An investigation of customer service experience and customer satisfaction and loyalty in Marks & Spencer and Sainsbury

Introduction

The contemporary business environment is characterised by stiff competition hence the need to put the customer at the center of focus. One important method of creating value for customers and maintaining a competitive advantage is through improving customer service experience. Executives of businesses have realized that it is not enough to offer quality products and services, but the businesses must also ensure they provide great customer experiences while shopping. The companies must strive to deliver and design quality customer service programs that ensure long-term financial benefits. The businesses must ensure that their customers derive maximum satisfaction during the shopping experience in their businesses. The way to make the customer more satisfied is through making the shopping experience more memorable due to the positive perceptions and attitudes developed from the shopping experience.

Customer experience defined anything a company does or fails to do in the process of interacting with its customers through virtue or real places. It is the meaningful things that the customer experience far and above the products and services offered that make the business stand a chance of becoming preferred by the customer (Kranzbühler, Kleijnen, Morgan, and Teerling 2018 p 445). The focus of the study is to do a comparative study of the customer service experience between major retail companies, namely Sainsbury and marks and spencer. The paper is organized into section one literature review, section two justification and contextualization, and finally, the methodology.

Research Objectives

General objective

To investigate the link between customer service experience and customer satisfaction and loyalty in Marks & Spencer and Sainsbury

Specific objectives:                                             

1 – To examine the quality of customer service experience within Sainsbury & Marks & Spencer

2 – To explore what is perceived as quality of customer experience at Sainsbury & Marks & Spencer

3. To find out the link between customer service experience and customer satisfaction, and customer loyalty
4. To determine if there is significant difference on the level of customer service experience and customer loyalty between Sainsbury & Marks & Spencer.

LITERATURE REVIEW

The importance of customer service experience have been extensively researched and can never be over-emphasized. Customer service experience is basically the experience that customers have when they get into contact with a brand or in their process of receiving services or the buying process. Customer experience has been described as new focus of building brands and consequently retaining and attracting customers. In the long-run, customer experience determines the competitiveness of business organisations. In that line, customer experience has been linked with customer satisfaction and customer loyalty. However, as noted in the introduction there is a paucity of studies comparing the impact of customer service experience between retail outlet brands. This chapter, therefore, reviews past studies and publications regarding the connection between customer service experience and customer satisfaction and loyalty. It focuses on what constitutes customer service experience and quality of customer experience, and more particularly in the retail stores’ sector. First, is the theoretical framework of the study.

Theoretical framework and conceptual framework

Services entail processes, deeds and performances. Customer service can be described as tangible or intangible activities that increase value on products towards meeting the expectations of customers and that lead to customer satisfaction and loyalty. Customer service experience can be challenging to quantify since different customers can have different experience of the same service but there are different measurements that have been invented to assess the quality of customer service and the most common is SERVQUAL. SERVQUAL was first developed by Parasuraman et al (1985), which initially included 97 attributes that were then shrunk into ten dimensions. The aim of developing the service quality measurement was to show that separate gaps in organizations contribute to the quality perceptions of the customers. The ten aspects as outlined in the SERVQUAL model include tangibility, credibility, responsiveness, reliability, access, competence, courtesy, security, communication, and understanding. The SERVQUAL model can be modified to fit in different fields, and in this study five dimensions that were included in the refined model are used. This dimensions include responsiveness, reliability, empathy, assurance, and tangibility. Responsiveness is the rate at which the organization is willing to help to help customers and how promptly the services are provided to the customers. Reliability is the performance of services in line with what is promised in a way that is accurate and dependable. Empathy is the level at which customers are shown care and provided with individualized attention by the firm through its employees. Assurance is the understanding and courtesy displayed by the employees as well as their ability to inspire confidence and trust. And tangibility is the physical facilities, equipment and appearance of the personnel. Since the current study will also include the online service experience of the customers concerning the online services of the two retailers some aspects of WebQUAL (Barnes & Vidgen, 2002).  The two additional dimensions are user-friendliness and interaction.  The now seven dimensions of SERVQUAL will be expected to influence customer satisfaction and loyalty. From this theoretical framework, the following conceptual framework is developed.

Customer service experience

Customer service experience entails the experience that customers have when they get into contact with a brand or in their process of receiving services or the buying process.

The customer service experience stems from several factors key among them, retail atmosphere, technology interaction, social environment, price, service interface, and prior customer experiences. The service interface is a direct interaction between the customer and the retailer agent. At this point, the employees of the organization matters in the quality of service delivered to the customer. The higher the motivation of the employee, the better the customer experience in the interaction. The social environment is determined by the other customers doing shopping in the retail space. Sometimes they may come from relatives, family members, or friends who become regular visitors in the retail space. Customer interactions have an impact on creating positive or negative shopping experiences (Kranzbühler, Kleijnen, Morgan, and Teerling 2018, p 456). The assortment derived from the ability of retailer to offer a variety of products and services to the customer. Customer service experience is enhanced when they immerse in a pool of choices created by the retailer’s ability to offer differentiated products that meet the customer needs. The more the customer can exercise flexibility in making choices of the products or services rendered in the retail, the higher the customer experience.

Technology also helps the customer to improve the shopping service experience since it helps reduce the wastage of time used in the shopping. Technology helps to improve the efficiency on which the customer orders, pays, and products delivered to their doorsteps. With the growth in technology in the recent past, customers don’t need to make physical visits to the shopping malls to look for products and order. They can do so within the comforts of their work desk, home, or while traveling by using smartphones. Some retailers have made customized mobile phone applications downloadable by the customers to help enhance their shopping experience and get faster services (Ramya 2015 P 117).

Customer access to other channels such as online platforms has an impact on the perceptions they derive from the service experiences in other channels. When the customer has several channels to evaluate from then, they develop a reference point to compare, which among a pool of many choices is the one with greater service experiences. For instance, a customer can compare the shopping experiences between company A and Company B in terms of ease of access to customer services through technology. They can also compare online delivery and physical visit to the retail shops and develop perceptions about the shopping experiences and the quality of service rendered. Several channels available help influence the customer perceptions about the quality of service provided among the several choices (Ramya 2015 P 120).

Prior customer experiences have an impact on customer perceptions of the quality of service rendered by the retail store. A happy first-time customer is likely to develop product and brand loyalty, and a subsequent visit will result in positive perceptions about quality service expectations. Dissatisfaction in the quality of service experienced during shopping has a more negative impact on the first time customer than a return customer (Ramya 2015 P 119). The return customer is likely to come back even if, at one point, he was dissatisfied by the service rendered than when a first-time customer has a poor service experience. The familiarity the customer develops with a particular brand such as Sainsbury has the impact of creating positive perceptions about the quality and the customer service experiences in the specific shopping outlet. The primary assumption derived from the belief that great customer experience in the first-time visit is likely to result in greater service experiences in the subsequent visits.

The companies create personalized products and loyalty programs that reward regular customers hence building personalized relationships with their customers. The customized relationships with the customers help improve the customer attitudes and perceptions about the quality of services available to a certain brand. In fact, a study by Agarwal and Singh (2018) in among retail stores in India revealed that customized relationship with the customer was one of most influencing factors on customer satisfaction.

The brand name is also another critical determinant of customer experiences (Johnston and Kong 2011, p 17). The brands may fall under two categories, namely what is sold within the retail store or the general brand of the retail store such as the marks and spencer brand. The customers may already carry with them perceived perceptions about a specific brand based on the messages delivered to them through advertisements. When the customer has prior knowledge, and a positive attitude towards a specific brand, positive perceptions may drive the level of customer satisfaction. The customer attitudes, perceptions may influence their behavior about the kind of service rendered in the retail outlet.

Customer satisfaction

Customer satisfaction can be described as the level at which the customer feels that their needs or expectations have been met. In other words, customer satisfaction is the outcome of comparing the customer expectations and service performance expectations. Customer satisfaction can either be transactional or cumulative (overall). Transactional satisfaction is short-term as it is centered on the immediate experience of a product or service. The customers, especially, the new ones, the first they have contact with the retailer can have transactional satisfaction or dissatisfaction. On the other hand, cumulative satisfaction is as result of repeated contact with the service or product repurchases. Nevertheless, in the current study, the researcher will not distinguish between transactional and cumulative satisfaction as it will only asking the participants to rate their satisfaction with overall service at the selected retailers.

Some researchers have also observed the factors that result in great customer satisfaction. One of the areas that the research explored is the relationship between customer service experiences and the level of satisfaction. From the studies, the results indicated that great customer service experiences are positively correlated with the level of customer satisfaction. The level of customer satisfaction also influences the level of customer loyalty to specific brands. These studies also discovered that there are several critical determinants to the level of customer service experienced by the customers. Some of the critical determinants of the customer service experience are after-sale services offered. After-sale services offered help in making a follow up on how the customer is fairing with the products they bought from the retail (Johnston and Kong 2011 p 16). The customers may have difficulties operating specific equipment purchased, and the after-sale services offers help on how to unlock such challenges. The customer may also want to give a feedback about certain aspects of the products or services that need improvement based on their tastes and preferences. After-sale services help improve customer service experiences with a specific brand.

Customer service experiences improvement can help improve the level of customer satisfaction and prompt return purchases through improving loyalty. Studies contend that the level of customer service experience is derived from several factors such as layout and display of the products. The other factor is the accessibility and location of the products and services. The studies also discovered that additional services such as loyalty programs, promotional activities, parking services, operational hours, and delivery time has an impact on the perception of the customer service experiences with a brand (Klaus and Maklan 2013 p 234). The quality, durability, and variety of merchandise in retail also have an impact on the level of customer service experience.

Galabo (2019) conducted a study on service quality of a canteen and student satisfaction. The study applied the SERVQUAL method to assess the service quality particularly on five dimensions – responsiveness, reliability, empathy, assurance, and tangibility. On the other hand, cleanliness, ambience, features, prices, and facilities were used in customer satisfaction. The study revealed that there is a relationship between perceived service quality dimensions and satisfaction. Specifically, there was strong positive correlation with responsiveness, reliability, empathy, and tangibility. The study indicated that an organization should focus on improving the quality of its services focusing on factors that determine customer satisfaction.

In her Master’s thesis, Agbor (2011) investigated the association between customer satisfaction and dimensions of service quality using the SERVQUAL model. The study applied quantitative method and convenience sampling was used to collect data from three service organisations. The study had mixed results as for two of the included companies service quality and customer satisfaction had is significant relationship but for the third one there existed no significant relationship between the two variables. In the same line, according to a study by Agarwal and Singh (2018) customer service experience is significantly related with customer satisfaction.

Customer loyalty

Customer loyalty is described as the tendency of being committed to one brand or organization by repetitively patronising the organization or making repetitive purchases of the product or service. It has been noted that a loyal customer will make repetitive purchases or visits regardless of the competitors marketing efforts or situational factors. Moreover, customer loyalty can either be behavioural, attitudinal, or composite.  Behavuoural loyalty is characterized by consistent and repetitive purchasing. For example, continual buying from one retailer hence becoming a solid   customer of the retailer. Nevertheless, it is not obvious that repetitious and constant purchases are due to psychology loyalty towards the retailer since other aspects such as proximity, price, or lack of an alternative may be influencing the behavior. On the other hand, attitudinal loyalty is influenced by psychological and sensational orientation of the customer. Every customer has his or her personal emotional attachment with the retailer, product, service, or brand. A customer who has attitudinal loyalty makes positive discussions about the specific retailer and even advises other consumers about the retailer even when he or she is unable to make constant or repeated purchases due to other factors such as distance.  Notwithstanding, in the retail sector composite approach is the most applied as it combines the aspects of both behavioural and attitudinal loyalty.  One study by Kursunluoglu (2011) about the impact of customer service on customer satisfaction and customer loyalty in retail sector in Turkey. The study results indicated that both customer satisfaction and customer loyalty are influenced by customer experience. Particularly, is was shown that customer experience alone can explain 12.5% of customer loyalty and 13.9% customer satisfaction. However, this study distinguished customer experience from service quality.

Other studies have assessed the relationship between customer satisfaction and customer loyalty in the retail sector. Already, Kotler and Armstrong (2006) had suggested that once customers are highly satisfied they are likely to make repeated purchases. Also, a study by Know and Denison (2000) had shown that customer satisfaction is a major determinant of customer loyalty in the UK retail market.

Summary and synthesis

From the review of literature it has been shown that quality of customer service is a widely researched factor as it is critical in shaping the customer behaviour. There are different methods and tools for measuring quality of customer service experience, but in the current, a modified SERVQUAL is the one that will be utilized. Notwithstanding, the researcher is interested in understanding the overall customer experience rather than specific dimensions of SERVQUAL. In addition, the literature has revealed that customer service experience is linked with customer satisfaction but the link with customer loyalty has shown varying results. Therefore, the current study is going to ascertain such association in the UK retail market. Furthermore, it has been uncovered that there is a paucity of studies comparing customer service experience, customer satisfaction and customer loyalty between retail stores, particularly in the UK.  Based on that gap, the researcher intends to make such comparison specifically focusing on Marks &Spencer and Sainsbury retail outlets.

METHODOLOGY

Research approach and design

A quantitative research approach will be utilised in the study. Quantitative approach focuses on numerical data and statistical analysis.  The main methods of collecting data under quantitative research is through questionnaires and surveys.  The objective of quantitative research is to get numerical data for generalisation across the population or to explain a particular occurrence (Gorard, 2004). The purpose is to establish the relationship between two variables.

Furthermore, the study will utilise a descriptive cross-sectional design. According to MacBurney and White (2013) in descriptive research the researcher has no control over variables and all he or she does is to explain the situation as it is during the data collection period. In the current study, the researcher will be answering the question “what is the impact of customer experience on customer satisfaction and customer loyalty?”  The descriptive research has the advantage that it allows the researcher to observe the situation in its natural way without interference (McBurney and White, 2013). In addition, the design is convenient as it consumes less time since the data is collected as it is at the moment. Nevertheless, the disadvantage of this descriptive cross-sectional design is that it cannot be used to clearly show the causative association among variables. Hence, in the current research, the researcher will be able to identify the effect of customer service experience on customer satisfaction and loyalty but it would be possible to make a conclusive claim that the identified customer satisfaction and loyalty is as a result of customer service experience.

The study will employ a comparative research design that will entail comparing two groups of customers in two leading retail companies, namely Sainsbury & mark and spencer.

Target population

The target population was individuals aged 18 years or over who will be visiting the two identified outlet in two-week period that the data was being collected.  The research setting is Sainsbury and Marks & Spencer retail stores, both of which are among notable retail stores in the British market. The geographical data collected within the city of London for two retail outlets.

Sample size

One of the most difficult, yet important part of a research is determination of the sample size. A sample refers to a subsection of the target population that has been theoretically specified. Different formulas are used in determining the sample, and large sample size is recommended for better result. However, due to time constraints and the lack of knowledge on the actual number of customers visiting the identified retail outlets, in the current study, the researcher settled to use a sample size of 120 customers. The total sample population split into two, with each group comprising 60 customers (60 from Marks & Spencer and 60 from Sainsbury).

Sampling technique

Structured sampling methods will help categorize the sample population under study into two groups to make a comparison. The criteria for inclusion after structuring the sample will be convenience sampling. Convenience sampling is non-probability sampling technique where the participants are selected according to their availability (Taherdoost, 2016). The disadvantage of this technique is that is can be biased and not give a true picture of the situation. However, given that the identified retail outlets has large number of customers and they do not a have uniform formula of entering or exiting the store, it was impracticable to use systematic sampling technique.

Research Variables

Customer service experience was the independent variable in this study while customer loyalty and satisfaction were the dependent variables.

 Data collection

Both primary and secondary data were in the research.  A self-administered questionnaire in which the participants fill in the information on their own was used in primary data collection. The questionnaire had three section, section 1 had respondent demographic information (Age and gender) and participant number and name of the store (M&S or Sainsbury).  The second section was about customer service experience. The other questions were about the frequency of the respondents in purchasing products at particular retailers.  Section two will include quantitative questions, for example, what factors influence you to shop at a particular retailer? Other questions based based on a Linkert scale for example the customer service experience will be categorised as  (1- Very low quality, 2- low quality, 3- moderate, 4- high quality, 5- very high quality). The level of satisfaction will be put as 1-highly unsatisfied, 2- unsatisfied, 3- moderately satisfied, 4- very satisfied and 5- highly satisfied. The customer loyalty will be measured using the frequency at which the customer has been shopping at the outlet, the intention to continue shopping at the outlet.

Secondary data will from each company’s publications and previous customer service experience feedback. Each retail shops for Sainsbury and Mark& spencer have internal reports on customer service experience feedback done regularly. The study considered the most recent customer satisfaction and service experience feedbacks available from both organizations for comparison purposes. Apart from the reports, both outlets have developed online customer satisfaction reviews, especially for those customers who shop through online platforms. The study will consider the comments of different customers online and what they feel and comment about the nature of service experience while shopping with each company. A combination of both secondary and primary data will help develop an objective discussion and results to avoid bias. Internal reports are essential but may be compromised through bias, but the primary data developed from the questionnaires will help address such weaknesses (Creswell and Creswell 2017. 37).

 

Data analysis

The study uses both quantitative and qualitative methods of data analysis. Statistical analysis will help draw patterns by analyzing frequency distributions and calculating averages. Some questions contain coded information from which the customer can choose the answer. The study will analyze such data using median, mean, modes, and calculating averages to help discover patterns, dispersions, and percentages of people who give those responses. The use of tabulation and spreadsheets to capture data for easy analysis. The study will also use statistical tools for data analysis such as the graphs, pie charts, and easy presentation of the data in a manner easily understandable by the general audience (Creswell and Creswell, J.D., 2017 p 29). Recording notes and capturing the attitudes, moods, and perceptions of the customers in the sample will help in strengthening the data generated from quantitative data. There may be areas that need more explanation from quantitative results, and the data collected qualitatively will help address it. Qualitative data will use the notes to help draw out generalizable statements from a variety of statements made qualitatively. The mixed-method approach is the best given that using the quantitative method alone may not capture perception, attitudes, and other non-quantifiable information. Using a qualitative method alone may also have limitations since it may be inappropriate where specific patterns and quantifiable information need analysis. (Lund, 2012. P 163)

Access and ethics

The researcher intends to get information by following the ethical principles of conducting a scientific study. The first part of the questionnaire will contain the objectives and goals of the research. It will also have a clause for voluntary participation where the participant will have to sign upon reading and voluntarily propose to continue to research. The respondents will know the benefits and risks of participating in the study. Finally, the respondents will have the right to withdraw at any stage of the study and have the right to choose which questions to answer. Data obtained is confidential, and the researcher will carry the moral responsibility of marinating that confidentiality. The researcher must strive to protect the data obtained from risks of hacking, and if accidentally it happens, they must divulge such information to the respondent at any time.

In addition, the researcher will seek permission from the management of the selected retail outlets (M&S and Sainsbury) to collect data from the customers in their stores.

Limitations 

Limitations with the study are that it is conducted within a specific geographical location and not comprehensive enough; perhaps there is a need for more research to come up with a generalizable theory. Sometimes the research methodology opted is not free from researcher bias. The bias may come from a part of the data collected from secondary sources through internal reports that may favor the company. However, the advantages of this method are that the different approaches consisting of both primary, secondary, qualitative, and quantitative data help complement the weaknesses of each other (Choy 2014102). Focusing on a small geographical area helps to dig deeper into the subject matter of the study.