Thursday, August 7, 2014

Why are Customer Service and Trust Important for Customer Retention?



Abundance by Dr. M. Abel

Service is an important component of customer retention, business development, and improved product sales. Companies that fail to develop customer service also fail to develop trust with their customers which mean they may lose a lifetime of patronage. Research by Webber, et. al. (2012) discusses provider service orientation and how this predicted cognitive trust much more than customer agreeableness. 

Trust is the root of all commerce and relationships. Cognitive trust is grounded in the perception of another’s reliability, dependability and competence (McAllister, 1995). The way in which customers view customer service representatives is important for the retention of those customers. 

Let us assume for a moment that you have a problem with a product and bring it forward to a customer service representative. When the representative doesn’t appear to understand the problem, doesn’t follow through on company promises, and makes a number of mistakes within the service process that trust will dissipate. 

We all have experienced these types of situations from time-to-time. You have a problem, can’t get it resolved, and the customer service representative has no idea what to do. The implication is that the poor performance of the representative also changes the perception of the company and their products. The representative actually does represent the company in the customer’s mind. 

Strong customer service is a “predisposition to provide superior service through responsiveness, courtesy, and genuine desire to satisfy customer needs” (Bettencourt, et. al, 2001). This requires a level of listening and understanding the options available to meet that customer’s needs. When staff are undertrained, not knowledgeable or indifferent they fail to fulfill their function at an adequate level. 

The study found that trust is built when customers go above and beyond the call of duty to service the customer. Their personality has a direct impact on how the customer perceives both the services offered and the service representative they are talking with. Ensuring positive demeanor that is focused on the customer and having the competence to meet that need is important for customer retention and future sales. 

McAllister, D. (1995). Affect- and cognition-based trust as foundations for interpersonal cooperation in organizations. Academy of Management Journal, 38, 24–59.

Webber, et. al. (2012). Personality and trust fosters service quality. Journal of Business Psychology, 27

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