FACTORS THAT BRING HIGH IMPACT ON THE QUALITY SERVICES AND CUSTOMER SATISFACTION IN BUSINESS ORGANIZATION Nur Hidayah Hanis Binti Mohamad Rusli [email protected] Faculty of Information Management, Universiti Teknologi Mara (UiTM), Malaysia

Abstract The organization realizes that customers are their most important asset and recognize that a high level of customer satisfaction can only be achieved by enhancing service quality. Because of that, customer nowadays very aware and alert of the quality of service and product that has been given by the industry either good or bad will affect their satisfaction level. This paper aims to discuss about the factors that bring high impact on the quality services and customer satisfaction in business organization. While, in business organization trust, commitment, and service qualities are frequently cited in the literature as a critical thing to achieving important firm outcomes.

Keywords: Quality services, Customer satisfaction, Trust, Value

1.0 Introduction Along with the development of information and technology, the amount of information available to customers has increased tremendously and consumers thus have developed their own opinions regarding the service. Moreover, customers are increasingly putting more emphasis on the quality of the products and services that they consume, rather than the price, and this is especially true for non-consumable goods (Shu-Mei Tseng and PinHong Wu, 2014). According to Zeithaml et al., 1996; Parasuraman et al., 1988; McDougall and Levesque (2000), cited from Houn-Gee Chen et al., (2012), they said that quality service, customer value, and satisfaction are some of the most important factors in the organization, especially in business competition for manufacturers and service provider alike.

Until

recently, researchers generally agree that service quality leads to higher levels of customer perceived value and customer satisfaction. Thus, according to Hossain (2015), cited from 1

Samson Yusuf Dauda & Jongsu Lee (2016), he said that whether providing services or products, services are context oriented, and since different industries offer different services, separate service quality models may be required for each sector to evaluate the satisfaction of customers. Thus, according to Yi (1990), he said that customer satisfaction is viewed as a collective outcome of perception, evaluation, and psychological reactions to the consumption experience of a product or service. Furthermore, according to Carr (2007), cited from Houn-Gee Chen et al., (2012), he argued that managers cannot simply create services, provide them at high-quality levels, and hope for the best; instead, he argued that service evaluations result from a comparison of services against the norms of fairness and the treatment of similar customers, a fairness of service consideration. Thus, consumer evaluations of service fairness and service quality influence their reactions to service (Huang and Su, 2010). Specifically, the fairness service plays a role equivalent to service quality in determining customer perceived value and attitudes in the business industry (Houn-Gee Chen et al., 2012). It is because nowadays, consumers evaluate services not only using personal standards (i.e. tangibles, reliability, responsiveness, assurance, and empathy), but also through principles of distributive, procedural, interpersonal, and informational fairness. Following is the example of factors that give a high impact on the quality services and customer satisfaction in organization.

2.0 Trust According to Verhoef et al., (2002), cited from Houn-Gee Chen et al., (2012) said that trust is a central construct for determining customer attitudes and behaviours. Hence, trust is regarded as the willingness of a party to be vulnerable to the actions of another party based on the expectation that the trustee will perform a particular action of importance to the trustor, irrespective of the ability to monitor or control the other party. Trust, commitment, and service quality are frequently cited in the literature as critical to achieving important firm outcomes (Pierre Chenet et al., 2010).

Customer perceptions of trust affect customer

satisfaction, the customer evaluations of a retailer, and ultimately, repurchase intentions. Besides, a trusting person believes that a trusted person or party is more likely to act in an upright manner, which is particularly important when the services required are related to money transaction or management. Trust is also an essential factor that enables people to build relationships under the condition of uncertainty and risk of fraud (Houn-Gee Chen et al., 2012). In business trust is viewed as one of the most relevant antecedents of stable and collaborative relationships. From the very beginning, researchers have identified trust as an 2

important contributory factor for service quality and customer satisfaction. Trust is considered to be an important element of consumer perceptions about brands and companies (Sukanya Kundu and Saroj Kumar Datta, 2015).

3.0 Customer’s Value According to Sigala, 2006; Kang et al., (2007), cited from Houn-Gee Chen et al., (2012), they said that understanding a customer’s value is important to improve customer relationships in service delivery. Hence, perceived value is the customers’ perspective or assessment of the product attributes and performance in the purchase procedure or use situation. Additionally, much research has indicated that perceived value has a strong, direct effect on customer trust and satisfaction. Customer value perception increases customer satisfaction and loyalty to the business, which in turn increases customer purchase intention (Houn-Gee Chen et al., 2012). Other than that, customer value is inherent in, or linked through use to, certain products or services. Customer value is something perceived by customers rather than objectively determined by sellers or other stakeholders, and these perception processes often involve the total package received from the sellers or service providers. In summary, perceived value is not only influenced by the service quality perceived by customers, as suggested in existing literature, but also the fairness of service provided by service providers (Houn-Gee Chen et al., 2012).

4.0 Customer’s Expectation The study of customer satisfaction had always received large attention by researchers (Ilias Santouridis and Panagiotis Trivellas, 2010).

Customer satisfaction has long been

recognized as a central concept and a critical goal of all business activities (Houn-Gee Chen et al., 2012). In details, according to Sukanya Kundu and Saroj Kumar Datta (2015), satisfaction is a person’s feeling of the pleasure or disappointment arising from comparing products’ perceived performance in relation to expectation. It is a state of experience that might vary in intensity but not in quality. Moreover, customer satisfaction is the primary mental state of customer which comprise by two things which is expectation before purchase and the perception about performance after purchase. Besides that, satisfaction is closely related to consumers’ expectations. To make it clear, according to Bitner and Zeithaml (2003), cited from Sukanya Kundu and Saroj Kumar Datta (2015), they also 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. Customer satisfaction has been 3

considered as a fundamental determinant of customer loyalty.

Nevertheless, customer

satisfaction is defined as a result of comparison between what a customer expects about services provided by a service provider and what the customer receives in actual terms. If the service provided by an organization does meet a customer’s needs and expectations, then this may subsequently lead to higher customer satisfaction (Sukanya Kundu and Saroj Kumar Datta, 2015).

5.0 Service Quality Service quality was described as a composite of service attributes or dimensions that are desirable to customers (Kum Fai Yuen and Vinh V. Thai, 2015). During the past few decades service quality has drawn a lot of attention from researchers and practitioners due to its strong impact on business performance, customer satisfaction, customer loyalty and profitability. Service quality is usually understood as a measure of how well the level of the delivered services matches customer’s expectations (Ilias Santouridis and Panagiotis Trivellas, 2010). The current global market is highly competitive, and service providers have become much more focused on achieving high levels of customer satisfaction by offering excellent service quality. Hence, service quality is measured based on a comparison between the perceptions and expectations on the service delivered (Shu-Mei Tseng and Pin-Hong Wu, 2014). According to Hashim Zameer et al., (2015), perception of the customers regarding the dimensions of service quality can be seen after the customers has used the product or availed the services. An effective way to judge the customers’ perceived value is customers’ next purchasing decision that is either it repeat to use previous product or service or switch to others.

Picture 1: The effect of quality service on customer satisfaction (Integrity Management Consulting, 2012)

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6.0 Customer Knowledge According to Shu-Mei Tseng and Pin-Hong Wu (2014), they said that to maintain the quality services and customer’s satisfaction, the business organization should expert in customer knowledge to attract them in the business. Customer knowledge refers to an enterprise’s understanding of its current and future customers’ needs and preferences. Usually, organization acquire customer knowledge by creating interactions and dialogues with customers, by observing how customers use products or experience service, as well as by analysing corporate data and information in order to forecast customer behaviour. Thus, enterprises also should carefully observe, interact and create dialogues with their customers to acquire customer knowledge so that they can provide customized service and maintain long-term relationships. According to Mithas et al. (2005), cited from Shu-Mei Tseng and Pin-Hong Wu (2014), he also stated that through interactions with customers, an enterprise can obtain customer knowledge related to new demands about products or services that can be helpful references for improvement; moreover, this process is beneficial to customer satisfaction, customer loyalty and employee productivity. Then, this knowledge can provide distributors and retailers with information by which to develop new products and increase the relationship between corporations and their customer. In other words, enterprises should use existing or potential customer information in order to extract customer knowledge and, through sharing and promoting customer knowledge, enhance their customer value (Shu-Mei Tseng and Pin-Hong Wu, 2014).

7.0 Customer Loyalty Based on a review the articles, this paper also found a few impacts of quality services and customer satisfaction which is customer loyalty. It founds that customer loyalty as a main actor in achieving the customer’s satisfaction. According to Ilias Santouridis and Panagiotis Trivellas (2010), customer loyalty is often examined from a behavioural point of view by measuring items such as number of repeat purchases, “share of wallet” and purchase frequency. A frequent assumption is that loyalty translates into an unspecified number of repeat purchases from the same supplier over a specified period. In this line, it defined loyalty as “a deeply held commitment to rebuy or repatronize a preferred product/service consistently in the future, thereby causing repetitive same-brand purchasing, despite situational influences and marketing efforts having the potential to cause switching behaviour”. Overall, despite the fact that there are plenty of different approaches aiming at the definition and conceptualization of loyalty, there is a general convergence towards the 5

view that both behavioural and attitudinal features must be included. According to Cronin and Taylor (1992), cited from Ilias Santouridis and Panagiotis Trivellas (2010), he pointed that the behavioural view is usually based on the monitoring of the frequency of repeated purchases and brand switches, while the attitudinal approach assumes that loyalty is derived from psychological involvement and preference and focuses on issues such as brand recommendations, resistance to superior products, repurchase intention and willingness to pay a price premium.

Diagram 1: The 6 key factors that influence customer loyalty (Loyalty Guide Reports, 2007)

8.0 Conclusion While several authors have emphasized the nature of service quality and the relationships between customer satisfaction and customer trust, this study sought to explore the new bridge of the factors that give an impact to the quality services and customers in the context of business organization. However, this study is also found that customer knowledge has a positive that influence the service quality and organizations should effectively gain customer knowledge regarding their perceptions of product quality and customer service, the effectiveness of sales personnel and related communications, as well as social compliance, so that they can properly manage customer dynamics and market trends in order to increase customer relationships, improve overall service quality, maintain the customer’s satisfaction and advance corporate competitiveness (Shu-Mei Tseng and Pin-Hong Wu, 2014). In other words, enterprises also should acquire valuable customer knowledge during the service process. As a conclusion, the organization should then identify, attract, and retain customers, as well as establish long-term customer relationships by which to enhance service quality and 6

customer satisfaction. As a recommendation, to strengthen competitiveness with limited resources, they should focus on reduction of products and services provided, transaction cost, wait time, and quality of goods that these four attributes have a strong impact on customer satisfaction or dissatisfaction depending on quality performance in business organization (Samson Yusuf Dauda and Jongsu Lee, 2016). Lastly, to maintain the quality services and customer satisfaction, the organization should pay attention to all these factors that will bring the high impact of the business.

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