Spectrum Cleaning Services Performance - Case Study Example

This report relates to Spectrum Cleaning Services (SCS) who have been operating successfully in Birmingham, UK and have had over 7.2 M turnover in the year 2006.In vie of their success, they are looking ahead for expansion in the Norwich area. Considering this, the three crucial decisions that SCS management has to make are: 1. How should they organize their sales force Do they even need a sales force 2. How can company relationships be developed to maximize customer loyalty 3. How is their marketing Mix matched up to their B2B market segment needs The objective of this report is to analyze and evaluate the current situation and arrive at possible solutions & recommendations for the above -mentioned issues being faced by the management of SCS. The research uses secondary method of research using resources available online, textbooks and academic journals. The discussion revolves around the necessity of having a sales force and how to build it to get a strategic advantage; ways in which to maximize the customer loyalty keeping in view the nature of the service offering and how to get a better hold of the B2B target market with their marketing mix. (195 words) Introduction: The subject of this report is a focus on how to maximize returns from a B2B organization by using sales force, customer loyalty measures and a marketing mix. The purpose of this report is make recommendations to SCS management about the strategies that they should adopt for success in the new region i.e. Norwich. Background: Current Organizational Structure of SCS From the current organizational structure it can be deduced that SCS is a centralized, line-staff function organization. Keeping this in mind and the growth strategy they choose, it would directly impact their success in the new region. The positive fact us that SCS has a very good word of mouth. However, the question is to maintain the same level of word of mount in the new region, they would have to match the same deliverables that they are in Birmingham. (141 words) 1. The Role of Sales Force. SCS will soon be completing a decade of operating successfully in the UK market. After establishing its brand name in the commercial cleaning market, now they are seeking to expand their operations to other regions. One resource that SCS has underrated till yet has been the sales force. While expansion is the strategy for SCS for the next five years, the need of having a sales force for the implementation of the expansion strategy is of extreme importance. After establishing the importance of having a sales force, the next step is to organize the sales force. Organization of sales force is carried out by: Organizing the sales force: Applied to SCS Organizing the objectives Achieve sales orders from atleast twenty offices in the nearby regions of Norwich Organizing the individual assignments Each sales person is responsible for arranging five orders a month. Organizing the tasks Each sales representative has to visit two offices a day Appointing a leader All the sales representatives will be reporting to the Sales Manager Effective organization of sales force requires: Adequate division of work: SCS management should divide work equally; the burden sharing should be fair. However, simultaneously, the burden sharing has to be intelligently allocated for e.g. out of a team of four sales people, the two who possess exceptional selling skills should be kept exclusively for this function and career growth options should be made for them. The two who are not so good at sales can also be utilized for other purposes for example if one of them is good at communication, he can help the rest of them with their letters and proposals. Span of management: The smaller the number of bosses the better it is. As the saying goes, "too many cooks spoil the broth" likewise too many bosses eventually lead to an authority proving tirade rather than a work team. It is best if the chain of command has only one boss giving clear-cut instructions. Change management: In the process of change management all the changes should be communicated to the sales people in way as to reduce their job insecurity. Geographical organization: It is recommended that after expansion SCS should try to follow the model of two level line organizations shown in the figure below. (Source-http://www-rohan.sdsu.edu) The advantages of having such an organization structure is that there is a clear line of authority, it is simple to follow and expedite, it is inexpensive and people can be held responsible. However, the disadvantages of this system are that there are no specialists and no growth opportunities for the employees. The Strategic implications of this are that such a strategy is good for a small firm like SCS that are growing. SCS can introduce territories to help in sales management. Outsourcing Sales function OR Building sales potential within: Another option available to SCS is whether to proceed had on and invest in building a sales force within the organization or invest a comparatively small amount and have independent sales representatives. The advantages of having an independent sales representatives are that there are no upfront costs, no benefit costs, there is straight commission, maybe good for new product introductions, and they usually know their customers. On the other hand the disadvantages are there is less control, they might provide less customer service, may not provide market feedback and may also carry competitors products. In this case, SCS is recommended to opt for building an in house sales force. The reason for this is that they are launching a well-known and well- accepted product in a new region. It is expected to yield good return on investment. Thus, building valuable human resource in form of sales force is crucial. (623 words) 2. Relationship Management and how it can be used to develop consumer loyalty The distinguishing factor between B2B marketing as compared to B2C and product marketing vs. services marketing is the increased reliance on relationship marketing and networking. Customer loyalty is extremely important for a service organization especially for SCS since it has quite a few small competitors. As specified by Albert E. Schindler in his article on about.com: Highest customer loyalty companies grows at twice the rates of their competition (Reichheld, 2006) Satisfying Customers without creating an emotional connection with them has no real value. (Gallup Organization 2003) Raising customer retention rates just by 5% could increase the value of an average customer by 25% to 100% 5% Improvement in Customer retention translates into a doubling of margins Loyal customers always return & become a dependable lifetime sales stream Loyal customers brag about your service/product creating Word of Mouth (WOM) the most effective advertising (-source www.about.com) Ways in which SCS can build customer loyalty and retention: Building business to customer loyalty: personalization, customized services and relationship marketing can do this. Since SCS is a B2B company, the majority of its business would be coming form a handful of clients who place large orders. It is crucial that good relationship building activities are maintained with them for example maybe remembering the birthday of the Managing Directors of the companies and sending them a birthday card, having small giveaway items made that are distributed to clients on occasions for example sweets in stockings on Christmas. Provide true customer service: providing customized services is now a clich and everyone is doing it. However, setting unmatched standards of service delivery is something that distinguishes one service provider from others. SCS would benefit by providing innovated services that are not yet being provided by any of the customers. This could include scenting of the clothes after cleaning and ironing. For this purpose SCS can strike a deal with one of the top of the line French perfume manufacturers and on one hand promote their services and on second hand provide value added services. Customer is always right: in services, there are many times that the customer might sound unfair or unjust or over demanding. SCS might encounter this problem often. For this purpose, there should be a separate cell of customer complaint handling. More often the customer is pacified f a representative of the company is willing to hear them out; at other times the SCS staff may have to make amends. However, dealing with customer complaints effectively can be a strategic aspect in the success of SCS. Be honest with the customers: Services marketing is about deliverables at a given time. There might be cases where the customer might be asking for a difficult stain to be removed. n such cases, the frontline representatives should be trained to handle the client and not to "over -commit". If something seems impossible, it is better to inform the customer at that point in time rather than encountering a dis-satisfied customer at a later time. Educate staff in customer care services: For the above mentioned recommendations to be possible, it would be necessary that the staff at all the points of contact including, the cashier at the counter, the other support staff at the counter, the customer complaint handling staff and the sales staff. For this purpose special internal motivation tag lines can be developed like a bank has "service with a smile' for their employees inscribed all over the place. This serves as a reminder after the initial customer handling training. The ways to increase customer loyalty by making service offering more competitive include the four-step model described below: 1. Determine what makes what your offer special Differentiation of services is one of the most difficult aspects when it comes to services marketing. It is difficult to identify the difference between staying in Mariott, PC or Avari. It applies to SCS. In this case, the bets way is to have feedback forms filled in by the customers that would have one question about their suggestions & recommendations. This would give ideas to make the service offering more special. 2. Study the customer service ideas on your list and examine their feasibility. Not all ideas are feasible enough to implement. The feasibility is a litmus test for the ideas generated above. 3. Choose one or two of customer service ideas and implement them. 4. Stay proactive and keep gathering customer service ideas: This process should be an ongoing process of self-improvement and continuous innovation. (759 words) 3. The Marketing Mix of SCS Before discussing the current marketing mix of SCS, the nature of the product is such that it is actually a service. SCS is providing services to its customers. A greater part of their offering is intangible. Considering this, their marketing mix consists not only of the four traditional P's of the marketing mix i.e. product, price, place, & promotion but also includes the additional 3 P's of services marketing i.e. people, process & physical evidence. The second factor to be considered while evaluating the marketing mix of SCS is that they are a B2B organization providing commercial cleaning services. It is not fair to say that the marketing mix of SCS is not any different from what it should be when serving individual customers. Infact, the marketing mix of SCS is more focused on B2B clients rather than individuals. A good example of this is that they have strategically chosen an outlet in a centrally located base where it is easier for commercial clients to contact and access them. Product: total quality management is being practiced and it can be seen that not only does SCS emphasize on building relationships with its customers but also with its suppliers. SCS has only one supplier who meets the safety and health standards and they prefer purchasing from "DBL cleaning supplies' only. Also, they are a wholesaler, which means that SCS would be availing significant discounts on bulk purchases. This also shows the focus of SCS on their commercial client base as compared to individual. Price: The pricing structure of SCS is typically focused at their commercial clients. If they were focusing on B2C market, they would have a rigid pricing policy with flat rate. The lack of a fixed pricing policy, having conditions related to length of contract, room for price negotiation and premium pricing are tactics that are directed specifically towards the B2B customers. Place: The choice of the venue for establishing an outlet shows their B2B focus. SCS are a cleaning service and after quality, availability and easy accessibility are the key words for their success. It is due to this that they strategically established their outlet in the mainland of Birmingham and now when they are looking ahead for expansion; their choice of venue is again such that it should be easily accessible. Promotion: The key factor that distinguishes the marketing mix of a B2B organization Vs a B2C organization is the promotion element. For any B2B organization, the marketing choices available at any time include: Participation in Trade Events Print advertising in selective industry related supplements and journals Limited advertising on radio and television Point of sale advertising Billboards and banners. SCS is utilizing the tools available and is participating in trade events. It does advertise occasionally. However, in view of expanding operations, it would be required in future to advertise on a large scale. For this purpose, additional to trade events, it is recommended that SCS should opt for hoardings and banners and announces the launch of new outlets through local newspapers. It is recommended to support the campaign with electronic spots that are aimed at informing the audience about the services. The additional hype created this way would create a top of the mind recall in the minds of the customers. The Additional 3 Ps Of Services Marketing People: As defined on learnmanagement.com, "An essential ingredient to any service provision is the use of appropriate staff and people. Recruiting the right staff and training them appropriately in the delivery of their service is essential if the organization wants to obtain a form of competitive advantage" Considering this and in views of the expansion-growth strategy SCS would need to recruit the right sales staff. The sales staff of SCF is the front line of this service that would be required to make door-to-door cold calls to the prospective commercial clients. The sales personnel are probably the only contact that the clients will have with SCS. Thus the sales staff should be recruited and trained keeping in mind the quality policy and values of SCS. They should be compensated accordingly. In sales management, a key point in motivating the sales staff is having performance tied to rewards. It is recommended that monetary bonuses should be given to sales people who out perform their sales targets. Process: This refers to the workflow systems devised in the organization that help in the process of delivering quality service to customers. In case of SCS, this may include order taking, collection and delivery of laundry, payment collection, receipts and billing process and relationship management. For this, SCS may require integrating technology in its outlets by deploying software's that can measure customer feedback and satisfaction levels, it can enable online order taking, it should also include online order tracking and status updates, it can include credit card /debit card payments or contractual payments. All these activities are not a norm for the commercial cleaning services but once these are employed SCS would be having a breakthrough technology edge over its competitors. The technology advantage would enable SCS to overcome its small and medium sized competitors in the fragmented market and would also increase brand loyalty. Physical Evidence: This refers to the visible aspects of the service to the customer. For SCS these may include the layout of the website, the outlook of the outlet, does it look clean and crisp. Looking clean and crisp is of extreme importance since SCS is providing cleaning services, the ambience of the outlet should be such that it should give an aura of extreme efficiency, cleanliness and hygiene. This may include small things like spick and span dust bins, properly dusted window panes, stainless glass being used everywhere, no dirty laundry in sight, the people on the counter should be wearing clean, crisp and starched uniforms. Recommendations: In the end, I would like to summarize the recommendations provided to CSS in the various sections of this report: It is recommended that SCS should maintain a competitive sales force and organize them in a two level line management structure. Geographical regions should be introduced to manage the sales function in a better way It is recommended that SCS should send small giveaways on occasions like maybe the birthdays of the Managing Directors of their clients or maybe a Christmas gift to provide a value added service to their customers and as a relationship building exercise. It is recommended that all the frontline staff should be educated in customer care services, including the sales staff. It is recommended to have a reward based pay system for the sales staff to improve their performance. Conclusion The initial years of SCS would determine the future success in the Norwich region. The word of mouth created in Birmingham is a positive to work with and the organization needs to grow internally to match up to the new needs and demands, which will come out of the expansion and growth strategy. With the implementation of the above-mentioned strategies, it is expected that SCS would perform well in the new market. (1190 words) (Total Word Count 2916 words) REFERENCES I. Case studies from www.thetimes100.co.uk II. Principles of Marketing by Philip Kotler III. Principles of Marketing by Frances Brassington IV. http://www-rohan.sdsu.edu/renglish/473/notes/chapt04/index.htm V. http://www.vista-consulting.com/marketing-articles/b2b-b2c-marketing.htm VI. http://www.b2bmarketing.com/resource_papers/7_key_differences_between.pdf VII. http://www.learnmarketing.co.uk/servicemarketingmix.htm VIII. http://www.processspecialist.com/customer-loyalty.htm IX. http://sbinfocanada.about.com/cs/marketing/a/custserviceas.htm Read More