Customer Experience in the Service Economy - Dissertation Example

In an intensely competitive business environment, sustainable competitive advantage has become imperative. The service industry has been forced to create new ways of finding competitive advantage (Chen & Hu, 2012). Retaining customers is considered to be more important than creating new customers. Retaining existing customers can be achieved through influencing customer behavior such as customer loyalty. Nurturing customer loyalty has become the most important goal for all enterprises (Curry & Gao, 2008).

Global developed economies are now becoming service economies where all organizations compete to some degree based on service delivered. While the services sector is the fastest-growing sector in the world economy, delivery of quality service and achieving customer satisfaction remains the biggest challenge (Bick, Abratt, and Möller, 2010). In services marketing, when consuming services, customers perceive the process of producing the service; they take part in the process. This is known as process consumption as they experience the service as it is delivered (Grönroos, 1998).

Therefore, consumption of the service process is a critical part of the service process. Customers may take the outcome of the quality for granted but they may also have difficulties in evaluating the quality of the outcome of the service process. Service quality has been identified as a key element of success in attracting repeat customers (Heskett et al, 1994 cited in Luoh & Tsaur, 2011) while customer loyalty has been found to be a paramount marketing objective for most service firms (Han, Kwortnik & Wang, 2008).

A positive relationship has been found between service quality and consumers’ behavioral intentions (Han, Ham, Yang & Baek, 2012). Service quality also positively impacts customer loyalty, thereby customer retention, and also enhances the chances of customer recommendations. However, service quality dimensions can vary across different service sectors (Kelley & Turley, 2001). Yoshida and James (2011) tested the aesthetic aspect of service quality. Server-customer interaction is a critical component of service delivery when evaluating customer satisfaction and dissatisfaction (Kivelä & Chu, 2001).

Schembri and Sandberg (2011) evaluated customers’ lived experience of service quality. 1.2 Problem Statement/Rationale for ResearchEven in the 1990s customer intolerance of poor service was evident and organizations that did not take notice of the shift in customer attitudes faced uncertainties and competitors took advantage of the situation (McCormack, Neal & Triplett, 1990). To provide quality service organizations attempted to define what customers meant by “service quality”.

Organizations started recognizing the importance of quantitative, systematic measures of customers’ perceptions of service quality and satisfaction. The competitive environment forced the banks to devise proactive marketing strategies. Financial sector reforms have blurred the lines between banks and non-banks; it has lowered the entry barriers thereby exerting pressure on the banks to perform and gain through competitive advantage (Choudhury, 2008).