The Service Sector and Customer Satisfaction

Unlike the production sector, the services sector is very different and demanding. There are five main features that distinguish service from production:

1. To be intangible: Since services are classified as “performance” rather than material elements, they cannot be evaluated in terms of being seen or touched as in products. For this reason, services cannot be stored and stocked, protected by “patents” and cannot be exhibited on shelves and showcases.

2. To be heterogeneous: It is not possible for companies operating in the service industry to standardize the goods they produce because it’s a person providing the service. Since every person has a different presentation style, personality structure, characteristics and habits, it is not possible to receive and provide the same service all the time. The service can vary from person to person, from customer to customer and from day to day.

3. The Concurrency of Production and Consumption: Most products are first produced, stocked for a while and then consumed. Contrary to this, services are produced and consumed at the same time.

4. To be nondurable: The specialty of services can carry with it some particular elements that can be identified as non-durability. These elements are;

a. It’s not possible to make an inventory or stock services.

b. Many service businesses encounter significant problems balancing demand and supply since services cannot be stocked.

There are no problems when demand is constant. However, a

fluctuation in demand creates problems for businesses.

5. Lack of ownership: One of the biggest differences between service and product is the lack of ownership of the service. When goods are purchased buyers have the right to claim ownership of the product, in service businesses when the service is produced the ownership does not transfer from the seller to the buyer.

The main factor that determines the future of businesses is the customer. While customer service, which is considered as a means of competition and survival, connects the existing customers to the business, it is the most important factor in the formation of a new customer portfolio and the continuity of purchasing habits of customers.

All activities and efforts within a business are based on satisfying the customer, retaining the customer and ensuring customer loyalty. Attracting new customers can be more difficult and more expensive than maintaining existing ones. Therefore, customer retention can be more important and critical than attracting new ones for the business.

In today's conditions, companies must have the following capabilities for effective service management:

• Quick to meet customers' requests

• Flexibility to meet different customer requests and to change rapidly

• Creativity at every stage of the organization

• Internal customer satisfaction, the employees within the organization

• The quality of the product offered to the customer

In addition to the operation personnel that play an active role within a company, there are also support departments such as accounting, administrative affairs and marketing. When the business is considered as a whole the overall aim of the company is to satisfy the customer. Nevertheless, the concept of customer has been divided into two, in conjunction with the total quality approach. In general, the concept of external customers is used when defining the people who use the products or services produced by the companies and the internal customer concept when talking about the employees of organizations.

Satisfying the internal customer ensures that things are properly functioning, therefore less mistakes. In this way, the external customer is more satisfied. When the customer is highly satisfied, the profit of the business increases and the costs decrease. Achieving internal customer satisfaction is only possible through strong communication among people involved in the process and a healthy understanding of each other's expectations.

The concept of external customer satisfaction is closely related to the concept of internal customer satisfaction. Internal and external customer satisfaction is a cycle as in the figure.

Satisfying the customer, maintaining them, meeting their needs and expectations constitute the strategies and policies of today's businesses which require them to put in intense efforts. Beyond all this, a high rate of change has been observed among today’s customers. Considering the developments in technology and the competition environment, changes have been observed among the new requests made by customers. The changes that have emerged among customer requests can be summarized as follows;

• As a result of increased level of knowledge, awareness and through being more selective, the customer wants to be valued.

• The customer wants the products or services that are provided to her/him at a low cost and high quality.

• The customer wants the products and services to suit their needs and expectations.

• The customer prefers to establish honest, close and warm relationships.

It is necessary to comply with some principles in customer relations and to transform them into determining factors of the Customer Relationship Management strategy. These principles have been clarified below:

1. To take on an encouraging role: The business must play an encouraging role in creating emotional involvement and acceptance in the customer. It is necessary to meet or exceed customer expectations without reflecting on the negative factors such as time and budget constraints of the business to the customer during marketing.

2. To become an expert in communication: The business must successfully make use of all communication channels in all marketing presentations made to the customer for sales purposes.

3. To take on an accommodating role: It’s inevitable that there will be situations during the relationship with the customer in which opposing views may arise between the business and the customer. In such cases, it is expected that the company will take on a compromising attitude and offer the most appropriate solution under the most suitable conditions to meet customer requests.

4. To take on responsibility: The business should approach the relationship with the customer with an awareness of its own responsibility. Customer satisfaction under any circumstance has become the most important responsibility that businesses should take into account.

5. To have a holistic approach: Making a sale to the customer should not be the sole target of today’s businesses. The service during the sale as well as before and after should be evaluated as a whole due to the fact that the main target of the business should be to ensure that the customer leaves with satisfaction under any circumstance.

6. Entrepreneurial understanding: It is essential that the business makes every attempt to satisfy the customer and should spare no cost.

7. Result oriented work: The business should put forward every type of result oriented effort in order to ensure a complete and uninterrupted communication with the customer.

Since customers have evolved into the most valuable assets of businesses today, customer satisfaction has become businesses most important goal. Practices and technological developments of enterprises can easily be imitated under intense competition conditions. However, since imitating customer relations is relatively difficult, it emerges as a factor that gives superiority against competitors. For this reason, it is very important for businesses to produce goods and services in line with customer needs and expectations, and to create customer satisfaction and loyalty.

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