Maximizing Criteria for Customer Loyalty - Coursework Example

Assignment 2 Question Table of Contents Table of Contents 2 Introduction 3 Criteria to Make Sure that Loyalty is Maximized 4 Techniques for Retail Organisations to Be Certain That Customer Service is of the Best Quality 6 Actions That Can Be Taken To Make Sure That the Customer Is Receiving the Best Possible Service 8 Conclusion 9 References 11 Introduction Bargaining power of suppliers in the retail industry has frequently been argued as ranging from a moderate degree to a high degree, especially when it comes to quality assurance services and production flexibility. It is worth mentioning in this context that where on one hand, quality assured services provide an opportunity to the retail organisations to serve their end-customers with best-assured quality, on the other hand, production flexibility ensures cost effectiveness and greater profitability to retailers through bulk purchases. Undoubtedly, better quality assurance and cost effectiveness play a major role in generating greater customer loyalty, which makes larger retail organisations like Tesco and Aldi, operating on a global front, highly dependent on their suppliers (The University of Sydney, 2006). In the present day era, maintaining good relationship with suppliers therefore becomes quite significant, as these retail companies have to balance the supply of the products with their commitment of quality assurance and quantity demanded by the ultimate customers. Furthermore, as commonly argued in the contemporary business scenario, supply chain effectiveness plays a significant role when determining business success potentials. Moreover, retaining customers and maintaining loyalty among them has also been a prime concern for retail companies, as the customers in the present day context opt for switching brand as per their requirements taking the advantages of easy availability of substitutes. Maintaining a good relationship with the suppliers can therefore result in maximising customer loyalty, as the goods supplied has to meet the customer’s tastes and preferences (Hsiao & et. al., n.d). Correspondingly, this paper will attempt to assess the possible ways through which, the retailers can ensure maximization of customer loyalty overall. It will thereafter focus on identifying the criteria based on which, the quality efficiency of their customer services can be ensured by the retail organisations. Recommendations will also be drawn concerning the deliverance of best possible services to the targeted customers by contemporary large-sized retail organisations like Tesco and Aldi. Criteria to Make Sure that Customer Loyalty is Maximized In the present era, achieving customer loyalty for a business has gained huge emphasis. It is considered that achieving customer loyalty is quite essential owing to the fact that they acts as the main source of revenue for any retail business. It has been accordingly viewed that tastes and preferences of the customers have been continuously changing due to which, successful retailing has become subjected to various strategic, operational and market alterations. It is in this context that retailing giants like Tesco and Aldi have been considering maximising customers’ loyalty as a vital aspect to improve their global market presence (Pitney Bowes Software Inc, 2012). Considering the importance of surety of maximising customer loyalty in retail organisations, suppliers can be evidently observed to play a non-negligible role. It is hereby considered that retail organisations must be committed towards building a relationship between the customers and its suppliers to ensure that the customer loyalty is maximised. Accordingly, it can be stated that suppliers must create transparency of information provided in the products that would further reveal the reliability and honesty of suppliers and its products to the customers, which in turn would result in loyalty within the targeted customers (Bollen & Emes, 2008). Utmost care should be rendered by the retail organisations towards the price expectation of customers, which must be met by the suppliers by reducing the overall cost of products being supplied by them to the retail stores. This can be done by reducing the number of middlemen required by the retail organisations for supplying the products. Moreover, the goods supplied by the suppliers of retail organisations must portray their commitment towards environment and the society, which in turn would foster customer loyalty towards the range of products provided by the retail organisations. It would be worth mentioning that customer loyalty can be maximised if the suppliers provide value based benefits in the products, such as quality assurance and environment friendly features, when being supplied to retail organisations. It is believed that providing more benefits in the products would result in attracting the customers and making them loyal to the brands of retail organisations. Effective communication within the customers and the suppliers must be initiated regarding the flow of product information to ensure maximisation of customer loyalty (Bollen & Emes, 2008). As often argued, retail organisations must develop a different initiative towards the suppliers that would meet the strategic plan of customer loyalty for a retail organisation. It is in this context that reliable suppliers can play a huge role in assisting the retail organisation goal to successfully achieving customer loyalty and maximise the same maintaining a consistency. Therefore, loyalty of customers can be maintained by supplying high quality products to the customers that would result in increasing their satisfaction. Timely supply of products also plays a huge role in maximising customer loyalty for retail organisations, as it is perceived by the customers that if the products are delivered on time than the brand can be totally relied upon. Innovation initiative within the suppliers can also result in developing new products that would ultimately cater the changing requirements of the customers and result in maximising their loyalty (Reiss, 2010). Techniques for Retail Organisations to Be Certain That Customer Service is of the Best Quality Services are intangible in nature due to which it might become quite complicated to measure the quality level of the service delivered. Therefore, it is considered that an organisation must adopt a systematic approach with its suppliers to be certain that the services provided to the customers are of best quality. Certainty of optimum service quality can be obtained by retail organisations by measuring the service performance provided by the retail outlets along with the services provided by the suppliers to meet the requirements of the customers. Feedback from the customers regarding the supply of products and the quality associated with the products supplied is also an effective process to measure the quality of services provided by retail organisations. Based upon the feedback derived from the customers, it can be apparently examined if the service provided to the customers is of best quality and if the suppliers are able to meet the customers’ requirements. It would be worth mentioning in this context that if the feedback obtained from the customers is positive regarding the service quality, a degree of surety can be obtained by the retail organisations that the services provided to the customers through the products supplied by its suppliers is of best quality. On the other hand, if the feedback obtained from the customers is negative, the organisation can be certain that the service provided by its suppliers is of inferior quality when concerning the supply of goods (Becser, 2007). Evaluation of complaints lodged by the customers regarding the supply of products and the products availed by them can also help retail organisations to be certain about the quality of products and services provided by them. Therefore, it can be stated that retail organizations can be certain whether the customer service delivered is of best quality through the evaluation of complaints lodged by the customers while availing the product or service provided by the suppliers. As it has been mentioned above, satisfied customers tend to be loyal because the services provided to them meets their expectations. Besides, it can be asserted that if the goods delivered by the suppliers meet the actual standard and expectation of the customers, the retail organisations can be certain that the product and service provided to them is of best quality (Becser, 2007). In addition, SERVQUAL can also be considered as an effective instrument that can be employed by retail organizations in order to manage their supply chain and assure quality services from their suppliers, which will help them to gain certainty regarding the quality of customer service provided to them through the products. It is believed that service quality can be measured to a certain extent by comparing the value provided by the suppliers in its products with the expectation of the customers in relation to the supply chain (Nadiri & Tümer, 2009). On the whole, it can be stated that standardising the supply chain being pursued by the suppliers would play a huge contribution in meeting the expectations of the customers in relation to the services availed by them through the products consumed. Actions That Can Be Taken To Make Sure That the Customer Is Receiving the Best Possible Service In the contemporary business scenario, it is considered that providing the best possible services is the only virtue for a company to retain loyal customers and sustain competitively in the market. In retail organisations, suppliers play a significant role to ensure that the services provided to the customers is best in its quality. Therefore, it is considered that retail organisations take up the action of enhancing the quality of suppliers that would further improve the enduring position of suppliers, which in turn would ensure that the customers receive the best possible services (Aiyerin, 2011). It is worth mentioning in this regard that the supply chain resources must be customised by retail organisations in such a way that would efficiently cater the specific requirements of the customers along with assuring that the services provided are of best possible quality. It has therefore been revealed that customer-supplier relationship is an important aspect for retail organisations to maintain customer loyalty. Hence, it can be considered that actions must be undertaken by these retailers to ensure that the customers receive the best possible services through an improved customer-supplier relationship. In the present day era, Supply Chain Management (SCM) has been subjected to continuous evolution in the changing business environment along with the changing tastes and preferences of the customers. Hence, it is believed that SCM is an essential tool for retail organisations to enhance the efficiency of its logistics and create the best possible value for the customers (Aiyerin, 2011). Correspondingly, it has been discovered that SCM system in retail organisations can provide a huge contribution in meeting the requirement of providing the best customer service. These contributions include reduction in the cost of products supplied, due to which the customers can avail the products or services at a relatively lesser price. Likewise, SCM system would increase knowledge about the customers and their perceptions to be acquired by the retail organisations as well as their suppliers, which in turn would facilitate these organisations to provide the best possible services in accordance with the knowledge and perception derived from the customers. Moreover, effective SCM system shall also help retail organisations to improve the quality of the products apart from creating a better relationship with the customers in relation to the services availed by them (Aiyerin, 2011). Customer centricity is also one important approach that must be initiated within retail organisations like Tesco and Aldi, in order to understand customer perspectives from a critical viewpoint and accordingly, decide the actions that have to be taken to provide the best services to the customers (Roland Berger Strategy Consultants, 2010). Conclusion From the aforesaid study, it can be ascertained that retail organisations depend upon their suppliers to a huge extent for providing quality services to the customers and retaining customer loyalty. Therefore, in order to maximise customer loyalty, transparency of information must be maintaining throughout the supply chain, including the contractual agreements made with the suppliers and the goods supplied in retail organisations. Continuous feedbacks from the customers would further provide knowledge about their expectations and perceptions regarding the quality of services and accordingly, help retail organisations to develop their services that would further cater their requirements. Moreover, certain actions must be taken by retail organisations to ensure that the services availed by the customers is best in quality by improving the quality level assured by their suppliers. In addition, SCM system must also be used in an effective manner by retail organisations that would increase the effectiveness of logistics and create more value for the customers. Nevertheless, it must be taken into concern that measuring service quality is in itself a challenging process owing to the involvement of unignorable qualitative factors such as customer preferences and suppliers’ ethical soundness as well as sustainability. Correspondingly, it is suggestible that retail organisations, like Tesco and Aldi, pay due attention towards developing well-structured and all-inclusive frameworks to measure their service quality of their suppliers in accordance with customers’ tastes and preferences. References Aiyerin, T., 2011. Supplier-Customer Relationship in Relation to Customer Satisfaction. Academia, pp. 1-66. Becser, N., 2007. Improving Service Quality in Retail Trade. Corvinus University of Budapest, pp. 1-241. Bollen, A. & Emes, C., 2008. Understanding Customer Relationships. Ipsos MORI Loyalty, pp. 1-47. Hsiao, M. J. & et. al., n.d. The Impact of Buyer-Supplier Relationship and Purchasing Process on the Supply Chain Performance: A Conceptual Framework. Papers. [Online] Available at: http://www.impgroup.org/uploads/papers/4210.pdf [Accessed April 11, 2014]. Lehto, A., 2013. Exploring Organizational Service Orientation: A Preliminary Analysis in the Retail Industry. Aalto University School of Business, pp. 1-48. Nadiri, H. & Tümer, M., 2009. Retail Service Quality and Behavioural Intentions: An Empirical Application of the Retail Service Quality Scale in Northern Cyprus. Marketing a Obchod, pp. 127-139. Pitney Bowes Software Inc, 2012. Customer-centricity in Retail: Improving the Customer Experience. White Paper: Retail, pp. 1-11. Reiss, B., 2010. Build a Good Relationship With Suppliers. Entrepreneur Media, Inc. [Online] Available at: http://www.entrepreneur.com/article/206530 [Accessed April 11, 2014]. Roland Berger Strategy Consultants, 2010. Customer-Centric Retailing – Now You Know What Your Customers Really Want. Consumer Goods & Retail Competence Centre, pp. 1-18. The University of Sydney, 2006. Introduction. Chapter One, pp. 1-224. Read More