Customer Loyalty Value Is Now the Key to Corporate Success - Essay Example

Running head: Marketing “Today, organizations need no longer concern themselves with service quality, satisfaction and loyalty – value is now the key to corporate success” Insert Name Insert Grade Course Insert Tutor’s Name 12 July 2012 Introduction “Today, organisations need no longer concern themselves with service quality, satisfaction and customer loyalty – value is now the key to corporate success.”  I totally agree with this statement because value has become the common denominator for organizational success and today’s organizations ought to ignore the concept of value at their own peril. Incidentally, business has evolved from the era when satisfaction, customer loyalty and quality were the determinant factors. But today value is the core consideration in the process of seeking organizational success. Background Among the many reasons why I agree with the above statement is that value has become a core function in Business Corporation to the extent that it has been relative to the overall organizational endeavour and success in its commercial activities. In essence, values are those principles that govern the existence, purpose and overall activities of an organization. Therefore, every organization is governed by certain principles that constitute its value (Cahill, 2006, 34). Value is a broad concept that underscores the inherent essence of an organization or in simple terms value underscores the organizational personality and moral fibre. As a result, value is of great importance in determining the efficacy of a corporation and has often been described as the key to organizational success in modern times. The evolution of organizations has witnessed a radical change in the priorities that govern organizational success. For instance, there was a time when quality was the core function of organizations and the success of Business Corporations was hinged on the capacity to deliver quality goods and services. During this time, most organizations primarily focused on quality parameters of their products and ignored the other considerations. Previously, the marketing concept defined organizational success as a function of marketing whereby an organization was successful only if it properly marketed its goods and services appropriately. The marketing concept was a quick replacement of the product concept that insisted on quality. In essence, the marketing concept implied that quality was not as important as marketing since customers buy goods on the basis of being persuaded and not on the basis of quality (Hurth, 2006, 8). The customer satisfaction concept, on the other hand, lays emphasis on the satisfaction of customers needs, fantasies and desires as the primary determinant of organizational success. This premise is based on the assumption that ‘customer is king’ which asserts the overall importance of customers in the success of organizations. Value could be the central pillar of organizational success depending on how value is defined and exemplified in the operations, objectives and activities of the organization. This paper aims at discussing the statement, Today, organizations need no longer concern themselves with service quality, satisfaction and customer loyalty – value is now the key to corporate success, to establish whether true or not. Argument-Value is the key to Corporate Success Contemporary organizations need no longer worry themselves with service quality, contentment and customer loyalty because the value is now the key to corporate success. Value is now the single most determinant of organizational success, and more emphasis ought to be laid on the development of organizational value (Lang, 2006, 37). Value is the essence of organizational success and since value determines the identity of an organization it plays a crucial role in developing a market niche for the firm. First is the aspect of organizational culture that incidentally underscores the governing concept of an organization and has overall implication on the prospects of an organization. Basically, organizational culture prescribes and sustains the value of an organization through the various organs of the corporation. Hence, organizational culture underscores the culture of the organization, which is the exemplification of the values of the organization. These are inculcated into all the members of the organization as new members are undertaken through courses to train them on the values. Value covers a diversity of parameters that range from quality, customer service, recruitment, marketing, human relations and public relations. For instance, an organization’s culture may insist on the satisfactory service to the customer whereby, the goods and services offered by the employees must be of a satisfactorily threshold. Organizational values describe the suitable standards which administer the behaviour of people within the organization. Without values, individuals will practice behaviours that are in line with their own personal value systems, which may lead to conduct that the organization does not wish to persuade. In a lesser co-located organization, the conduct of individuals is much more noticeable than in larger, dissimilar ones (Whitman & Hernon, 2001, 87). In these smaller organizations, the need for expressed values is reduced because intolerable behaviours can be confronted openly. Nevertheless, for the larger corporation, where preferred behaviour is being heartened by different individuals in diverse places with unlike sub-groups, an articulated account of values can draw a corporation together. Evidently, the organizations values ought to be in line with its principle or mission, and the dream that it is trying to accomplish. Stated values of an organization can offer a framework for the group leadership of a company to encourage universal norms of behaviour, which will sustain the achievement of the companys objectives and mission. Though, just as with a mission or vision undertaking, it is one thing to have a written roadmap to a corporation’s values that stay on the wall, or in a file, but it is somewhat another thing to have existing values that influence the culture - the way that things get done. Constant communication of the values; values ought to fit with the company’s communication, both within and externally (Cochran, 2003, 44). If a company states that it is entertaining, team-oriented where each one counts, then having a customary style with an image of the CEO may dispute this. Refer regularly to the values in talks along with sermons, in editorials in internal/parish publications. Recognize and thank those individuals who have attained something, which mainly emphasizes the values. Register New Folk; the values ought to be explicitly accessible as new members join a company. If a corporation is a business, this can be an element of the selection procedure, if a church, and then unambiguously stating the values of the cathedral creates anticipation in the minds of neophytes. The church then requires delivering on that! Revisit and invigorate the Values; it is significant to revisit your values once in a while - permitting members to modernize them. This has the power of registering those who have tied the organization lately, and avoids the articulated values no longer sparkle the business culture. Confront conflicting behaviour; ensuring that feedback is offered to those who don’t follow the values of the corporation (Hayes, 2008, 28). If people are permitted to live out incongruous values, then after a while there is a clear hazard that these will appropriate the desired values, predominantly if it is the more self-motivated, dominant people who are adopting the contradictory values. Periodically inspect with Feedback, ask individuals what they consider as the values of the corporation - not only affiliates, who may be swayed by the stated values, but strangers - observers, clients, former members. Values are the features that change a company’s mission along with vision into actuality. Quintessentially, values outline commercial culture and play an imperative role in the daily activities of managers. Recruiting; values should be the features we look for in job interviews. People, who display our organizational values, ought to be the ones hired. For instance, if having a client focus is one of corporation values, then enquiring about delivering client service would be crucial. Training; every corporation should comprise of their organizational values in point of reference. Actually, they ought to be reinforced during each organization’s training program. Think about the effect of being capable to link company values to leadership. Performance; performance appraisal arrangements should comprise the corporation’s organizational values (Scott, 2000, 99). Organizations ought to reward performance that sustains organizational values. It appears so simple. Organizational values help attain success. As a result, company’s hire for them, coach to improve them and distinguish/reward founded upon them. Although, in reality, a number of cases where the values of a company are significant. For instance, there are organizations that thrive on a commercial culture. They are aggressive; profit/results motivated and have a wonderful sense of urgency. Although their values do not reproduce any of these attributes. Organizational values are inimitable to each corporation. They should not immediately be politically accurate marketing terms. Values ought to represent the culture of the commerce. It is acceptable to be spirited and profit driven. In some sectors, it is a necessity. Counter-Argument-Value is not the key to Corporate Success In spite of the fact that value is integral in the success of organizations, value is not the key to corporate success (Sims & Rogovsky, 2006, 29). Value is important in determining the essence and identity of the organization, but overall success in the commercial sense comes from a combination of factors that include service quality, satisfaction and customer loyalty. Whereas service quality insists on the excellent nature of the service provision profile, satisfaction and customer loyalty affirm the concept that ‘customer is king’ whereby the customer determines the success of a company and is the basis around which the activities and operations of the organizations revolve. This echoes the marketing concept that underscores the importance of a marketing function as the core task of the organization through which services and products of an organization are marketed. Therefore, satisfaction is of great essence because with the absence of customer satisfaction, the organization will not be able to make any progress. Customer loyalty, on the other hand, is an index of organizational success in the sense that it indicates the aspect of quality and satisfaction of customers. Therefore, though value is an imperative factor in the success of business organizations, the three pillars of corporate success are service quality, satisfaction, and customer loyalty (Heineckei, 2011, 83). Service quality is fundamental to organizational success; it illustrates a comparison of anticipations with performance (Zeithaml, 2009, 24). A corporation with an elevated service quality will satiate customer needs at the same time as remaining economically viable. Better service quality may boost economic competitiveness. This objective may be accomplished by understanding and advancing operational processes; recognizing problems swiftly and systematically; instituting valid and dependable service performance mechanisms and measuring client satisfaction and other performance results. Service quality is a management term used to portray achievement in service. It echoes both objective as well as subjective facets of service. The precise measurement of an objective part of customer service necessitates the use of cautiously predefined criteria. The measurement of skewed aspects of customer service depends on the conventionality of the expected advantage with the perceived outcome. This is dependent upon the customers thoughts of the service they might accept, and the service providers aptitude to present this imagined service. Pre-defined purpose criteria may be unachievable in practice, in which case, the greatest possible achievable outcome becomes the ideal. The objective model may still be poor, in subjective terms. Service excellence can be related to service latent, service procedure, and service outcome (customer satisfaction) (Rogovsky, 2005). A purchaser will have an anticipation of service established by factors such as proposals, personal needs, and past experiences. The anticipation of service and the apparent service result may not be equivalent, thus leaving a gap. Competence is the control of the required skills along with the knowledge to execute the service. For instance, there may be proficiency in the awareness and skill of contact workers, knowledge and ability of operational shore up personnel and research abilities of the organization. Courtesy denotes the factors like politeness, admiration, consideration and openness of the contact personnel; contemplation for the customers possessions and a clean as well as neat appearance of contact personnel. Credibility elucidates the factors like dependability, believability and sincerity. It engages having the customers most excellent interest at heart. It may be prejudiced by organization name, company standing and the personal features of the contact personnel. Security symbolizes the customers autonomy from hazard, risk or hesitation including physical protection, financial security along with confidentiality (Sparks et al, 2001, 33). Access denotes the approachability, in addition to ease of contact. For illustration, the waiting time is not extreme, and there are expedient hours of operation and an expedient location. Communication underscores both informing clients in a language they are capable to understand and also listening to clients. A corporation may require adjusting its language for the unreliable needs of its buyers (Vermeulen, 2011, 43). Information might comprise, for example, elucidation of the service as well as its cost, the connection between services and costs and pledges as to the way any difficulties are successfully managed. Knowing the customer denotes making an attempt to understand the clients individual needs, providing personalized attention, identifying the customer when they turn up and so on. Tangibles are the material evidence of service, for example, the form of the physical facilities, devices and equipment used to grant the service; the form of personnel as well as communication materials along with the presence of other buyers in the service facility. Reliability is the aptitude to perform the assured service in a reliable and accurate manner. The service is executed correctly on the primary occasion, the bookkeeping is correct, records are latest, and schedules are kept (White & Schneider, 2004, 59). Responsiveness denotes the willingness of workers to help clients and to provide a punctual timely service, for illustration, mailing a deal slip instantly or setting up engagements quickly. Customer loyalty is another imperative pillar of organizational effectiveness. Customer loyalty illustrates the tendency of a client to select one business or merchandise over another for a definite need. In the wrapped goods industry, buyers may be explained as being "brand loyal" since they tend to select a definite brand of soap more frequently than others. Note the application of the expression "choose" although; customer loyalty becomes manifest when decisions are made and courses taken by customers. Customers may articulate high fulfilment levels with a corporation in a survey, although satisfaction is not equivalent to loyalty. Loyalty is established by the actions of the client; customers can be extremely satisfied and still not be loyal (Szwarc, 2005, 72). Customer Loyalty has turned into a catch-all expression for the end product of many marketing mechanisms where customer statistics is used. Amplified customer loyalty is the end result, the preferred benefit of these plans. All of the above techniques have two ingredients in common - they boost both customer preservation and the enduring value of customers. Customer loyalty is the outcome of a well-managed purchaser retention programs; buyers who are targeted by a maintenance program reveal higher loyalty to a business. All customer maintenance agendas rely on communicating with buyers, giving them support to remain vigorous and selecting to do business with a corporation. The best way to influence customer behaviour organizations must take action (Griffin, 2002, 25). Customer figures and models founded on this data can elucidate on which customers are almost certainly to take action and become loyal, irrespective of what kind of front-end marketing plan in practice how to "wrap it up" and avail it to the customer. The information will provide insight on who to advance to, and how to save valuable marketing dollars in the course of creating customers who are loyal to the organization longer. Customer satisfaction is an expression frequently used in marketing, is a gauge of how products along with services supplied by a corporation meet or exceed customer expectation (Siskos & Grigoroudis, 2009, 54). Customer satisfaction is described as the figure of customers, or proportion of total customers whose accounted experience with a corporation, its merchandises, or its services (ratings) surpasses particular satisfaction goals. In a review of nearly 200 higher marketing managers, 71 percent reacted that they established a client satisfaction metric extremely useful in managing as well as monitoring their businesses. It is perceived as a key performance gauge within business and is frequently part of a Balanced Scorecard. In a dynamic marketplace where businesses contend for customers, purchaser satisfaction is seen as a significant differentiator and ever more has become a crucial element of business strategy. Within organizations, purchaser satisfaction rankings can have powerful results. They focus workers on the importance of satisfying customers’ expectations (Priva & Srividya, 2011, 12). In addition, when these ratings plunge, they caution of problems that can have an effect on sales and profitability. These metrics enumerate an important factor. When a brand has devoted customers, it gains constructive word-of-mouth marketing, which is both open and highly successful. Therefore, it is indispensable for businesses to successfully manage customer satisfaction. To do this, a company requires reliable and symbolic measures of satisfaction. In researching satisfaction, companies generally ask clients whether their merchandise or service has met or surpassed expectations (Butscher, 2002, 23). Therefore, expectations are a crucial factor behind satisfaction. When clients have high hopes and the actuality falls short, they will be dissatisfied and will possibly rate their experience as less than satisfying. Consequently, a luxury resort, for illustration, might receive a minor satisfaction rating compared to a budget motel—albeit its facilities along with service would be perceived superior in supreme terms. The significance of customer satisfaction reduces when a firm has boosted bargaining power. For instance, cell phone arrangement providers (e.g. like AT&T and Verizon) take part in an industry that is an oligopoly, where simply a few suppliers of a definite product or service exist (Paladino, 2011, 76). Therefore, numerous cell phone plan contracts have many of fine print with stipulations that they would never vanish if there were, a hundred cell phone system providers, since customer satisfaction would be way extremely low, and customers would effortlessly have the alternative of leaving for an improved contract offer. There is a significant body of experiential literature that ascertains the advantages of customer satisfaction for corporations. In conclusion, the statement, Today, organizations need no longer concern themselves with service quality, satisfaction and customer loyalty – value is now the key to corporate success, is both valid and invalid in equal measure. Actually, value is of great importance in the pursuit for success by an organization in its commercial endeavours. Value underscores the essence of an organization and defines what an organization’s stands for and how it pursues its objectives all through. Hence, value can be described as a crucial indicator of corporate success in the sense that the organization relies much on value for its overall success. On the contrary, the aspect of value being incidental to success is an overstatement because value only plays a smaller part in an organization’s pursuit for success. There are other crucial parameters that determine organizational success namely; service quality, satisfaction and customer loyalty. Service quality sets the standard for the nature of services provided by an organization while customer loyalty is an objective of every organization and indicates successful planning. 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