CUSTOMER RELATIONSHIP ON ENTERPRISE PERFORMANCE
INTRODUCTION
This chapter highlights information and issues concerning the background of the study on the
effects of customer service on the performance of an enterprise. This chapter also highlights the
objectives of the study, scope of the research, limitation of the research, definition of technical
terms and contribution of the research.
Background of the study
Customer service is the overall activity of identifying and satisfying customer needs. Giving
customer’s service may mean giving them excellent service once, e.g. providing refreshment and
a place to sleep for a busy traveler on a journey. More often it refers to the whole process of
meeting customer needs time and time again and giving them a better service than they expected.
Enterprise is committed to delivering exceptionally high standards every time. The goal of the
company is to exceed customer expectations. Customer service will absolutely make or break
your business. Businesses can compete two things on, price and service. A company that chooses
to compete on price will find itself locked in a continual battle with others who run sales and
lower prices because price shoppers have traditionally shown no loyalty. This means the
company that bases its future on offering the lowest price will lose a large part of its customer
base to the next company that can beat its prices, (Coye, 2004,).
The company that chooses to provide the best customer service can assure itself of customer
loyalty and thus, profitability. There are many examples of companies such as Nordstrom's. They
are renowned for their superior customer service and their customers would not think of
shopping anywhere else, even if the items were a little less expensive. Another prominent
example is Disney. A trip to any Disney resort shows that superior service is the bottom line.
With every detail attended to and all "cast members" allowed and expected to provide superior
customer service, their customers don't mind paying top dollar for their vacations, Dibb et al
(2006).
On the other hand, poor customer service can doom a company quickly. Circuit City is a perfect
example. When they replaced their experienced, knowledgeable sales associates with lower paid,
lower motivated, less trained associates, customer service (and satisfaction) suffered a mortal
blow. They were never able to recover from that, Hamer (2006).
As the competitive environment becomes more turbulent, the most important issue the sellers
face is no longer to provide excellent, good quality products or services, but also to keep loyal
customers who will contribute long-term profit to organizations (Tseng, 2007). To compete in
such overcrowded and interactive marketplace, marketers are forced to look beyond the
traditional 4Ps of marketing strategy, which are not longer enough to be implemented for
achieving competitive advantage. Therefore, relationship marketing has become an alternative
means for organizations to build strong, ongoing associations with their customers. As a part of
marketing strategy, relationship marketing seek to acquire and retain customers by providing
good quality customer services, and therefore has become one of the keys to success in acquiring
strong competitiveness in the present markets, because of its implications for access to markets,
generation of repeat purchase, creation of exit barriers, and the view that it benefits all parties
(Andaleeb, 1996).
Poor customer service can negatively influence a business in a variety of ways. This is especially
true for small businesses that rely on repeat business and positive word-of-mouth advertising for
its success. In addition to running the risk of alienating current customers with sub-standard
service levels, chronically poor service can influence the business’ potential for attracting new
customers as well.
Poor levels of customer service can cause you to lose even the most forgiving of customers.
Consumers tend to do business with a company because it is convenient, it is a habit, or they are
looking for particular product or service that is hard to find elsewhere. Even these stalwart
customers can be turned away by inferior levels of service, Hamer (2006).
Limitations of the Research Study
The researcher anticipates information non-disclosure from the Management. However, the
respondents will refrain from rendering vital information in fear of prejudice and victimization.
The researcher will overcome this by assuring them that the information is purely for academic
purposes.
Problem Statement
Poor customer service has the potential to cost your business customers before they even buy a
thing. When new patrons walk into a business and find themselves ignored, talked down to or
subjected to long lines and uneducated employees, they might head for the door before they even
reach for their wallets. Customers who experience poor service levels often tell their friends and
family members about the bad experience to warn them away. This will cost your business
potential customers. People will have already formed a negative opinion of your business before
ever setting foot in your door. Many business enterprises fail to notice the importance of good
customer service thus retorting to price reduction as a means of luring and winning customers.
This strategy eventually fails them fatally losing their customers and potential customers to other
enterprises that have mastered the skill of customer service.
Confronted with the fierce competition in today marketplace, there have been many marketing
strategies for service providers to plan and implement. However, consumers are disturbed by a
number of marketing activities ranging from aggressive sales tactics, telemarketing, direct mail,
doorstep selling, radio advertisement, TV advertisement, and internet promotion to customer
loyalty programmers (Peng and Wang, 2006). There are also evidences shows that consumers
tend to other competitors when they cannot be satisfied with the service quality. Relationship
marketing strategy might be one of the best ways for service providers to retain customers and
building customer loyalty. Many empirical studies have provided evidences that relationship
marketing tactics have impact on behavioral loyalty which affects customer retention (Peng and
Wang, 2006). Therefore, well awareness of the target consumers and building good relationship
with them is the most significant issue. The challenge for service providers is to attract more
customers, focus on building good relationship quality with customers, make customers satisfied
and trust, and step by step obtain customer’s loyalty, through relationship marketing tactics.
Independent Variable Dependent Variable
Customer Service
Intervening variables
Source: Author 2013
Enterprise Performance
Quality customer
service
Innovation and
information technology
Good reputation
Accountability
Prices
Location
Significance of the Study
This research proposal will be very useful to small and medium sized enterprises through
offering the importance of customer service to their growth. The enterprises will realize that
quality services.
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