Monitoring and Researching Service Success and Failure

Monitoring and evaluating service performance is important because it allows for improvement throughout the service profit chain. Measurement and analysis allows businesses to make decisions based on data, lowering their exposure to risk and providing more predictable results (Gale 1992). Small businesses such as Canary Jane’s Flowers have less need and means to monitor performance, due to smaller sample sizes and more intimate existing knowledge of the business and customers, but such research still holds substantial value for service improvement.

It is common and natural for business operators to self-assess their performance against their past performance and objectives, but it is generally unreliable when done without structure, analysis and impartiality (Parker 2012). Canary Jane’s currently has unstructured performance measurement without formal metrics, consisting of a personal awareness of repeating customers, and reviews on external websites. The business is incidentally reviewed extremely well, with an average 4.9 star rating from 35 reviews on Facebook, Yelp, Yellow Pages, and Etsy. Reviews and ratings are currently the only impartial measurement of Canary Jane’s performance.

Measurement of returning customers is important as it is much cheaper and easier to retain customers than it is to attract new ones (Hennig-Thurau & Klee 1997). As such, customer retention rates are a very important metric to measure. Measuring retention rate is a simple calculation comparing a quantity of new customers to existing customers, but requires those two points of data. Returning and new customers can be counted simply by asking all customers if they have shopped at Canary Jane’s before, with figures stored and compared and monthly intervals to assess retention and attrition rates. A services success or failure will also be impacted by the organisations ability to manage capacity and demand.

References: 

Parker, D 2012, Service Operations Management, Edward Elgar, Cheltenham: UK, pp. 285-287.

Hennig-Thurau, T & Klee, A 1997, 'The impact of customer satisfaction and relationship quality on customer retention: A critical reassessment and model development', Psychology and Marketing, vol. 14, no. 8, pp. 737-764.

Gale, B 1992, Monitoring customer satisfaction and market-perceived quality, American Marketing Association, Chicago.