Whether service providers truly understand customers needs and means to retain customers.docVIP

Whether service providers truly understand customers needs and means to retain customers.doc

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Whether service providers truly understand customers needs and means to retain customers   Abstract. It is well known that customer satisfaction impacts customer loyalty and market share. Based on over-optimism perspective, this study further examines the differences between the service provider and taker in terms of perceived service quality. It also explores the differences factors of forming customer satisfaction, trust, and customer loyalty. The analysis on dyad questionnaire shows that the perceived service quality of the service provider is generally higher than that of the service taker. As for forming factors of customer satisfaction, trust and customer loyalty, both the two parts believe that satisfaction originates from core service and staff service quality. But there exist differences in forming of trust and loyalty. For service quality dimensions affecting trust, the service provider considers core service as the origin one, while the service taker consider staff service quality as the vital one. And of the forming path of customer loyalty, the service provider believes switching costs can raise customer loyalty, which is different from the service takers view on this matter. The author provides some practical suggestions in view of these findings.   Key words: service quality; over-optimism; customer satisfaction; trust; switching cost; customer loyalty   1. Introduction   In Reichheld and Sassers study (1990), as long as the loyal customer defections is reduced by 5%, it is possible to realize a rise of 25% in profit. In some enterprises, the difference can even be as large as 85%. Pervious studies conducted on service industries with excellent performance showed that the commitment to quality, satisfactory handling of customers needs, and strengthening customer satisfaction decide continued existence of enterprises (Buzzell Wiersema, 1981). From the perspective of organizational behavior, enterprises emphasizing customer satisfaction are lik

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