Topic > Impact of Customer Service on Consumer Buying Behavior

Index IntroductionCustomer ServiceChapter SummaryIntroductionThis chapter attempts to examine the basic themes and topics essential to this study. It will critically examine the existing literature on this topic, providing an in-depth analysis in relation to the aims and objectives of the project. The section will explore elements of customer service – service improvement practices, customer relationship management and staff training – followed by an assessment of consumer purchasing behavior that includes components of customer satisfaction and loyalty. Finally, a summary of the chapter will be provided, presenting the hypotheses and theoretical framework for this study. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay Customer Service Customer service can be simply defined as the relationships that an organization's employees have and maintain with its consumers. It covers a wide range of areas that include pre, during and after sales service (Kursunoglu, 2014). Different companies employ different levels of customer service. While some companies place great importance on their customers to put their wants and needs before anything else, other organizations simply try to make profits by all means. The types and quantity of customer service provided depend on the individual organization, as well as the market in which it is present (Batra, 2017). Achieving competitive capabilities is essential for businesses to compete in any competitive market. Competitive capabilities can be viewed as the actual or realized strength of a manufacturer relative to its competitors. Companies must meet the specific requirements of customers in an attempt to distance them from the competition. With increasing competition and increases in technology, customer needs have evolved to include not only high-quality products but also exceptional customer service (Hong et al. 2014). There are numerous factors that contribute to effective customer service. A service improvement practice (SIP) is a method, process or way of doing things to improve customer service processes through increasing service delivery performance. Companies that adopt the greatest number of customer service improvement practices are more likely to consistently increase the quality of their customer service (Dickson, 2015). For example, some organizations offer repair and replacement services, provide various goodwill gestures to customers on a daily basis (Legge, 2016), as well as constantly collect and analyze customer complaints, which is vital as it focuses directly on customers' needs. and desires (Dickson, 2015). Jebarajakirthy and Sivapalan (2017) believe that high service quality provides a source of competitive advantage for organizations. They determined that by maintaining high service quality, customers' intention to repurchase will be strengthened, allowing companies to maintain a long-term relationship with their customers. This is further strengthened by Prakash and Mohanty (2013) who state that higher levels of service quality produce greater customer satisfaction and sales growth. While numerous strategies can generate such results, if service quality is created distinctively, it is difficult to imitate. This can offer a unique selling point to organizations compared to its competitors. By adopting more SIPs for customers, companies will improve their level of quality, thus enabling themto create greater value for the customer and inevitably increase loyalty to your organization. While effective customer service can be achieved in countless ways, service failures can have detrimental effects on successful and profitable customer relationships (Cambra-Fierro et al. 2015). When services fail to meet customer expectations, they are considered service failures. This can instigate customer dissatisfaction, negative word of mouth or customer defection which can subsequently lead to the loss of customers to competitors (Koc et al. 2017). According to Cheung and To (2017), an organization's response to service failures determines whether a strong brand image is built or its previous efforts are threatened, thereby damaging the organization's reputation. This is supported by Andreea (2015), who argues that organizations that establish particular recovery strategies after service failures can create a large advantage. Although service failures are considered inevitable, the most important factor for organizations is customer confidence in the company's ability to make things right and inevitably produce a satisfactory solution. By responding correctively to service failures, organizations successfully maintain the trust of their customers, thus encouraging customer loyalty. Customer relationship management (CRM) can be defined as the fundamental organizational processes that focus on creating, maintaining and improving long-term associations with customers in an attempt to increase satisfaction, loyalty and retention of the customer (Herrhausen and Schögel, 2013). The purpose of CRM is to build connections with customers to understand their wants and needs. It is increasingly recognized as a means to develop innovative capabilities and build long-standing competitive advantage (Bhat and Darzi, 2016). According to Tseng (2016), CRM can be classified into analytical and behavioral CRM. Analytical CRM refers to how a company collects and examines valuable information through communication with its customers. The information is developed into modified strategies that attempt to meet and exceed customers' wants and needs. Behavioral CRM refers to the integration of a company's connection channels with its customers. The various networks such as stores, customer service, and website for which customer purchase and service records are documented help companies understand the purchasing behavior of their customers (Tseng, 2016). The CRM is then used to recognize and prioritize the most suitable customers according to numerous scoring procedures, illustrating clear goals and objectives for the company. However, Bhat and Darzi (2016) believe that CRM is a concept composed of four different components; complaint resolution, customer knowledge, customer empowerment and customer orientation. Complaint resolution is how a company addresses customer complications, while customer insight considers how an organization collects, manages, and shares information with, from, and about customers (Ashnai et al. 2010) . Customer empowerment examines how a company gives its customers the power/authority to make decisions, with customer orientation referring to a set of beliefs that puts customers' interests first . By adopting these four concepts, companies can instill CRM at the highest level, inevitably leading to customer loyalty and competitive advantage (Bhat and Darzi, 2016). The importance of training has been increasingly recognisedas a means of intensifying the level of customer service of organizations. . Training can be expressed as a continuous process of direction, correction and improvement at every level of performance. It is a fundamental part of every organization as it helps in accumulating human resources which are crucial resources for the success of a company (Sharma, 2014). Lee (2012) believes that training improves employees' knowledge, skills and abilities, enabling them not only to achieve better results, but also to implement organizational practices to required standards. Furthermore, Currie (2010) states that coordinated communication and employee training are vital to internal organizational success, as well as the quality of service provided to customers. This is supported by Zumrah (2015), whose study demonstrated a positive relationship between training and customer service offerings. However, there are other factors that are overlooked by these studies that need to be considered. For example, an individual's level of competence and interpersonal skills can have a great influence on the quality of the service provided. Ro and Mattila (2015) found that dissatisfied customers can be identified by organizations by recruiting individuals with good interpersonal skills and traits of authentic friendliness. Compassionate employees are able to identify customers' personal characteristics and communication styles, thus being able to correctly assess a particular situation and ultimately decide on the appropriate action needed to satisfy customers' wants and needs. Furthermore, Punia and Kant (2013) recognized elements that influenced the effectiveness of training, therefore shaping the level of service offered. They stated that lack of support from top management and colleagues, individual employee attitudes, job-related factors, and deficiencies in training programs all have an immeasurable effect on training effectiveness. By regulating these factors, companies can offer successful training, thereby providing optimal customer service. Consumer purchasing behavior refers to customers' purchasing behaviors before, during, and after a sale. Consumers are influenced by organizations at distinctive levels, including administrative communication, the atmosphere within stores, and the qualities of each individual brand (Elg and Hultman, 2016). As we know, every individual has their own preferences on the items they purchase, as well as the place they purchase it from. Organizations therefore adopt distinct marketing strategies in an attempt to influence consumers' individual purchasing behaviors, thereby attracting them to their company. It is important for companies to create value for customers to drive customer satisfaction, loyalty and profitability (Kumar and Reinartz, 2016). By doing so, companies can find ways to influence their customers' purchasing behaviors, building customer loyalty and retention and ultimately increasing the company's long-term success. Customer satisfaction can be viewed as an individual's perception of the performance of a product or service in relation to his or her expectations (Torres and Kline, 2013). It's about meeting needs at the end of the service. Although each customer will have a distinct level of satisfaction with different services, satisfaction can simply be viewed as an evaluation of how well a company could meet or exceed customer expectations (Kursunoglu, 2014). Customer satisfaction is essential for every competing company as it is the main determinant of the level of success in the business worldcompetitive today (Marinkovic and Kalinic, 2017). A satisfied customer is very likely to share their experiences with family and friends, encouraging them to purchase a product/service. Likewise, a dissatisfied customer could potentially switch brands and possibly leak information about their negative experiences, consequently damaging an organization's reputation and therefore sales (Evans et al. 2009). Furthermore, customers' repurchase intention is strongly linked to customer satisfaction (Marinkovic and Kalinic, 2017), demonstrating the great importance of the topic for organizations and marketers. There is a lot of research on customer satisfaction. According to Isac and Rusu, 2014, customer satisfaction or dissatisfaction is based on an individual's ability to learn from past experiences. Expectancy disconfirmation theory explains that an individual compares their post-purchase perceptions to their prior expectations before the purchase. The resulting gap between expectations and performance results in disconfirmation (Van-Ryzin, 2013). For example, when a company's perceived performance exceeds customer expectations, positive disconfirmation is created, which then leads to customer satisfaction. Furthermore, if a company's perceived performance does not meet customer expectations, negative disconfirmation can occur, which then leads to customer dissatisfaction (Petrovsky et al. 2017). In addition to this, assimilation theory states that consumers attempt to avoid dissonance by adapting perceptions to a certain product/service in an attempt to bring it closer to their expectations. Customers can reduce the uncertainty caused by the difference between anticipation and performance by modifying their expectations to match the perceived performance of the product, or by increasing the level of satisfaction by minimizing the importance of disconfirmation (Isac and Rusu, 2014). However, it is argued that these theories may have many potential flaws. First, both approaches assume a connection between expectation and satisfaction, but do not specify how disconfirmation of expectations can lead to satisfaction or dissatisfaction. Second, assimilation theory theorized that individuals are sufficiently motivated to adjust their expectations or perceptions of product performance. Adjustment to actual product performance can lead to a positive relationship between expectation and customer satisfaction, thus predicting that this could not occur unless expectations were negative to begin with (Isac and Rusu, 2014). Customer loyalty can be described as an intentional solution by the user to build a relationship with a company over a long period of time (Išoraitė, 2016). Companies increasingly recognize the importance of increased loyalty, as it can lead to a number of benefits such as reduced marketing costs, increased brand extension prospects and increased market share (Evans et al., 2009). Popular organizations can build customer loyalty to such an extent that their customers are committed to the point of sharing the company's purpose and values, providing a unique and powerful customer experience (Grewal et al., 2017). It is one of the largest intangible assets a company can have, as it offers not only vast potential for differentiation, but also provides a source of competitive advantage (Cossío-Silva et al. 2016). According to Evans et al. (2009), loyal customers are a good source for spreading positive word of mouth, as well as demonstrating great resistance to competitive offers. Customer loyalty is vital for organizations. The costs of dealing with loyal customers aresignificantly lower than the costs of attracting new customers, as loyal customers are more likely to pay for products or services to other potential customers (Cossio-Silva et al. 2016). Furthermore, individuals loyal to a company are less sensitive to price changes and also purchase more often and in large quantities from companies, demonstrating the crucial nature of customer loyalty towards companies (Alves et al. 2016). The concept of customer loyalty has been studied extensively by various researchers. Beck et al. (2015) stated that customer loyalty consists of two theoretical elements of attitudes and behaviors. First, attitudinal loyalty is simply a perception that a particular entity desires. Individuals are seen as information processors who gather information to form attitudes. Gathering solid positive attitudes through systematic assessment influences many customer-related behaviors. Even without repeat purchases, supplier recommendation from one customer to another demonstrates the presence of attitudinal loyalty (Cossío-Silva et al. 2016). Second, behavioral loyalty involves repeat purchases, which originate from an individual's habits (Beck et al. 2015). Loyalty is perceived as a way of behaving and “repeat purchasing” is an indicator of loyalty. Behavioral loyalty is key, while attitudinal loyalty is considered a cognitive perception. Research indicates a positive relationship between behavioral and attitudinal loyalty (Cossío-Silva et al. 2016). However, Fraering and Minor (2013) indicated a four-step process necessary to form customer loyalty which is made up of cognitive, affective, conative and action loyalty. The initial stage is cognitive loyalty which comes from an individual's knowledge from previous or recent experiences, followed by affective loyalty which refers to an emotional connection that forms between the customer and the product (Ordun, 2016). The third stage is conactive loyalty, where repurchase becomes a behavioral intention like impulse buying, finally followed by action loyalty where customers not only have the intention to buy, but also the motivation to repurchase. Loyal customers' commitment is believed to be immutable, regardless of competitors' movements (Fraering and Minor, 2013). This four-step process is further supported by Han et al. 2011, which attempted to test previous loyalty-based work. Their results illustrated a strong connection between the four stages and found that the theoretical framework had a convincing ability to predict the last stage of loyalty. While customer loyalty brings rewards to businesses, it also provides benefits to customers. Switching costs are seen as the one-time costs that customers associate with the process of switching from one supplier to another. When individuals abandon an entity, they face various switching costs (Chebat and Haj-Salem, 2014). By sticking to one provider, people won't have to offset these costs. Additionally, most organizations offer loyalty rewards programs and loyalty cards. This not only generates profits for organizations but also allows individuals to accumulate loyalty points and save money by purchasing items from the same company (Meyer-Waarden, 2015). For this study, customer service is considered effective if it has a positive influence on consumers' purchasing behavior. Purchase intention refers to an individual's conscious plan to purchase a product/service. It stimulates and guides consumer purchasing behavior (Haque et al. 2015). According to Hassan et al. 2015, the AIDA model (Attention, Interest, Desire, Action) is a marketing model..