How Can the Customer Services Improved at Wal-Mart

Abstract

This research aims to focus on how customer services can be improved differently at WAL MART, the world’s largest retail giant. The research contains why improving customer service is necessary for WAL MART, how it can make its’ customers a life long partner, analysis of customers’ demands and wants in terms of complaints referred by them, and give a solution to such complaints. The researcher has also shown some strategic marketing policies that drive toward improving customer services. A case study has been included to show the impact on customer service for treating the employees badly.

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Introduction

It was the primary objective of every business professional or firm to satisfy his/her or its’ customers needs since men started to take it as a profession about thousand of years ago. Though the format was different the purposes remain the same. No one can ignore the issues relating to customers’ satisfaction. All the services provided for customers vary from one to another firm. Some firms provide very high-quality service whereas some provide very low-quality service. So in this modern epoch of science improving customer service has now become the most alarming issue for every firm as well as for WALMART to survive in the competitive market. A recent survey of buyers in the Wal-Mart retail center focused on their level of satisfaction with distribution service. By this research, it will be examined the status of customer care improvement, i.e., input provided by the buyers, in the buyer-seller relationship. It was hypothesized that the improvement of customer care of a company would be related to greater customer satisfaction. Information provided by customers should propose sellers’ guidance for improving their overall services.

How Can the Customer Services Improved at Wal-Mart

The data has been collected both from primary and secondary sources. Resources are also gathered from academic books, journals, periodicals, websites, and articles. A researcher conducts a field survey to find out the expectations of the consumers regarding various customer services like online shopping facilities provided by WAL MART. The researcher has also generated several complaints made by the customers of WAL MART to find out the exact causes regarding the fall of service quality of WALL MART. Considering the data generated both from primary and secondary sources, the researcher has pinpointed the key problems relating to the fall of customer service at WAL MART and thus at the same time also provided guidelines to overcome such situation.

Data Collection and Analysis

Both the qualitative and quantitative method of data collection has been used in the study. Data for this study came from the online index (Kavilanz), the University of Michigan’s published customer service index, and from several primary and secondary sources. Qualitative data include interactive interviewing, observation, and written descriptions by respondents. The researcher for this study has generated various information through interviewing customer service conditions at WAL MART and observed the true story. Quantitative data analysis refers to a pictorial, graphical representation of the data based on qualitative information.

Review of Academic Literature

This part of the research helps the readers to gain some knowledge about the key academic literature relating to this topic. It will also help them to focus on the key strategic issues of the research.

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Customer

Customer means the target market for a company (private and public) to whom it provides goods and services according to their (customer) needs, wants, and demands. In the context of marketing, the customer is known as an asset for every company with which they dealt in such a way that it can generate a high market share for the company. To retain this customer forever WAL MART must treat them as their asset like other company assets, which has not been found in their recent performances. Needham (2006) shows the importance of a public service ethos to delivering good quality public services has gained considerable recent attention in the UK. Government ministers, trade union leaders, a parliamentary select committee as well as a national newspaper have stated their belief in a distinctive and valuable ethos of public service.

Service

From a management viewpoint, “Service is defined as an aid that helps the customer attain his operational objectives. Alternatively, this is an activity or a result of an activity, which has value to the recipient. Under this concept, any act which provides utility is a service (Hauk). On the other hand, service refers to a kind of element of a marketing program designed to facilitate goods to satisfy the customers buying objectives. It has been found in several studies that WAL MART’s current services can not meet the customers buying objectives, isn’t it a notable issue for WAL MART?

Online Shopping

Consumer shopping orientation was identified as an important predictor of online shopping behavior (Sheth and Parvatiyar, 1995; Swaminathan et al., 1999). Despite the importance of shopping orientation in the context of online shopping, no research has addressed the issue of whether online consumers with different shopping orientations have different criteria in evaluating shopping websites.

Existing evidence from the research showed the importance that Internet website attributes have on consumers’ online shopping behavior. “In online shopping, where consumers typically cannot see or feel the product and have no intrinsic cues to rely on, the brand name serves as a heuristic for the evaluation of the product” (Lwin, and Williams, 2006, p.245). By providing an established brand name, Internet marketers can increase the likelihood that consumers will purchase the product from them because of the lower levels of perceived risk (Tan 1999).

Customer Satisfaction

Customer satisfaction depends on the product’s perceived performance relative to a buyer’s expectation. If the product’s performance falls short of expectations, the customer is dissatisfied. If performance matches expectations the customer is satisfied. If performance exceeds expectations, the customer is delighted, Kotler and Armstrong, (2003) stated that satisfaction is the customers’ evaluation of a product or service in terms of whether that product or service has met their needs and expectations. Fe and Ikova (2004) added that the perception of the word “satisfaction” influences the activities which we conduct to achieve it.

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“Researchers have also identified customer satisfaction from a multidimensional nature and view overall satisfaction as a function of satisfaction with multiple experiences with the service provider” (Marks, 2005). And high customer satisfaction can be ensured through the improvement of customer services dynamically. A survey conducted by the University of Michigan pithily resulted that the services of WAL MART have been declining for many years. Another estimate based on the customer satisfaction Index, Michigan, America has shown that WAL MART’S customer satisfaction score dropped at 72 last year, down from 81 in 1995 (Fornell, Claes. et. al., 1996). According to Shaw (4 MAY, 2006), “[s]o it has now become an important object to improve the customer service level of WAL MART.” According to Stank, Daugherty, and Ellinger (1997), [c]ustomer satisfaction is a key component of competitive strategies, and keeping customers happy is critical to long-term business success.

Customer service

Self (1997-1998) states that “[c]ustomer service is any contact, whether active or passive, between a company and a customer, that causes a negative or positive perception by a customer” “Excellent customer service (is) the ability of an organization to constantly and consistently exceed the customer’s expectations” (Ward, n.d.). Customer service, an activity that includes identification and satisfaction of customer needs. Giving customer service may mean giving them excellent service once. “More often it refers to the whole process of meeting the customer needs time and time again and giving them a better service then they expected” (The Times 100. n.d.).

Relationship between service quality and customer satisfaction

The empirical studies show that two constructs service quality and customer satisfaction are conceptually distinct (Bitner,1990; Boulding; Kalra; Staelin, and Zeithaml,1993). Sureshchandra et al. (2002) identify that the survey result shows that there are high relationships between service quality and customer satisfaction. Sureshchandra et al. (2002), have emphasized that the two constructs service quality and customer satisfaction do exhibit independence and are indeed different constructs from the customers’ point of view. In more recent studies Spreng and Mackoy (1996) addressed the relationship between service quality and customer satisfaction by using the model developed by Oliver et al. (1992). The model integrates the two constructs and suggests, among other things that perceived service quality is an antecedent to satisfaction. Spreng and Mackoy (1996) showed that service quality leads to customer satisfaction. Bitner (1990) developed a model of service encounter evaluation and empirically supported the effect of satisfaction on service quality. Boolton and Drew (1991) also proposed that satisfaction leads to service quality. Earlier, Woodside et al. (1989), supported the casual reality of service quality and satisfaction with data collected in the area of health care.

The aforementioned studies showed that customers will be satisfied if a company would be able to change its’ service quality positively in favor of them. It means improvement of service quality increases customers’ choice of opportunity to advanced their lifestyle. Even there is a negative impact of service quality on customer satisfaction which is now becoming the key factor for WAL MART.

Improving customer services: Isn’t it obvious for WAL MART?

Customer service is often called the variable issue that changes day by day due to changes in market needs. So improvement of customer service is the primary strategic goal for all marketing programs. Because it will help them (customers) to survive in the competitive market. In another sense, since human needs are never fully satisfied, so frequent improvement of customer services is required. Moreover, the more a company can improve its’ customer services the more it can increase its’ percentage of loyal customers. Hence,” highly satisfied customers are less price-sensitive and produce several benefits for the company. They talk favorably to others about the company and its’ products and remain loyal for a longer period” Kotler and Armstrong, 2007, p.73). But if the customer services are not changed by the changing requirement then it will not yield an expected benefit for the company. The company will lose its’ image, market share and face financial risk.

Finally, it has been found based on the above statement that improvement of customer services is necessary for WAL MART. Because if it is not done then from a corporate viewpoint company will face loss of profits, gains, and relative market share. And from a social viewpoint company will be neglected by the social community and face numerous criticisms. (Note: WAL MART has already fallen into such problems).

How can firms keep their customers for lifetime

WAL MART can follow several steps to retain its customers by providing improved services. The strategies to keep the customers for life can be sorted into some basic steps that any business professional can utilize. For getting enthusiastic referrals and keeping the customers for life the following proven techniques can be followed (Sanow, 2008):

  1. Inform customers what the company is going to do.
  2. Inform about the time when the intended things are going to be done.
  3. Reward the customers for various product improvement-related suggestions.
  4. Send handwritten thank you cards containing various attractive designs.

Peter Drucker’s success has come from following this strategy. He sent 12 thank you cards a day.

  1. Do phone calls in return promptly which makes you look good to your customers since not all companies can follow this strategy.
  2. Maintain the vision of the company under promise and overdeliver.
  3. WAL MART should emphasize Customers’ convenience not over its’.
  4. WAL MART must make sure the customers that it (company) has a keen interest to serve them(customers).
  5. WAL MART must treat the current customers as their best ones and thus they should keep stay in touch and continue to serve their needs and wants.
  6. If there is any mistake, it’s not enough to say “I am sorry”. So the company needs to have a “GOOF KIT”.
  7. Establish a customer advisory panel whose main duty is to deal with customer complaints.
  8. Evaluate the present condition of customer services through hiring mystery shoppers.
  9. Avoid using jargon, speak your customers’ language.
  10. Treat the company’s employees well so that they can generate a high market share. Because poorly treated employees may cause poor customer service. As it has already become an alarming issue for WAL MART.
  11. Never show an indifferent attitude to your customers, try to treat them horizontally.
  12. Give back to your best customers. If you run a special price or product offer for first-time customers, ensure your current customers are offered the same opportunity.

Online shopping at WAL MART, losing it’s standard of services

“Wal-Mart, however, did not fare well with its online profits. Though Wal-Mart is the world’s largest retailer, it ranked number thirty in the online index. Many people reason that Wal-Mart did not improve because of its new websites face-lift, which may have made their online shopping services more confusing than helpful” Problems facing by the WAL MART customers(Lewis, 3 October 2007): (1 to 6)

  1. Now it has become a single click task for online shoppers. But WAL MART can not provide the facility at a satisfactory level.
  2. Customers have to face so many hassles while standing in a long line for buying a product.
  3. Nowadays employees behaved is getting rude towards the customers.
  4. Sometimes customers are overcharged for a product.
  5. Downmarket products at prices that no longer seem very attractive.
  6. Wal-Mart used to have a rule where if a customer was charged more than $3.00 than the marked price of an item, they got the item for the lower price. But this rule is not now applying by the associates of WAL MART.
  7. Pointing towards an indiscriminate direction

“From the 2006 Holiday results, we see an increase in multi-channel retailers, but they still lack the unique ideas of “pure-play” e-tailers. However, if these “click and mortar” retailers continue to evolve from their brick and mortar heritage by implementing better online services, we will probably continue to see their customer satisfaction results climb. However, from Wal-Mart’s results, one can conclude that an appealing website design and easy-to-use features are key factors in increasing profits” (Retail vs. Online Shopping, n.d.).

Problems faced by online shoppers

  1. There is no customer service number.
  2. Customers have to send their complaints, mode of product services through email.
  3. Customers have to wait for days to get a response.
  4. The wrong date of product delivery is written, often two or three days later.

How to handle customer complaints

Handling customer complaints efficiently is another notable issue for WAL MART to do succeed in its’ corporate life. Not all firms can deal with the issue efficiently. It may happen due to not having a separate code of customer dealings guideline. However, here are some typical ways that have shown that WAL MART can follow to deal with the complaints as effectively as can.

Give full attention

The primary task will be to pay hundred percent attention to what the customers are saying to the company associates or employees. Avoid half listen and write down the complaints specifically in the company database.

Let the customers express their feelings

Don’t make the customer angry by defending him/her or by interruption while addressing the complaints. They don’t care why the problem occurred, so let them vent.

Express regret and mean it

All problems do not occur at the employees’ fault. But sometimes they should take the blame and apologize for having such a bad experience.

Ask the customers how they won’t make things right. Then do more

It is the advanced form of the technique of serving the customers according to their demand. In this context, the complaints advisory panel may ask the customers to show the ways how they can make them happy by solving the problems. Be polite and generous. Because everyone doesn’t want much but simply wants the panel to listen to him/her.

Assure the customers to solve the problem

When the complaint is listened to and confirmed then assure the customers that action to prevent the problem will be taken soon. So “don’t worry”.

Thank them

The company should thank the customers for providing direct feedback regarding business development information. And it can be achieved through efficient complaint handling (Agnihothri, et. al., 2002).

“If your employees handle every customer complaint using these steps, you’ll keep 99% of them coming back. You’ll have a healthier business because it keeps getting better. And we all know happy, loyal customers are the foundation of a healthy, sustainable business” (Stirtz, 17 Feb 2008 ).

Treating the company employees well results in improved customer services

A report stated on WAL MART-world’s largest retail giant, showed that treating the employees poorly results in bad customer service. Hence, Wal-Mart scored the lowest of any retailer on the American Customer Satisfaction Index from the University of Michigan study, earning it the title of “Worst Customer Service in America.” “This is the second time Wal-Mart has earned the title in the last three years” (Goldschmidt, February 2008). WAL MART’s problems are low wage fixation, poor health care, inconsistent scheduling for store employees, lack of concern from the corporate office, disputes in bonus distribution to the employees.

Suggestions to overcome the obstacles

  1. Increase the wage and develop a pay scale scheme through consulting with the employees.
  2. Develop a schedule for the store employees and maintain the time strictly with the supervision of the logistics director.
  3. The health condition of the employees must be considered and appoint a permanent doctor in every store if necessary.

If all the firms (retailers and large corporate houses) can take care of their employees well then it will make a high return for the firm. When employees are being satisfied with their present job condition then customer service will automatically be improved.

Various marketing strategies that lead to improving customer service

WAL MART should focus more strategically on the following marketing strategies to improve its’ current market condition. These are the basic formulas for any kind of business to survive in a competitive global business.

  • Reactive marketing: The salesman sells the product and encourages the customer to call if he or she has questions, comments, and complaints.
  • Proactive marketing: The company salesperson contacts the customer from time to time with suggestions about improved product uses or helpful new products. (D’souza, n.d.).
  • Customization: It involves taking initiatives to design the market offering. Such a strategy can be applied when information is collected relating to customers’ needs, wants, and demands.
  • Customization: Leaving it to the individual customers to design the marketing offering- allowing customers to be prosumers rather than consumers (Kotler, and Armstrong, (2003).
  • Internal marketing: An ongoing process whereby an organization aligns/put or brings into line, motivates, and empowers employees at all functions and levels, to consistently deliver a positive customer experience that helps achieve business objectives.
  • Implementing Total Quality Management (TQM): An organization-wide approach to continuously improving the quality of all the organization processes, products, and services (Kotler, and Armstrong, (2003). Most of the customers are no longer able to tolerate the average type of service quality. They just want improved service quality from time to time and it can be ensured only when the company will be able to implement the TQM. So today’s executives should view the task of improving service quality as their top priority. Because there is a very close relation between service quality and customer satisfaction

Ingredients that constitute a successful customer service operation: A guideline for WAL MART as well as for other SMEs and large corporate houses

  • Customer-centric strategies: Put the customers on top of the mind and the rest will follow. Strategies that are taken to place the customers in the center position are much more likely to result in greater satisfaction for the customer and greater customer acquisition and retention for the company.
  • Shared knowledge base: Having a structured document database that creates, organizes, and publishes the case histories relating to the company’s customer service strategy. An easy-to-navigate receptacle for all past histories enables agents, partners or customers to be automatically provided with the most relevant documents depending on the specified context to facilitate rapid case closure (Gaillard, n.d.).
  • Self-service center: A self-service solution provides several benefits both for the company and the customers- creating a new service request, tracking the status of existing cases, and making interacting with the customer team in the resolution process from start to finish. Moreover, self-service solutions give end customers direct access and automated assistance to the company’s knowledge base at any moment.
  • Partner center: A Partner center is nothing but a little bit different from the self-service center. The variables that make it different include additional, customizable functionalities so that partners can play a more proactive role in the resolution of open cases (Try-Service, n.d.).
  • Role-Based Experience: “Creating easy to use, role based dashboards and reports gives managers a snapshot view into case progression and performance of what each customer service agent team is working on in real time. Comprehensive reporting capabilities allow for result to be instantly quantified and problems to be fixed to ensure even more efficient case resolution in the future” (Try-Service, n.d.).
  • Business Intelligence: “To fully harness the knowledge base and information aggregated through collaboration, it is critical to then create value from this data. This boils down to integrating this intelligence into the service resolution process and changing fundamental business processes to provide insight into what customers want improved” (Gaillard, n.d.).
  • Cross-sales integration: In creating a more engaging, collaborative experience, customer service becomes a more dynamic issue relating to the company’s sales and marketing department (Wind, July 2005).

In short, paying stronger attention to customer detail and exchange of information with the internal and external resources facilitate to improve the operational efficiency of the marketing agents. Thus it leads to provide valuable and up-to-date customer service (Gaillard, n.d.).

Legendary customer service

Customer satisfaction the virtuous circle.
Figure: Customer satisfaction the virtuous circle.

The figure stated above has shown a legendary customer service model. The model depicts that good customer service makes the customers happy. Such positive feelings drive the customers toward repeat purchases. Which in turn helps to earn better profits for the company. And if the company would be able to earn more and more profit then surely it will also hold a large portion of the relative market share. In short, it can be inferred that good customer service brings several benefits for the company.

Ethical issues

  1. Overcharging practices need to be lessened.
  2. The legal rights of consumers must be ensured.
  3. Goods must be sold at affordable prices.
  4. Distribution of quality products must be ensured.
  5. They should clearly represent the products by avoiding misleading promotion.

Conclusion

“Most customers prefer improvement of good service to lower prices” (The Times 100. n.d.). Customer satisfaction is like an investment. It is equivalent to research and development in a manufacturing company (The Times 100. n.d.). If someone is loyal to a company they will recommend it to their friends. There is a saying “Take care of your customers, and profit will take care of it”, (Tailor, n.d.). So it is time for WA L MART to revive its’ condition. It can follow the above strategies if the company would like to see its’ prosperous corporate life.

References

Agnihothri, Saligrama. et. al., (2002). Leveraging technology to improve field service. International Journal of Service Industry Management. Vol. 13(1). 47 – 68.

Bitner,1990; Boulding; Kalra; Staelin and Zeithaml,1993). February, 2008. Journal of Business Market Management, Vol. 2 (1).

D’souza, cajetan.(n.d.). philip kolter- excellent marketing management summary. Web.

Fe and Ikova (2004). Web.

Fornell, Claes. et. al., (1996). The American Customer Satisfaction Index. Journal of Marketing, Vol. 60, No. 4 (Oct., 1996), pp. 7-18.

Gaillard, Philippe. (n.d.). Emphasizing the “C” in CRM: Ingredients for Customer Service Success. CRM Today. Web.

Goldschmidt, Alex. (2008). Wal-Mart’s Poor Customer Service Has Got to Go. WalmartWatch.com. Web.

Hauk, G. James. Handbook of Modern Marketing.

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Kotler, Philip. and Armstrong, Gary. (2003). Principles of Marketing,10th ed. Bitnar and Zeithaml: Prentice Hall.

Lewis, Truman. (2007). Wal-Mart Era Ending Ending. Consumer Affairs. Web.

Lwin, O. May., and Williams, D. Jerome. (2006). Promises, Promises: How Consumers Respond to Warranties in Internet Retailing. THE JOURNAL OF CONSUMER AFFAIRS. Vol. 40(2). 236-260.

Marks, JMM. (2005). Customer service as an identication of service quality in south African super market. A script submitted in partial fuifillment of the requirements for the degree M. Consumer science. In the faculty of natural and agricultural science.University of Pretoria. (Sureshchandar et al., 2002). Web.

Needham, E. Catherine. (2006). Customer Care and the Public Service Ethos Journal of Public Administration. Vol. 84, No. 4, 2006 (845–860).

Retail vs. Online Shopping (n.d.). “Click and mortar” Retailers Posing as Competition to “Pure-play” E-tailers. Web.

Sanow, Arnold. (2008). 25 Ways to Keep Customers for Life. Customer Service Manager (CSM). Web.

Self, T. John. (1997,1998). What is Customer Service? Improving Customer Service. Issue # 1 of 70.. Web.

Shaw, Mike. (2006), RFID Application Issue, Trust worth computing, Web.

Sheth, J.N. & Parvatiyar, A. (1995) Relationship marketing in consumer markets: antecedents and consequences. Journal of the Academy of Marketing Science, 23, 255–271.

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Stirtz, Kevin. (2008 ). How to Handle Customer Complaints, StirtzGroupsLLC. Web.

Sureshchandra G.S. et al. (2002) The relationship between service quality and customer satisfaction – a factor specific approach. Journal of Services Marketing. Vol. 16. Iss. 4. 363 – 379.

Swaminathan, V., Lepkowska-White, E. & Rao, B. (1999) Browser or buyers in cyberspace? An investigation of factors influencing electronic exchange. Journal of Computer-Mediated Communication, 5. [WWW document]. Web.

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Wind, Yoram (Jerry). (2005). Marketing as an engine of business growth: a cross-functional perspective. Journal of Business Research. Vol. 58(7). 863-873.

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