Marketing Strategy and Competitive Positioning pdf ebook

CHAPTER 13 COMPETING THROUGH SUPERIOR SERVICE AND CUSTOMER RELATIONSHIPS
interactions (such as responsiveness or empathy), as well as the context of service delivery 
(tangible elements), are replaced with customer experiences via the website. Offline, the 
design, quality and surroundings of the physical retail store and the knowledge, nature and 
actions of sales staff all send signals to customers about the quality of products and ser-
vices on offer. These important sensory cues about the reliability of the product and store 
are absent online. The website therefore takes on a dual role as substitute for both physical 
context and human interaction in signalling the potential credibility and quality of the busi-
ness prior to purchase. Such signals become more important online, where the customer is 
dislocated from the business and requires greater reassurance.
Online customers also place greater importance on information about products and 
companies prior to purchase online. The Internet makes information location easier but 
the computer screen provides a smaller viewing window, with different characteristics, 
than a traditional retail store, so information must be concisely and usefully conveyed in a 
customer-friendly format.
The website also takes on a role in providing personal service. Internet purchasing often 
lacks the feedback of face-to-face or telephone interactions, making it harder for Internet 
sellers to customise service offerings. Technology does allow for customised service by 
remembering customers’ previous purchases in order to make recommendations of poten-
tial products to buy, which can drive sales. Nonetheless, the website plays a crucial role in 
online service, but remains only one part of the broader service bundle.
An increased role for trust and assurance
Interestingly, offline evaluations of service quality have paid relatively little attention to 
customer trust issues. Major offline service studies, such as the SERVQUAL measure of 
Parasuraman et al. (1988) or the retail adaptation by Dabholkar et al. (1996), include no 
specific dimension on trust or security. However, the separation of the customer from the 
company in Internet buying suggests a significantly greater importance for trust in effective 
online strategies.
Trust in the online environment is multifaceted and complex. Three key trust issues 
appear in online retail: that the company will deliver products as promised; that the com-
pany will respect customer privacy, not disclosing personal details to third parties; and 
that the company will securely handle financial information. These issues affect both new 
and long-term Internet users. Some research has found that trust in the company can be a 
major driver of customer loyalty, far more than is the case with offline selling (Harris and 
Goode, 2004).
As Internet commerce has continued to grow, and online company brand names 
have become as recognised, or more, as those in offline operations, many thinkers have 
suggested that trust issues may decline in importance. Research in the early part of the 
2000s started to back this up, identifying a role for trust that is reduced from the early 
pivotal role suggested by some analysts (Wolfinbarger and Gilly, 2003). However, by 
2019 the role of Internet companies and social media in various scandals and social 
harms appears to have rolled back any progress made by online companies in generat-
ing trust in consumers and the public. Certainly, most customers now expect to get 
what they bought online, but trust issues now centre on the use of personal information 
and behavioural data, as well as the prevalence of untrustworthy information (‘fake 
news’, etc.) online. Such global issues affect perceptions of all online businesses. Thus, 
online service quality cannot be evaluated without major attention being placed on 
trust issues.
It is important that management thinking about customer service quality perceptions 
and relationships with sellers should recognise important differences in their growing online 
channels compared to more conventional offline operations. Not least among the reasons is 
that customers who become disaffected because of online experiences with a company may 
easily transfer their negative perceptions to the company’s offline business.

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MEASURING AND MONITORING CUSTOMER SATISFACTION
13.8 
Measuring and monitoring customer satisfaction 
One start to measuring customer satisfaction can be made through complaint and sugges-
tion systems. These catch those highly dissatisfied customers who bother to complain. The 
problem, of course, is that it may be too late to retrieve the situation, though swift attention 
to customer problems has actually been shown to help bond closer relationships – what 
Berry and Parasuraman (1991) refer to as ‘doing the service very right the second time’. 
For every dissatisfied customer who complains, however, it is estimated that around 12 
others will be equally dissatisfied but not bother to complain. They will simply take their 
business elsewhere and may even tell others about their bad experiences (the ‘well poison-
ers’). There is, therefore, a need for a more systematic assessment of customer satisfaction 
rather than sitting back and waiting for problems to emerge. 
A more systematic approach is the use of regular customer satisfaction surveys, as 
now used by many service providers from railway companies to the leading international 
accounting firms. A four-step approach is typically adopted (see Figure 13.8 ):
1