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CUSTOMER SATISFACTION AND CUSTOMER LOYALTY 0

Customer Satisfaction and Customer Loyalty

Mary Reshard

Org 575- Critical Evaluation of Research and Theory

Colorado State University – Global Campus

Dr. Woodruff Thomas

March 6, 2017

Table of Contents

Section I - Organizational Problem or Opportunity 3

Description of the Problem or Opportunity 3

Purpose of the Investigation 3

Management/Business Questions 3

Research Question 1 ………………………………………………………………………….

Research Question 2…………………………………………………………………………..

Research Question 3………………………………………………………………………….

Intended Audience 4

Summary of Section Highlights 4

Section II – Problem or Opportunity Background) 5

Definition of Terms 5

Management Question or Management Dilemma Related Topics 5

Current State of the Target Organization 5

Relevant Organizational Processes or Systems or Functions 5

Relevant Theory 6

Summary of Section Highlights 6

References 7

Section I - Organizational Problem or Opportunity

The report will show the connection between customer satisfaction and customer loyalty. Customer satisfaction is an important matter in business. Satisfied customers often refer other customers to the business by word of mouth and by doing so this leads to revenue growth. Meeting the needs of the customer has an impact on the business outcomes. Knowing how to transform customer form just being satisfied to loyal is important to the growth of the business. The only way to improve business is to listen to the needs of the customers and what he or she really wants is beneficial to the business. Customer satisfaction helps companies calculate sales and measure customer satisfaction over a period of time. Research permits the company to see where the strength and weakness of the company and allows the company to improve on the quality of services that the customer value. Customer loyalty relies on the customer service that he or she receives from the company and that includes the hairdresser skills , communication, and the service provided to the customer.

Employees play a major part in customer service and in order to maintain a plesant work environment the employees must have the proper training so that he or she will know what is expected of him or her in the workplace. Macik & Nalewajek (2014) stated the main task of salon is to encourage not only the customer but also the hairdresser and to stay because when the hairdresser changes workplace, the clients follows hence there should be implemented suitable personnel policy and motivational systems at work,atmosphere conducive to development

( Macik & Nalewajek, 2014).

Customers pay attention to hairdressers behavior and it is important for hairdresserand Manager to be professional at all time be courteous, respectful, and most all make sure he or she is meeting the needs of the customer.

Description of the Problem

Hairdressers are dissatisfied with the compensation he or she is receiving the company learned this recently from one of the employees that was leaving she stated that she had taken on another position in a different company due to the pay scale and management. Hairdressers feel that the manger is not approachable. The hairdresser have several complaints about management and being treated unfair. Hairdresser express working conditions with the owner and they feel as though they have not had the right training on salon policy and procedures. When asked the manager did she go ver the company policy and procedures and if the training was done she stated she had completed the process. The hairdresser stated they did not get the training and just orientation on who the company is and what they do daily in the salon. Hairdresser that are satisfied will be motivated and content in the workplace.These problems have caused the company to become unorganized. Because of this the dissatisfied employees show the unhappineness through their work. Research shows that Employee job satisfaction influences a customer ' s perception of quality, customer satisfaction and the development of high relational switching cost ( Boukis & Gounaris, 2013).

Customers have complained about the hairstylist and the work ethics of some of the workers. The owner is investigating the problems within his business and has learned that the manger is not working on the complaints that she is getting from customers. This problem has caused customers to leave the business. About 20% of our loyal customer are not coming in on a regular any more. Revenue and growth are at a stand still causing the business to cut back on some of the services. The business understand that customer service and employee satisfaction and loyalty of the customers are a major part of the business. The business has to work towards several problems to ensure the quality of service improves and the customers loyalty through customer service is improved to rebuild the service.

Purpose of the Investigation

The importance of this study is to gain a better understanding on the problems that our organization faces. Learn what the organization can do to slow down if not stop employee retention, customer loyalty, and, satisfaction of our customers. An investigation must be done to gain a better understanding of the problems the organization is facing so that the company can make recommendations on how to provide service that will be satisfactory to the customer and a better work environment for the hairdressers. Jhajharia & Gupa (2015) One of the biggest impacts on a company's productivity is the satisfaction of the employees. If the high performing employees leave the company it is even more difficult to attract new talent if your company is not satisfying the employees.

The salon will need to make adjustments in employee training and management practices in order to have better outcomes of the current situations. Once the problems have been rectified, then the organization will be in a position to grow and market for new business.Tatikonda (2013) stated that our customers are the most important part of our business and that they are the focus point of our operation. Poor performance results in dissatisfaction of customers. It is our job as an organization to make sure our customers’ expectations are being met. When our customers are unsatisfied the growth and revenue is affected. The owners is taking a careful look at the problems and wanting to implement problem-solving techniques and do some skill building along with implementing different training programs to ensure proper decision making of management is being carried out. The investigation will help the organization get a firm handle on the situation.

Management/Business Questions MQ:

What changes need to be implemented in the business to restart the growth of the business and what will be the most cost effective way to implement these changes?

The need to have these questions answered will help the salon to better understand what necessary steps the salon will take to rebuild the business. The salon owner will get a better understanding on cost and time it will take to train and implement programs to better service his customers and employees. At the same time begin working to ensure that the salon is operating in a productive manner.

Research Q1:

What will be the cost to implement employee training systems and loyalty programs for our customers and employees?

Research Q2:

What kind of strategy can the salon use to resolve the problems with customer service and employee retention?

Research Q3: What is a cost to the company for losing customers?

Intended Audience

Businesses that have a problem with customer satisfaction, loyalty, and employee retention could benefit from this study. The owner has lot to lose if the business is not prosperous. The employees and customers will lose out as well. The customers would have to look for other salons to take his or her business to if the doors close because the business continues to lose customer and employees could be laid off because of the business not being able to correct the problems. There will not be enough revenue to keep the doors open. However, if the business could turn the situation around and make the business productive then the chances of growth would then become possible.

This study will help organizations learn how to retain his or her customers. Businesses have to have a clear vision and mission because Groscurth (2014) says a clear mission inspires employee engagement, fosters customer engagement, and helps boost company performance -- among other benefits. Organizations have to learn to put the customer first and make sure that the customer’s needs are met in order to have continued growth. Business owners can learn from the study how to put the first and what stratagies they have to use to satisfies his or her customers. It is important for the salon owner to make necessary changes to better service the community and his or her employees. Managers will have the opportunity to make changes within the organization to ensure continued growth of the business. Hair salons can take the information from this study and use it to train employees. The training on customer service techniques and skills building will help employees develop better performance to help eliminate the loss of customer.

Summary of Section Highlights

Customer service is the key to business growth. Magatef and Tomalich (2016) building relationships creates lifetime customers because when customers have a relationship with a company, they are ready to forget any other competitors offer. As our organization is working on growth and change we need to According to McGuire,Charles, Pasmore and Rhodes (2015) invest intentionally in a leadership culture that will match the unfolding challenge. The beliefs that drive leadership behaviors need to align with the operational business strategy.

The Kitewheel study shows that business owners need to align their loyalty programs with what the consumer wants (Roesler, 2015). As our organization continues to investigate the research process, we will be able to fully understand what changes need to be in effect in order to change the current way we provide service to our customers and learn how to provide better service to our employees.

Section II – Problem or Opportunity Background

In this section, we will discuss customer service and employee retention and how the two relates to each other to solve problems in our organization. Frey, Tomas & Totzel (2013) client satisfaction and the importance of satisfaction of our employees will help increases employee retention. Because our salon realizes that customer, satisfaction and retaining our employees are important the organizations owner is taking a closer look at what the needs are of our organization so we as a team can work on rebuilding the broken system. Good general introduction - Remember to include a purpose statement with your introduction to tell the reader the purpose of your paper and to provide a brief map of what will follow the introduction – – Remember to write your CT assignments and portfolio project in third person – APA considers the use of I, you, we, etc. to be informal unless personal reflections are requested.

Definition of Terms

This section is definitions on the words used in this discussion. These definitions will be used to explore the meanings and discuss customer satisfaction, loyalty, and retention in our organization.

Definition #1: Customer service is necessary to attract new customers, satisfy existing customer, and build the organization to a profitable state. Llieska (2013) Customer Satisfaction – is the customer’s feelings of pleasure or disappointment resulting from comparing a product is perceived performance (or outcome) in relation to his or her expectation.

Definition #2: Employee retention Mita (2014) a technique adopted by businesses to maintain an effective workforce and at the same time meet operational requirements.

Employees are an important part of the organization to ensure employees work up to his or her capacity. The employer has to maintain a work environment that is accommodating to his or her employees.

Definition # 3 Customer Loyalty Ranade (2012) a customer continuing to believe that your organization’s product/service offer is their best option. Customer Loyalty is important part of growth to the organization Customers often stay with business because they have been loyal to the business for a long period.

Definitions section should have citation-supported definitions of specific terms that are unique to your study and not general business terms. Also, remember to use the exact format presented in the template. The terms above are general business terms- your study may not require any unique definitions.

Management Question

Current state of the target organization

The organization is a small business located in South Florida on the beach where area residents are doing business. Revenue is approximately $150,000 yearly. One of the problems is leadership is not making the right decision when it comes to the business, customers, and employees and this problem has an effect on our business its staff and the customers. Having the skills and knowledge to comfort problems is an important factor in business. The manager is not making good decision with the customers and employees Ejimabo (2015) discusses bad policy and inconsistence in decisions making are among the major challenges in organizational systems and have created many unresolved problems among leaders and their employees in our current workplace and entire society. Remember to support your facts. This is a good discussion however would be stronger with citation support related to your topic.

Management structure and reporting or decision making process currently.

Employee performance and the revenue of the company have been impacted due to poor management. Employees are supposed to have a full week of training in a classroom setting so that when they are on the floor they know how to address different situations. Managers are to take the responsibility of making sure each employee is ready to perform his or her duties. The lack of said training has caused three problems customer satisfaction, customer loyalty, and employee retention. In order for employees to do well in his or her position they need to understand what the salon expects of them they must have clear goals and know the direction of our company. Mclntire (2011) they need clarity of their role, their boundaries and their authority level. They also need feedback regarding both how to perform well and how well they are performing. Good description that would be stronger with additional citation support, otherwise some of these statements are personal conclusions or opinions that do not provide support in academic essays

Relevant organizational processes, systems, or functions

Employee performance and the revenue of the company have been impacted due to poor management. Employees are supposed to have a full week of training in a classroom setting so that when they are on the floor they know how to address different situations. Managers are to take the responsibility of making sure each employee is ready to perform his or her duties. The lack of said training has caused three problems customer satisfaction, customer loyalty, and employee retention. The training programs that the company offers are not being properly done and because of management not following the company’s policy, the company has lost revenue and employees as well as customers. The systems in place are not helping employees to be skillful or productive in their work. Nelson, (2017) tells employers that if they give their employees the right resources whether it is training or equipment will give them what they need to provide customers with the right services needed.

Different mental and personal thinking and that some people are reluctant to speak because of adverse reaction from the employer. This relates to my organization because we have to break old habits and develop new habits in order to better assist the customer. Often time employees stay quit because of retaliation from management. However, there is a no retaliation policy in place but employees still remain quite about some of the problems. The owner has started an investigating from what he has discussed with customers and the few employees that were willing to come forward and speak on problems that they were having with management. The organization has to be able to teach so that new knowledge is obtained about the business and then must be applied daily to turn the business around and make it profitable. Remember to support your facts. This is a good discussion however would be stronger with citation support related to your topic.

Relevant theory

The theory I would like to discuss is a learning organization theory that will help diagnosis how the problems started and what the organization needs to do to reverse the damage to the company. Senge theory is called a learning organization and refers to as a living organism. and this theory is about empowering and motivating employees. In addition, how the employer must strive to accomplish goals together. Senge suggest that we have to use whatever opportunity is available to understand from the circumstances whether it is practices or the competition so that changes in our salon will get better.

The theory relates to my organization because the organization has to learn how to be productive, one can only learn this by trainings, and programs set in place to enhance the thinking and productivity of the organization. This theory further suggests that individuals have different mental and personal thinking and that some people are reluctant to speak because of adverse reaction from the employer. This relates to my organization because we have to break old habits and develop new habits in order to better assist the customer. The organization has to be able to teach so that new knowledge is obtained about the business and then must be applied daily to turn the business around and make it profitable. Remember to support your facts. This is a good discussion however would be stronger with academic and/or industry support. Remember to add citations to your listed sources to strengthen your discussion.

Smmary of Section Highlights

Client satisfaction is an important factor of employee satisfaction, which in turn increases employee retention. In order for our organization to get, our customers to return and rebuild the business the organization will have to look at new strategies Keenan (2015) stated that an organization needs to set clear goals, objectives, and track success by ensuring things are kept simple create context that will drive the behavior the salon is looking for from our employees.

Aronowitz, Aaron, and Deirdre (2015) Implementing new and improve system will allow the organization to look at what went wrong and to start fresh with making sure the organization managers and employees are working towards the same common goal as a team. The organization can achieve these goals by working together as a team.

References

Kermani, Z. , (2014) A Study of the Linking Between Job Satisfaction and Customer Satisfaction: Journal of Marketing Development and Competitiveness vol. 7 Iss: 4 , 104-109

Mącik, R. & Nalewajek, M., (2014) Implications of Different Mental and behavioral approaches To Hairdressing service – Consumers Clustering Approach Retrieved from http://www.toknowpress.net/ISBN/978-961-6914-09-3/papers/ML14-672.pdf

Spiros Gounaris , Achilleas Boukis , (2013) "The role of employee job satisfaction in strengthening customer repurchase intentions", Journal of Services Marketing, Vol. 27 Iss: 4, pp.322 – 333

Groscurth, C. , (2014) Why Your Company Must Be Mission-Driven retrieved from http://www.gallup.com/businessjournal/167633/why-company-mission-driven.aspx

Gupta, H., & Jhajharia, P. (2015, July). A Study of Employee Satisfaction and Its Impact on Employee Retention in Retail Sector. Journal of Business and Management , 17(7), 01-07. Retrieved from http://iosrjournals.org/iosr-jbm/papers/Vol17-issue7/Version- 1/A017710107.pdf

Tatikonda, L. , (2013) The Hidden Costs of Customer Dissatisfaction Retrieved fwww.rom http:/ maq2013_spring_tatikonda_r-pdf.pdf

Ejimabo NO (2015) The Influence of Decision Making in Organizational Leadership and Management Activities. J Entrepreneur Organize Manag 4:138. doi: 10.4172/2169- 026X.1000138

Mclntire, M., (2011) How To Develop Competent Employees Building Strong Companies Through Focused strategic Alignment and Accountable leadership Retrieved from http://www.imglv.com/articles/developemployees.htm

Stringfellow, A., (2017) 42 Experts Reveal Their Top Tips and Strategies on How Organizations Can Improve Customer Retention Retrieved from ttps://www.ngdata.com/how-to-improve-customer-retention/

Aronowitz, S., Aaron, D., and McGinty, D. (2015) Getting Organizational Redesign right Retrieved from http://www.mckinsey.com/business-functions/organization/our- insights/getting-organizational-redesign-right

Duncan.E. Rawson, A., and Jones, C., (2013) The Truth about Customer experience retrieved from https://hbr.org/2013/09/the-truth-about-customer-experience

Gupta, H., & Jhajharia, P. (2015, July). A Study of Employee Satisfaction and Its Impact on Employee Retention in Retail Sector. , 17(7), 01-07. Retrieved from http://iosrjournals.org/iosr-jbm/papers/Vol17-issue7/Version-1/A017710107.pdf

Magatef, S.G., & Tomalieh, E,F. (2015, August). The Impact of Customer Loyalty Programs on Customer Retention. International Journal of Business and Social Science , 6(8),

McGuire,J., Charles, J., Pasmore,P. W.., and Rhodes, G. B. (2015) Transforming Your Organization Retrieved from https://www.ccl.org/wp-content/uploads/2015/04/TYO.pdf

Roesler, P., (2015) 9 Stats That Prove The Value of Loyalty Programs Retrieved from http://www.bizjournals.com/bizjournals/how-to/marketing/2015/02/9-stats-that-prove- the-value-of-loyalty-programs.html

Tatikonda, L. , (2013) The Hidden Cost of Customer Dissatisfaction Retrieved from https://www.imanet.org/-/media/3624cb55dea84e3c8285bbb5b97fe4e4.ashx

Tong, W., (2015) Analyzing The Relationship Between Customer Satisfaction and Customer Loyalty Retrieved from https://www.theseus.fi/bitstream/handle/10024/87964/THESIS.pdf?sequence=1

Trapp, R., (2015) How Effective Leaders Keep Change Management Programs On Track Retrieved from http://www.forbes.com/sites/rogertrapp/2015/08/25/how-effective- leaders- keep-change-management-programs-on-track/#931570f42a68