Improving Customer Service at Vista DVD Rentals
The Vista DVD Rentals store is at a crossroads. After a number of years in operation, the store is facing a critical turning point that could dictate future survival or the suspension of any further business. The transformation must revolve on vastly improved customer service. As is the case for most businesses in New Zealand, customer service has come to play an increasingly important role in Vista’s relevance. Consumers have come to expect a certain level of accommodation on the part of a retail or rental operation and this imposes a high level of importance on the decisions that companies make with respect to the customer experience. Essentially, customer service can be defined as the set of standards, practices and procedures that shape the customer’s experience through the course of a business transaction. This denotes two primary aspects of customer service: that which relates to the experience within the context of a single transaction and that which relates to the long-term experience of the customer in the context of an ongoing business relationship. As the discussion hereafter will demonstrate, these two aspects are directly entwined. Provided that the former is characterized by convenience, flexibility and consistency, the latter is likely to become a long and fruitful relationship for both sides.
First and foremost for Vista is the need to improve the convenience of its operation. As more and more customers determine to make their rentals through online measures, Vista must take efforts to ensure that its service model achieves a higher level of accommodation. Among the reasons that Vista has struggled in the past is its inconsistency of hours, the fact that the store is neither open particularly late or particularly early and the fact that it continues to charge exorbitant late fees even for rentals returned minutes passed their due date. These impediments to customer convenience are likely to turn many customers toward the more convenient online modes of DVD rental.
Still, there is evidence that many customers still prefer a personal and social interactiveness during this process. As Doolin (2005) notes in its research online retail models, one such “model was tested using a survey of some 700 New Zealand Internet users. Both the perceived risk and perceived benefits of Internet shopping were found to be significantly associated with the amount and frequency of online purchases made. Loss of social interaction in Internet shopping was associated with reduced online spending.” (Doolin et al., p. 66) This denotes an opportunity for personalized businesses such as Vista. By taking such efforts at improved convenience as extending the store’s hours to midnight, ensuring that the store is no longer subject to unplanned closings and removing late fees for DVDs that are returned before sunrise of the next day, Vista might help to keep some of its customers that might otherwise move to the web for their rental services.
Establishing flexibility is also tremendously important for Vista. At present, the company suffers from the many of the limitations of a small, family owned business. This includes a shortage of personnel and limitations of payment methodology. It is time for Vista to begin viewing its family orientation as a benefit rather than a limitation. As Lyman (2004) reports, “family ownership plays a role in the creation of positive customer service interactions.” (Lyman, 303) In this case, that should be facilitated by expanding the number of payment methods accepted to include credit cards and should be driven by highly individualized attention. This should especially be true where customer registration and refund issues are concerned. Because the company lacks the formal structures of a larger corporation, the owner has the freedom to treat customers according to their needs. As Blodgett et al. (1995) note in their research, the results indicate that the major factor that determines why some dissatisfied consumers seek redress and give the seller a chance to remedy the problem, while others exit and engage in negative word-of-mouth behavior, is the perceived likelihood of success. Results also show that, once a dissatisfied customer seeks redress, that person expects to receive a fair settlement but, more importantly, to be treated with courtesy and respect.” (Blodgett et al., p. 31) By creating a more flexible experience where the customer does not feel he or she is treated as a faceless source of revenue, Vista can help to improve its own reputation in its local community.
Consistency is also a feature which can be difficult to attain in a small company. But the first step toward doing so would be to create a more nuances pricing and rental-length structure in which newer films cost more and must be returned sooner but in which older films cost less, can be kept longer and do not have late return fees. Moreover, this consistency must be evident in the way that refunds are handled, queries are addressed and grievances are satisfied. According to Ennew & Binks (2005) “the notion of building relationships and delivering quality service in order to encourage loyalty is perhaps of particular importance in the service sector where it is often argued that customer attraction costs are significantly higher than retention costs. Central to the idea of investment in the development of service quality and customer relationships is the belief that such investments will enhance loyalty, retention and profitability.” (Ennew & Binks, p. 219) Consistency is important to achieving this balance.
To date, Vista has experienced a decline in revenue as have many other digital rental services. In order to remain viable in the face of online rental services and other competition, Vista’s customer service must evolve into its greatest asset. As a small company, it does have the unique capacity to satisfy the needs of its clientele but it must do so through a refinement of the convenience, flexibility and consistency of its customer services practices.
Blodgett, J.G.; Wakefield, K.L. & Barnes, J.H. (1995). The Effects of Customer Service on Consumer Complaining Behavior. Journal of Services Marketing, 9(4), 31-42.
Doolin, B.; Dillon, S.; Thompson, F. & Corner, J.L. (2005). Perceived Risk, the Internet Shopping Experience and Online Purchasing Behavior: A New Zealand Perspective. Journal of Global Information Management, 13(2), 66-88.
Ennew, C.T. & Binks, M.R. (2005). The Impact of Service Quality and Service Characteristics on Customer Retention: Small Businesses and their Banks in the UK. British Journal of Management, 7(3), 219-230.
Lyman, A.R. (2004). Customer Service: Does Family Ownership Make a Difference? Family Business Review, 4(3), 303-324.
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