Customer Compatibility Management as a Tool to Increase Customer Loyalty and Operational Efficiency in Service Companies

Customer Compatibility Management as a Tool to Increase Customer Loyalty and Operational Efficiency in Service Companies

Authors

  • Irina A. Zakharova Lomonosov Moscow State University

Keywords:

Operational efficiency, types of customer variabilities, customer service, compatibility management, customer loyalty

Abstract

Customers of service companies, being an integral part of the service itself, confirm the thesis that each service provided is unique, and the variability introduced by customer behavior significantly affects both loyalty and efficiency of the company, and also creates operational risks. Customers don’t just consume or buy a service, they help create it, even if it means showing up to a scheduledмmeeting on time. Companies for a long time haven’t paid attention to the variability introduced by customers, and moreover, if earlier they considered it in terms of its impact on the organization’s operations, today they are increasingly considering the impact of variability on the behavior of customers themselves. In the same way that companies experience dissatisfaction when customers exhibit behavior that is out of line with their activities, customers experience discomfort when the experience of contacting an organization and receiving a service does not match their expectations and desires. Thus, customers and companies impose variability on each other. Accounting for variability, what Frey calls a classic accommodation, improves customer satisfaction through higher operating costs. On the other hand, reduced variability or classic reduction lower operating costs, but often at the cost of quality customer satisfaction. Achieving compatibility between organizational capabilities and customer preferences is a key issue for organizations in increasing business performance and customer loyalty. This article examines the types of variability brought by customers, reflects scientific discourse and analyzes the strategies of service companies in various industries in terms of managing customer variability, and also explores the areas of activity to achieve compatibility between the company and service consumers.

Author Biography

Irina A. Zakharova, Lomonosov Moscow State University

PhD, School of Public Administration, Lomonosov Moscow State University, Moscow, Russian Federation.

Zakharova@spa.msu.ru

References

Bailey Ch. Customer Insight Strategies: How to Understand Your Audience and Create Remarkable Marketing. London, New York: Kogan Page, 2020

Buell R.W., Campbell D., Frei F.X. The Customer May Not Always Be Right: Customer Compatibility and Service Performance // Management Science. 2021. Vol. 67. Is. 3. P. 1468–1488. DOI: https://doi.org/10.1287/mnsc.2020.3596

Buell R.W., Choi M. Improving Customer Compatibility with Tradeoff Transparency // Harvard Business School Working Paper. 2019. № 20–013. URL: https://www.hbs.edu/ris/Publication%20Files/20-013_Jan_2021_revision_5e19ba8f-9ced-4fdc-b69f-fc3e19fdbd23.pdf

Campbell D., Frei F. Market Heterogeneity and Local Capacity Decisions in Services // Manufacturing & Service Operations Management. 2010. Vol. 13. Is. 1. P. 2–19. DOI: https://doi.org/10.1287/msom.1100.0299

Chuang C., Hu F-L. Technology Strategy-Innovating for Growth of Citibank // International Review of Management and Business Research. 2018. Vol. 7. Is. 2. P. 317–324. DOI: 10.30543/7-2(2018)-1

Frei F. Breaking the Trade-Off Between Efficiency and Service // Harvard Business Review. 2006. Vol. 84. Is. 11. P. 93–101.

Frei F., Morriss A. Uncommon Service: How to Win by Putting Customers at the Core of Your Business. Boston: Harvard Business Review, 2012.

Frei F., Morriss A. Unleashed: Unapologetic Leader’s Guide to Empowering Everyone around You. Boston: Harvard Business Review Press, 2020.

Guajardo J.A., Cohen M.A. Service Differentiation and Operating Segments: A Framework and an Application to After-Sales Services // Manufacturing & Service Operations Management. 2018. Vol. 20. Is. 3. P. 440–454. DOI: https://doi.org/10.1287/msom.2017.0645

Sasser W.E. Match Supply and Demand in Service Industries // Harvard Business Review. 1976. November. P. 133–140.

Downloads

Published

2022-10-30

How to Cite

Customer Compatibility Management as a Tool to Increase Customer Loyalty and Operational Efficiency in Service Companies. (2022). Public Administration. E-Journal (Russia), 93, 7-21. https://spajournal.ru/index.php/spa/article/view/159

Issue

Section

Scientific articles

Categories

How to Cite

Customer Compatibility Management as a Tool to Increase Customer Loyalty and Operational Efficiency in Service Companies. (2022). Public Administration. E-Journal (Russia), 93, 7-21. https://spajournal.ru/index.php/spa/article/view/159

Most read articles by the same author(s)

<< < 21 22 23 24 25 26 27 28 29 30 > >> 

Similar Articles

1-10 of 188

You may also start an advanced similarity search for this article.

Loading...