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Businesses that offer their customers the highest levels of service might like to believe that all their efforts to pamper and please will pay off with an extremely loyal following.
"Customers you might expect to be the most 'stuck' are the ones who are disproportionately vulnerable to service competition."
But as new research from Harvard Business School demonstrates, the customers you think are your best and most loyal are likely to be the first to cast you aside when a challenger to your service superiority barges into the market. "Our results suggest that this is due to increasing expectations for service in these marketsthe longer a firm has held a service advantage in a local market, the more sensitive are its customers to it service levels relative to
competitors enter and exit markets and what the composition of a market is at any one time," says Buell. Third parties also track service quality (J.D. Power in this case). And because banking is a service that touches almost everyone, its customer group is diverse, making the study's results applicable to other service industries, such as hotels.
customer
Buell's general research agenda considers how firm-level decisions affect customer actions and firm performance. He is continuing to collaborate with Campbell and Frei on a research project that explores different parts of
a bank's operating system to determine the degree to which each transaction affects customer satisfaction. "Past research has shown that the employee, the kind of transaction, the location, and the market can all affect customer perceptions," Buell says. "But no work has disentangled what percentage?is related to each of these factors. This will in turn indicate to what degree operating managers can control customer satisfaction. Essentially, we're looking at the entire operating system and drilling down to determine which factors are most important for driving perceptions of service quality."