Relationship Marketing: Improving Work Environments and Employee Relations - Literature review Example

Relationship Marketing In an economic climate where large companies are cornering the market and offering prices so low that small businesses can’t compete, it is critical for companies to isolate areas of customer service in order to maintain a profit margin. There are of course, several ways to approach this but most importantly, improving work environments and employee relations is the most effective way to begin. To begin this discussion, it is relevant to discuss a recent study which was conducted within a uniform supply company over the span of 130 of their offices. The results indicated that customer satisfaction and loyalty was a direct function of customer satisfaction and loyalty: Loyalty Research Center delved into the results and derived a critical link between the employee and customer loyalty was with the managers and their ability to communicate with the route drivers. Managers who were providing more information and feedback to their drivers had higher employee satisfaction and in return, higher customer satisfaction. Dissatisfied employees felt managers were not providing enough support in their daily job responsibilities. In addition, the Loyalty Research Center determined the customers with greater satisfaction resided in the offices with higher employee satisfaction scores. (Loyalty Research Center, 2000) Most companies which specialize on improving customer service or departments within companies which specialize in improving customer service, have found that one of the most important aspects of customer - employee relations is communication. This means that it is critical for companies to ensure that each and every employee within the company, has a clear and concise knowledge of their job description as well as what the company expects of them. Companies may expand on this criteria by providing their employees with incisive as well as with information or training on how to best succeed at their job. When an employee has a sense of stagnant placement within their job, they will often settle into a level of mediocrity due to no clear motivation or incentive plan. When there is however, a continual opportunity for advancement, employees are much more likely to focus on excellence in order to achieve higher status within the company as well as a higher pay scale. In reference to the study which has been used for an example fort his discussion, the following strategies were established: The Loyalty Research Center recommended implementing a Direction, Ability, Motivation plan where employees were first provided a clear understanding of their responsibilities and the proper components for being successful in their role. The goal of these two initial steps was to boost employee motivation within the organization. (Loyalty Research Center, 2000) Typically, what companies want to avoid is a sense of being owed, by the employee. If employees do not feel adequately compensated or feel that they are being poorly treated, their loyalty and commitment to their work within company guidelines; will decline. The study involving the assessment of employee loyalty was able to obtain data from all of the employees involved with the study, as to what their level of loyalty or contentment within the company actually was. This information allowed the Loyalty Research Center to divide these employees into 3 categories. Each category was then assessed based on an action plan appropriate to the employees within that category. Employees who were discovered to be highly satisfied were used as role models for other satellite offices and companies. These employees and their job performance were documented as listed as “best Practices”. The second group of employees which were somewhat neutral (occupied the largest number of employees within the study), were assessed as to how improvement could be implemented making the employees more happy as well as increasing the satisfaction of their customers. The last group which was composed of employees which were highly dissatisfied with their job, were also assessed. The plan of action implemented was to attempt to relocate these employees to other positions within the company which might be more of an appropriate fit for their qualifications and strengths. If this type of resolution could not be reached, these employees were encouraged to consider finding another job in which they may be happier. There is an old adage which says that a company is only as good as its worst employee. This can be interpreted in a number of ways. These strategies and outcomes of this study actually raised the company’s customer service ratings as well as scores rating employee performance and satisfaction overall. The company conducting this study drafted the following conclusions based on all of the data collected after improvements were made: When managers improved their communications to the employees that interact with customers, they were better informed and able to manage customer problems more efficiently. Identifying offices with a higher rate of dissatisfied employees relates to more issues with customer satisfaction. Focusing on managers of these offices corrects employee issues and thus leads to greater customer loyalty. Employees want a sense of direction and as well as a feeling of accomplishment. Providing the tools to do the job well will translate into improved customer service and recurring business. (Loyalty Research Center, 2000). When discussing the type of experience a customer has with a company, The first and foremost issue will be the interaction that the customer experiences, with the employees. The following is an exert from a research lab specializing in business matters: Around the corner from my office is a U.S. Post Office. I dread going there. While I acknowledge obvious service improvements that the U.S. Postal Service has made in its customer service, these improvements have not been enough to overcome my frustration in dealing with a particular employee of this branch. She never smiles, she never looks me in the eye, and she never thanks me. I feel that she is irritated at me for walking into the office and causing her to do work. She looks very miserable and unhappy in her job. This would account for her behavior. (The Business Research Lab, 2007). This is a common scenario, where customers are treated rudely or without enthusiasm, resulting in the customer’s redirection to another company with friendlier staff, to ascertain the service or product required. The type of attitude that an individual has regarding their job effects not only quality of customer service and profit margins, but also keeps employees within their job long term, thereby reducing the problem of turnover. Turnover is one of the largest financial hardships or profit losses that a company can experience. High turnover rates cause companies to have to reinvest in training new employees which is essentially time which employees are paid for but are not productive. Training periods for new employees range in length from company to company, but are only profitable to the company when the employee remains within the company and earns the company a profit. In the event that a company is attempting to reduce turnover rate or avoid an increase in turnover rate, compensation to employees which is above minimum standards, will ensure more of a desire to maintain a position with the company in question. Once again, allowing employees the constant opportunity to advance within the company either in position or in compensation or both, will keep an employee motivated to not only stay with the company but to improve within their job capacity. Positive reinforcement is such a universally positive method of encouraging good behavior not only from a business standpoint but from a psychological one as well. Certainly, those in management are required to discipline or correct poor performance or behavior on the part of their subordinates; but with this, it is just as important to positively reinforce good or above average performance. This may mean a simple verbal or written ‘pat on the back’ from a supervisor to an employee or a small token of reward such as a gift certificate to a local restaurant or shopping center. If an employee feels valued by their employer, they will strive to maintain that earned trust and adoration. Company / customer relations may also be maintained by the offering of promotional and complementary services. This is a somewhat traditional method of extending the hand of friendship and loyalty to the customer and has been used by businesses small and large, “Complementary services are an interesting customer retention tool. They have the potential to prolong and intensify the company - customer relationship, create customer satisfaction and build barriers to changes of loyalty”(Hennig - Thurau et al, 2000, p. 107). Customer equity is also a moving trends in managing company / customer relations, “The long term value of the company is largely determined by the value of the company’s customer relationships, which we call the firm’s customer equity”(Rust, et al.,2000 ,p.4). Another highly recommended aspect of employee satisfaction and loyalty is for a company to offer a means of ownership to all of its employees. This is usually in the form of stocks. Employees who have the sense that they own a small part of the company or are somehow invested in the company, will be much less likely to depreciate in their work standards and ethics. Furthermore, granting employees opportunity to purchase stock options within a company; acts as somewhat of a bonus or incentive. If the company does well, the employees who own stock within the company will also benefit, both financially and in their work capacity. Along with making ownership available to customers, a company has a responsibility to ensure that the vision of the company is clear to its employees such that they not only understand what is expected of the as an employee but also what the employees can expect from the company. Strategy meetings which include employees on the company goals over a period of time, can greatly improve employee performance. There is such a big difference between simply going to work and acting out redundant job requirements with little idea as to the larger picture involved, and having a clear idea and incentive regarding the future of the company one worked for. Communicating the overall company goals to employees can also be an integral part of encouraging the best possible performance from them as possible. The overall environment of a company has a great deal to do with how its employees respond to their job and their coworkers. If the overall environment of the company communicates a high expectation of excellence along with respect and valuing employees, then employees will respond accordingly. Similarly, this will set a precedence for the type of potential employees who come through the door seeking employment. If a company is not concerned with the level of satisfaction of it’s employees; the employees will act accordingly and spread the ambiance of the company to those in the general public or coming through the doors, looking for a job. It is also important to evaluate the overall interviewing process utilized by a company. This is also true of a company’s recruitment process. In the retail industry, supervisors and district managers will often distribute business cards to professionals within other retail chains working in management capacities fro long periods of time. For example, if a district manager frequents another store, in the same industry as his or her place of employment, and receives quality and professional customer service each and every time via the same individual; it would be prudent to possibly recruit that individual to change companies by switching to the company doing the recruiting. This is such an effective means of identifying excellent, potential future employees because one is able to see that individual in a real situation where their professional skills are adequately portrayed. The approach to ensuring employee satisfaction for the purpose of keeping customers happy and boosting profit margins can begin with the interviewing process. This can be approached from a few different angles. First of all, the individual doing the interviewing and hiring should be properly trained to weed out interviewees who are unfit for the position as well as to identify potentially excellent employees. Providing supervisors with training programs that will allow them to operate in the best interest of the company when interviewing and choosing the company’s next employees. The following criteria are effective questions a company may ask themselves in order to isolate the most efficient means of interviewing and hiring: “Is your company making effective hiring and placement decisions? Do your hiring managers know how to identify candidates who are the best match for your company? If not, this mismatch may be a source of discontent to both the employer and the employees” (All Businesses.com, 1998). Finally, one of the most important aspects of of keeping employees happy, is the benefit plans offered tot hem. Health insurance is such an important feature to any company’s benefit plan such than many people work at certain companies strictly for the benefit of retaining healthcare benefits from them and their families. Vacation days and sick days are also important inclusions in a benefit package which should improve over time in order to allow the employee to feel a sense of incentive. In seeking to maximize profit, customer service and reduce employee turnover rate as well as incidents involving unhappy or disgruntled employees, a company must consider its salary such that it is above minimum standards, a benefit package and constant incentives to keep all of its employees happy such that they can reflect this to their customers. Works Cited: --------------------, (2000), “Case Study: Improving Commitment through Employee Loyalty” Loyalty Research Center, retrieved from website Novemebr 23, 2008 at: http://www.loyaltyresearch.com/cse2.html ----------------------, (2007), “A Business Research Lab Tip”, The Business Research Lab, retrieved from website on November 23, 2008 at: http://www.busreslab.com/tips/tip15.htm ---------------------, (1999)“Reducing Turnover”, All Businesses.com, retrieved rom website November 23, 2008 at: http://www.allbusiness.com/human- resources/workforce-management/1123-1.html Hennig-Thurau, T. and Hansen, U. (2000), “Relationship Marketing: Gaining Competitive Advantage through Customer Satisfaction and Customer Loyalty“, Springer Verlag. Rust, R.T., Zeithaml, V.A. and Lemon. K.N. (2000), “Driving Customer Equity: How Customer Lifetime Value is Reshaping Corporate Strategy“, The Free Press. Read More