Reply to the two DB post 250 words a piece see attached (Must introduce a NEW CONCEPT)

Discussion Board Forum 2- Service Defections

Sydnie Harris

Liberty University

Busi 650

Service Defections

Key Concept Explanation

In this discussion post, I have decided to observe the term service defections in order to understand how this impacts a consumers’ loyalty to a company. When organizations produce a product or service, quality is always measured to determine if there are any defections. Defections can be measured by a customer’s return to a company. Per (Meredith, R., & Shafer, M., 2017), “in many services, the analogy to a product defect is a defecting customer-that is, a customer who takes his or her business elsewhere” (p.217). In other words, defections in services or products generally drive customers away from those specific services or products, which is known as a customer defection. Companies who can reduce service and customer defections will benefit from profit growth and efficiency. Service defections are important in process control because a customer who decides to take their business elsewhere is parallel to a product defect.

Comparison

After further investigation on this topic, I have discovered that customers who decide to take their business elsewhere are known as defecting customers and they must be monitored for several different reasons. Meredith and Shafer (2017), explains the benefits of long-term customers, and the necessary feedback needed from unhappy customers to identify areas of improvement. In researching my selected topic, the articles reviewed the relationship service defections have with customer satisfaction and retention. For example, both service defection and customer satisfaction are measured using a balanced scorecard to measure and monitor a company’s performance. The balanced scorecard gives owners and managers in a corporation an idea on how internal and external customers view a company. Companies with a developed balanced score card can, “clarify and gain consensus on the strategy, communicate the strategy throughout the entire organization, align departmental and personal goals to the strategy, ensure strategic objectives are linked to annual budgets and receive timely feedback” (Meredith, R., & Shafer, M., 2017, p.204). Organizations that are capable of developing strategies that help improve their services and products will improve how customers view the company.

Another observation after continued research on the topic of service defection is the influence on the customers’ emotional state. Customers experience different emotional behaviors due to desirable or undesirable experiences with a product or service. For instance, “someone who has wrecked their car because they were talking on their mobile telephone and therefore distracted may experience guilt, whereas someone whose car was wrecked by someone to whom they lent their car may be angry” (Watson, L., & Spence, T., 2007, p.492). The reason for different emotions towards this situation is the difference in being angry with someone else or oneself. These different emotions will impact a customer’s behavior towards selecting where and how much they are willing to pay to have their vehicle fixed. Companies who can identify these issues will develop several strategies to serve different types of customers.

Other observations that were collected that impact service defections include price competition and the downsizing of an organization. The loss of customers due to a service defection results in companies having to increase their prices to compensate for their losses. “In the face of competitive price threats, developing relationships with customers may be effective in discouraging customer defection” (Kaltcheva, D., Winsor, D., & Parasuraman, A., 2010, p.5). The downsizing of an organization will help reduce organizational cost, but “has an immediate negative impact on customer satisfaction levels and on projected retention rates” (Williams, P., Khan, M. S., & Naumann, E., 2011, p.405). Customers quickly lose loyalty to the brand, products, and services which lead to the diminishment of long-term customers.

Article Summary

The article I have chosen to further analyze for this post is Four Steps to Reduce Product Defects (2017). This article begins by discussing how imperative it is for brands to remain competitive in today’s environment by facing and keeping up with their customer’s evolving needs. All over the world, a consumers’ perception of the quality of a product or service has transformed and customers no longer have the same expectation when purchasing apparel. For instance, when consumers find a clothing item that is damaged in the stores, they will typically ask a store clerk if there are any more in stock. However, online retail shoppers behave differently when they are shipped a defected product. They will likely return and usually do not rebuy the item and often find another brand. “Poor products quality can have costly future consequences for companies, including direct impact on the brand and customer loyalty” (2017).

In order for organizations to meet a consumers’ expectations, maintain their brand strength, and reduce the amount of product defects they must follow four key steps, “evaluate quality control sampling plans, employ a tightened inspection level III sampling plan, adopt a zero-defect policy, and shift the focus to quality assurance” (2017). Following these steps can help organizations reduce the loss of their customers and ensure they can surpass customer expectations by firming the brand equity. Companies who also adopt new quality control plans and acceptable quality levels will allow them to grow into their clients’ desires.

Biblical Integration

In order for companies to avoid and maintain service defections, organizations must practice excellent service and produce quality work, while customers must learn how to practice forgiveness. In Colossians 3:23 (New International Version), Paul tells us, “whatever you do, work at it with all your heart, as working for the Lord, not for human masters.” Leaders and employees who serve the Lord through their work will drive them to produce and provide the best they possibly can to their customers. Producing quality and excellence daily is pleasing to Jesus. This chapter then evolves into speaking towards those who have made a mistake but work towards correcting it. Colossians 3:25 (New International Version) states, “anyone who does wrong will be repaid for their wrongs, and there is no favoritism.” Companies who produce a defected service or product will be forgiven for their wrong doing. Consumers, on the other hand, will have a much more difficult time at forgiving a company for their wrong doings since they can always go find another producer. I believe it is important for Christian consumers to practice forgiveness when an organization makes a mistake. In Colossians 3:13 (New International Version), we are told, “bear with each other and forgive one another if any of you has a grievance against someone. Forgive as the Lord forgave you.” Giving companies a second chance will allow them to learn and grow from their mistakes so it does not occur again.

Application

Service defections, the key topic I have chosen to discuss, is applied to the real world of daily business by companies losing profits and business due unhappy customers. Customer retention and quality assurance methods must be established within an organization in order to maintain customers and avoid any errors. Even the most successful businesses must deal with service defections at some point in time, and it is crucial they haves strategies in place to address it. Whether that be a discount for free product/services to a unhappy customer, a backup plan in place will show a company’s loyalty to their brand and customers.

Annotated Bibliography

Four steps to reduce product defects. (2017, March 19). just-style.com. Retrieved from http://ezproxy.liberty.edu/login?url=http://go.galegroup.com.ezproxy.liberty.edu/ps/i.do?p=ITOF&sw=w&u=vic_liberty&v=2.1&it=r&id=GALE%7CA486101330&sid=summon&asid=71978d597969c9f5714b4b439ff854e3

The journal discusses the importance of companies to remain competitive with their brands and being able to adopt to new quality control levels and quality assurance with their products. For example, when a shopper finds a damaged piece of clothing in the store they typically try to find another one without the flaw. If an online shopper receives a damaged product they will return the product and more than likely not rebuy a new one. Product quality that is poor will have a costly impact on a brands future and the loyalty of their customers. The article then begins to explain how to reduce product defects, maintain brand strength, and meet changing customers’ expectations by the following: Evaluating quality control, employing a tightened inspection plan, adopting a zero-defect policy, and shifting their focus to quality assurance. This article believes following these steps will help companies reduce the loss of customers and product defects.

Kaltcheva, V. D., Winsor, R. D., & Parasuraman, A. (2010). The impact of customers' relational models on price-based defection. Journal of Marketing Theory and Practice, 18(1), 5-22. Retrieved from http://ezproxy.liberty.edu/login?url=https ://search-proquest-com.ezproxy.liberty.edu/docview/212247334?accountid=12 085

This article explains the results from a study that was conducted in order understand the relationship between customer defection and price competition. The loss of customers’ places retailers in the position to charge more for their products (no matter the quality) to compensate the loss of clients. Resource-intensive strategies are then needed to be in place to ensure their customer retention rates. The article also discusses how price competition is unavoidable for companies today and it creates a negative atmosphere for company owners. If retailers do not compete with others on prices, they are forced to develop new strategies that will help them defend their market share.

Meredith, J. R., & Shafer, S. M. (2017). Operations management for MBAs (6th ed.). Jefferson

Piha, L. P., & Avlonitis, G. J. (2015). Customer defection in retail banking. Journal of Service Theory and Practice, 25(3), 304-326. Retrieved from http://ezproxy.liberty.edu/login?url=https://search-proquest-com.ezproxy .liberty.edu/docview/1768593188?accountid=12085

The purpose of this article is to provide organizational owners and managers insight on why customers depart and services fail in the retail banking industry. A European bank with an international presence that provides retail banking services is observed for this study. The bank experienced an increased defection rate in their customer credit sector, and they were curious as to why customers were leaving. Gathering information from 6,000 retail customers who has defected, and in this companies case a defected customer is someone who has closed at least one of their bank accounts. Research explains how customers who feel appreciated and are being provided excellent customer service and service quality will improve a customers’ intents to stay with a firm. By companies eliminating anything that causes customer dissatisfaction, stress decrease will help improve areas that drive customer satisfaction. Customer dissatisfaction must be monitored regularly in order to avoid any others to follow their lead.

Watson, L., & Spence, M. T. (2007). Causes and consequences of emotions on consumer behavior. European Journal of Marketing, 41(5/6), 487-511. doi:10.1108/03090560710737570

The purpose of this article is to recognize how consumers experience different emotional behaviors due to either desirable or undesirable situations. The article gives a great example explaining how if someone wrecked their car on accident they would experience guilt when buying a new car or having it fixed. Whereas someone whose car is wrecked by someone else would experience anger when buying a new car or fixing it. These different emotions affect a consumers’ behavior and how they do or do not appreciate a company’s services or products. The article then explains how there are three approaches to studying emotions which are: dimensions, categories, and cognitive appraisals. These approaches groups customers’ emotions based off similarities rather than determining the cause of their emotions. Companies who can maintain a holistic perspective on emotionally charged decision making will allow them to dive into many different strategies that assist and serve many different types of customers.

Williams, P., Khan, M. S., & Naumann, E. (2011). Customer dissatisfaction and defection: The hidden costs of downsizing. Industrial Marketing Management, 40(3), 405-413. doi:10.1016/j.indmarman.2010.04.007

This article discusses how there is very little research on how customers are impacted through a company downsizing its services or products. The overall goal of downsizing is to reduce costs for a company. Research in this article has shown that companies who downsize have a negative impact of customer satisfaction and there are lower retention rates. This will lead to companies experiencing financial losses and create unknown for their expected future revenue. Jobs are also lost or financially impacted when companies downsize. Customers lose loyalty to the brand, products, and services which leads to the diminishment of long-term customers.