Managing Profitable Customer Relations - Coursework Example

Managing profitable relations By of Institute Outline 0 Introduction 2.0 Managing Profitable Relations 3.0 How Provide Excellent Customer Service 4.0 Using Your Mobile Phone to Boost Sales 5.0 Importance of Customer Satisfaction 6.0 Improving Customer Satisfaction Rates 7.0 Conclusion 8.0 Bibliography Developing Excellent Customer Service Introduction Excellent customer service is the key to success of every business be it a small enterprise or a multinational corporation. Customer service means the people. Customer service “is the ability of an organization to constantly and consistently give the customer what they want and need,” (Howardell 2004, Para. 5). A business can neither exist without it nor can profit without first conquering the minds and hearts of its customers. Therefore a company needs to come up with ways of managing their customer relations. This is the process through which a company builds and maintains profitable customer relationships through the delivery of superior customer value and satisfying their needs. It is the ability to acquire, keep and grow customers. This paper will discuss how to manage profitable customer relations, how to provide excellent customer services as well as the importance of satisfying customer needs. It will also look at how your mobile phone can help you boost your sales. Managing Profitable Customer Relations The secret to achieving lasting customer relationships is creating superior customer value and customer satisfaction. If customers are satisfied, they will be more loyal to the brand helping the company maintain a dominant position in the market share. Customer value: due to increased competition and saturation of similar products in the market customers will have a wide range of products to choose from. But customers will always go for the brand that is believed to offer the highest customer value. Customer value refers to the difference between one company’s products in terms of costs and benefits and the products of competing companies. For example, when a customer purchases a Toyota Prius Hybrid automobile, he derives a number of benefits. Not only will he have fuel efficiency but he also demands higher status and image in the society. He is seen as more environmentally responsible as compared to other brands. Therefore a customer will have all these perceived benefits in his mind together with the costs and efforts of acquiring it and compares it with another brand and select the one which weighs more than the other. The idea is not necessarily that the item has higher value but that the customers perceive it to have more value. Customer Satisfaction: this relates to the performance of the item as perceived by the customer according to his expectations. Where the product in question does not measure up to the expectations of the buyer he will be dissatisfied and may never buy from that company again. If it meets expectations, he will be satisfied and may never leave the brand unless another product comes which is perceived to have more value than the current one. And when the product exceeds the expected performance, the customer is delighted. So a company should always aim at exceeding customer satisfaction and should never promise more than they cannot deliver, (Caruba 2001. P. 51). For this to happen, a company requires more than just a set of policies. It requires embracing a companywide attitude, a company culture where everyone participates in the achievement of this objective. However, this should be achieved without having to make losses, profitably. How Provide Excellent Customer Service Lately, large companies have been spending billions of money to manage and maintain their public image on how their customer services are. Customer service has become such an integral part of the success of a business. Companies which have failed to treat their customers properly have seen their downfall while those which have concentrated their efforts in providing quality services have flourished in their undertaking. Some of these include Apple, GE, Toyota, Google. Google’s success story has come about due to its commitment in wooing their customers through consistent quality improvement coupled with constant innovation over the years. It keeps on introducing new features enabling it to command a 30% market share of all web searchers. For Toyota, the quality and reliability that their vehicles possess continue to be the gold standard of the entire industry. Its success has little to do with its profits nor is it its good products. Rather, it’s the mindset or philosophy of management that the company holds which is customer-centric and based on respect for customer needs. Other companies include the GE which for the longest time has remained the epitome of success. It has undertaken measures to promote the goodwill and satisfaction of its customers. This program is referred to as “GE Six Sigma Black belts”, (Anonymous 2009, P. 8). Through the program, the management experts help their internal customers to streamline processes, cut costs and to increase the profit margins at no extra fee. It also ensures that items with high demand never go out of stock so that when customer requires something, they get it without any delay. The GE also advises in having a blog as a means of reaching out to customers. And their commitment to customer service has definitely paid off. Another company which has succeeded through excellent customer services is Apple. Its success originates from the fact that its products measure up to customer expectations unlike competing brands like Dell which have been frustrating customers by continuously providing poor quality products (Anonymous 2009, P. 5). It has been consistent in providing high quality service to its customers. Reports have shown that amongst the Personal Computers providers, it was perceived as the best company by customers due to its customer service. These are just some of the brands that have proven that customer service is crucial for the success of a business enterprise. Using Your Mobile Phone to Boost Sales Mobile phones and other personal technologies can play a big role in boosting the sales of a company. This is because they help you work even when you are not in the work place. It is also easy to carry around with you and you will probably have it everywhere you go thus you can use it in any conceivable situation. To start with, a mobile phone can be very effective in helping you update your appointments as it connects you with your office computer system without allowing anything to slip through. Alarms and reminders will help you keep your list of tasks up to date so you do not forget any of them. The GPS technology that your mobile has ensures that you will never get lost. It will help you to determine the most effective and efficient delivery path that you should adopt and it will also help you track your deliveries and note any difficulties or delay involved. Also, the easily accessible internet in your mobile phone gives you uninterrupted internet supply even when you are outside the office desk. One can do online research, type documents, create bookmarks, set up RSS feeds and open web pages by clicking on links in emails even when he is in a bus. It is easy to receive and reply your emails quickly using your mobile and this increases your chances of concluding sales orders with your customers. One can also email your office, the suppliers or the warehouse to ensure customer needs are met promptly. A mobile phone is also an important social networking tool using Facebook or Twitter and it acts as a very effective communication channel. If one has a smart phone, it is possible to add tweet, photos and blogs to keep your networking up to date. One may need customer contact details or their profiles to be able to access their clients. The CRM applications will link you to your office computer system where you can retrieve all the information you need on your customers such as orders, pricing data, accounting information, stock levels. Thus it’s possible to deliver a more specific service to a customer increasing the company’s productivity. It is also easy to access documents from your phone by using PDAs. PDAs provide you with a storage system where you can store all other documents that you will need in making a sale. For example the word processor or spreadsheets allow your phone to keep the information you need and you can access it any time and at any place. You can also connect several phones to computers which will enable you to transfer all your documents. The phone can also be used to arrange conference calls when you can’t get all the important players at the same time. It will also help you to get in touch with the proceedings of a conference meeting when you cannot be able to attend. This prevents delay of decision making due to geographical barriers. Also a cable or Bluetooth will help you connect your phone to a computer or laptop. Through that, you can be able to transfer all the data you need such as customer details or appointments as between the two. Importance of Customer Satisfaction By providing excellent customer service, the firm is able to highly satisfy its customers who will stay loyal to the brand and continue purchasing from the firm. This will provide the firm with long-term returns. It will have the following outcomes: Creating Loyalty and Retention of customers: proper management of good customer relations will highly satisfy the customers. This in turn will ensure that the customers remain loyal to the firm and on top of that, they will spread the good news of the good quality of the firm’s products. Studies have shown that customer satisfaction has diverse effects on the returns of the company. Even a little drop from complete customer satisfaction can result into a big drop in the loyalty of the customers, (Kotler, 2010, P.23). Losing a single customer does not just mean loss of a single sale, it means loss of a lifetime value that the customer would have continued making if he had remained loyal to the brand as well as the extra customers he would have brought by telling them about the company’s good products. It’s even possible for a company to lose money in a specific but to continue benefiting from a long term relationship with the customer. Growing Share of Customers: on top of creating customer lifetime value, good customer relationship management will help marketers maximize their market share of customers which is acquired by getting the customer’s to buy its products. For SKN Style Company, it should aim at increasing its share of the market by selling its home ware products. For this to happen, a firm has to present a range of variety goods for the current customer. The employees could also be trained on cross-selling and up-selling so as to increase sale of products and services to the existing customers. For instance, Amazon.com knows how to command its market power by improving customer relationships. On top of bookselling it now offers office products, lawn and garden products, home improvement services, jewelry, apparel and accessories and online auction. Through this, it is able to capture a greater share of customers than before or as compared to other competing booksellers. Building Customer Equity: for any firm to have a business, it has to create value from its customers both the current and the future. It is a long-term effect, not just to create profitable customers but also to retain them for life so as to capture their customer value and to acquire greater market share from their purchases. Customer equity refers to the discounted customer lifetime values for its customer both existing and the future ones. The more the firm’s profitable customers are loyal the greater the firm’s customer equity. A firm’s customer equity signifies a better performance than its current sales or even market share because it reflects the future performance of the firm. A firm should look at its customers as assets of the firm that needs to be properly managed and maximized. The firm should be able to turn its customer to be loyal by investing in delighting them, nature them, retain and make them grow. This may be done by use of promotional blitzes aimed at attracting them and creating satisfying and profitable transactions. Improving Customer Satisfaction Rates For one to improve the rate of customer satisfaction, it is paramount to understand the customers and their needs. One therefore has to take an extra step to learn their needs, wants and demands. This will help the firm design want-satisfying products and increase the value of their customer relations. For this, the firm may require to conduct a customer satisfaction survey by asking them questions, (Center for the Study of Social Policy 2007, P. 22). These questions may include: Were you satisfied by the products you purchased and if yes how much? Were you satisfied with our services? On overall, how well did our company meet your expectations? What are some of the things you did not like about our products or services? Do you intend to buy from our company again? Would you recommend our products to another buyer and if not why? Which area would you recommend that the company improves on so that it can meet your expectations? These are just some of the questions that the company may ask but there may add many more depending on the line of business of the firm. Conclusion Customer satisfaction is paramount to the success of any business and managing good customer relations is the secret to achieving customer satisfaction. When the customers are satisfied, there are benefits that accrue such as increased returns and market share. The company should always try to find out from the customers what they really want and then tailor their goods to meet those needs. A company should always endeavor to provide excellent customer service to its customers at all times even if it includes going out of their way for that. Failure to satisfy customers is a sure way to failure for the company. Bibliography Caruba, Alan (2001) A Step-by-Step Guide for Writing a Business Plan and Starting Your Own Business. Entrepreneurs Guidebook Series, 3rd Edition. Patsula Media. Amazon.com Kotler (2010) Marketing: Managing Profitable Customer Relationships, retrievable from http://www.prenhall.com/behindthebook/0132390027/pdf/Kotler_CH01.pdf [Accessed on 8th Nov. 2011] Center for the Study of Social Policy (2007), Customer Satisfaction: Improving Quality and Access to Services and Supports in Vulnerable Neighborhood. Eye Street, NW Suite 500, Washington DC. Anonymous (2009). Nine Ways to Use Your Mobile Phone as a Sales Tool: The Marketing Donut. Retrievable from http://www.marketingdonut.co.uk/marketing/customer-care/customer-service/nine-ways-to-use-your-mobile-phone-as-a-sales-tool [Accessed on 8th Nov. 2011] Howardell, Doug (2004). How to Improve Customer Service: Customer Service Training Programs, ACA Group, Aracadia, CA. Read More