Service Problems in PayPal - Research Proposal Example

Address Service Problems in PayPal Reflective ment on markers feedback I am thankful to my teacher that under the guidance of him I got to learn many things. The comments of the teacher are really helping me to improve the assignment. In the comment 1, the teacher asked to focus one on what is relevant to the task mentioning. Here I have written that what is the problem and why it is so important. I have added a new introduction describing the significance of relationship marketing. I have written that, in this highly competitive world, relationship marketing gives an edge over others. It helps to know the customer requirement, increase satisfaction and retain the customers for a long-term value generation. In the comment 3, teacher asked to establish relevance between relationship marketing theories and the PayPal case. I have written a literature review explain how the organization is adopting the arguments of relationship marketing strategies made by the researchers.In comment 5, the teacher asked to focus on a particular area in depth. In the literature review with reference to PayPal I have addressed that.In the comment 6, the teacher feels that the re engineering part of PayPal is not relevant and I have deleted it.In the comment 7, in the service marketing mix part found to be not related to customer relationship management, so that part is deleted. The comment 8 also says that again it is not a part of relationship marketing theory. So again it is deleted. In the comment 9, the teacher found that the recommendations are vague and not related to the theory. Here I added recommendations which advice to go for data analytics and improved technology for improvement. In comment 10, I have added more references. Introduction In today’s world, business organizations are facing challenges from many aspects. Be it stagnant economy, after effect of global financial crisis or lower purchasing power, business houses are suffering a lot. To come out from the situation business organizations keep on focusing on the marketing department. Cause this department is responsible for the revenue generation for the organization. There are different ways of marketing can be done. Advertisement, digital marketing, through public relations or customer relationship marketing are the common form of marketing strategies. Among all the strategies customer relationship marketing is given top priority because it enables the relationship marketing manager and marketing personnel to directly connect with the organization of the customer on a one tone basis. This form of marketing gives stress on retentions of the customers by focusing on customer’s satisfaction rather than aggressive sales and advertising strategy. Relationship marketing is different from other form of marketing be it understands the long-term value of customer relationship by keeping regular communication with the client beyond only sales promotion messages. The relationship marketing process also includes the non-opportunistic behavior, which is absent in the traditional sales process (Morgan& Hunt, 1994). With the help of customer relationship managers, the organizations get to know what does the client want? The specific requirements of the customers can only be known and delivered in one keeps close communications with the customers. Otherwise through regular sales promotion channels organizations do not get to know what makes the customer satisfied. The market strategies also fail to reflect the specific requirements of the customers. So comparing all the tools it can be said that customer relationship management is one of the effective tools for long-term revenue generation. Background of the study Purpose of the study Different kinds of problems are faced by PayPal users such as poor customer care, some fraud allegation etc. It has also been alleged that in some cases the transaction account of the customers have terminated without prior information. The study will try to address these problems with the help of internal marketing and customer relationship management. With the development in e-commerce in recent years, several companies which enable customer to transfer money, get paid and buy online have been founded. One of the oldest and most reputable companies is PayPal. The company has won several awards for e-commerce processes. However, there are a lot of customer relationship issues lying under the great company. PayPal was started in December 1988 by Mr. Levchin and Thiel. The main objective of the founders was to create a digital wallet that could be used to make transactions in online platforms. PayPal came to be in October 1999. This was when a Confinity engineer developed an online demonstration that enabled users to make email payments. In November 1999, the company set up the money market fund; a program that gave users the chance of earning dividends on their unused funds in their accounts.As a move to promote the company, they awarded the first sign up users with $10. On January 2000, the company enabled eBay payments. This enabled it to ride on the great brand name that eBay had created. Within that period, the number of PayPal accounts grew to 100,000. The number grew rapidly and by March 2000, it was slightly above 1 million. In 2002, PayPal offered its initial public offer and its stocks rise by 54% during its first trading day. During the same year, there were calls for eBay to merge with PayPal and on October the same year,eBay acquired PayPal,. It also integrated mobile technologies in their business. The company also cooperated with many companies as become a major global payment service provider. Its acquisition of Bill Me and Fraud Sciences Ltd also enabled it to provide its customers with enhanced better services. Currently PayPal has 153 million users. Additionally, it is available in 190 countries and supports 24 global currencies (PayPal, 2014). Although PayPal’s history gives a great business story, there are many customer service issues associated with the company (Del Rey, 2013). The company has been a source of horrible stories by its users for a long time. The first customer service issue related with the company is its inability to provide people with a confidential digital wallet as it was designed during its establishment years (Faull, 2013). Stories about held up funds which has led people to miss up on paying their bills, making crucial purchases and transacting their business are associated with the company. Secondly, the company has terminated the accounts of various users without giving any substantial details (Grabianowski& Crawford, 2014). The company seems to infringe on the rights and freedoms of its users by dictating the activities which they should be engaged in. Additionally, the company is associated with many fraud cases which they are unable to resolve in sober ways. Lastly, the company’s customer care is not able to handle the concerns of its customers efficiently (PayPal Community Help Forum, 2011). Long delays and customer dissatisfaction are major issues associated with the company. The concerns about the services at PayPal have even led to the creation of websites and blogs that are focused on airing customer service problems at PayPal. Literature review with a special reference to Paypal The beauty of the relationship marketing lies in its long term nature. (Dwyer et al., 1987), argued that, relationship marketing is longer in much longer in duration compared to the transactional process of traditional marketing. Paypal being a reputed organization also look forward to go for long term relationship with customers so that the existing customers do not go for other peer organizations over Paypal as the organization is currently suffering from customer related problems. According to Copulsky & Wolf, (1990) relationship marketing is basically direct marketing and one to one relation is one of the key component of the process. This is a challenging area for Paypal, because the processes are entirely digitalized and automated. So chances are less that the human connection between customer and organization representative will be established. As some fraud cases are against them, digitalization and surveillance might help PayPal Relationship Marketing-->In this part, I dont need Relationship Marketing, Its too wild. Please talk all about of the Internal Service Quilty Theory in around 1000 words, and go for two details for example training, teamwork, communication, or management support in 1000 words. Internal marketing can play a major role here. The employees are considered as the internal customers, they can be convinced to handle and address the external customers. It is done to improve the attitude of internal customer towards external customers. If internal customers are satisfied then they can keep the external customers satisfied. Relationship marketing has gained popularity over the recent past. In the wake of increased competition, business organizations have looked at ways of increasing their competitiveness in the market. One of the ways of doing this is by attracting and retailing customers. On this light, focus on building healthy relationships between businesses and customers has gained popularity in the market (Maxim 2009. p.289). This has given birth to relationship marketing; a marketing approach that aims at building and sustaining relationships in the market. This marketing approach is partly based on the fact that it is less expensive to retain customer than to attract a new one. For this reason, business organizations that have an aim of increasing and sustaining their market share have placed a lot of emphasis on relationship marketing. According to Gummesson, there are four main types of relationships developed in relationship marketing. One of them is classic market relationships. This relationship focused on developing and sustaining healthy relationships in between customer- supplier dyad, aspects in the physical distribution network and the supplier-customer-competitor triad Gummesson, 2008).. The second type of relationship is special market relationships which are focused on full time and part time marketers. Relationships with dissatisfied customers, e relationships and para-social relationships part of this relationship. Third are mega relationships that exist way above the level of the market. They include such relationships as those that exist between business organizations and regulatory bodies. Lastly are nano relationships that exist below the market level (Gummesson, 2008). They are relationships that exist inside organization such as employee-employee relationships. There are various theories used to explain relationship marketing. The first theory to the marketing approach is transactional versus relationship marketing. In relationship marketing, businesses are focused on establishing relationships. It is associated with a high level of customer anxiety, high degree of contact between the buyers and sellers, customization of products, and confidence & social benefits are accorded high importance. On the later, relationship marketing is associated with lower levels of anxiety, lesser contact, standard products and customers are focused on transactions and not establishing relationships. The second theory of relationship marketing is the planning theory which is focused on laying out strategic plans on how to achieve specific objectives in the future. Internal marketing, ethics, service quality and management of portfolios are other marketing theories that explain relationship marketing. Service marketing is another major theory used to explain relationship marketing. This theory will be used for the purposes of analyzing the customer service at PayPal. The service marketing theory approaches relationship marketing from the perspective analysis of the nature of services. This approach can be divided into four major parts namely value proposition, goods services continuum, characteristics of services and the services marketing mix. The value proposition of services seeks to identify the link between value and customers. It is pointed out that the value of services is derived from their use and in the ideal product being offered. Liking this to PayPal, it can be noted that the various customer services problems associated with the use of their services devalues them on the view of customers. Taking an example of the freezing of accounts under unexplainable circumstances, it is worth noting that such problems challenge the business of the users; hence rendering the PayPal services unhelpful. Additionally, the theory points out that the value of services is based on services and solutions to the problems faced by consumers. On this point, it can be noted that the value of PayPal services is lowered by the inability of the customer service care to provide appropriate solutions to the problems affecting the customers. Lastly, the value proposition points out that the value of services is associated with the emotional value that consumers get and not just the economic benefits. The high number of complaints against PayPal depicts the bad emotional value associated with the company’s services. From the above, it can be acknowledged that the value of PayPal services is challenged by its poor services. The second aspect associated with the service marketing theory to relationship marketing is the goods and services continuum. According to the continuum, there are pure goods and pure services. In between lies products which can neither be classified as pure goods nor pure services. PayPal services lie here (Fitzsimmons n.d., 18). It is expected that the input by customers which includes remittance of payments, transfer of funds, upload of funds or payment for services or goods be done automatically as per the terms and conditions of the company. However, this does not always happens since the company holds funds, terminates accounts, put accounts under probation and sometimes exposes users to fraud. It can be acknowledged that PayPal service processes need re-engineering from a services good continuum. Fourthly the theory analyzes the marketing of services from the analysis of the core characteristics of services. The theory points out that the intangibility of services, their perishability, heterogeneity, inseparability and lack of ownership characteristics of services must be taken into account when providing services (Fitzsimmons n.d., 20). Services are intangible in nature; hence can only be sensed by feel or sight. This makes it difficult for customers to make decisions since they have to rely on reputations of the services being offered. On this, the bad reputation of PayPal in the market is usually a turnoff to many potential customers. Next, services are highly perishable. On this, once the chance to provide a service is lost, it cannot be recovered. Services are variable in that one customer’s experience is different from another’s. There is also lack of ownership of services; but instead customers rent the facilitating platforms for the period of service delivery (Moeller, 2010). Services are also inseparable from their providers. Lastly are the services marketing mix. This aspect of services marketing theory outlines the 7Ps that need to be integrated together so as to boost the marketing of services. The P’s includes product, promotion, people, price, physical evidence, process, place and price. These characteristics will be analyzed in detail in the section below. Conclusion For relationship marketing there is no one size fit all strategy. No technique can give the assurance of success either. It is even said that no guidebooks exist that guarantee an effective design, execution, monitoring and measurement of any relationship marketing program.( Pinto, 1997). As the service is too personalized and customized, each and every organization has developed its own way of doing relationship marketing. PayPal has also developed its own strategies and succeeded as well. Gummesson (1997) mentioned that, the measurement of success of relationship marketing has not developed properly. If revenue from the business and sales volume is considered as the yardstick of success, then it can be said that PayPal has successfully implemented the relationship marketing concept. This paper has been able to give an insight into PayPal. From the analysis of the company, it was identified that the company has employed great business strategies that have enabled it to emerge as a leader in global e commerce. However, it was identified that the company lacks an appropriate customer relationship management approach to its marketing processes. Customer relationship approaches was identified to be a recent trend in marketing that enables companies to establish relationships with customers and suppliers. Various types of relationships were discussed. It was also seen that there are several theories that are used to explain customer relationship marketing. From this paper, it can be acknowledge that PayPal needs to review its customer services so as to empower it to deal with the service problems identified. The company should consider the following recommendations. Recommendations-->please give clear suggesttion Emphasis on Internal Marketing Internal marketing deals with the leveraging value of employees. If the internal marketing is done properly then the then the internal customers of the staffs will remain happy and satisfied. Chances are there that their happiness and satisfaction will be translated towards the external customers. The customers who were not satisfied with service of PayPal now can return back to them. Customer service care has to be improved The customer service care at PayPal is poor. The support staff does not have the capacity to deal with the concerns of the clients in the most appropriate manner. Instances where they do not give relevant information have been reported. Additionally, the cycle time taken by the staff to address concerns raised by the customers also needs to be reduced drastically. Incorporating live chat on their website would be a great way of tackling this problem. The human resources also need to be trained so as to boost their capacity of dealing with the customers. However, these problems can be solved with the help of Fletcher et al.(1990) about relationship marketing. They argued that help can be taken from the database modeling and analytics. It would give PayPal a better understanding of customers and that also with a limited resource Advanced Technology has to be implemented The technology has opened many avenues for relationship marketing. The mobile, internet, digital facility, social media, online communities and other online public relations activities such as newsletters seasonal greetings etc. have made the work of marketing manager easier and effective. PayPal can give more stress on these practices. Customer’s Security has to be ensured Establishing new security measures to deal with fraud cases should also be done. Most of the disputes associated with the company arise from security related issues. The termination of accounts, holding of funds and probation of accounts should be done strategically so as to avoid harm to genuine customers. Service delivery should be done timely and properly Even though the company boasts of having operations in 190 countries, not all the users in those countries enjoy their full services. The ability to upload and withdraw funds is a major challenge to a large number of PayPal’s customers and often leads to disputes which affect the customer experience negatively. PayPal should standardize their service delivery so as to enable its customers to enjoy their services with more ease. References Copulsky, J.R. & Wolf, M.J. (1990), ``Relationship marketing: positioning for the future’’, Journal of Business Strategy, Vol. 11 No. 4, pp. 16-20. Del Rey, J. (2013) “Healthy Tension” Emerging Inside PayPal as It Looks to Reverse Poor Customer-Service Reputation, Wall Street. Available from:http://allthingsd.com/20130829/healthy-tension-emerging-inside-paypal-as-it-looks-to-reverse-poor-customer-service-rep/ [Accessed 21 Apr 2014]. Dwyer, F.R., Schurr, P.H. and Oh, S. (1987), ``Developing buyer-seller relationships’’, Journal of Marketing, Vol. 51 No. 2, pp. 11-27. Faull, J. (2013) PayPal sees 40m fewer customer service issues after addressing the issues it has “become known for”. The Drum. http://www.thedrum.com/news/2013/08/30/paypal-sees-40m-fewer-customer-service-issues-after-addressing-issues-it-has-become [Accessed 21 Apr 2014]. Fitsimmons, (n.d) Ch. 2. The Nature of Services.pp.17-30 Grabianowski, E. &Crawford, S. (2014) How PayPal Works. How stuff works?http://money.howstuffworks.com/paypal7.htm[Accesed 21 April 2014] Gummesson, E. (1997), ``Emerging approaches to return on relationships’’, in Christopher, M. and Payne, A. (Eds), Proceedings of the 5th International Colloquium in Relationship Marketing, Cranfield School of Management, Cranfield, pp. 9-23. Gummesson,E. (2008) Total Relationship Marketing. 3rded, Oxford: Butterworth-Heinemann Ivy, J. (2008) Anew higher education marketing mix: the 7Ps for MBA marketing”, International Journal of Educational Management, Vol. 22 No.4, pp.288 – 299 Maxim, A. (2009) Relationship Marketing – A New Paradigm In Marketing Theory And Practice, pp.288-299 Moeller, S. (2010) Characteristics Of Services – A New Approach Uncovers Their Value. Journal of Services Marketing.24.5. (2010); 359 – 368 Morgan. R&Hunt.S,(1994), “The commitment trust theory of relationship marketing”, The journal of marketing, Vol 58, pp 20-38 PayPal (2014) About Us PayPalhttps://www.paypal.com/ke/cgi-bin/webscr?cmd=p/gen/about-outside[Accessed 21 Apr 2014]. PayPal (2014) History PayPalhttps://www.paypal-media.com/history[Accessed 21 Apr 2014]. Pinto, S.K. (1997), ``Marketing de relacion o la transformacio n de la funcio n de marketing’’, Harvard Deusto Business Review, pp. 32-40. Rafig. M. &Ahmed, P. (1995) Using the 7Ps as a generic marketing mix: an exploratory survey of UK and European marketing academics,Marketing Intelligence & Planning, Vol. 13, No. 9, pp.4 - 15 Read More