Background of the Study
Successful businesses capitalize on their ability to ensure satisfactory customer relations. Effective communication enables employees of a company to create and promote customer loyalty amid stiff market competition (Soderlund & Rosengren, 2007). Customer loyalty is the level to which customers demonstrate repetitive purchasing behavior from a service provider or a trader (Bell & Patterson, 2007). It makes customers show positive attitudes towards a service provider or a trader of a particular good, hence feeling an endless urge to buy the good from that particular trader whenever a need arises. Kueh and Voon (2007) stated that loyalty is understood in three dimensions. The dimensions are behavioral, attitudinal and cognitive. Behavioral dimension looks at the behavior of a customer with respect to repetitive purchasing of a product from a given trader. It shows preference for a product or brand. Attitudinal dimension looks at customer’s intensions to buy a brand while cognitive dimension is concerned with the customer’s ability to remember a brand (Lawfer, 2004).
The research has shown that word of mouth advertisement, which is an element of good customer relations, is important in attitude formation (Lawfer, 2004). When members of staff of a company take time to greet their customers when they visit the company to make purchases or for window shopping, they employ word of mouth advertisement, which impacts decision making. Customers like to associate themselves with products from companies that value them, hence making customer relations a vital aspect in determining customer loyalty and the general success of a company (Brandi, 2001).
Starbucks Corporation is a company that operates with the business name ‘Starbucks Coffee’. It is an American coffee company that is regarded as the largest coffeehouse in the world. The company has numerous stores in different countries. It has created employment opportunities for several hundred thousand employees who play a pivotal role in ensuring its success by ensuring good customer relations.
The company relies on good customer relations as a way of competing to maintain its market share. Good customer relations make it highly competitive with its main competitors like Costa Coffee. The two companies sell similar products, including hot and cold beverages, whole-bean coffee, pastries and snacks among others. Starbuck also has evening locations that provide a variety of beer and wine. The similarity of the products and services offered by the two leading coffee houses call for appropriate application of strategies for each of the companies to win the heart of their customers and maintain their customer loyalty. It is for this reason that Starbucks’s employees apply the art of speaking right from the time when customers come to their stores. It is interesting to find out how employees at Starbucks Coffee apply customer relations as a move towards creating and promoting customer loyalty.
The Study Scope
The concept of customer loyalty is very broad, and there are several factors that influence it independently. Some of the factors are customers’ age, the size of a company or firm, the location of a firm, and infrastructure among others. To increase reliability and enhance clarity of this study, its scope will be narrowed down. As such, the study will focus on the aspect of customer relations as a basic element that determines customer loyalty. The study will also be solely based on Starbucks Company.
Customer loyalty is of great interest for every business organization. The management levels of organizations seek to find ways by which they can keep their customers loyal to their brands due to the global commerce that threatens to push some companies out of business. Organizations have come to understand the role that employees serve as the first point of contact with customers. Customers develop different attitudes towards organizations based on the kind of reception that they are given on arrival at the doorsteps of the organization. This concern explains the increasing prominence of word of mouth advertisement that employees do for their brands at the moment they welcome customers to their companies or organizations.
Business operations are becoming increasingly complex with technological advancements. New companies are created every day, and customer demands also keep changing. Therefore, companies need to have a clear knowledge of the best ways to keep their customers loyal to their brands so that their competitors do not outdo them in the market. The need for customer relations is increased by information explosion, which is evident from the Internet. Customers are confused about their brands of choice as new brands are introduced every day and presented as the best by means of advertisement. The current situation has made customers develop interest in companies where employees are ready to welcome them. They also like companies that offer basic information about their products to aid them in the decision making process before they make purchases. Good customer relations help customers in simplifying information about products as they process and focus on what is important.
This study is relevant since it provides information about a practical approach that Starbuck members of staff use to ensure the prevalence of good customer relations. The approach consists in the use of communication by word of mouth to create and promote customer loyalty. Since every business organization has interests in attaining customer loyalty, the findings of this study will help them know the role of good customer relations in maintaining customer loyalty and ways of achieving it through verbal communication.
Study Aims and Objectives
This study seeks to determine how customer loyalty can be created through customer relations. For the sake of this study, customer relations are given a narrow look, which is mainly focused on verbal communication between customers and Starbuck’s members of staff.
To achieve the main aim of this study, it is intended to meet the following objectives:
- To establish how good customer relations help in creation and maintenance of customer loyalty;
- To understand how members of staff can use communication as a strategy towards creating customer loyalty;
- To understand the importance of customer loyalty to a business organization.
This study will be guided by a number of questions as identified below:
- How do customer relations influence customer loyalty?
- How can employees create customer loyalty through communication?
- What is the importance of customer loyalty to a business enterprise?
- How does customer loyalty help to face stiff market competition?
This study is based on the perception that good customer relations that Starbuck’s members of staff display by the use of communication help them in creation and maintenance of customer loyalty.
Because of the highly competitive nature of the business environment, organizations are constantly focused on strategies that ensure that they remain relevant in their various industries. One of the major concerns has been the need to create customer loyalty, which can help organizations to maintain their market share. Organizational managers have learnt the role that employees play in creating customer loyalty. Many companies offer similar goods or services, hence increasing the level of competition for the market share. With the resulting pressure in today’s workplace, it is easy to end up with a dysfunctional organization because of demoralized and demotivated employees. Failing to create good customer relations makes it difficult for a company to have loyal customers who have full trust in its brands. The problem prevents organizations from meeting their objectives as they are pushed out of market by their rival companies.
This section provides a description of how the study will be conducted. It brings out the research design, target population, sampling design and size, data collection instruments, data analysis and interpretation tools, and limitations of the study.
In quantitative research, explanations are given to phenomena through a collection of mathematically analyzed numerical data. This study is aimed to find out customers’ opinions, perceptions and reactions to the mode of reception at Starbuck Coffee. It used qualitative research design that is effective in understanding people’s underlying reasons, opinions, and motivations to behave in a particular manner. The researcher mainly observed the way in which Starbuck employees receive and treat their customer in relation to the word of mouth.
Rationale for Selecting Appropriate Strategy
The determination of the strategy to use in this study was based on the purpose of the study. It was necessary to consider whether the study was aimed at generating numerical evidence, giving an explanation to whether something happened, or both. The purpose of the study called for the use of qualitative research design as it is effective in studying people’s perceptions over issues and motivations to behave in a given manner. The strategy helped to understand people’s motives, associations, as well behavioral triggers (British Library, n.d.).
Limitations of the Study
The study was particularly focused on the beverage industry and the implications of customer relations on the development and retention of customer loyalty. Although the study was conducted in a business environment, the results obtained should be regarded as specific to the beverage industry, and they should not be perceived to be representative of other industries. The study can be improved by doing a comparative analysis of the studied company, Starbuck, and other companies dealing with similar products. A comparative analysis can help establish the difference between Starbuck that ensures good customer relations and those that do not.
By observing the mode of behavior of members of staff at Starbuck Coffee, it is obvious that they are keen to say hi to customers whenever they visit the company. They are organized to work in shifts, hence ensuring that there is always someone to attend to incoming customers by welcoming them to the store. Members of staff approach customers directly, welcome them and talk to them in a way that depicts a desire to turn customers into buyers.
When customers enter a store of the company, they are received by neatly dressed members of staff at the reception desk. The receptionists direct customers to different sections of the store based on their interests. At different sections of the store, there are members of staff on standby. They are well-informed of the products in their respective sections and use their communication skills to inform customers about what to expect from the products. The members of staff take their time to respond to questions and concerns from the customers. It involves telling customers the contents of their products and reasons why they should be preferred over similar products that are available in the market.
The customers who visited the store were keen to listen to the information that was given to them by the various members of staff. They asked several questions about various products before making their choice. At the time when customers exited the store, most of them showed delight and took time to say bye to the members of staff at the reception. Some of them left their contacts behind and made requests for doorstep delivery of products.
Customer loyalty is built through creation of trust among customers on products’ ability to satisfy their needs. Customers choose the firms to trust under different circumstances. The choice of a firm to be trusted with the provision of particular products is made in accordance to the manner in which firms, through their employees, take initiatives to build good customer relations through communication. Communication is regarded as a tool that is used to attract customers and to win their trust for a firm’s products or brand. As such, an organization that creates a culture of effective customer relations realizes success as it creates customer loyalty. Formation of trust among customers is dependent on the emotional ties that are created when firms invest in relationships. Communicating to customers helps to convince them that a firm cares for them and that it is concerned about their welfare. In a business environment, customers are in a state of uncertainty. They are not sure about the intentions of the firms and the ability of products to satisfy their needs. Uncertainty is solved through good customer relations, where members of staff attend to customers and offer them adequate information about their products.
Generally, the success of Starbuck Coffee is attributed to its good customer relations. Members of staff take time to attend to customers from the time they enter the store to the time they leave it. The management has members of staff at different sections of the store who offer information to customers on the products in their sections. All in all, customers are satisfied when they are warmly welcomed and given enough information about the products of their choice. They develop trust in a firm’s ability to offer them quality products and services; hence they become loyal to the firm.