A Model of Employee Loyalty - Essay Example

Section/# A Model of Employee Loyalty Within each and every market, there exists opportunities for providers to maximize the service quality that they can present their consumers. Taking the case of supermarkets as an example, it can immediately be noted that a range of high, mid-grade, and low-end providers offer very much the same products to the customer; however, the true differential that exists between the three broad categories is contingent upon the quality of care and service that they are able to exhibit to the consumer. As such, it is broadly understood that the high end supermarkets are expected to exhibit extraordinarily high levels of customer service whereas more low end supermarkets are expected to offer little in the way of quality in terms of the customer service experience. Yet, as competition between and amongst these thre sectors remains fierce, firms are always seeking a way to differentiate themselves from the competition and offer higher levels of “quality” to the consumer; as a means of encouraging them to utilize the supermarket to fulfill more of their grocery and consumption needs (Williams & Hutchinson, 2013). Through an examination of the different strategies for consumer loyalty that can be promoted, it is the hope of this author that the reader will be able to gain a more useful level of inference concerning the way in which low cost leaders such as TESCO and Aldi might approach the market and seek to redefine themselves; while at the same time encouraging new customers and retaining the old ones that have allowed them to build the successful business model they currently reflect. Firms such as TESCO and Aldi pride themselves on being low cost leaders within a market that is saturated by firms attempting to represent themselves in the very same way. As such, the need to actually represent the lowest costs to the consumer without sacrificing service quality comes to be an essential element for continued survival. The issue that is faced has to do with the fact that the need to represent low costs necessarily decreases the amount of time and money that can be directed towards increasing the quantity or quality of customer service that is provided. Yet, rather than viewing this as an excuse not to attempt to promote further levels of customer service, the approach of this particular summary and analysis will focus upon the low-cost alternatives that the likes of TESCO and Aldi could engage to increase their customer service integration and quality with the consumer. A loyalty program is one of the most effective means of encouraging the shopper to engage with the store again in the future. Countless stores and service providers have utilized loyalty programs to increase repeat customer flow into their places of business. In much the same way, both Aldi and TESCO could benefit from customer loyalty programs. One of the main reasons for why this customer loyalty program is being encouraged within this analysis has to do with the overarching understanding of the constraints that exist within this sector (Ferrante, 2013). Ultimately, as has been noted, these firms are unable to engage costly customer service approaches that might be contingent upon hiring further personell or re-training the existing staff. Factored in with other approaches to increasing satisfaction and promoting store loyalty, such approaches can become extraordinarily costly when effected across the board. Taking the case of either Aldi or TESCO as an example, the sheer scope and cost of hiring even one additional employee per store or reducing the amount of time that the existing employees have to perform their other core functions would create massive cost overruns that would necessarily be passed on to the consumer (Stephens, 2006). In tandem with the loyalty program, an ancillary approach that can be developed is a marketing strategy that engages the consumer with the understanding that all of the products and services the firm offers are directed at satisfying the consumer’s needs. Although this is an approach that is leveraged by many goods and service providers, big box retail outlets such as Aldi and/or TESCO oftentimes find themselves fighting the stigma of being unresponsive giants that care little for the expectations or needs of the consumer (Mende et al., 2013). As can adequately be noted, such a negative stigma confines the overall chance of growth and development that these firms might otherwise exhibit. A such, providing this loyalty program and seeking to encourage consumers that the firm places their satisfaction at a premium will necessarily go a long way in encouraging those that might have been negatively impacted by this image to give the stores another chance (Zhao, 2013). However, with a loyalty card/program, the financial pressure that is exhibited on the individual store is drastically reduced. Moreover, this level of engagement with the consumer is not something that can be delayed (Bakti & Sumaedi, 2013). Ultimately, many of the competitors to Aldi or TESCO have long ago instituted their own rewards/loyalty programs that are designed to keep customers returning. As such, firms that wish to stay relevant within the market will find it necessary to adapt to these pressures and follow suit for the firms that have already been the “first movers” within the market. Whereas the first option that has been discussed within the analysis is relatively low cost, in terms of overall implementation costs, the second option will require a higher level of investment. As a function of their “low cost” approach to the market for groceries and consumer goods, firms such as Aldi and TESCO have rarely utilized commercial television advertising as a means of defining their stores or encouraging the consumer to visit. However, as can be understood from an analysis of the other firms within the market, such an oversight is something that can ill be afforded if these hope to remain relevant within the market of the future (Zhang et al., 2011). Whereas instituting new training programs or hiring more individuals would have extraordinarily high costs, seeking to redefine, or define as the case may be, these stores to the would-be consumer is an order of magnitude more affordable in the long run. Naturally, prior to engaging in any such customer loyalty marketing blitz, the firm and its analysts should carefully consider the cost benefit analysis and how the firm might expect to generate continued profits in the event that it did attempt to redefine itself to new or potentially returning customers (Richard & Zhang, 2013). One such way that this could be engaged is to represent the grocery chain as primarily focused on saving the customer money; but nonetheless interested in the overall shopping experience and hiring individuals that share this commitment. Firms within the United States that have taken such an approach and represented it within their marketing programs, to a great degree of success one might add, include: Wal-Mart, Target, Kroger, and Bi-Lo. A final approach that will be mentioned within this analysis has to do with providing new shoppers within a target market a gift certificate as a means of encouraging them to come and experience the difference in price and quality for themselves. Although this approach is perhaps the most costly approach of all, it still pales in comparison to the other customer loyalty approaches that other firms have engaged. As such, by encouraging new shoppers to come into the store and see the prices and experience the customer service first hand, the firm is extending a good faith gesture; something that is interpreted by the consumer in two positive ways (Goldsmith & Amir, 2010). The first way that it is interpreted is of course based on self interest and the desire to use the coupon and save money. The second positive engagement that is made is with respect to building trust; as the consumer that uses the coupon will feel confident that it would not have been supplied had the grocery store not been confident that it could meet or exceed their expectations for quality and low prices. This joint positive impact creates a situation in which the individual is oftentimes left to subconsciously consider the grocer in terms of a more favorable way than they might otherwise (Yaya et al., 2013). In such a way, seeking to engage with the consumer by offering them something for nothing invariably provides a residual benefit for the firm or business entity that engages in such an approach (Kuruzovich et al., 2013). Naturally, there are limitations to the rewards that can be gained from such an approach; however, considering the fact that low-cost leaders such as Aldi and TESCO gain the lion’s share of their business from consumers that are primarily interested in issues related to cost and convenience, an introductory offer such as this speaks to the core of their customer base and provides a powerful tool through which customer loyalty can be maximized in both the long and the short term (Higgins & Young, 2008). Finally, it must be stated that none of these approaches are guaranteed to work in and of themselves. A great degree of the final success for such programs is contingent upon the way in which the culture of the brand is able to shift and adapt to the changes that have been specified. However, by leveraging different approaches based upon the needs and perceived deficits within the market, the firm can hope to achieve a much higher level of brand loyalty than could ever have been realized had they chosen to continue to perform a “business as usual” approach (Zhu, 2013). From the information that has thus far been presented, it is clear and apparent that a multitude of different approaches can maximize the level of consumer loyalty that firms such as Aldi or TESCO might wish to effect. Depending upon the market or demographic group in question, there is no single approach that is guaranteed to work at a bare minimum cost. Because of this, it will be necessary for the decision makers of these projects to carefully measure the determinants of a specific region or demographic and plan what level or engagement would maximize the loyalty that might be represented. Such an understanding of differentials between markets and between customers is an essential understanding in seeking to craft an effective strategy. For instance, many firms have performed cost benefit analyses and come to realize that the most effective strategy that they might employ is one that is reflected within all markets. Sadly, once such a determination is made, the level and extent to which differentials between consumer groups and different preferences or needs of the customer can be considered is decreased; sometimes leading a situation in which millions of pounds are wasted for an approach that ultimately would have been better suited within a particular demographic or region. Bibliography Bakti, I, & Sumaedi, S 2013, An analysis of library customer loyalty: The role of service quality and customer satisfaction, a case study in Indonesia, Library Management, 34, 6/7, pp. 397-414, Library, Information Science & Technology Abstracts, EBSCOhost, viewed 30 April 2014. 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