Customer Satisfaction and Retention
The purpose of a customer satisfaction initiative is to measure the extent to which customers’ expectations have been met by products and services provided by a company which are measured through survey techniques, assessing complaints and questionnaires (Scott, 2000). Customer retention on the other hand is the ability of a company to keep its existing customers by providing them with the right products and services, and building long term relationships (Buttle, 2004). Customer satisfaction exists in the minds of customers, and therefore difficult to know if customers are satisfied or not; customer retention, however, suggests that those customers who stay are satisfied – to an extent, anyway, unless a monopoly exists and customers have no real choice but to stay, of course.
Customer satisfaction and retention Smart Travel & Tours (STT) is very important especially to a company like Smart Travel & Tours (STT) that provides services to its customers. Customer satisfaction and retention should be made the main goal of the company in order for the company to succeed in the future. A company will cease to exist without customers. Therefore, customer satisfaction and retention are two sides of the same coin, meaning they work hand in hand (Buttle, 2004). Despite the strong relationship that exists between these two, customers could be satisfied with the services provided but will not be loyal to the company, possibly because of what competitors are offering (Hansen and Hennig-Thurau, 2000). Competitors might be offering a better price, or specific offers, or better service. A company might also be able to retain customers that are not satisfied because there is no real competition that exists to threaten the existence of the company (Best, 2000). A satisfied customer is likely to come back to buy from the company again, therefore leading to customer loyalty and retention.
Customer satisfaction is not just about providing the right product at the right price to customers, but also about appointing the right person to sell this service to them (Kotler and Keller, 2006). Employees attending to customers should therefore have the right skills in order to respond to customer needs effectively end efficiently (Potter-Botman, 1994). The attitude and behaviour of the ‘front-line’ employee having close contact with the customer could well determine if the customer will return or not depending on the way they are treated (Hansemark and Albinsson, 2004). In most services companies, the service features, service quality and handling customer complaints are the determining factors of customer satisfaction (Hansemark and Albinsson, 2004). The responsibility to attain customer satisfaction lies in the hands of the managers because they are the ones to make sure that those working closely with the customers are well trained and fully understand the company’s goals (Kotler and Keller, 2006). Customers become less price sensitive, less influenced by competitors, stay loyal to the company, and buy additional products only when they are satisfied with the products and services provided to them (Kotler and Keller, 2006). Customer retention is very profitable to service companies, and the best source of business, and thus strategies should be more focused on customer retention than customer satisfaction (Knox, 1998;Allen Derek and American Society of Quality, 2004). The personalisation of service – taken to new levels by online companies such as Amazon and Lastminute.com – as well as relationship marketing and management, are key areas of development is the field of customer service.
As a travel business and a business that sells services to customers, Smart Travel & Tours (STT) considers customer satisfaction and retention as a very important aspect of the business in order to achieve growth. The business makes sure that customer satisfaction is put first from the recruitment process right down to the selection and training process. Getting the right employee for the job has been the business priority because it will determine what kind of reaction the company will get from its customers.
In order for the business to reach its ultimate goal, educated and experienced people have been employed. The owner and founder of the business holds a degree in Travel and Tourism and also worked with a travel company in Ghana for four years before university. A company in this industry needs someone with knowledge and experience of how the industry operates to be in charge if it is to compete effectively and thrive. With the knowledge and experience of the owner, the business is confident of what kind of tour packages or deals they can give to their customers in order to satisfy them. The business also plans to employ those who have experience in sales and customer service in order to meet customer needs. Despite the experience already gained by employees, the business has also allocated training for employees that will meet the business’s standards. The business’s standards are high and need to be maintained by making sure that the retained customers are still provided with the same, better standard of service. The company will make sure that customers are put first and employees should well understand the importance of customer satisfaction and retention and make them the main focus of the company. Employees will also be trained on telephone manners, handling complains and what kinds of deals are available. The company will not promise customers deals they cannot provide.
Retaining old customers will, according to research, cost the company about five times less than getting a new one (Desatnick, 1998). This is because the company can already identify the needs of existing customers and therefore know what to do to meet these needs, whereas it is difficult to identify the needs of new customers who are ‘unknown quantities’. Therefore the company has to consider all customers as important because it is a new company and needs as many customers as possible in order to meet its goals. In order to satisfy customers, the company plans to provide customers with cheap holiday and tour deals that are value for money. This means the company will compare prices and also packages with its competitors and try to sell at a lower price to its customers – although, arguably, this may well not be the best policy in the long term and is a common error in start-up companies. Therefore the company has to make sure they have good and cheap flight deals from Crystal Travels and Greaves Travels and tour tickets from Eazyway Travels (USA), WihKash Travel and Tours (Ghana), Wiseman Travels (Sierra Leone), Khartoum Tours (Gambia).
Some questionnaires on customer satisfaction and complaints will be made available to customers to describe their experience with the company and the employee who attended to them. These questionnaires will help the company to identify problems with their service and make sure it is improved. This also helps the company to identify training needs to train employees on how to improve customer service.
Customer satisfaction and retention is highly important to STT because the company relies largely on word-of mouth to advertise its business and therefore needs not only to satisfy but also retain its customers.
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Best, Roger (2000). Market-based management: strategies for growing customer value and profitability. 2nd edition. Prentice Hall
Buttle, Francis (2004). Customer relationship management: concepts and tools, Volume 13. 4th edition. Butterworth-Heinemann
Desatnick, R.L. (1988). Managing to keep the Customer; Houghton Mifflin, Boston, MA
Hansemark, Ove and Albinsson, Marie (2004). Customer Satisfaction and Retention; the experiences of individual employees. Vol. 4. Pp 40-56
Hansen, Ursula and Hennig-Thurau (2000). Relationship marketing: gaining competitive advantage through customer satisfaction and customer retention. Springer
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