Enhanced Customer Service: Key to Business Success - Research Paper

Introduction

Enhancement of customer sales and service is the superb key for a business to succeed which any company should make it a priority. Customer service has evolved over the years, which has now evolved around the use of social media instead of just one-on-one interaction with the customer face to face or via a phone call, making customer service more essential than before (Pan & Nguyen, 2015). Happy customers assist a business to build credibility in their operations. According to Anshari et al. (2019), about 77% of loyal customers recommend a business to a friend if such a company has a positive experience. Today, customers no longer buy just products and services, but most of their purchase decisions are based on buying experience and ideas. A strong company already has a great customer relationship, but a smart company always strives to improve its customer sales and service through attending and carefully listening to customer desires and needs.

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Today, firms are facing the toughest competition than before as they shift from product philosophy to sales and marketing philosophy, which requires strong customer service and relationship in general. Improved customer sales and service is the cornerstone of creating a market orientation with strong customer service (Anshari et al., 2019). It is now hard for businesses to get customers, and to retain them is the most challenging task as customers currently are more educated than ever before, and they look out for various superior alternatives in a company by using several tools to verify a company's service.

The paper examines the economic value of customer loyalty to a company or business and gives out recommendations to increase customer loyalty, and some critical sales and service principles that should be incorporated in a business are identified. Also, the influence of achieving quality customer service standards on sales is presented with an in-depth examination of the significance of ensuring full alignment of sales and service goals to support seasonal and annual financial plans in a company.

Economic Value of Customer Loyalty

Customer loyalty is an act in which customers choose the products and services of a company consistently over the company competitors. A loyal customer cannot be easily swayed by availability or price, but they always will to pay more prices and make sure they receive the same quality product and service they love and know (Evanschitzky et al., 2012). It is through customer loyalty that companies continually meet and exceed customer expectations. Future purchases are likely to be made on the same company by a customer who trusts the products and services got from the company.

The significance of customer loyalty impacts almost all the metrics that are essential to running a business. A business would not survive without happy customers who consistently buy goods. The economic value of loyal customers is seen from the cost of acquiring new customers (Piyathasanan et al., 2015). New customers are more costly to get, and they do not spend more money compared to loyal counterparts. The value of loyal customers is their ability to assist a business is growing and keeping high profits, which tend to be low in the short term, especially when loyal customers are view in the company as part of the profits will be spent to acquire new customers.

Loyal customers are vital for business growth because customers who come back to the same company and spend more money are good for the company as they contribute to higher revenue. Lack of loyal customers is churned to a company, and it negatively affects the business growth to a large extend. According to Evanschitzky et al. (2012), loyal customers make business growth to be more comfortable, and it will retain more resources that could have otherwise been utilized to acquire new customers. Another economic value of loyal customers to a business is the element of referral that loyal customers make to their friends and families. The referral is very significant to the bottom line of a company. The lifetime value of a new referral to a company is 16 percent higher compared to that of a non-referral customer (Evanschitzky et al., 2012). It happens because loyal customers already have opinions that are positive on the company products and services, and their friends and relatives are more likely to recommend customers that fit the company products and services more perfectly. Therefore, companies that have referral programs that are formalized experience 86% referral experience a higher growth rate in revenue (Piyathasanan et al., 2015). Generally, a company that invests in loyalty is not only preventing the customer from leaving, but it is also maximizing the opportunity for the company growth.

In any business, customer loyalty reflects higher profits. The economic value is the benefit of customer loyalty after subtracting the overall cost such as sale labor, marketing cost, and software cost together with the opportunity cost of maintaining customer loyalty. The significance of customer loyalty is not only an excellent idea, but it is also a necessity for keeping a company afloat. One of the best investment choices a company can make is directing its resources to enhance of customer loyalty. Piyathasanan et al., (2015), found that a 2 percent increase in retention of customers produces an equal effect on the company profits as cutting the operation costs by 10 percent. Hence, the payoff of retaining customers is worth it, instead of using fewer resources on customers.

The best recommendation for increasing customer loyalty is to increase the resources of keeping the customers around and offer products and services of high quality and quantity that has value to the customers so that those customers praise the service they receive and refer some of their relatives and friends to the company.

Sales and Service Principles for Retail Business

Retail businesses should follow some notable sales and service principles in all their operations as it allows them to carry out a tight operation and enable in fulfillment of customer expectations. Also, adherence to the principles will help in generating value for the overall business. The first principle is customer orientation. Here, the retail company determines the needs and attributes of its customers and does its best to satisfy those needs to the fullest. It monitors and establishes standards of customer satisfaction and makes an effort to meet customer expectation and needs that are related to the product or service that are sold by the retail business. It involves the development of a quality product that is appreciated by customers. The retail should also respond to complaints and queries of customers.

The second principle is a coordinated effort in which the retailer integrates all activities and plans to maximize efficiency. Currently, retailers are integrating their stores with e-commerce sites, and telephone sales to move out inventory items rapidly (Schniederjans et al., 2014). The retailers also emphasize on various merchandise channel as they employ a multi-channel system which is tied together with a database that incorporates all information concerning customers, identify buying trends, manage inventory, and facilitate effective merchandise management.

The third principle is understanding the 4 Ps. This is principle is considered old, but it is still valid till today. It assists retailers to understand the whole foundation of their business. The 4 Ps are Product, Place, Promotion, and Price (Schniederjans et al., 2014). They are essential for the perfection of products and services provided to customers as they all make up the marketing mix. A retail firm has to launch a product that customers want to buy, and that will satisfy their wants, needs, and desires at the same time it must deliver profit for continuity of the business. The price attached to the product must be consistent and meet all the business requirements and must be set at a level that customers can afford. Then, the retailer should set a physical store, e-commerce, or a catalogue for customers to pick products. After having the product at the right price and in the right place, the retailer has to promote the product for the customer to know the existence of the company product.

The fourth sales and service principle are goal orientation. A retailer should set sales and service goals and utilize its implemented strategy to attain them. Goal orientation is the intensity to which a retail business focuses on sales and service tasks and results of such tasks (Schniederjans et al., 2014). The goal orientation is used to predict performance as it advocates a focus on the ends the business sales are made and how much sales performance will affect the entire business.

Influence of Setting and Achieving Quality Service Standards on Sales Results

Setting and achieving quality service standards have a substantial positive impact on sales. A company sale will improve because internal quality practices influence customer satisfaction, and it results in to increase in sales due to customer orientation (Maden et al., 2014). When a company sets and achieves quality service standards, it results in orientation in both process and customer, which then directly impacts both employee and customer management.

Good quality standards overcome poor marketing as the process of inbound marketing in a company is customer-focused, which assists customer service. Attainment of quality standards creates an excellent reputation for a business and increases customers' lifetime. It also retains the best employees and offers a company the ability to enter a profit-sucking cycle (Maden et al., 2014). More so, good quality service standards are an essential aspect of customer and supplier relationships. Quality service standards are significant for potential customers, management, and employees of a business.

Service standards are considered as a tool used by management to confirm that they offer to their customers exactly what they promise. Achieving the standards is a clear indication that the exact service planned for is offered to customers. As a result, the customer will be satisfied and become loyal to the company (Maden et al., 2014). Loyalty creates a sales multiplier effect through referrals. Also, achieving quality service standards is an indication of consistent and sustained performance of the business, which translates to higher sales.

An example of influence created by setting and achieving quality service standards on sales in a company is the creation of customer loyalty due to high-quality services offered, which attracts more customers to the company services through referrals. With an increase in the number of customers, then sales will automatically increase because fewer resources will be used in acquiring new customers.

Importance of Aligning Sales and Service Goals With Financial Plans

To enable a business to do better and operate smoothly, it is important to have clear sales and service goals aligned with the overall business financial plans. The budget should mirror the sales and service goals for better implementation of such goals and make the right decisions on areas to allocate investments and spending (Thome et al., 2012). The goals are the vision of the company sales and services to offer to its customers, and they are aspirational and realistic. Then, financial plans guide the company in setting up its resources to execute the goals. It ensures the resources required, such as equipment, personnel, and investment, are available to assist in achieving the sales and service goals. Th...