation, customer service is the backbone of any company in the business sphere and as such, it is important for the customer satisfaction levels be high thanks to good service. This allows for the company to achieve prosperity in the markets which are often saturated from competitors. Great customer service begets brand loyalty allowing for a company to experience growth at an improved rate thus it is important for failures in customer service be mitigated or eliminated.
- Ireland, R. D., Hoskisson, R. E., & Hitt, M. A. (2016). Understanding business strategy: Concepts and cases. Mason, OH: South-Western Cengage Learning.
- Shin, H., & Cassidy, R. (2017). Customer Responses to Service Failure in Direct and Indirect Harm Context: An Abstract. In Marketing at the Confluence between Entertainment and Analytics (pp. 247-247). Springer, Cham.
- Tseng, S. M., & Wu, P. H. (2014). The impact of customer knowledge and customer relationship management on service quality. International journal of quality and service sciences, 6(1), 77-96.
- Zott, C., & Amit, R. (2017). Business Model Innovation: How to Create Value in a Digital World. GfK Marketing Intelligence Review, 9(1), 18.