Page 327 - Introduction to Business

CHAPTER 8 Marketing Basics 301

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cerns or product quality issues.” By having a far higher standard of customer serv-
ice, a share of wallet may be increased by as much as 80 percent. 63
Companies must guard against providing too high a level of service. When cus-
tomers do not respond in some desirable way, such as giving a vendor more busi-
ness, or the costs associated with providing a higher level of customer service are
high, firms may be overcommitting resources. They also need to be sure that their
customer service is reliable. Reliability includes receiving shipments on time; order reliability The consistency with which a
accuracy, completeness and condition; getting repairs done on time; consistency of product is produced or a service
rendered
product quality, and so on.
An important aspect of customer service is how customer complaints are han-
dled. The astute company welcomes complaints, because if they are handled prop-
erly, they will prevent customer defections, increase loyalty, improve sales, and result
in customers spreading favorable word-of-mouth comments. Jay Narivaha, senior
vice president of Technical Assistance Research Programs, a customer service con-
sultancy, says that customers who have problems resolved are more loyal than those
64
who don’t have problems. Companies should fear noncomplainers. These are cus-
tomers who don’t make their concerns known but defect to another vendor, leaving
the previous supplier completely in the dark as to why, and with less business.
Often, it takes only a single complaint not handled fairly to result in a lower level
of satisfaction and increase the probability of the customer’s becoming someone
else’s customer.
When complaints from customers arise, the most effective strategy is to deal
with them immediately. The importance of immediately responding to complaints
is emphasized at British Airways. Sir Colin Marshall, British Airways’ chairperson,
says, “We try to make it clear to employees that we expect them to respond to cus-
tomers on the spot—before a customer writes a letter or makes a phone call.” And
65

Case in Point

McDonalds’s Grapples with Poor Service Levels

McDonald’s hired mystery shoppers to increasing customer wait time. Headquarters says
visit its fast-food restaurants and that the longer wait times are fueled by the failure of
evaluate food quality, cleanliness, and the restaurants to use the new equipment properly.
service. The results were disappointing: speed of The franchisees claim that the equipment is poorly
service standards were being met only 46 percent of designed. Headquarters wants franchisees to train
the time and 30 percent of customers had to wait employees better and hire more crew members for
more than four minutes. The mystery shoppers also lunch hours. The franchisees are resisting because
reported rude service, unprofessional employees, and both recommendations would increase their costs—
inaccurate service. cutting into already meager profit margins.
The frustration being experienced by McDonald’s
Source: Julie Forster, “You Deserve A Better Break Today,” Business
customers has led them to turn to competitors, like Week, September 30, 2002, p. 42, and “Fast Food, Slow Service,”
Wendy’s, Burger King, and Carl’s Jr. Financial Fortune, September 30, 2002, p. 38.
problems have also occurred. Profits for 2002 were
lower than those for 2001, and the company’s stock Questions
closed at $18.16 on September 18, 2002—a seven- 1. Do you mind waiting more than four minutes to
year low. get your food in a fast-food restaurant?
In 1999, CEO Jack M. Greenberg introduced 2. Who is to blame for the longer wait times,
Made-For-You kitchen configurations that use headquarters or franchisees?
computers to make fresher sandwiches. The problem 3. How can you explain the problem customers are
was that the better product took longer to make, experiencing with McDonald’s employees?

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