Why is a small business potentially in a better position to achieve customer satisfaction than is a large firm? Large firms usually have a competitive advantage over small business in most elements in business operation (Longenecker, Petty et al. 2003; Longenecker, Petty et al. 2010). However, customer satisfaction has been questioned as being potentially better achieved by Small business than by large firms (Longenecker, Petty et al. 2003; Higgins 2009; Tjan 2009; Heaney 2010; Longenecker, Petty et al. 2010). There are a number of valid reasons for why small business can excel over large businesses in this area (Higgins 2009; Tjan 2009).
In today’s fast paced business global environment, customers are seeking quality customer service and satisfaction to compliment a good/service purchased (Longenecker, Petty et al. 2003; Heaney 2010; Longenecker, Petty et al. 2010). While all businesses can provide quality customer satisfaction, small business has a far greater potential to achieve this goal due to advantages of being highly flexible, offering unique goods/services (due to the lack of corporate policy and bureaucracy) and the ability to serve customers directly (Longenecker, Petty et al. 003; Heaney 2010; Longenecker, Petty et al. 2010). It is this personal interaction and relationship focus that can truly provide a quality difference (Longenecker, Petty et al. 2003; Tjan 2009; Heaney 2010; Longenecker, Petty et al. 2010). Large firms have often failed at providing enough customer satisfaction due to the lack of a personal touch, often given by a smaller business (Murray 2003; Tjan 2009). Tjan’s explains that large companies often associate customer service and satisfaction to standard operating procedures and scripted answers (Tjan 2009).
This perception of service can often create frustration and lacks the empathy and common sense approach that a flexible small business can bring to the relationship(Tjan 2009) . Large companies like BT and Xerox have realised that large firms, in general can intimidate and be impersonal to small customers (Murray 2003). In an attempt to break this impersonal image, both firms downgraded their operations (through demergers or scaling back) to focus on the importance of meeting with customers and creating relationship based sales (Murray 2003).
These measures have been followed by many large firms due to emerging studies like Bolton’s which suggest that there is a distinct linear relationship between customer satisfaction and customer loyalty (Longenecker, Petty et al. 2003; Murray 2003; Longenecker, Petty et al. 2010). American Express’s own studies support this notion, in which results found that customers generally want a good customer service experience, and over time, they will be more willing to pay for it (Heaney 2010).
Of those surveyed, 60% said they would spend on average, 8% more if they received great service (Heaney 2010). As a whole, small businesses possess the ability to achieve superior customer satisfaction over a larger competitor due to the freedom found in personal interaction with customers, the ability to be available when needed and the flexible approach to catering for most customers’ enquiries(Longenecker, Petty et al. 2003; Higgins 2009; Tjan 2009; Longenecker, Petty et al. 2010).
It is these abilities that can defiantly give small business the edge over large firms in providing this important element of customer satisfaction (Longenecker, Petty et al. 2003; Higgins 2009; Tjan 2009; Longenecker, Petty et al. 2010). Word Count: 417 References Heaney, C. (2010). Great personal service wins for small business – study. The Herald Sun. Melbourne. Higgins, B. (2009). “Customer Service – Are small businesses better at wireless support? “. Retrieved 25. 04. 2011, 2011, from http://www. longboatmobility. om/wireless-support. Longenecker, J. , J. Petty, et al. (2003). Small Business Management: An Entrepreneurial Emphasis 12th Edition. Mason, Ohio, Thompson South Western. Longenecker, J. , J. Petty, et al. (2010). Small Business Management: Launching and Growing Entrepreneurial Ventures 15th edition. Mason Ohio, South-Western Cengage Larning. Murray, M. (2003). A real Chip off the old block. The Independent UK. London. Tjan, A. (2009). Why small companies are better at customer service. Harvard Business Review.