Case Study Week 6

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Customer Relations/Service Comparisons Devry University, Customer Relations BUSN 258ON_B Erik C. Corrigan Constance Blanson 04/05/2012

Today’s marketplace is saturated with competition offering rock bottom prices. This gives the attitude that I can go anywhere that is convenient to me. What makes one business stand out more than the other is the customer service that is provided. That is the importance of customer service. Will the customer actually drive a little out of their way to shop with you and not the competitor closer to them? Customer service varies in great degrees in business today. To this day some companies don’t go the extra mile to ensure quality customer service. This is intended to disect the polar opposites. On the low end, the satellite TV giant Direct TV leaves a path of unsatisfied customers in every city it touches. On the other side of the coin is Apple and its blueprint for success. DirecTV is known for it’s funny commercials and the catch phrase, “Don’t just watch TV, Direct TV.” They spent $89 million in R&D in 2011, and overshadowed that number with $420 million in advertising (Rubin & White, 2012). Customer service development has no place in the TV giants’ tunnel vision. The numbers that mean anything to them are new subscribers per quarter. Class action lawsuits have been filed against DirecTV that describe the company’s use of bait and switch sales tactics. (Mathis, 2009). The lawsuit alleges that customers were told they could purchase additional receviers, then after paying $100 to $200, they find out that the receiver is not theirs to keep, it is only leased and they pay additional leasing fees. Over the last three years the Better Business Bureau has had almost 25,000 filed complaints against the company (Better Business Bureau, 2012). They have been called “bullies” and “con-men” by consumers and Television Broadcast companies. In the end, the customers are the ones that lose out. Any number of customers can attest to getting different information each time they call customer service. The right hand doesn’t know what the left is doing. The satellite provider has a monopoly on one of televisions’ most sought packages, the NFL package. Football fans have

no other provider, (Thanks to the license with NFL and DirecTV), that can show out of market football games. This means inevitably, some people will endure the poor products and services provided to them. DirecTV is listed as #110 in Fortune 500’s ranking of America’s largest corporations, with a market value slightly over 37 billion dollars. That is a pretty good bottom line for a company that rates just barely a C- in customer satisfaction rankings (Bode, 2011). DirecTV is and will see a continued growth of competition. This will hurt the entertainment juggernaut if more isn’t done to please the customer and retain their business. Waiting until the competition comes along to make changes will only have subscribers jumping ship. None of the major cable providers have registered great marks in customer satisfaction, and DirecTV isn’t the worst. Developing a strong grasp of customer service and loyalty will easily make the company soar above the rest. Begin with dropping the early termination fees and contracts. Brandish a sword of amazing customer service and customers will stay with you, not because they are contractually obligated. Singly the most important change that must be made to improve the company’s image is their call centers. The lack of consistency in data that customers receive is not only frustrating but also incorrect half of the time (Mathis, 2009). The skills for handling customer problems needs to be streamlined to certain groups that only handle specific types of problems. By specializing you create less need for an agent to thumb through a manual trying to employ generic tactics to solve their problems. Now, certain groups of agents handle loss of service, and certain agents handle problems with remote controls and the receivers. DirecTV has the means to restore its image. The only question is whether they feel that it will be profitable in the long run. DISH Network saw that it needed changes in its customer

service and satisfaction. Mid last year the company retooled its thinking, and made the customer experience much better. During the second and third quarter they lost nearly a quarter of a million customers. When the changes took place, the scale tipped the other way. The fourth quarter of 2011 was an unprecedented triumph for the smaller satellite service adding 33,000 customers (Baker, 2012). As for the customer service hall of fame, I have to put Apple in this category. Apple continues to top its competitors according to the American Customer Satisfaction Index. (American Consumer Satisfaction Index, 2012). It has nearly a double digit lead on the runnerup, HP. Of course a lot can be credited to the phenominon that is the iPhone and iPad for the company’s profits. It goes further though, straight down to every single Apple customer service reprsentative. No employees in the Apple stores are paid commission. Their hard work in sales will get them promotions, but they don’t need you to buy that iMac or else they starve. I consider that a plus for the customer experience. No pushy salespeople. In fact the opposite. From the top down Apple trains its employees to empathize with the customers and find solutions to their needs. They are instructed never to correct a customer for mispronouncing something (Ide, 2011). Likewise Apple provides keywords to replace words that sound negative. Apple has carefully planned and grown an environment that is welcoming and filled with knowledgeable and friendly employees. It has worked. According to the Wall Street Journal Apple’s reatil stores see more visitors in one quarter than all four Disney parks put together see in a year (Loftus, 2011). I suppose that if one had to pick an area for improvement by Apple, it would be pricepoint. Apple is considerably higher than it’s Android and PC competitors. Creating a

watered down version to gain more of the market in recession, could make sense. Ultimately, Steve Jobs vision of excellence is carried on in every employee that enters their doors. The cheerfulness, trendy décor, and innovative and interlinked products that Apple puts on the market are second to none.

Works Cited American Consumer Satisfaction Index. (2012, January). Scores by Industry: Personal Computers. Retrieved from American Consumer Satisfaction Index: http://www.theacsi.org/index.php?option=com_content&view=article&id=147&catid=&Itemid =212&i=Personal+Computers Baker, L. B. (2012, February 23). Dish Network adds subscribers, beats Street. Retrieved from Reuters: http://www.reuters.com/article/2012/02/23/us-dishnetworkidUSTRE81M1JD20120223 Better Business Bureau. (2012). BBB Business Review. Retrieved from Better Business Bureau: http://www.la.bbb.org/business-reviews/Satellite-Equipment-and-Systems-RepairService/DirecTV-Inc-in-El-Segundo-CA-81000357 Bode, K. (2011, October 13). J.D. Power: U-Verse, DirecTV Highest Rated TV Services. Retrieved from Broadband Reports .com: http://www.broadbandreports.com/shownews/JD-PowerUVerse-DirecTV-Highest-Rated-TV-Services-116554 Ide, M. (2011, June 16). Apple Store Employee Training is Rigorous and Demanding. Retrieved from IT ProPortal: http://www.itproportal.com/2011/06/16/apple-store-employee-trainingrigorous-demanding/#ixzz1pXgoZHka Loftus, T. (2011, June 15). That Warm, Fuzzy Apple Store Feeling? All Planned. Retrieved from Wall Street Journal: http://blogs.wsj.com/digits/2011/06/15/that-warm-fuzzy-apple-storefeeling-all-planned/?mod=google_news_blog Mathis, D. (2009, December 1). Federal Appeals court clears way for DirecTV lawsuit for alleged ‘bait and switch’ scheme. Retrieved from Kern Valley Sun: http://www.kvsun.com/articles/2009/12/15/news/doc4b0c3f5dd53d0523420840.txt Rubin, J., & White, M. (2012, March 29). DIRECTV Group's CEO Hosts Latin American Investor Day. Retrieved from Seeking Alpha: http://seekingalpha.com/article/469811-directv-group-sceo-hosts-latin-american-investor-day-transcript

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