Quality Service Management - Assignment Example

QUALITY SERVICE MANAGEMENT By of the of the of the School 30 May Using examples, explain how the unique characteristics of services apply to the accounting firm? Globalization has brought a change in how most organizations conduct their businesses. Earlier on, most activities in a business were conducted manually, but with the advent of computerization, new firms (virtual and physical) have been developed either purely oriented to delivering services exclusively, or to add value to tangible products offered by the firm. Marketing tangible products and services exhibit their great divergence; this is the difference a manufacturing and an accounting firm demonstrate. According to Wolak, Kalafatis and Harris, “what makes marketing field of services distinct from products is the nature of the services arising from their perish ability, inseparability, intangibility and variability characteristics” (1998, p.4). Accounting firms offers services, which are performances that cannot be stored. For example, offering accounting advice is done simultaneously, at the appointed time when the service is required, such that the client can find its value. Unlike manufactured products produced, distributed and stored for future use, it is impossible to separate the accounting firm as the services provider from what it offers clients. The presence of an accountant is vital to deliver the financial advice, which makes the consumption of the service inseparable from its production. Different services offered by accounting firms are characterized by heterogeneity, considering there are different practicing accountants, with varying experiences among other features. This variation “concerns challenges in standardizing services in relation to divergence in outcomes, service producer, time and customer’s participation” (Moeller, 2010, p.363). Similarly clients of accounting firms cannot be able to make evaluation of the services until they are purchased and consumed; simply because services lack the tangible features associated with a product. Example, the quality of financial advisory service can only be evaluated after implementation What strategies could the accounting firm use to reduce the intangibility of its service offering, and thus reduce the perceived risk for the client? The perceived risk for the clients is related to the uncertainty level clients have when they fail to realize the tangibility aspect of the service offered. Customers react differently to services offered, and in pursuit of the value and ways to evaluate it, they would seek the signs of the service quality. The accounting firm has hence a role to tangibilize it services, which would require focusing on the marketing mix among others strategies so that the respective service producer (accountant) can suggest the quality of their intangible accounting service to the clients. Advertising and publicity: The accounting firm wants to convey the benefits of their services to their existing and potential customers, which is made difficult by the aspect of intangibility. However, marketers of the accounting firm and its services need to carry a positive image of the firm’s capability to deliver. The aim is to improve clients’ evaluation and convince them before they purchase the services they require, by exploring strategic marketing methods where advertisements and publicity is used to send a strong message (to potential clients) that support a clear position, and clarify their image to reduce the intangibility (Pravab, 2010). Advertising and publicity exposes the firm to potential market and avails relevant information first hand, which clients often prefer to make enquiries before reaching a purchasing decision. Information and pricing: When the firm places such information open to the public, it attracts attention and most clients would like to verify whether the image of the service advertised reflects the actual performances. It raises the bar on both clients’ demands and quality of accounting firm’s services. The goal is to enhance clients’ satisfaction with the services; meaning that as long as the clients are confident and satisfied with the service, even if the set prices are high and publicized, they will always make the firm the first choice because they can evaluate the service and realize its value at that cost. Physical evidence: Most of service industry today have gone ahead to feature tangible assets that aid in delivery of the service. For example, Ron in the scenario is able to offer better service to clients when he visits them in their business premises. Just like a flight attendant in an airline’s flight is strategy to tangibilize the service, the same applies for an accountants’ presence during service delivery, where they can demonstrate the service quality and expertise, offer support and quality advice with clear understanding of the problem. Davies suggests that “evaluations can be improved before purchase of services by offering a clear identity through cues that make the service tangible, during purchase by offering user-friendly scripts and by ensuring that staff offer appropriate advice, which relies on managing service encounter, and after purchase by marinating service relationships” (1996). Demand for accounting services fluctuates across the financial year. What strategies could accounting firm use to minimize the impact of fluctuating demand for its services? First, the accounting firm has to realize that the nature of its fluctuating demand of services is the predictable type. The firm can point out its busiest months and should also be able to plan ahead for the low seasons where their revenue generation declines. Other than the services they offer that seems to yield the high revenues in their busy months, they should consider offering other services that are not dictated by seasons or government regulations like the BAS and tax returns. The impact of fluctuating demand leads to financial losses of the firm considering the high cost and low returns during non busy months. The accounting firm has the alternative of expanding its services offered in an ongoing basis throughout the year. It includes periodic or perpetual inventory accounting among other accounting and financial reporting services. The other strategy is differentiating its services from others, which is well supported by the marketing plans. The firm can create its own brand and obtain leverage in the market. It hence acquires a competitive advantage from other firms that clients would prefer switching to their firm for its differentiated service. During busy periods, how could the firm reduce the need for clients to wait for the accountant? If waiting is unavoidable, how could the accounting firm minimize the negative impact? It is evident that the productive capacity of Mr. Ron Brown accounting firm is a constraint to the number of clients to be served in scheduled period. There are two alternatives; one, the firm can contract temporally, but competent additional accountants to ease the workload during the busy period. Second, Ron’s firm could outsource certain workloads for their clients such as the PAYG earlier on time to reduce delay complaints. Effectively, the firm would be able to adjust its capacity to meet demand and reduce the need for clients having to wait substantial time while waiting to be served. Similarly, with more competent employees, where delays are unavoidable, appointments can be scheduled appropriately with tight scheduled clients, which eliminates the negative image created for the firm demand seems to overweigh the firm’s productive capacity. It is all about “managing the behaviors of the customers so that they can co-exist peacefully” (Hoffman & Bateson, 2010, p. 11). Competent accountants would provide quality services that the firm’s management need not to re-check their work. They can also be assigned the task to offer services to classified, loyal customers at their business premises (often done by the manager) to speed up the services. Why is it important for an accounting firm to develop relationship with its clients? Should the firm develop close relationships with all of its clients? Justify your opinions. Developing a relationship with a client in the service industry is a way of trying to tangibilize the service. The relationship between the accounting firm (seller) and the client (buyer) concerns building trust and confidence in service offered. For such a service organization, the contact personnel play a critical role in influencing the future service decisions of their clients. Kentler and Guiltinan reiterates Donsley’s claim that “it is the clients relationship rather than the service itself that is being sold;” in actual sense unlike the presence of a manufactured product on sale, what is available is the contact accountant in this case who actually represents the service (1984, p.78). This provides an opportunity to enhance clients’ satisfaction, especially knowing how the accounting firm operates, it system and methods and make better evaluations of the services. The firm can be able to retain loyal customers for its future profitability. Accounting firms aim to offer their clients quality service, but are also out for business. While the clients demand a specific value for their money, the outcome of the service could vary and this cold conflict with the clients’ expectations. Other than running after money the firm should consider the clients’ expectations. Most clients demand timeliness, accessibility, comprehensible advice, initiative, improved relationship, and client choice and control among other factors from their accounting firms (cpaaustralia, n.d.). It is worth developing close relationships with those clients whom the firm can exceed their expectation, since their satisfaction is achieved. However, some clients are persistently unsatisfied; the firm could be willing to strive to meet their expectations, but if their complaints end up destroying the image of the firm it is better to let go of the client. In such a situation such complaints would serve to rectify the firm’s services. How can the accounting firm overcome the variability that is inherent in service organizations that require interactions between clients and the employees of the firm? The answer lies in raising the competency of the firm’s employees. Other than the educational background in accounting experience and practical knowledge acquired and shaped through assigned tasks would improve the employed accountants’ capacity to deliver quality services. It does not imply that those on industrial attachments or the casual employees should be eliminated, but given sufficient training and supervision to raise competent accountants. Together the firm can undertake training and development sessions for career advancement and keep up with the changing demand in the accounting field. Hence they can set their own standards of services and name in the market for what they offer. Regardless of the accountants performing the task the firm remains assured that quality service would be delivered, because of the expertise and background training. Others entail demanding clients’ participation during service delivery where possible to avoid the variation after delivery of the service that could be unsatisfactory for the client. Benefits the accounting firm could gain by making greater use of electronic channels when interacting with current and prospective clients? Reaching out to potential clients: Some potential, profitable clients that are referred to the firm could be in far distant locations, since the visiting to market and sell the service could be quite costly, the firm can conduct their discussion online, the client can transfer their necessary information whether book of accounts and inventory assets among others that are required to review. This eliminates the needs to travel around repetitively to conduct reviews, understand the client’s company problem so as to provide the financial advice. Supports relationship and firm marketing: Because of the electronic channels, the firm and the clients enjoy timely communication of business experiences, to recommend changes. It fosters close relationships regardless of the distance provided there is maintenance of contacts. The firm’s advertisement could become easier and provide an opportunity to compete with other rivalry firms. Computerization: Automation of the firm’s activities could speed up the delivery of services, replace the paper based system and allows better accounting application to conduct mathematical and statistical calculations required. It would promote creativity in accounting field and foster knowledge seeking for the firm’s accountants. What problems could the firm experience by using electronic channels to service clients? Insecurity issues: Some clients feel much secure with the face to face communication rather than offering such sensitive financial information of their companies via electronic means. Due to the fear of package interception and hacking, such clients could resists change and persist on traditional accounting methods the firm offers. Usability and operation: Unless the firm takes time to train its staff on the use of accounting applications, their services would remain incompetent compared to rival companies. Even the staff can resist change unless they realize its value. It could be challenging in learning how to operate and customize automated systems for specific clients, but it is solvable over time. References List cpaaustralia, n.d. Client Relationship Management. [online] Available at: http://www.cpaaustralia.com.au/~/media/Corporate/AllFiles/Document/professional-resources/practice-management/module6-practice-management-guide.pd f [Accessed 30 May 2014]. Davies, M., 1996. Image Problems with Financial Services: Some Considerations for Improvement. Management Decision, 34 (2), pp.64 - 71. [online] Available at: http://www.emeraldinsight.com/journals.htm?articleid=864830 [Accessed 30 May 2014]. Hoffman, D. & Bateson, J.E.G., 2008. Services Marketing: Concepts, Strategies & Cases. 4th Ed. Mason, OH: Cengage Learning Australia. Kentler, K. A. and Guiltinan, J. P., 1984. Strategies for Tangibilizing Retail Services: An Assessment. Journal of the Academy or Marketing science, 12 (4), pp. 77-92. [online] Available at: http://link.springer.com/article/10.1007/BF02721801#page-1[Accessed 30 May 2014]. Moeller, S., 2010. Characteristics of Services – A New Approach Uncovers their Value. Journal of Services Marketing 24 (5), pp.359-368. [online] Available at: https://noppa.aalto.fi/noppa/kurssi/tu-22.1309/materiaali/TU-22_1309_moeller__sabine.pdf[Accessed 30 May 2014]. Pravab, 2010. Service and the Characteristics of Service: Intangibility, Inseparability, Variability and Perish ability. [online] Available at: http://pravab.blogspot.com/2010/04/service-and-characteristics-of-service.html [Accessed 30 May 2014]. Wolak, R., kalafatis, L. and Harris, P., 1998. An Investigation into Four Characteristics of Services. Journal of Empirical Generalization in Marketing Science, 3, pp. 22-43. [online] Available at: http://pdf.steerweb.org/emp1.pdf > [Accessed 30 May 2014]. Read More