An Evaluation of Customer Response to Customer Service Delivery

8/6/2019 An Evaluation of Customer Response to Customer Service Delivery

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AN EVALUATION OF CUSTOMER RESPONSE TO CUSTOMER SERVICE

DELIVERY: A CASE OF MOI UNIVERSITY ELDORET

BY

MILLY SHONGET


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CHAPTER ONE

1.0 INTRODUCTION

1.1 Introduction

This Chapter introduces the general understandings of the proposed topic of study. It also

provides the background details of the area of study in the selected area. The chapter is

subdivided into Background, Objectives, Problem Statement, Research Questions,

Hypothesis of Study, Rationale and Justification of Study, Scope and Limitations of

Study, and Theoretical Framework.

1.2 Background of the Study

In the present scenario of competitive environment, excellence in customer service is the

most important tool for sustained business growth. Customer complaints are part of the

business life of any corporate entity. This is more so for academic institutions because

they are service organizations. As a service organization, customer service and customer

satisfaction are the prime focus. Thus organizations believe that providing prompt and

efficient service is essential not only to attract new customers, but also to retain existing

ones.

Organizations come up with many initiatives that are oriented to providing a better

customer service and a better complaints redressal mechanism with a view to Out serve

customers. These initiatives are aimed at minimizing instances of customer complaints

and grievances through proper service delivery and review mechanism and to ensure

prompt redressal of customer complaints and grievances. They also help in identifying


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shortcomings in product features and service delivery. Customer dissatisfaction would

spoil organizations name and image. The organizations policy on grievance redressal

follows the under noted principles.

Competition, processes, and technological improvements in delivery systems have

resulted in a gradual shift in strategic focus from price to service quality in the retail

banking industry. Continuous improvement in service quality is considered a requirement

in the financial services industry at a time when it is undergoing an extraordinary rate of

change in organization, products, and delivery methods. Supporting multiple service

delivery channels with state-of-the-art technology is now a key competitive issue for

financial service institutions.

Across all sectors customer attention is paramount to any serious corporate player. This

performance is still evaluated in the traditional way for example: sales, profits and share

prices, yet in the banking industry, companies are creating positive and consistent

customer experiences. Banks compete against Customer loyalty, as they compete against

other microfinance businesses which are wide spreading these days. Keeping customers

satisfied is critical now, since losing a customer support mean losing them in business.

Customer response becomes an integral part of business, both from a regulatory

perspective and a customer service standpoint. It is important to listen to dissatisfied

customers and taking actions to remedy issues, where appropriate. Customer response is

just one initiative under a larger strategy called customer experience management where


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companies can develop service standards and delivery processes to meet these standards.

In developed countries, one of the most important customer service skills one can

develop is the ability to understand and effectively respond to the customer's needs and

concerns. For a long time, organization sales and services has been perceived to be

mostly about trying to convince the customer that he needs the product. However in UK,

excellent customer service delivery starts by first taking the time to get to know the

customer, his situation, his vision, his frustrations and his goals (Salas, 2005).

Most managers would like to believe that firms are in the service industry, and not in the

product industry. Thus they tend to compete in terms of financial prowess rather than

service quality. People, resources, time, and systems are devoted more to managing assets

and cash rather than managing customers and service.

In fact most bank systems are designed to control customers rather than satisfy

customers. Products and procedures are set up for the convenience of the organization

rather than that of the customer. A big organization may have as many as three vice

presidents responsible for guarding its assets, but no one to take care of customer service

and complaints. Organizations usually give customer service and satisfaction very low

priority, and accordingly assign it to a low level, if not lowly-paid, manager. Few or none

of the organizations elaborate systems and structures as designed to monitor and

maintain customer loyalty.


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Moreover, customer service discipline must promote customer service principles, share

information about customer service enhancements and recognize customer service needs

in order to help improve operations and deliver excellent service to external and internal

customers. Banks have built up a structured system in order to make banks redressal

mechanism more meaningful and effective. Such system ensures that the redressal sought

is just and fair and is within the given frame-work of rules and regulation. All employees

of the Bank are made aware about the Complaint handling process. The lifeblood of any

business is its customers; profit comes from sales minus cost. Sales must be realized first

before cost becomes relevant. Customers decide sales based on their perception of

product and service quality. In short, quality determines profits, and customers alone

define and determine what that quality is and should be.

Service quality is one of the critical success factors that influence the competitiveness of

an organization. An organization can differentiate itself from competitors by providing

high quality service. Service quality is one of the most attractive areas for researchers

over the last decade in the retail banking sector (Avkiran, 1994; Stafford, 1996; Johnston,

1997; Angur et al, 1999; Lasser et al, 2000; Bahia and Nantel, 2000; Sureshchandar et al,

2002; Gounaris et al, 2003; Choudhury, 2008). However, this study will again investigate

the factors that enable organizations to attract and maintain their customers. There is no

guarantee that what is excellent service today is also applicable for tomorrow. To survive

in the competitive service industry, organizations have to develop new strategies which

will satisfy their customers.


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1.3 Statement of the problem

Academic institutions that excel in quality service can have a distinct marketing edge

since improved levels of service quality are related to higher revenues, increased cross-

sell ratios, higher customer retention and expanded market share. Likewise, provision of

high quality services enhances customer retention rates, helps attract new customers

through word of mouth advertising, increases productivity, leads to higher market shares,

lowers staff turnover and operating costs, and improves employee morale, financial

performance and profitability.

Excellent service quality is crucial to business survival in the present banking

environment in order to gain competitive advantage and corporate profitability. Thus, it is

essential to analyze the means of measuring and evaluating service quality provided by

banking institutions as they adjust to the dynamic changes in the banking environment.

Previous studies have produced scales that bear a resemblance to generic measures of

service quality, which may not be totally adequate in assessing the perceived quality in

the banking sector. Therefore, delivering quality service to customers is a must for

success and survival in todays competitive banking environment. This study aims to

identify and validate the dimensions of service quality within the academic sector in

Kenya from the customers perspective.

1.4 objectives of the study

i) To find out the drivers of customer satisfaction, that leads to positive reponses from

the customer services


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ii) To identify the benefits of delivering effective customer service

iii) To assess the challenges in the institution that contributes in unsatisfactory delivery of

service to customers

iv) To investigate the vital role the Management plays in providing an environment

conducive to the delivery of quality service

1.5 Research Questions

The research questions for the study are:

i) What are the drivers of customer satisfaction, that leads to positive reponses

from the customer services?

ii) What are the benefits of delivering effective customer service?

iii) What are the challenges in the company that contributes in unsatisfactory

delivery of service to customers?

iv) What is the vital role the Management plays in providing an environment

conducive to the delivery of quality service?

v)

1.6 research hypothesis

HO: There is significant relationship between customer response and customer

satisfaction in service industry

HO1: Customer response does not influence customer satisfaction

1.5 Significance of the study

The main purpose of this study is to analyze the several activities or events that

jeopardize effective execution of quality service delivery. This research, specifically,


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purports to determine how these activities affect the customer's responses. This study also

aims to distinguish the role of the customers and the service providers in effective

interchange of business. This research takes into account the practices of service

providers that affect the giving of loyalty and trust among the customers.

1.6 Scope of the study

This study will be carried out at Moi University. The university has experienced

significant variation in service quality performance, following a series of modification of

the service system and had introduced an extensive programme to address perceived

Service weaknesses.

.

1.7 Conceptual Framework

In a transaction driven business such as a university, institutions have proactively put in

place a framework for reviewing what is occurring in their retail operations by analyzing

complaints that have not been resolved. They are doing this in an effort to improve

customer service. Similarly, the way in which customers concerns and expectations are

subsequently handled speaks volumes about an organizations ability to attract and retain

consumers.

Figure 1.1: Conceptual Framework

Independent Variable Dependent VariableCustomer response strategy involves

i) Classify Customer Complaints

ii) Analyze & Report Trends

iii) Take Management Action

iv) Improve Complaints Process

Customer delivery improvement invol

i) the systemic intervention strategy

ii) Strong focus on quality

iii) adaptive learning

iv) improvement over time


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The foundation of the framework is that service provision needs to be based on customer

responses, the two systems need to be functioning well in order to be effective. The

service delivery framework describes these levels as: As individual complaints are

recorded, the nature of the complaint, along with the product or service the complaint is

about, requires classification. In the service sector, complaints that violate internal

university policies and procedures should be classified separately from other customer

service issues.

Once complaints are classified, the data should be analyzed and reported on a regular

basis. The goal of analysis is to identify themes or trends that occur with front-line

service delivery. This is done with an eye toward both regulatory matters, and those that

help improve customer experiences. Given that many organizations report to their chief

executive and board of directors on a semi-annual basis, this ensures complaints

management activities receive senior executive attention and accountability. With issues

identified, actions must be taken to improve front-line service delivery. This may include

updating customer service standards, improving communications, or providing additional

training to staff on products/services. Actions should remedy systemic issues. Changes

should be monitored closely to ensure actions result in fewer customer complaints.


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Although a complaints management process may exist, it is important to know how well

it is working. Ask key questions of customers who use the system, including whether or

not they view the process as accessible, easy to use, and fair. This will identify areas for

improvement. Since research indicates that complaints handled professionally and in a

timely manner result in customers continuing to do business with an organization, it is

essential that customers who complain are satisfied with the complaint management

process. This will not only help to retain business, but will also reduce the damage that

negative word of mouth has with existing or potential customers.

organizations need to have the capacity to interpret the demand and to identify the type of

services which is appropriate to support the different clients. The competence of service

delivery is critical to the success at that level and needs to be developed and adapted

continuously. The main difference of the service delivery framework is: the systemic and

strategic thinking underlying the intervention strategy, the strong focus on quality and

impact and adaptive learning/improvement over time. The conceptual framework aims to

guide the design and the decisions of interventions. The operationalisation requires a

feasible intervention process. Besides improved systems, this requires strategic planning,

focusing on core functions, defining desired impacts at different levels, structural changes

in the organisations, performance management, development of adequate systems and

procedures and a rigorous competence development of staff to adapt to the new

requirements.


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An Evaluation of Customer Response to Customer Service Delivery