Post on 09-Feb-2017
ID No: 0594617 Lecturer: Sheree Anne O’Neill
Travel and tourism is of the world’s largest growing global industries which in
recent years has become more difficult for travel agencies to achieve high levels
of customer satisfaction. In a market where the tourism industry is now focusing
less on manufacturing and more on customer service, management is now
implementing new and already established innovative theories and models to
improve customer satisfaction levels and service recovery where customer’s
expectations are not being met. Furthermore, research has shown that is a direct
correlation between the quality of service, customer satisfaction and customer
loyalty and retention (Kuo, Chang, Cheng & Lai, 2013). This means that in order
for tourism businesses to survive and flourish in today’s society, management
must change the way they think and operate in order to facilitate to a changing
customer market, also known as a paradigm shift (Gustafsson & Johnson, 2003).
This essay will discuss how established models and theories are used by
management in the travel and tourism industry in order to develop customer
service strategies which influence customer satisfaction, loyalty and perceived
value. Moreover, the essay will also explain the term ‘best practice’ in regards to
resolving service conflicts to achieve customer retention.
Kuo et al. (2013) claims that customer satisfaction is defined as the customer’s
level of contentment following a comparison between the expected and perceived
quality of customer service. Consequently, because each individual has different
perspectives on what is considered high levels of customer service, the quality of
service the customer perceives may be much lower than the actual level the
establishment believes has been delivered (Harris, 2013). A commonly used
framework by tourism establishment management to assess levels of service
quality and customer satisfaction is the SERVQUAL model (also known as the
gaps model) (Parasuraman, Zeithaml & Berry, as cited in Kuo et al., 2013). When
the model was originally developed, it identified 97 attributes which were found to
have an impact on the quality of customer service. These attributes were split into
ten categories for assessing the quality of service. Since 1988, the ten dimensions
have been reduced to five which are tangibility, reliability, responsiveness,
assurance and empathy (Parasuraman, Zeithaml & Berry, as cited in Daniel &
Berinyuy, 2010). The gaps model was primarily designed to be adapted to service
type businesses which establishments within the tourism industry today are
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ID No: 0594617 Lecturer: Sheree Anne O’Neill
primarily based on so it is frequently utilized by travel and tourism management to
improve customer service quality. The model is used by companies to identify the
gaps between the levels of service quality the customers perceive they are
receiving and the level of customer service that management believes the
employees are delivering. This allows service management to implement service
policy changes to bridge the gaps in each one of the five categories identified
within the model. Furthermore, the gaps model also takes into account external
factors which may influence customer expectations including cultural, social,
personal and psychological differences (Daniel & Berinyuy, 2010).
The second area of importance within the service industry in travel and tourism is
customer loyalty. This can also be directly linked to customer satisfaction as
mentioned before as that area plays one of the vital determinants in customer
retention and repeat business. An important conceptual model utilized by
management in the tourism industry to help increase customer loyalty is the
customer relationship management model (CRM) (Gustafsson & Johnson, 2003).
This framework with the customer being its central focus, focuses on three main
areas of importance in order to increase customer loyalty. These areas are
marketing, service and sales although there are numerous variations of the model
adapted by different businesses, some with more than three areas of focus
(Harwood, Garry & Broderick, 2008). The CRM seeks to improve the business
relationship between the customers and service employees of an establishment.
When business management, particularly in small companies can efficiently
identify the needs and wants of the consumers this can allow them to actively
increase customer loyalty and their customer base. Moreover, it allows companies
to better distribute their products and services as well as taking advantage of new
emerging trends within the market (Long, 2015). Useful information and
knowledge can be gained from identifying and analysing particular trends in
customer purchase in certain market segments. Some of these may be based on
geographical locations or demographics of the customers such as age, income
and even gender. Once specific consumer trends are identified by applying this
framework, management are then able to formulate appropriate and productive
processes retain and grow their customer base. Furthermore, this model can be
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ID No: 0594617 Lecturer: Sheree Anne O’Neill
used to identify the best methods in order to receive constructive feedback from
different types of customers (Long, 2015).
The third area of importance which can be affected during service is customer
perception. This links back to the earlier discussion on customer satisfaction and
the inception of the gaps model as that particular model as well as measuring
levels of customer satisfaction also identifies the gaps between the customer
perceptions on service quality and the actual level of customer service that
management believes is being delivered to the consumer (Daniel & Berinyuy,
2010). Another popular model utilized by business management which focuses
particularly on customers’ perceptions is the three rings of perceived value model.
This framework is especially exercised by corporate travel companies. The three
rings focus on the three areas which Folkman (2011) believes, is the basis of
improving customer perceptions in a service based industry. These areas are the
basic product or service, support and enhanced service. Using this model,
management are then able to draw up a framework which looks at five different
categories within these three areas. These particular specifics in each three
sectors are the customer concern, key elements, who is responsible for each
area, abilities needed in order to meet the requirements in each area and the
focus or benefits of meeting all essential criteria in each category (Folkman,
2011). From analysing all these angles, management is able to ensure that the
quality of products and service not only meet the very diverse customer market’s
expectations but also exceed them. Furthermore, the model allows business
management to access which department within the company is liable to oversee
specific products and services and initiate or reinforce appropriate training in
particular departments on products and service where necessary. Meeting the
consumers’ needs and desires at such a high level, allows vast improvement
within customer perception levels of not only the employee servicing them but also
the company as a whole (Folkman, 2011).
Finally, in order to maintain customer loyalty, repeat business and attract new
customers through word of mouth, management within a service industry need to
analyse what they consider ‘best practice’ in resolving customer conflict situations
to achieve service recovery. Service recovery refers to the actions that an
establishment’s employees take in response to a service failure. A service failure
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ID No: 0594617 Lecturer: Sheree Anne O’Neill
happens when a customer’s perceptions of the service they have received do not
meet their expectations (Michael, Bowen & Johnston, 2006). One of the models
most often implemented by travel and tourism management in service recovery is
the problem solving model. This strategic framework used in retaining dissatisfied
customers, has seven stages to the process (Harris, 2013). The first two steps tell
the employees to identify and understand the problem. This means they need to
understand exactly what the problem is by letting the customer vent and using
empathetic and active listening as well as repeating the details back to the
customer to ensure the details understood are correct. The third and fourth stages
refer to the employee identifying some possible solutions to the problem based on
the uniqueness of the situation and making sure they the solutions to the problem
fit within the company’s guidelines and regulations. The two steps after these
involve the employee(s) and other suitable parties where necessary selecting the
best solution to the problem and putting it into practice. It is imperative that the
chosen solution not only fits into company policy and regulations but also satisfies
both the employee and the customer. The final process on the problem solving
model is where the employee is to observe the originally dissatisfied customers
reaction and assess whether the solution was successful or not (Harris, 2013).
Using this model, management within the travel and tourism industry can make
sure that service recovery from customer complaints is carried out in a
professionally and methodical approach to achieve maximum customer retention.
In relation to service recovery, there are a number of reasons behind why
business management considers this particularly important. One of the theories
behind this is the service recovery paradox. This is a theory where researchers
have suggested that disgruntled customers but receive a high standard of
excellent service recovery, may be even more satisfied than they were to begin
with and be much more likely as repeat customers than those customers who did
not experience a problem during their visit (Michel, 2002). However, there have
been theorists who have denied that any such theorem exists and stated that
there is no sure way in order to completely satisfy a customer except with an error
free first time service. Furthermore it was suggested that most dissatisfied
customers are reluctant to complain (Andreasen & Best, as cited in Michel, 2002).
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ID No: 0594617 Lecturer: Sheree Anne O’Neill
Whether the service recovery paradox exists or not, it has established that service
recovery within the service industry is of the upmost importance.
In conclusion, with the tourism industry becoming an increasingly competitive
market, management within businesses are striving to think of new and innovative
ways in order to improve the quality of service within their establishments. The
four fundamental areas within the service industry which focus on the customer
are satisfaction, loyalty, perception and service recovery. In order to achieve these
four important customer service criteria, there are a varied array of service
facilitator models for management to utilize in improving their establishments level
of customer service. Four of these popular models are the gap model, the CRM
model, the three rings of perceived value model and the problem solving model.
These examples can be used to bridge gaps between customer expectations and
perceived levels of service, improve overall customer satisfaction, achieve high
levels of customer loyalty and repeat business and exponentially increase the
quality of service recovery which results in repeat business through ‘best practice’.
Furthermore, it is theorised that customers who have concerns during customer
service that have these problems efficiently taken care of achieve a higher level of
satisfaction than customers who did not experience any problems to begin with,
otherwise known as the service recovery paradox. Keep in mind, in the words of
Gandhi, (as cited in Harris, 2013, p.1) “A customer is the most important visitor on
our premises. He is not dependent on us; we are dependent on him. He is not an
interruption in our work; he is the purpose of it. He is not an outsider in our
business; he is part of it. We are not doing him a favour by serving him; he is
doing us a favour by giving us an opportunity to do so”.
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ID No: 0594617 Lecturer: Sheree Anne O’Neill
References
Daniel, C.N., & Berinyuy, L.P. (2010). Using the SERVQUAL model to assess
service quality and customer satisfaction. Retrieved from http://www.diva-
portal.org/smash/get/diva2:327600/fulltext01
Folkman, Z. (2011). The three rings of perceived value: an integrated customer
focus. Retrieved 15 August, 2015, from
http://www.clemmergroup.com/blog/2011/04/12/the-three-rings-of-
perceived-value-an-integrated-customer-focus/
Gustafsson,
A., & Johnson, M.D. (2003). Competing in a service economy (First ed.). Michigan, United States: HB Printing.
Harris, E.K. (2013). Customer service: a practical approach (Sixth ed.). New
Jersey, United States: Pearson Education Inc.
Harwood, T., Garry, T., & Broderick, A. (2008). Relationship marketing:
perspectives, dimensions and contexts. Berkshire, United Kingdom:
McGraw-Hill Education.
Kuo, N.T., Chang, K.C., Cheng, Y.S., & Lai, C.H. (2013). How service quality
affects customer loyalty in the travel agency: the effects of customer
satisfaction, service recovery, and percieved value. Asia Pacific Journal of
Tourism Research, 18(7), 803-822. doi:10.1080/10941665.2012.708352
Long, N. (2015). What is a customer relationship model? Retrieved October 15,
2015, from http://smallbusiness.chron.com/customer-relationship-model-
10191.html
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Michel, S. (2002). Exploring the service recovery paradox. Retrieved from
http://www.dienstleistungsmarketing.ch/oldsite/downloads/artikel/michel/
exploring-sr-paradox.pdf
Michel, S., Bowen, D., & Johnston, R. (2006). Service recovery management:
closing the gap between best practices and actual practices. Retrieved from
http://www.dienstleistungsmarketing.ch/documents/MichelBowenJohnston_
Service_Recovery.pdf
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