Why Is Service Quality Important in Business – Service Alliance Group
Why Is Service Quality Important in Business
How does service quality influence customer satisfaction? Why do customers keep repeatedly returning for the same good or service provider?
The importance of service quality has increased significantly over the last decade or so, both locally and globally. From a global perspective, organizations strive to improve their customer experience to strengthen their brand reputation and increase sales revenues. In other words, companies are now focusing on ensuring that they provide excellent services to customers instead of simply providing them with goods.
This article discusses the importance of service quality when doing business. Also included in this article are tips that can help improve your company’s quality of service.
The Importance of Service Quality in Business
When consumers interact with businesses, they expect high standards of service. They want better value for their money and demand superior customer service to ensure they don’t have negative feelings about the purchase. For example, they might demand a refund on a faulty item if they receive poor after-sales support.
However, they tend to recommend the company to friends and family if they are provided with a great customer service team. Therefore, companies must invest time and resources to build positive relationships with existing and potential new customers.
Customers today are demanding higher levels of service quality. As a result, companies must offer exceptional customer experiences across every stage of their interaction. Companies should therefore focus on developing strong internal capabilities, such as processes, systems, and tools, on delivering outstanding customer service.
It Is Essential
Measuring service quality should be part of your marketing plan.
Otherwise, you will need clarity about what you’re offering customers, how well you’re doing, and whether there are opportunities to improve.
While providing great customer service is important in all aspects of a business, it is particularly critical for those roles that directly contact customers. For example, salespeople must understand what makes customers tick, anticipate their needs, and develop customer trust-based relationships. Marketing professionals must ensure that customers know about products and services effectively while ensuring brand consistency throughout channels. And customer service representatives must help customers navigate systems, resolve issues, and feel valued.
Sales and marketing teams often work together to ensure that customers receive consistent messages across all touchpoints. But there are times when one department may need to take charge of a situation, such as when a customer is having trouble placing an order or resolving an issue. These situations require salespeople to step up and become experts, taking control of the conversation and helping customers solve problems quickly.
When sales and marketing teams collaborate well, both benefit from better customer service. For example, when salespeople take ownership of conversations, they gain greater insight into customer needs and preferences, which helps marketers craft messaging that resonates with customers. Likewise, marketers can use data insights from sales conversations to improve campaigns and target prospects.
Has Direct Impact on Customer Satisfaction
High service quality is important because it positively affects the impact on customer satisfaction and loyalty. High service quality helps organizations retain current customers and attract new ones. In addition, high service quality reduces costs associated with acquiring new customers.
The importance of quality cannot be overstated. It’s often cited as being the single biggest driver of customer satisfaction. An American Marketing Association study found that 89% of consumers believe that companies are responsible for providing high-quality products and services.
In addition, there are many ways to improve quality. For example, according to research by the University of California (Berkeley), nearly half of customers say poor quality leads to negative experiences and dissatisfaction.
Boosts Sales
The main reason why high service quality is critical to an organization is that it boosts sales. A recent study by IBM found that consumers are willing to pay up to 20% more for products and services from companies that provide great customer experience. In addition, this study showed that customers who perceived a company’s services as high quality were likelier to do business. Moreover, customers who buy from business owners with high customer satisfaction are likely to return for more.
It Is Cost Effective
Another benefit of providing high service quality is that it saves marketing dollars. Retaining existing customers by providing them with high-quality services can be less expensive than attracting new customers. Additionally, retaining customers already buying from you is much cheaper than convincing new people to purchase from you.
Suffices Customer Expectations
According to a recent UC Berkeley Graduate School of Journalism, consumers are willing to spend more money on high-quality products. This makes sense because it aligns with our innate desire to buy things we believe are good. However, there is one caveat: people want to spend only a little money. They like to feel like they got value for every dollar spent. So how do you balance customer expectations with budget constraints?
The answer lies in providing exceptional customer experience and service quality. You must provide excellent products or services that exceed the standards set by your competitors. If you do that, your customers will likely reward you with loyalty and repeat purchases.
It Cements Your Reputation
Quality reflects on your company’s image. Customers and prospects can easily share either positive or critical feedback about your quality products and services on social media platforms like Twitter and Facebook. In fact, according to a recent University of California at Irvine study, nearly 80 percent of customer trust online reviews over traditional forms of advertising. That is why you must never take negative reviews for granted.
Social media puts the power of word-of-mouth marketing into the hands of consumers. As a result, many companies now rely heavily on social media to build their brand image. In fact, according to research firm eMarketer, online reviews account for nearly 30% of the overall quality of customer satisfaction today. And because 92% of customers trust online reviews, businesses must take steps to ensure that their products and services live up to expectations.
A strong reputation for quality can help differentiate your business from competitors and build customer loyalty. For example, consider the American Apparel clothing retailer’s controversial marketing campaigns that led to numerous product recalls, financial losses, and a public backlash against the company. As a result, many shoppers turned to Amazon, Walmart, and eBay to purchase replacement items.
If your business regularly delivers what it promises, then your customers are more likely to post positive things about your business online. This drives your brand awareness and creates the “fear of missing out” (FOMO) effect, leading to increased traffic and sales.
Boosts Your Reputation
Quality service is another aspect of customer service beyond just responding to complaints and providing great support. This is the link between your customer service and your reputation. When customers hear about your excellent customer service department, they talk about it. And when those conversations spread across social networks, blogs, and forums, it becomes even easier for people to learn about your company.
This type of word-of-mouth marketing is a powerful form of advertising because it’s based on real experiences rather than paid advertisements. Customers aren’t looking for a product; they want someone to solve their problem.
If you’re providing excellent support for your customers, the odds are high that they’ll refer their friends to you and tell them why your product/service is so valuable. Furthermore, most companies know how important it is to provide good service. Still, many don’t understand what it looks like— and it’s where things start to go wrong for many brands — failing to offer quality customer service can undermine a company’s reputation and, over time, its marketing efforts.
Over the last 20 years, this has become increasingly relevant because of the accessibility of social media platforms like Facebook and Twitter. These sites allow consumers to post complaints online easily, and sharing information via smartphones makes it easy for those posts to reach potential customers and generate negative comments or those who had a bad experience with your services.
Research suggests that unhappy customers are much more likely to talk about their positive experiences with friends and family members than they are with traditional marketers. So if your company isn’t delivering great and proactive customer service, you could lose out on opportunities to advertise and sell your product.
Makes You Reach and Even Exceed Industry Standards
Accreditation is one way to demonstrate to regulators and consumers that your organization meets these standards. This gives your company credibility and helps you stand out from competitors.
It gives you credibility with your customers and helps you demonstrate your commitment to quality. You’ll gain access to a wider range of potential customers because accredited organizations often prefer to work with businesses that meet high standards. And it’s easier to attract talented employees when your organization meets industry-recognized standards.
Quality management systems are used across many industries, including manufacturing, healthcare, retail, financial services, transportation, telecommunications, and government. They are usually based on ISO 9000, ISO 14001, OHSAS 18001, or similar international standards. These standards cover everything from managing waste to ensuring good working conditions. In addition, some public sector agencies, such as the Food Safety Authority of Ireland, require compliance with specific standards.
Helps Manage Expenses
Poor quality increases costs. Quality control system models are designed to ensure that the quality of goods and services meets specifications. When poor quality reaches consumers, it can cause problems for businesses because they must either repair or replace the product. This can lead to increased costs.
In addition to the financial losses associated with poor quality, there are many potential legal ramifications. For example, if defective products reach customers, companies often face lawsuits for breach of contract, negligence, and strict liability. They may also face fines and penalties for violating consumer protection laws such as the Magnuson Moss Warranty Act.
Customers Are More Attracted to Better Service Quality
One important aspect of running a successful business has happy customers. And according to research by the Booth School of Business of the University of Chicago, one of the best ways to ensure happy customers is to provide excellent customer service professionals.
The study found that consumers are willing to spend up to $6 extra per purchase to receive exceptional customer service. This figure represents approximately 15% of the total cost of goods sold.
In addition, the study found that people are willing to pay up to $5 extra per purchase if they feel like they received good customer service. This represents about 10% of the total cost.
This finding suggests that customers are willing to spend money to avoid poor customer service experience.
Interestingly, another study showed that customers prefer to buy from businesses with low prices over those with high prices. However, they’ll choose the former if they offer better customer service.
Makes Your Company More Popular
When competing against businesses that offer better customer service, there are several ways you can ensure yours stands out. First, make sure you have a good reputation online. Your reviews and customer satisfaction ratings are key here. A positive rating helps potential customers trust you, while negative ones can hurt your image. This goes for online and offline positive reviews; the more positive feedback you have, the easier it will be to attract more customers.
Next, establish yourself as a trustworthy company. Consumers don’t want to deal with shady businesses. So make sure you communicate clearly with your customers and answer questions promptly. Also, keep your promises. Don’t take advantage of people or break agreements. You never know when a dissatisfied customer might spread the word about their experience.
Finally, use social media to promote your company. Post photos of your quality products and employees, give free samples and show off special offers. Share information about promotions, events, and awards you’ve won. These activities help build positive relationships with current and prospective customers.
On Ensuring Great Service Quality
Measuring service quality is challenging, especially since there are no hard and fast rules. However, there are some guidelines to follow to ensure you’re getting accurate data.
Understand What Your Business Is All About
Consider the context of your business. For example, do you provide a product or service that’s unique? Or do you compete against many others offering similar products or services? These factors can affect how much customers value your prompt service.
Directly Ask
First, ask your customers how satisfied they are with your service. This gives you a snapshot of their thoughts about your current offerings but doesn’t necessarily tell you whether those issues will continue.
Listen carefully to what customers are saying about your brand. Then, ask yourself: What do my customers think I’m good at? What don’t they like? How could we improve our service?
Use Different Methods to Arrive at the Results
Don’t just rely on customer surveys; use multiple methods. For example, you can conduct one survey and another interview to see how well each method measures different aspects of service quality.
Use Feedback
Customer feedback can provide insights into your performance against your goals and objectives. It can also give you ideas about what could be improved in your product or service. This information can help determine whether you meet your customers’ expectations and needs.
Avoid Bias
Third, try to avoid bias when gathering information. For example, if you’re trying to figure out why people aren’t happy, don’t focus solely on negative comments. Instead, look for positive and negative comments, even though they might seem contradictory.
Don’t Break Promises
Make sure that you deliver on promises. Be clear and honest and provide what you promise. Deliver on your commitments. Don’t break promises. You’ll lose credibility and variation in customer trust.
Be Respectful
When you receive a complaint about one of your products or services, it might seem like a simple matter of asking questions to determine the customer’s issues and how to fix them. However, it’s important to remember that every customer request is only sometimes reasonable. Some are downright unreasonable. You don’t want to be insensitive or unsympathetic toward a customer who wants something different. Instead, try to understand why they’re upset and empathize with them. This indicator shows you care about them and are willing to work together to find a solution.
Respond to Customers’ Inquiries Quickly
According to research, giving relevant answers to customer questions improves the company’s image and brand perception. For example, one study showed that consumers rated a hotel more favorably after receiving responses within 24 hours than those who waited longer than 48 hours. Another study revealed that a fast response to customer complaints increased consumer satisfaction and loyalty.
Provide a Great Lasting Experience
Whether your business offers any service, an effective customer communication strategy can help you improve operations by ensuring that workers quickly understand visitors’ needs. This is because it allows them to focus on tasks related to those services rather than having to deal with mundane problems such as lost passwords, billing issues, etc.
Make Sure Your Frontline Employees Know Your Services By Heart
All employees who interact with loyal customers must thoroughly know the company’s products and services. Not only does it make sense to ensure that every proactive customer service employee knows what they are doing, but it’s also important to know how to answer questions and solve problems. If you do, you could gain potential customers.
Be Honest in Your Dealings
When loyal customers ask questions or require help deciding which service they need, it’s usually best for companies to answer their inquiries honestly and tell them everything they need. This can help build customer trust and encourage the customer to choose your service over another one.
The Five Service Quality Dimensions
The concept of service quality is essential to understand the loyal customers’ expectations and perceptions about the service providers. A service provider must know what customers want and how they can provide those things to loyal customers. There are many ways to measure service quality dimensions, for example, the structural equation model. One of the most important aspects of measuring service quality is determining the gaps between actual performance and customer expectations. These gaps are called service quality gaps. If there is no gap, we say the service quality is perfect. However, if there is a gap, we say there is a loophole in service quality dimensions.
Tangibility
The term tangibility refers to the appearance of physical facilities and equipment, including cleanliness, professionalism, and signage. This includes everything from the building to the furniture inside to the uniforms worn by proactive customer service employees. Appearance is often overlooked in favor of functionality, but it plays a major role in creating customer expectations about what they should experience during a visit to your business.
Customers are increasingly expecting business owners to provide a much higher level of service, and they want to feel comfortable while doing business there. Therefore, you must take care of the basics to avoid alienating customers. For example, they might think less highly of your business because of your poor appearance.
Reliability
The reliability dimension is about how reliable your products are. How much does product quality affect how well-known you are? Does the reputation of your brand mean anything to your consumers? Are people willing to pay extra money for your product because they know you’ll stand behind it? Do you care enough about your customers to ensure they don’t suffer if you screw up? You’ve got a winner if you answer “yes” to those questions.
If you don’t care about your customer base, you should rethink this. Your customers will quickly switch brands if you fail to deliver on your promises.
Responsiveness
Regarding on the quality on customer satisfaction levels, responsiveness as one of the dimensions of service quality is an important determining indicator that identifies whether or not a brand succeeds. In fact, according to research conducted by Deloitte, nearly three-quarters of consumers surveyed say they’d rather buy from companies that respond promptly to requests.
In addition to being responsive, brands must also be proactive. They must proactively reach out to potential customers and answer questions about products and services before the customer asks. This builds customer trust and demonstrates a commitment to providing excellent customer service experiences.
Assurance
The word assurance is defined as “the quality of being reliable.” In other words, it’s the knowledge and courtesy of people who work in your organization. As a result, they’re able to communicate trust and confidence. And customers expect businesses to be the expert in the service they deliver because they know that you’ve done your homework, researched your market, and are ready to give them what they want.
Communicating that expertise to customers is important when they have many options but need to figure out who to trust when buying products online. For instance, if you run an e-commerce site, you might display credentials like certifications or customer reviews, which help assure customers that you’re trustworthy. This is especially true for those who shop online frequently because multiple companies sell similar items.
Empathy
Empathy describes the ability to understand another person’s feelings and emotions. Proactive customer service involves paying close attention to customers’ feelings and being sensitive to their needs. Service providers must put themselves in their customer’s shoes to see things from their perspective. This helps them better meet customer expectations and deliver positive experiences.
In addition, empathy helps service providers build stronger relationships with their customers. When people trust each other and feel comfortable communicating openly about their concerns, they tend to become loyal customers. As a result, service providers earn repeat business from satisfied customers.
To End
A good customer journey can help improve or reinforce an individual’s perception of the service quality of your business. Do you need assistance in improving your customer service team? Give us a call so we can assist you with this.
