Customer Service and Selling Essay

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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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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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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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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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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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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