EXECUTIVE SUMMARY
In today’s world of brutal competition, companies are being forced to reduce their operating costs. Although this seems an obvious choice, reducing the costs too deeply can result in loss of precious customer loyalty. Customers have become more demanding and they are well aware of the fact that their loyalties have become important for the survival of companies.
Organisations have started taking measures that have reduced certain customer privileges, but the top companies are doing their best to reverse this trend. Most of the large companies are trying to avoid any reductions to their customer service budgets. These companies are pampering their loyal customers with better facilities and services, even if it means providing lesser facilities to the new ones. “While cutting back-office expenses, they’re trying to preserve front line jobs and investing in cheap technology to improve service” ( McGregor, J. When Service Means Survival). Companies have realised the value of front line workers as their elimination leads to huge service backlogs, they have understood that it is more important to improve the productivity of the current staff and provide cross- training to its front line workers. Also, shifting all the front line workers under a single roof would result in lesser operating costs and better profitability. Several top brands such as USAA put a lot on emphasis on cross training programs for their call centre employees to improve their productivity.
Service sector players such as hotels are now formulating strategies in order to please their repeat buyers. Apart from cutting their purchasing costs by combining purchasing deals, these players are concentration their resources on their loyal patrons. These old customers are given more privileges than the newer ones, because they are loyal. A concept of creating ‘tier’s is being followed, in which, the ‘elite customers’ are provided better and enhanced services.
Many top companies, such as Zappos.com, have decided to invest and concentrate more on its repeat customers, thereby shifting some of their resources from the new customers. Supplier relationships have taken a new turn, where many companies, like LL Bean, have discontinued their association with their supply providers due to their poor customer service. Customer service and providing competitive products are the driving factors behind such decisions. Some organisations have also started using inexpensive technologies such as Twitter to respond to customer complaints. Other organisations such as BMW have introduced new facilities such as Wi-Fi service at its dealerships as a cheap way for its customers to pass time. Such utilization of inexpensive yet useful services effectively improves the customer service experience.
ANALYSIS
Marketing is all about fulfilling customer’s needs and wants. The aim of any business is to deliver customer value at some stage or the other. “A marketer’s task is to devise marketing activities and assemble fully integrated marketing programs to create, communicate, and deliver value to the customers” ( Kotler ,P. Marketing Management. p24). Today, keeping customers happy and loyal have become more critical than ever. Let us analyse this case with reference to the marketing- mix decisions that marketers make in order to offer their services to the customers.
- Product: Organisations need to make decisions regarding their product variety, quality, features, packaging, warranties, services and designs in order to enhance value of its offerings to the final customer. One of the best examples is Zappos.com, the online shoe retailer, which provides exceptional service features such as free shipping and one-day delivery options to its customers. Such service offering enables the company to develop a repeat customer base. This loyal customer base is further targeted with customised offerings.
- Price: This includes offering discounts, allowances, credits and other attractive offers. These days, hoteliers are offering several discounts and additional benefits to its patrons. Their strategy has changed from acquiring new customers to retaining and attracting the old ones by offering them more resources and facilities at the same price. These ‘elite’ customers are offered host of additional benefits such as better agents and better service.
- Promotion: this marketing mix consists of advertising, sales promotion, sales force optimization, public relation and direct marketing factors. Organisations, these days, are trying to optimize their sales force by putting more emphasis on cross-functional training and by optimizing its front line team. Marketers have realised that they need a robust front line sales force that can effectively handle and provide customer service. They are the face of an organisation, and companies cannot afford to ignore this fact. Therefore, organisations such as USAA are providing cross functional training to its call centre reps and have put all their call centres under one roof for cost optimization.
- Place: This includes coverage, channels, locations, assortments, inventory and transport. Car companies such as Hertz cars must make effective use of this marketing mix to provide exceptional service to its cab users. Credit card giant, American Express has now allowed its call centre employees to choose their own work timings. These strategies would be helpful, not only to the customers but also to the company employees. And it is very important for companies to keep their employees happy because of the rising turnover rates. Marketer can also use internet as powerful tool for sales activities, increasing their reach and promoting their products globally. Tools such as Twitter, Facebook and LinkedIn can also be used effectively for this purpose.
There are several other ways in which the customer service can be enhanced. Market researchers can collect useful information about new trends, customer preferences and the competitive scenario. They can use the internet and send questionnaires, and gather primary data related to the target markets (Kotler ,P. Marketing Management). It is important that the marketers identify their target markets and the target customers.
CONCLUSION
If we look at the broader picture of this article, we can say that the biggest takeaway would be the fact that keeping old customers happy has become very critical to the marketers. Due to increasing cost pressures and intense competition, marketers are stretching their budgets, and at the same time treating their loyal customers better than ever. Companies are cutting back office jobs, but they have realised the importance of their front line staff that acts like a face of the company. If we look at the top insights that we get from this study, we can put them in the following way:
- Make the workforce flexible by providing cross functional training and other sales skills.
- Keep employees happy by providing benefits, newer facilities and perks.
- Use cheap technology and generate new ideas to serve customers effectively.
- Provide exceptional service to loyal customers and focus on building long lasting relationships.
References
McGregor, J. (2009) When Service Means Survival. Bloomberg Business Week. Print.
Kotler, P., Keller, L., Koshy, A. (2009). Marketing Management. United States, Pearson, Print.
