Recovering Customer Loyalty When Things Go Wrong - Assignment Example

Extended Service Encounter Reflective Journal Introduction Developing customer loyalty is key for any business to maintain its competitive edge in the market and enhance their profitability in today’s demanding and competitive business environment. In order for businesses to develop customer loyalty, they have to focus on building and maintaining long-term relationships by providing quality services that meet the needs and expectations of their customers. Although many businesses acknowledge the significance of developing good relationships with their customer’s through the provision of quality services, it is not always clear how they can develop and maintain customer loyalty (Mattila, 2001; Price, Arnould & Tierney, 1995). Nevertheless, a critical review of relevant literatures in service and relationship marketing depict that the quality of a service encounter determines whether or not customers develop loyalty to a particular service provider (Jayawardhena, Souchon, Farrell & Glanville, 2007; Noone, & Matilla, 2009). Basically, an extended service encounter is a customer’s actual interaction with a service provider over a longer period of time, often lasting for more than 30 minutes (Price et al, 1995; Noone, & Matilla, 2009). In this paper, I will present a reflective journal accounting my personal experiences in relation to multiple extended service encounters with Gloria Jean’s Coffee House in Callaghan campus, Newcastle University. Gloria Jean’s Coffees is an Australian coffee company with over 1,000 coffee houses in 39 countries around the world. In Australia the company has over 460 coffee houses including 14 in Newcastle and one next to Callaghan campus (Gloria Jean’s Coffees, 2012b). The coffee house in Newcastle sells and serve a wide range of espresso coffee drinks, speciality teas, whole bean coffees, cold drinks, coffee accessories and pastries Gloria Jean’s Coffees , 2012). In this reflective journal, I will describe my extended service encounters with Gloria Jean’s Coffee House in Callaghan campus, Newcastle University. In this case, I will describe what happened and how I felt every time I visited this coffee house. Moreover, I will analyse my experiences and evaluate each service encounter at this coffee house based on a particular set of criteria. The criteria that I will use to evaluate each service encounter include credence qualities, high involvement and people processing features as depicted by Shamma, Dyer & Liebrenz-Himez (2011). In addition to this, based on my multiple service encounters with Gloria Jean’s coffee house in Newcastle, I will identify three main areas of dissatisfaction and provide several justified recommendations for improvement. Service Encounter 1 On May 10, 2012, my service encounter with Gloria Jean’s Coffee House in Newcastle University was extremely frustrating due to the excessive time I spent queuing on the line and waiting for my coffee order to be delivered. On this day, I was rushing a group meeting next to the library for a group discussion but I decided to stop for a cup of coffee. I expected that I would spend about 15 minutes at the coffee house. I entered the coffee house, found a long queue, but I expected that the queue would move fast. However, I was disappointed that even after queuing for approximately 10 minutes, I was yet to reach the counter since the queue was moving very slow. Perhaps my expectations were too high but I expect that cashiers should process customer orders as fast as possible. I must admit that I almost lost my patience and walked out but considering the fact that the coffee house was a bit crowded and Gloria Jean’s Coffees are made from scratch after every order, I decided to wait a bit longer. When I finally got to the cashier, I ordered a Caffé Latte, this is one of my favourite coffee blends consisting espresso and steamed milk. After waiting for about 5 minutes, my order finally came. From the onset, it seemed that the waiter had brought a Caffé Latte however, I after tasting the coffee, I realised that, what was brought was not what I ordered. The waiter had brought a Cappuccino rather than a Caffé Latte. I was dissatisfied with the service since I had to queue and wait for about 15 minutes only to get the wrong order. Since I was in a rush and could not wait any longer, I decided to drink the Cappuccino. Later on, I complained to the waiter about the oversight. He was very courteous and apologetic about what had happened and promised that it would not happen again. In addition to this, the waiter gave me a 50% discount. I was very impressed by the way in which the waiter addressed my complaint. I felt that their service recovery was very effective since I purposed to return to Gloria Jean’s Coffee House because I enjoy their products. Although I was initially dissatisfied with the service, I felt reassured that, next time I would visit the coffee shop, my needs would be duly met. This encounter made me recall the sentiments of Mattila (2001), who observed that service failures are inevitable even in high performance businesses. Nevertheless, in cases of service failures an effective service recovery approach can enhance customer retention or loyalty (Tax & Brown 2000; McCollough, Berry & Yadav, 2000). On a scale of 1 to 5, where 1 is very dissatisfied and 5 very is very satisfied, I would rank this service encounter as a 3 as far as getting value for money is concerned. This is mainly because I had to wait for 15 minutes in order to get my order. As a student, I have very limited time thus waiting for a cup of coffee for 15 minutes is not viable. Moreover, I got value for money because I was given a 50% discount after getting the wrong order. I would definitely recommend this coffee house to my friends and family mainly because they provide high quality coffee products. When it comes to recommending this service to my friends and family, I would as well rank this service at 3.Even after the service failure, I will continue buying coffee at Gloria Jean’s Coffee House. This is mainly because this was that first time that this problem had occurred. Furthermore given that the coffee house was a bit crowded, I think that the waiters were a bit overwhelmed hence the delays and the confusion with the orders. Service Encounter 2 On June 25th, 2012, my service encounter with Gloria Jean’s Coffee House in Newcastle University was fairly disappointing. After studying in the library, I was in the company of some friends, we decided to get coffee at Gloria Jean’s Coffee House. One of my friends went to pay for our orders at the cashier while the rest of us waited. The place was a bit crowded, at first it was a difficult to get a convenient seating space. After pacing around for about two minutes, we were finally able to get a suitable seating space. Just like in my previous service encounter, we had to wait for about 15 minutes before getting our orders. I felt disenchanted that we had to wait for this long however, being in the company of my friends made it a bit easier for me to wait. My friends and I ordered Caffé Lattes and chocolate muffins to accompany the drink. The muffins were not ready so we had to take our coffees first while we wait for the muffins. The waiters promised that the muffins would be ready within a short while. However, after 20 minutes we were almost halfway through with our coffees, the muffins were still not ready. One of my friends had to go to the counter to remind the waiter about our order. When the muffins were finally brought, my coffee was somewhat cold and I didn’t find it enjoyable to eat the muffin with cold coffee. Although the muffins were extremely good, my friends and I were disappointed with the delays. At this point, I felt that if there was another competitor nearby who offered the same product as Gloria Jean’s Coffee House, I would opt to go to that coffee shop rather than buy coffee in a crowded Coffee House that provides slow services. In the surrounding environs there are a few coffee shops that do not necessarily provide the same products as Gloria Jean’s Coffee House but the speed of their services is relatively fast. In reference to Leon Festinger’s theory of social comparison (1954), I realised that my purchasing decisions were relatively influenced by my social settings and other people’s opinion about a particular service provider. Gloria Jean’s Coffee House is a very popular coffee house in our school. It is one of the favourite places that a considerable number of my peers like to meet while enjoying a cup of coffee. This has in turn influenced my purchasing behaviors and opinion about this coffee house. Regardless of recurrent service failures, I have found myself continuously visiting this coffee shop. Personally, I can attribute this pattern to social influences in the sense that I assess my opinions and purchasing behaviours by comparing myself with others so as to minimise uncertainties. This habit is in line with Festinger’s theory of social comparison (1954) (Raab 2011). In addition to this, Bibb Latane’s social impact theory (1981) offers some insights on why I continuously visit Gloria Jean’s Coffee House despite recurrent service failures. According to this theory, social forces such as immediacy, strength and number can influence consumer’s allegiance to a particular service provider. In this case immediacy refers to closeness in time or space, strength refers to intensity or importance of a source whereas number refers to how many individuals there are (Miao, 2008). I strongly believe that these social forces have greatly influenced my emotions, responses and behaviours in relation to Gloria Jean’s Coffee House. Consequently, I believe that my allegiance to this coffee house despite of its slow services has been due to the fact that the coffee house is in close proximity to my home and campus library , I enjoy their products, most of my friends frequent the place and that the coffee house always has a large number of people. Based on this service encounter, I believe I got value for my money in spite of the service delays. The products that the coffee house offers are of high quality and are very appealing. Despite of their service delays, I would generally rank this service encounter as a 3 since the service delays at Gloria Jean’s Coffee House is a reoccurring problem that does not seem to get the attention that it deserves. After this service encounter I would still recommend this coffee house to my friends and family due to their great products. When it comes to recommending this service I would rank this service at 3 however, I would advise them that, if they are in a hurry they should find an alternative service provider. Service Encounter 2 On June 10, 2012 after a very demanding group discussion session, my friends and I decided to visit Gloria Jean’s Coffee House next to our school. It was a bit chilly thus we needed hot coffee to warm us up before proceeding to the next class session. On entry, we found a relatively short queue. Subsequently, the waitress took our orders and after a few minutes, I came back with three cups of coffee. I noticed right away there were some improvements in their service delivery. Unlike other occasions when we had to queue for at least 10 minutes in order to get our orders , on this day, within 5 minutes our orders were brought to the table. Although, I was impressed by the quick service we got, I felt that the only reason why we were served within a short time spun is because, there were only a few customers in the restaurant. Nevertheless, with time more customers started to come in and I could notice that the queue started to become longer. One of my classmates stood in the queue for about 15minutes. She eventually got tired of waiting and walked up to one of the waitresses to notify her that she had waited for a long time and that she was going to leave. The waitress apologized profusely and assured the customer that this occurrence would not happen again. Furthermore, the customer was given a discount coupon as compensation for the service failure. I empathized with this customer since in previous service encounters, I had experienced this kind of service delay. Considering my previous service encounters characterised by service delays, I felt that if I was the customer who had waited for over 15minutes and I was not yet served, my zone of tolerance for service delays would have easily been narrowed down and I would be forced to leave (Nobrega & Campos, 2009). Although my needs were met in this service encounter, I must say that I was dissatisfied with the services offered at Gloria Jean’s Coffee House due to the plight of other customers who had to wait for long periods of time in order to get served. I feel that there is some kind of laxity among the employees working in this coffee house since despite various service failures the customer turn out is still high. In relation to value for money, I rate this service experience 4. However when it comes to recommending this coffee house to my family and friends, I would rank this service experience 3. Satisfaction Analysis Basically, for any business to succeed in today’s competitive business environment, they have to focus on building and maintaining long-term relationships by providing quality services that meet the needs and expectations of their customers. Through the multiple service encounters I have had with Gloria Jean’s Coffee House in Newcastle University, I feel that this coffee house has both positive and negative service attributes. One of the positive aspects of its services relates to its products. According to Jerome McCarthy’s model (1960), on the 4P’s of marketing (price, product, promotion and place) one of the most crucial aspects of marketing is a product. A product is considered as the item that satisfies the needs and wants of consumer hence promoting consumer loyalty. A product can either be a tangible good or an intangible service. Without a product, relationship marketing or any other marketing approach is futile (Needham, 1996). According to Dhar & Wertenbroch (2000) and Bitner (1992) consumers, subscribe to particular service or purchase particular products with specific goals. These goals can either be hedonic or utilitarian. Hedonic goals relate to the consumption experience that consumers get whereas utilitarian goals are functional in nature. For instance, consumers who visit Gloria Jean’s Coffee House are able to meet their utilitarian goals in the sense that they are served with high quality coffee products that revitalizes and appeals to their tastes. In the course of the multiple service encounters I have had with Gloria Jean’s Coffee House, one of the aspects that have made this coffee house to standout from the rest is its products. The coffee house has a wide range of high quality of coffee products that are well blended to provide consumers with an appealing, revitalizing and rich taste. This is one of the aspects that this coffee house has capitalized on in order to retain its consumers. Another positive aspect that I encountered in Gloria Jean’s Coffee House in Newcastle University is its service recovery approaches. According to Mattila (2001), service failures are inevitable even in high performance businesses. However, effective service recovery approach can enhance customer retention and loyalty (Tax & Brown 2000; McCollough, Berry & Yadav, 2000). Personally, I think that the service recovery approaches used at the Gloria Jean’s Coffee House in Newcastle are effective. For instance, during my first encounter, the waiter was very courteous and apologetic about the service failure and promised that it would not happen again. In addition to this, the waiter gave me a 50% discount as compensation for service failure. Similarly, in my third service encounter I witnessed an effective service recovery after a service failure. On the other hand, I feel that there are several negative aspects pertaining to Gloria Jean’s Coffee House services. One of the key areas of weakness pertaining to the services of this coffee house include its physical service environment. Wall and Berry (2007) observe that the physical service environment of a service provider in most cases exerts a powerful effect on the behaviours of consumers, their satisfaction with a particular services and their perception of quality service. During my second service encounter at Gloria Jean’s Coffee I was dissatisfied by the services due to the fact that there was not enough sitting space. Machleit, Eroglu & Mantel (2000) observe that the ambient, social elements and the design of a particular service environment can influence consumer’s loyalty to a particular service provider. Despite of the high quality products provided at this coffee, I was still able to feel to dissatisfied with the services due to the design of its physical service environment which encourages crowding. Moreover, another negative aspect pertaining to Gloria Jean’s Coffee House services is service delays. In the course of the multiple service encounters I have experienced with Gloria Jean’s Coffee, I have witnessed reoccurring cases of service delays. Despite the fact that several complaints have been issued regarding this service failure, no improvements have been made. The reoccurring cases of service delays have negatively impacted on my satisfaction with their services. In reference to the “commitment and trust theory”, I feel that, as a result of reoccurring cases of services delays, Gloria Jean’s Coffee House in Newcastle University has gradually failed to establish consumer commitment and trust. According to the commitment and trust theory of relationship marketing, businesses can develop customer loyalty by developing relational networks with their customers characterised by trust and commitment. Due to the reoccurring cases of service delays, consumers are bound to lose their trust and commitment towards their services. Reflection and Recommendations As I reflect back on the multiple extended service encounters with Gloria Jean’s Coffee House services in Newcastle University, I think that the coffee house should focus on improving three main areas namely; the design of its physical service environment, service speed and customer complaint and feedback system. In order for the company to retain its customers, it should implement the following measures; Develop a convenient physical service environment that can cater to the needs of its consumers. It is apparent that the coffee house has a high customer turnout on a regular basis thus it would be necessary to create a physical service environment that will provide consumers with adequate space, convenience and comfort to enjoy their products. Wall and Berry (2007) observe that the physical service environment of a service provider can exert a powerful effect on customer satisfaction with particular services. In order to enhance service speed, the company should hire more service attendants in order to effectively cater to its high customer turnout. Alternatively, the company should restructure its ordering system so as to speed up its service delivery process. Recurrent service delays can be major cause of customer dissatisfaction thus it is crucial for Gloria Jean’s Coffee House to focus on enhancing its service speed so as to retain its customers (Nobrega & Campos, 2009). Lastly, the company should develop an efficient complaint and feedback system that will provide a platform for customers to air their grievances. Additionally, customer feedback should be reviewed regularly in order to effectively identify and cater to the needs and wants of consumers. 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