ABSTRACT

Customer service is the provision of service to customers before, during and after

a purchase. The researcher decided to do this study to know if the customer service really

affects the business. The survey was constructed as an interviewer-administered

questionnaire with rating and closed end questions (Saunders et al., 2009). Descriptive

statistics such as frequency count, percent and rank are considered. From the findings the

customer service that the employee provides make the establishment stronger, and it makes

other establishment lose their best employee and have a profit sucking cycle. This study

will thorough explain how big is the effect of customer service in every business. The

reader of this research will learn and discover new things.

It will discuss how customer service affect the owner and the customers. How long

the problem will last, is it short-term or will it continue in the future. This research will

make the business owner know how important the customer service they give to their

customer. How satisfied a customer is depends on the quality of service received by the

customer. The gap is often between the perception of customers and their expectation,

which will eventually determine whether they are dissatisfied, satisfied or excited.

It is hoped that this study will inform the employees, owners and customers about

a good customer service that will positively affect the business, whether in terms of profit,

loyal employees and loyal customers.

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 ACKNOWLEDGMENT

First and foremost I would like to thank God for giving me knowledge and

heavenly wisdom, for guiding me to finish this immersion. Without Him I can do nothing.

To the parents, I would like to thank them for the unconditional support. The

financial that they provide and for understanding me for going home late. They give me

positive thoughts that I can finish their immersion without making a big problem.

To the employees, in the boutique business, and the customers, I thank them for the

time that they gave to answer the questionnaire survey. Without them I can’t finish this

research.

And to the teacher for being an inspiration, for sharing their knowledge, who taught

the student consistently of what and how we should behave in the work, that's why the

student made this far. The teacher make this all possible.

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 CHAPTER 1

Introduction

Customer service is the provision of service to customers before, during and after

a purchase. It concerns the priority an organization assigns to customer service relative to

components such as product innovation and pricing. The perception of success of such

interactions is dependent on employees “who can adjust themselves to the personality of

the guest”. Kurtenbach (2000) explains that those who are successful in customer service

rank their customers experience as the top priority.

Customers do not buy goods or services, they buy the benefits goods and services

provided them with. They buy offerings consisting of goods, services, information personal

attention and other components. Customers are lifeblood of any organization, and without

them, a firm has no revenues, no profits, and therefore no market value (Grönroos 2000,

3). Delivering service quality to satisfy the customers need is considered an essential

strategy for success and survival in today’s competitive environment (Parasuraman et al,

1985). To attain true customer satisfaction companies need to achieve quality not only by

eliminating the causes for direct complains but need to provide their products or services

with excellent, attractive quality – provide the delight to the customer. So research on

customer satisfaction is often closely associated with the measurement of service quality

(Cronin and Taylor, 1992; Bitner and Hubbert, 1994).

In different services industries the relationship between customer satisfaction and

service attributes have been difficult to identify because services nature is intangible

(Hong, Goo et al., 2004; Nguyen and Leblanc, 2002). Due to intangible nature of services

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it is difficult for the firms to analyse how the customers perceive and evaluate the desired

outcome of the service quality (Zeithaml, 1981). As customer evaluate their level of

satisfaction by experimenting the service quality, satisfaction with services is related to

conformation or disconfirmation of expectations (Smith and Houston 1982). The issue of

highest priority today involves understanding the impact of service quality on profit and

other financial outcomes of the organization (Zeithaml et al., 1996).

This thesis reports the effect of customer service on boutique business in Surallah

Public Market. To show that customer service is where the business rely to keep the

business going on. The industries must not just show a solution to the direct complain of

the customer, rather they should improve their product and services, to create a more loyal

customer in the future. Emphasis on this study is the customer satisfaction that will make

a healthy business, repeat customers, and a word-of-mouth praise. Poor customer service

that can damage reputation, the customer lifetime drops, lose the best employee, and enter

a profit sucking cycle. Growing business that will create a new personnel, have a broader

customer base, lots of favourable financing opportunities, and can have a relocation

possibilities. Good customer service that has a properly trained representatives, a greater

profit, loyalty, and internal benefits.

Through this study we will find out where, when, what, how, and why customer

service is important in every business industries. Does it really affect the business or it is

just because of poor strategy in business. This study will thorough explain how big is the

effect of customer service in every business.

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Statement of the problem

The research will revise existing knowledge or practices about customer service. It

will discuss how customer service affect the owner and the customers. How long the

problem will last, is it short-term or will it continue in the future. This research will make

the business owner know how important the customer service they give to their customer.

1. How can customer service affect the income and the way they run their

business?

2. What are their strategies to make the customer comfortable?

3. What are the benefits of having a good customer service?

Significance of the study

This study will contribute to the improvement of customer service that the

employees gave to their customer. We hope that this research will encourage the

owner and also the employees to be more attentive and to provide a better

customer service, to know the point-of-view of customer towards the customer

service and to apply it as an effective strategy that will benefit not only the owners

and employees but also the customers.

The outcome to be considered consist of the following: the improvement of

employees customer service towards their customer; development of a positive

attitude towards customer service; increase in business’ competencies; able to spot

the difference between a business who give a good customer service with those

who give a poor customer; enhancing employees independence; help the business

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 organization to develop a more effective customer service that take the interest of

the customer; the owners will be able to prevent the upcoming problem that will

come because of a poor customer service; and it will encourage the business

organization to develop and upgrade their customer service.

Definition of terms

1. Customer Service – is the provision of service to customers before, during and

after a purchase.

2. Purchase – to get something by paying money for it

3. Market Value – the amount for which something can be sold on a given market

4. Customer Satisfaction – a measure of how products and services supplied by a

company meet or surpass customer expectation

5. Service Quality - an achievement in customer service

6. Intangible – an asset (as goodwill) that is not corporeal

7. Financial Outcomes – the difference between earnings before interest, and taxes

and earnings before taxes

Scope and Delimitation

The main purpose of this study is to provide information regarding the

customer service and how customer service affects the business. The study

considers the business owners’ personal information such as their name (optional),

gender, age, and section.

The researcher limited the study to 10 business establishment from Surallah

public market and 10 customers from Surallah year 2018. Each of the respondents

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 were given a survey questionnaire to answer. The owners’ selected came from ten

different establishments, and the customers was selected in random to avoid

prejudice of their perceptions.

In order to assure manageability of the collected data, the survey

questionnaire only included multiple choice items, checklist and ranking/rating

questions and did not include open-ended response.

Conceptual Framework

Customer Satisfaction Growing Business

 Healthy Business  New Personnel

 Repeat Customer  Broader Customer Base
 Word-Of-Mouth Praise  Favourable Financing
Opportunities
 Relocation Possibilities

Customer Service

Poor Customer Service Good Customer Service

 Damage Reputation  Properly Trained

 Customer Lifetime Value Representatives
Drops  Profit
 Lose The Best Employee  Loyalty
 Enter A Profit Sucking Cycle  Internal Benefits

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 CHAPTER 2

Literature Review

Introduction

In the literature there are so many related review that will further enrich this study.

This section shows a systematic review and meta-analysis that is used to indicate and

identify what are the Effects of Customer Service on business with- Effect Of Customer

Service On Customer Satisfaction, A Case Study Of Fidelity Bank, Adum, Kumasi,;

Customer Service Loyalty; Poor Customer Service and Its Impact On The Rwandan

Economy; Customer Service and Business Results: A Survey Of Customer Service From

Mid-Size Companies -It also shows in what status are participating, and what is the help

of it for their achievement. And it shows who is more desperate to participate in after school

programs and shows the good outcome in participating in afterschool programs.

Effect of Customer Service on Customer Satisfaction, a Case Study

Published on June 2011 by: Enyonam Afi Ako-Nai

Customers perceive service in terms of quality, but how satisfied they are with the

overall experience, is what defines their satisfaction. Whether the customer is satisfied

after purchase depends on the offer’s performance or the customer service in this case, in

relation to the customer expectations. However, according to Zeithaml et al (2006)

although service quality and customer satisfaction are used interchangeably, there is indeed

a distinction.

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 Customer Satisfaction is when the outcome of the service matches the expectations

of the service. As pointed out by Looy et al (2003), even though they differ one is a

component of the other. Zeithaml et al (2003) defines it as the customer’s evaluation of a

product or service in terms of whether the product or service has met his needs or

expectations. Failure to meet needs results in dissatisfaction, or a poor perception of the

service quality. Satisfaction can be acknowledged in various senses depending on what

needs the customer had before the service; it ranges from feelings of fulfilment,

contentment, pleasure, delight, relief, and ambivalence. Although it tends to be measured

as a static quantity, it is dynamic and evolves over time being influenced by a variety of

factors. Service quality is one of those factors that contribute to customer satisfaction, in

other words a component of customer satisfaction measure. As Looy et al (2003), points

out the distinction between the two is a very important one. The level of customer

satisfaction is the result of the customers comparison of the service quality expected in a

given service encounter, with the perceived service quality. In addition, the distinction is

that in 14 measuring customer satisfaction, the actual experience of the customer is the

basis of assessments while in service quality measurement the customer experience is not

required. According to Zeithaml et al, (2006), satisfaction or dissatisfaction is a measure

or evaluation of a product or service’s ability to meet a customer’s need or expectations.

CUSTOMER SERVICE LOYALTY

Published on September, 2011 by: Glathi John Charles

The assumption of all the basic loyalty business models is that keeping existing

customers is less expensive than acquiring new ones. It is claimed by Reichheld and Sasser

(1990) that a 5% improvement in customer retention can cause an increase in profitability

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between 25% and 85% (in terms of net present value) depending upon the industry.

However, Carrol and Reichheld (1992) dispute these calculations, claiming that they result

from faulty cross- sectional analysis. Barlow (1992) argues that the development of

consumer loyalty is a strategy which identifies, maintains, increase the output of the best

customers through a value-added services, interactive and long term focused relation. The

procedure is thus selective and requires information on the actual or potential value of the

customer. The interactivity is also interesting by taking account of the possible in implicit

or explicit way emitted feedbacks. 6 Finally Barlow (1992) insists on the long-term

duration and relation. The development of consumer loyalty consists thus in the

development of strategies and more or less general or selective actions likely to increase

the fidelity of the customers. The concept of retention is more attached to the not-departure

of the customer materialized by the continuation of the repeat purchases.

A first remark on the relation question is of static nature: the central point of

customer relationship management is that fidelity and repeat purchase cannot be reached

only by brand preference nor even by product satisfaction. It is therefore the interactive

and long term focused added value relation which becomes a choice factor at least in an

emotional dimension. Trust, commitment and attachment, contribute to reinforce the

relationship (Morgan and Hunt, 1994). These three factors reinforce the customer’s

functional dependence to the firm and can increase the switching costs. That is why heavy

purchasers with high attitudinal loyalty are the real loyal and less vulnerable to

competitors’ actions in the context of a mutual relationship. On the other side heavy

purchasers with low attitudinal loyalty are very vulnerable to competitor’s actions because

they are perhaps “locked’’ to the company for particular reasons (i.e. monopolistic

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situation, particular advantages). These “prisoners” may switch to competitors once the

exit barriers will fall down (Jones and Sasser, 1995).

Poor Customer Service and Its Impact on the Rwandan Economy

Published on July 2009 by: Gloria Lwakabamba, Research Fellow - IPAR

In a span of 2 weeks, in preparation for the annual Leadership Retreat had an

objective of evaluating customer satisfaction levels in Rwanda. From our findings, it

emerged that 25% of tourists experienced bad customer experience during their stay in

Rwanda. Rwandan customer service is seen as the worst in the East African region, which

comprises of Burundi, Uganda, Tanzania and Kenya. It also revealed that service quality

varies across sectors and is linked to skills, with white collar sectors generally performing

better and blue collar sectors, notably transportation remains weak in service performance.

In addition, further findings showed that the biggest problem with poor customer was the

lack of consumer awareness of what to expect and a cultural aversion to demanding better

as among the potential causes of poor service. Consumers who have lived outside Rwanda

or visited elsewhere in the region are 50% times more likely to complain when they get

poor service than those who have not. However, using the ‘satisfaction profit chain’

approach, it showed that if customer service were to improve significantly, it could increase

the Rwandan Gross Domestic Profit (GDP), as much as $40 million a year by 2012.

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Customer Service and Business Results: A Survey of Customer Service from Mid-

Size Companies

Published on April 2013: Dimensional Research

Every business manager knows that when a customer has a problem, the experience

of resolving the issue has a profound impact on future purchase. This effect has been

amplified as social media and web review sites enable customer service experiences to be

widely shared with friends, colleagues, and the general public. But just how impactful are

these experiences on buying behaviour? How long does the effect last? And what is the

impact for mid-sized companies? The following report is based on a survey of 1046

individuals who have had experiences with the customer service of a mid-sized company.

The survey’s main intent was to quantify the long term impact of customer service on

business results. The survey was conducted by Dimensional Research, an independent

market research company specializing in technology. This survey clearly demonstrates that

customer service has a dramatic impact on the buying behaviours among customers of mid-

sized companies. Good customer service results in increased personal and business

purchases while bad customer service drives customer to find alternatives. Interestingly,

customer service experiences are judged more on the timeliness of the interaction than on

the final outcome. Customer service has a long-term impact on buying decisions, with

customers continuing to be effected years after the initial interaction. Customers share

service interactions more widely than ever before. Social media and review sites are

providing awareness of customer service experience, and these stories influence the

purchases of others.

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 CHAPTER 3

Methodology

Method of Research

The researcher decided that the respondents would be the employees or the owner

of the boutique establishment and the prospective customers here in Surallah Public Market

to get a better and accurate result. The researcher personally give the questionnaire survey

to the respondents so the researcher can sympathized and talk a little with the respondents.

Method of Collecting Data

The researcher decided to collect primary data in form of a questionnaire survey.

The gathering of data range from a survey at the Surallah Public Market to collect

information through questionnaire that was given to the owner/employee and customers of

boutique business. The questionnaire survey were used to recover or discover data in this

case. And the questionnaire was divided into two parts, the first part was answered by the

owner or employee, and the second part was answered by the customers. To be able to have

a more accurate result. And the researcher use the secondary data in terms of company

information and background history that has also been used in this research in order to get

a deeper understanding about the company.

Sampling design

The survey was constructed as an interviewer-administered questionnaire with

rating and closed end questions (Saunders et al., 2009). The questionnaire was designed to

be able to answer the research questions.

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 The survey was conducted during morning and afternoon when it was assumed that

the response rate would be higher. To avoid misunderstanding the researcher explain, what

is the purpose of this research and why the researcher is conducting this? The survey

questions existed as category questions and others numeric rating questions

Statistical Treatment of Data

Responses to the questionnaire by the owners of boutique establishment were

statistically analysed with the data requirements of the study. Descriptive statistics such as

frequency count, percent and rank are considered.

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 CHAPTER 4

Analysis, Presentation, and Interpretation of Data

Analysis

How satisfied a customer is depends on the quality of service received by the

customer. Gap analysis model by Ziethaml et. al., (1988) and Groonros (2000) is often used

to determine the quality of service. The gap is often between the perception of customers

and their expectation, which will eventually determine whether they are dissatisfied,

satisfied or excited. Those customers who are satisfied or excited have a very high

percentage of being retained and eventually will become loyal at the end.

The sample size was 30, and all questionnaire was answered, 15 of which is

customers and 15 were employees or owners of boutique business.

Responses of employees/owners

Table 4.1 Number of years in this kind of business

Frequency Percent

0 – 1 year 2 13.33

2 – 5 years 6 40

Above 6 years 7 46.67

Total 15 100

From table 4.1, 7 establishments representing 46.67% to have been in the business

in above 6 years. This may be describe that these establishment is strong and firm because

15
they were able to reach this long. And 40% of the establishment is in 2 to 5 years in

business. And there are only 13.33% of establishment that is below 1 year.

Table 4.2 the same employee from the day they started the business

Frequency Percent

Yes 3 20

No 12 80

Total 15 100

Table 4.2 shows that only 20% of the establishment have remained the same

employee from the day they start their business. It shows that the percent of being loyal or

willingness of an employee to stay in one place is only 20%. On the other hand there are

80% who answered that they have been changing their employees since the day that they

start their business.

Table 4.3 Encounter an arrogant customer that makes them lose their temper.

Frequency Percent

Yes 15 100

Never 0 0

total 15 100

Table 4.3 aims to know the point of view of the owners and employees. The table

shows that 100% of the owners and employees answered that they encounter an arrogant

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customers that makes them lose their temper. All of the respondents additionally add that,

it is not avoidable since all people have a different personality.

Table 4.4 did you ever experience that a customer praise you?

Frequency Percent

Yes 15 100

Never 0 0

Total 15 100

Table 4.4 aims to show that there’s not only a rude but also an appreciative

customers. 100% of the respondents answered that they experience that a customer praise

them. Even it is rare, it still helps them to continue their business, because there’s still

people who wants their service.

Table 4.5 do you have a customer that always buy in your store?

Frequency Percent

Yes 15 100

No 0 0

Total 15 100

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Table 4.6 Are you friendly towards your customers?

Frequency Percent

Yes 15 100

Sometimes 0 0

No 0 0

Total 15 100

In table 4.5 shows that, 100% of the respondents answered yes, to the question if

they have a customers that always buy in their store. Also in table 4.6 100% answered yes

of being friendly towards their customer. They said that in this kind of business you need

to know your customer so that they would want to come back in your store. It is their

strategy to make the customers comfortable. And some of the respondents said if the result

of being friendly is a higher income then why not.

Table 4.7 did you ever think to close down your business?

Frequency Percent

Yes 0 0

Sometimes 3 20

Never 12 80

Total 5 100

In table 4.7, there is only 3 respondents who answered sometimes, representing to

20%. This may be just the nature of business that sometimes you think of giving up because

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you see no future in your business. But the blessings sometimes comes at your critical

moment, maybe that’s why this 20% still continues their business because of the blessings.

On the other hand 12 of the respondents representing 80% answered that they never think

of closing down their business. One of the reason is that the income is great and that the

customers satisfy with the service that they provide.

Table 4.8 Do you talk to your employees to give a better service towards your

customers?

Frequency Percent

Yes 12 80

No 3 20

Total 15 100

In table 4.8 only 20% answered that they are not talking to their employee to give

a better service towards their customers. And 80% answered they are talking to their

employee to give a better service towards their customers. It shows that this 80% train their

employees on how to communicate with their customers.

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Table 4.9 Employees rate with the service they gave to their customer

Rate Frequency Percent

In table 4.9, from 1 to 10 ratings, 15 of the
1 0 0
respondents representing 100% answered 10. They
2 0 0
3 0 0 said that they give their best to entertain and satisfy
4 0 0 their customers.
5 0 0
6 0 0
7 0 0
8 0 0
9 0 0
10 15 100
Total 15 100

Customer’s response

Table 4.10 Number of years as a customer

Frequency Percent

0 – 1 year 12 80

2 – 3 years 0 0

Above 3 years 3 20

Total 15 100

In table 4.10, 12 of the respondents representing 80% appeared to have been a

customer in the establishment that they choose for not more than 1 year. This may be

describe that this 80% are changing from time to time where to buy their products. On the

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other hand 20% of the respondents have been a customer in their preferred establishment

for above 3 years. This may be describe as customer loyalty and the establishment’s ability

to retain its customers, a view supported by Zeithaml et al. (2003:110), who maintained

that, the outcome of customers’ satisfaction is their loyalty and ultimately retention by the

organization.

Table 4.11 How long does it take for the employee to response to the customer?

Employees response Frequency Percent

Longer than expected 0 0

Fast 0 0

Normal 15 100

Total 15 100

In table 4.11, 100% of the respondents answered normal. It shows that the employee

is not taking a long time to response to the customers and they are not also fast in

responding.

Table 4.12 Are the employees friendly to you?

Frequency Percent

Yes 12 80

No 3 20

Total 5 100

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Table 4.13 how do the employees response to the customers

Employees response Frequency Percent

In an irritated voice 0 0

In a calm voice 15 100

Total 15 100

In table 4.12, 80% of the respondents said that the employees are friendly towards

them. And 20% answered that the employees are not friendly. And in table 4.13, 100% of

the respondents answered that the employees response to them in a calm voice. Even

though the 20% answered that the employees are not friendly they still response in a calm

voice.

Table 4.14 Employees introducing their new product

Frequency Percent

Yes 9 60

No 6 40

Total 15 100

In table 4.14, 60% of the respondents answered that the employees are introducing

their new product. This may be describe as a marketing strategy, that the employees are

promoting their products even the customers are not asking. On the other hand 40% of the

respondents said that the employees are not introducing their new product. It shows that

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they don’t have a marketing strategy, they just wait for the customers to ask them if they

have new products. And this makes the business weak and not firm.

Table 4.15 how likely the customer will refer this establishment

Frequency Percent

Not likely 1
In table 4.15, 60%
2
answered 5, this means that they
3
are in the middle, they will likely
4 3 20
recommend the establishment
5 9 60
that they choose to other people.
6 3 20
20% answered 4, and there are
7
also 20% who answered 6.
8

Most likely 10

Total 15 100

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 CHAPTER 5
Summary, Conclusion, and Recommendation

Summary of Findings

Customer service is the provision of service to customers before, during and after

a purchase. Below are the summary of results from the questions the researcher gave to the

respondents.

How does Customer Service Affect Customer Satisfaction

From the data obtained, only some of the establishment provides appreciable level

of customer service expected by the customers. This came from the customer responses

obtain.

What Are the Barriers to Quality Customer Service?

From the responses obtained from the customer service of employee, it was realized

that, each of the employee serve averagely above 50 customers a day and due to large

number, employee are pressured to be able to give attention to, be patient with each and

every individual customer.

How Does Customer Service Impact Customer Loyalty

From the data obtained, because some of the customers are satisfied with the service

they are loyal to the establishment. Most of the customers also have recommended the store

to others and they intended to continue purchasing in the establishment. However most of

the store is not spacious which one of the concerns raised by the customers is. Other

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strategies such as making a relaxing atmosphere, responsiveness, empathy, and assurance

are generally satisfying to the customers.

What customer service will really make the establishment strong and firm?

From the data obtained, it shows that a friendly atmosphere makes a repeat

customers. Not only satisfies the customers it also satisfy the employee. Because a better

service creates a better customer. It also shows that the owner should not only focus on

how to delight the customers but the owner should also give the employees or the service

provider the attention that they long for. So the effort that you put will not only make a

loyal customer but also a loyal employees.

Providing a customer service that has a friendly atmosphere make the establishment

strong and firm. Since the establishment will create a broader customer base and favourable

financing activities will come that will help the business grow.

Conclusions

The purpose of the research was to find out whether the customer service they

provide affects their business and how big the impact of it in running the business. From

the findings above the customer service that the employee provides make the establishment

stronger, and it makes other establishment lose their best employee and have a profit

sucking cycle. There are also a loyal customer that would want to continue buying in that

establishment. Providing a good customer service makes it hard for the employee if their

customers is rude.

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 In conclusion, the researcher can confidently say that good customer service will

positively affect the business, whether in terms of profit, loyal employees and loyal

customers.

Recommendations

Throughout the study it was proved that customer service greatly affects the

business. Patient is a very important factor when you are in the field of business. Customer

service providers of every establishment should provide other customer strategies that will

attract and delight the customers in place. For those who are already in the business they

should entertain the customers even they are not asking, they should always smile and greet

the customers with energy, the owner should not just give their full attention to please their

customers but also give attention to their employees so they will remain loyal until the end.

And for those who want to start up a business they should study first if their product is

feasible, if they have many competitors, and their prospective customers. That way they

will not lose all of their start-up capital.

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