Services Industry and Customer Loyalty

BusinessSales / Service

  • Author Isabel Simon
  • Published September 28, 2010
  • Word count 364

Depending on the nature of the business, there are several ways that employees interact with customers, many of which have lasting effects. What works for one type of business may not work for another, and quality of work is not necessarily the same as quality of service. That’s because services (which are intangible and are "experienced") are unlike products (which can be consumed). For service organizations, however, the most important thing to remember is that the CUSTOMER is the "focal point" of all decisions and actions. (Chase, Aquilano, & Jacobs,"Production and Operations Management-Manufacturing and Services," 8th edition, 1998).

There are businesses in which the primary function is interaction with the customer -airlines, for example. Also, services can be either "facilities-based, "a retail store for example- or "field-based," like cleaning. A good way to visualize customer focus is to picture a triangle with the "customer" in the middle, connected to each of the three corners. In one corner is the "service strategy," in another the "systems," and finally the "people" corner completes the triangle. The (high or low) degree of customer contact is another factor in determining the exact amount of customer influence that exists.(Same source as referenced above).

Obviously, companies want to keep as many customers as they can. According to Ruth P. Stevens- business consultant, teacher and author (in recent article, B2B Marketing Trends- online marketing site), business-to-business customers are especially valuable because there are fewer of them. These are the ones who order large quantities- repeatedly, and who also send the company referrals. Ruth P. Stevens lists the following seven "market retention" strategies(same source):

  1. Meeting and exceeding customer expectations

  2. Customer service

  3. Penetration marketing

  4. Defection prevention

  5. Continuous relationship selling

  6. Loyalty programs

  7. Winback

Notice that customer service, relationships, and loyalty programs are included in this list. That’s because no matter how well a company operates internally, customer satisfaction is the key to success, especially in the services industry. Additionally, a good way to retain customer loyalty is to offer a rewards program, for example a way to earn points redeemable for merchandise, travel, and more. In conclusion, good products must be accompanied with superior services, plus reason to remain loyal.

Isabel Simon is a retired Sales Executive with extensive experience in customer loyalty programs. Isabel enjoys writing and sharing her experience and knowledge.

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