Page 326 - Introduction to Business

300 PART 3 Marketing

• Opinion Research Corporation, Princeton, New Jersey,
found that completely satisfied customers were almost 42
percent more likely than merely satisfied customers to
exhibit loyalty. 56
• Bain & Company consultant Frederick Reichheld esti-
mates that 65 to 85 percent of customers who had
defected stated that they were “satisfied” or “very satis-
fied” with their former supplier. 57
There is growing acceptance that an effective way to
determine how satisfied customers are is to visit personally
with them. Companies that have used this concept have
benefited significantly.
• The general manager of the Wireline division of Schlum-
berger and his top subordinates regularly visit their cus-
tomers. They discovered that its shallow-well customers
didn’t need the division’s full range of technical skills and
the extra costs they had to pay for them. 58
• Weyerhaeuser Sawmill general managers and operative
personnel (Cottage Grove, Oregon) spend a week at a time
as “employees” of their customers, looking, listening, and
learning. Insights learned gave this sawmill the edge over
others in terms of productivity, profit, and morale. 59
• Sir Colin Marshall, chairperson of British Airways, has his
service managers regularly talk to the airline’s passengers.
On the basis of these interactions, British Airways asked
This Smith Barney ad shows the importance of customer its flight crews not to pass out food and drinks and then
satisfaction in companies’ marketing programs. disappear because just seeing crew members increases
passengers’ customer satisfaction levels. 60
• Deere & Company has its engineers in the field for ten days or more watching
their customers put prototypes to work. The results: a redesign of the trans-
mission of its 7000 series of row-crop tractors, which allowed for a super-slow
speed for garlic and other crops. 61

LEARNING OBJECTIVE 8
Discuss the importance of customer service programs and
how they should be conducted.

Customer Service
Deliveries, processing orders, installation of machinery, helping customers with
problems, explaining and honoring warranties and guarantees, checking out shop-
pers at department stores and supermarkets, repairs, accepting returns, providing
emergency shipments—these are examples of what is involved in providing cus-
tomer service. Although it is ancillary to the product itself, the importance of cus-
tomer service should not be underestimated. Customer service is now perceived by
many experts as the key to achieving sustainable competitive advantage. When
competitors’ products and services are perceived as being equal—which is often
the case today, because products and prices are easily duplicated—the services
offered often decide who gets the business. “When the all-important issue of cus-
tomer service is examined, it has been estimated that customers are five times more
likely to switch vendors because of perceived service problems than for price con-

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