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The role of customer service in business administration and management. A study of Federal Polytechnic Nekede Owerri Imo State.

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CHAPTER ONE

INTRODUCTION

Background to the Study

Customer service plays a pivotal role in business administration and management. It is the backbone of any successful business, as it directly impacts a company’s reputation and bottom line. According to a study by Bain & Company, a 5% increase in customer retention can increase a company’s profitability by 75% (Reichheld, 2001). This statistic underscores the importance of customer service in maintaining and growing a business. Furthermore, the study also found that businesses that prioritize customer service experience growth in revenue and an increase in customer loyalty.

The role of customer service in business administration and management is multifaceted. It involves handling customer complaints, providing information about products and services, and ensuring customer satisfaction. According to a study by the American Express, 7 out of 10 U.S. consumers say they’ve spent more money to do business with a company that delivers great service (American Express, 2017). This indicates that good customer service can lead to increased sales and profitability.

Moreover, customer service plays a significant role in brand image and reputation management. A study by Zendesk found that 87% of customers think brands need to put more effort into providing a consistent experience (Zendesk, 2013). This suggests that businesses need to invest in customer service to ensure a consistent and positive customer experience, which in turn enhances the brand image.

In the era of social media and online reviews, customer service has become even more critical. A study by Harvard Business Review found that businesses that respond to customer reviews and complaints on social media see a boost in customer advocacy, while those that don’t experience a decrease (HBR, 2016). This highlights the importance of customer service in managing a company’s online reputation.

However, despite its importance, many businesses still struggle with providing excellent customer service. According to a report by NewVoiceMedia, U.S. companies lose more than $62 billion annually due to poor customer service (NewVoiceMedia, 2016). This suggests that there is a significant opportunity for businesses to improve their customer service and, in turn, their profitability and reputation.

Customer service plays a crucial role in business administration and management. It impacts a company’s profitability, brand image, and reputation. Therefore, businesses need to prioritize customer service to ensure their success and growth.

Statement of the Problem

The problem statement in the context of the role of customer service in business administration and management can be articulated as follows. Despite the recognized importance of customer service in the business world, there is a significant gap in understanding how it directly impacts business administration and management. Many businesses fail to realize the potential of customer service as a strategic tool for business growth and sustainability (Homburg, Müller, & Klarmann, 2011).

The lack of a comprehensive understanding of the role of customer service in business administration and management often leads to a misalignment between customer service strategies and overall business strategies. This misalignment can result in decreased customer satisfaction, reduced customer loyalty, and ultimately, a decline in business performance (Zeithaml, Bitner, & Gremler, 2018).

Furthermore, there is a lack of empirical research that quantitatively measures the impact of customer service on business administration and management. This lack of research makes it difficult for businesses to quantify the benefits of investing in customer service and to make informed decisions about their customer service strategies (Parasuraman, Zeithaml, & Berry, 1985).

Moreover, the role of customer service in business administration and management is often overlooked in academic literature. Most studies focus on the role of customer service in marketing and sales, neglecting its potential impact on other aspects of business administration and management (Grönroos, 2000).

Additionally, the rapid advancement of technology has significantly changed the landscape of customer service. However, there is a lack of understanding of how these technological changes impact the role of customer service in business administration and management (Rust & Huang, 2014).

The problem lies in the lack of understanding and research on the role of customer service in business administration and management. This gap in knowledge hinders businesses from fully leveraging customer service as a strategic tool for business growth and sustainability.

Aim and Objectives of the Study

The aim of the study is to examine the role of customer service in business administration and management. The specific objectives of the study are:

To find out the technical skills of customer service in the field of business administration and management.
To analyze the impact of effective customer service on business growth and sustainability.
To identify the strategies and techniques used by successful businesses in managing their customer service.
To evaluate the relationship between customer satisfaction and business performance in the context of customer service.

Research Questions

The research questions are buttressed below:

What are the technical skills required of customer service within the field of business administration and management?
How does effective customer service impact business growth and sustainability?
What strategies and techniques are used by successful businesses in managing their customer service?
What is the relationship between customer satisfaction and business performance in the context of customer service?

Research Hypothesis

The hypothetical statement for the study is stated below:

H_O: Customer service has no significant impact on business growth and sustainability.

H_O: Customer service has significant impact on business growth and sustainability.

Significance of the Study

The significance of customer service in business administration and management cannot be overstated. In the modern business environment, customer service plays a pivotal role in determining the success or failure of a business. It is the direct line of communication between your company and your customers. It is also the mechanism through which customers form their perception of your company, and it is often the difference between maintaining a loyal customer base and losing customers to competitors.

Customer service is a critical component of business administration and management because it directly impacts customer satisfaction and loyalty. A business that provides excellent customer service can differentiate itself from its competitors, leading to increased customer retention and loyalty. This, in turn, can lead to increased profitability, as it is generally more cost-effective to retain existing customers than to acquire new ones. Furthermore, satisfied customers are more likely to recommend your business to others, leading to increased customer acquisition through word-of-mouth marketing.

In addition, customer service plays a significant role in shaping a company’s reputation. In today’s digital age, a single negative customer service experience can quickly go viral, causing significant damage to a company’s reputation. On the other hand, consistently providing excellent customer service can enhance a company’s reputation, making it more attractive to potential customers and investors.

Moreover, customer service can provide valuable insights into customer needs and preferences, which can inform business strategy and decision-making. By listening to customer feedback and complaints, businesses can identify areas for improvement and develop strategies to address these issues. This can lead to improved products and services, increased customer satisfaction, and ultimately, business growth.

Furthermore, customer service can also play a role in employee satisfaction and retention. Employees who are empowered to provide excellent customer service can experience increased job satisfaction, which can lead to lower employee turnover. This not only reduces recruitment and training costs but also ensures that your business has a team of experienced staff who are knowledgeable about your products and services.

The role of customer service in business administration and management is multifaceted and far-reaching. It influences customer perceptions, shapes company reputation, informs business strategy, and impacts employee satisfaction. Therefore, businesses that prioritize customer service are likely to experience increased customer loyalty, improved reputation, and business growth.

Scope of the Study

The study examines the role of customer service in business administration and management. The study is restricted to Federal Polytechnic Nekede Owerri Imo State Nigeria

1.8 Operational Definition of Terms

Role: In the context of business, a role refers to the responsibilities or tasks that an individual or a department is expected to perform within an organization. It defines the functions, duties, and accountabilities of a position.
Customer Service: This is a series of activities designed to enhance the level of customer satisfaction. It’s about ensuring that the customers’ interactions with the company are positive. It involves addressing customer queries, complaints, and requests, often through various communication channels like email, phone, or social media.
Business Administration: This is a broad field that encompasses all the operational and strategic aspects of running a business. It includes areas like finance, human resources, marketing, operations, and strategy. Business administration aims to organize people and resources in a way that effectively and efficiently achieves the organization’s goals.
Management: This is the process of planning, organizing, directing, and controlling resources (people, finances, materials) to achieve organizational goals. It involves setting the strategy of an organization and coordinating the efforts of its employees to accomplish its objectives through the application of available resources. Management also includes activities related to staffing, leading, and controlling an organization’s operations.

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