Page 389 - Marketing Management

366 PART 5 SHAPING THE MARKET OFFERINGS

In interactive marketing, teamwork is often key, and delegating authority to frontline employees
can allow for greater service flexibility and adaptability through better problem solving, closer em-
ployee cooperation, and more efficient knowledge transfer. 46
Technology also has great power to make service workers more productive. When US Airways
deployed handheld scanners to better track baggage in 2008, mishandled baggage decreased almost
50 percent from the year before. The new technology paid for itself in the first year and helped con-
tribute to a 35 percent drop in complaints. 47
Sometimes new technology has unanticipated benefits. When BMW introduced Wi-Fi to its
dealerships to help customers pass the time more productively while their cars were being ser-
viced, more customers chose to stay rather than use loaner cars, an expensive item for dealers to
maintain. 48
Companies must avoid pushing productivity so hard, however, that they reduce perceived qual-
ity. Some methods lead to too much standardization. Service providers must deliver “high touch”as
well as “high tech.”Amazon.com has some of the most amazing technological innovations in online
retailing, but it also keeps customers extremely satisfied when a problem arises even if they don’t
actually talk to an Amazon.com employee. 49
The Internet lets firms improve their service offerings and strengthen their relationships
with customers by allowing for true interactivity, customer-specific and situational personal-
ization, and real-time adjustments of the firm’s offerings. 50 But as companies collect, store,
and use more information about customers, they have also raised concerns about security and
privacy. 51 Companies must incorporate the proper safeguards and reassure customers about
their efforts.

Best Practices of Top Service Companies

In achieving marketing excellence with their customers, well-managed service companies share a
strategic concept, a history of top-management commitment to quality, high standards, profit tiers,
and systems for monitoring service performance and customer complaints.
STRATEGIC CONCEPT Top service companies are “customer obsessed.” They have a
clear sense of their target customers and their needs and have developed a distinctive strategy
for satisfying these needs. At the Four Seasons luxury hotel chain, employees must pass four
interviews before being hired. Each hotel also employs a “guest historian” to track guest
preferences. With more branch offices in the United States than Starbucks has, Edward Jones
brokerage stays close to customers by assigning a single financial advisor and one
administrator to each office. Although costly, maintaining such small teams fosters personal
relationships. 52

TOP-MANAGEMENT COMMITMENT Companies such as Marriott, Disney, and USAA
have a thorough commitment to service quality. Their managements look monthly not only at
financial performance, but also at service performance. Ray Kroc of McDonald’s insisted on
continually measuring each McDonald’s outlet on its conformance to QSCV: quality, service,
cleanliness, and value. Some companies insert a reminder along with employees’ paychecks:
“Brought to you by the customer.” Sam Walton of Walmart required the following employee
pledge: “I solemnly swear and declare that every customer that comes within 10 feet of me, I will
smile, look them in the eye, and greet them, so help me Sam.”

HIGH STANDARDS The best service providers set high quality standards. Citibank aims to
answer phone calls within 10 seconds and customer letters within 2 days. The standards must be set
appropriately high. A 98 percent accuracy standard may sound good, but it would result in 64,000
lost FedEx packages a day; 6 misspelled words on each page of a book; 400,000 incorrectly filled
prescriptions daily; 3 million lost USPS mail pieces each day; no phone/Internet/electricity 8 days
per year or 29 minutes per day; 1,000 mislabeled or (mispriced) products at a supermarket; and
6 million people unaccounted for in a U.S. census.

PROFIT TIERS Firms have decided to raise fees and lower services to those customers who barely
pay their way, and to coddle big spenders to retain their patronage as long as possible. Customers in
high-profit tiers get special discounts, promotional offers, and lots of special service; customers in