Tackling Non-Service Culture

Abstract

Having been appointed as the new Managing Director in the World Business Organization, I

have realized that the firm has an alarming non-service culture where the complaints previously

forwarded by clients were ignored both by the head of legal and compliance and the executive.

Further, I have noticed that there is very little formalized feedback or contact between the

employees responsible for handling complaints and other sections of the business like customer

service, product design and risk management. As a part of my strategy to address these issues in

my capacity as the newly appointed Managing Director (MD), I have appointed my former

colleague from the firm I previously worked to a position which just got formulated, head of

customer relations. Beside this reorganization, I intend to start a program for internal

communication which will foster virtues of positive attitude in addressing customer complaints

particularly explaining why it is necessary to rebuild or develop customer relationship as well as

properly make use of feedback from these customers.

Introduction

In any firm, customer service is essential as it can aid in overcoming or ameliorating poor

marketing. However, changing the culture of customer non-service into one where all the

customer complaints and better service get offered is quite expensive. Some of the main areas

where customers experience difficulties, particularly with such cultures of customer non-service,

are such as long waits and extended response time for their issues and needs. They also

experience poor attention to service or good’s details, lack of knowledge and or experience by

company representatives and impersonal and unprofessional interactions with the business’

employees. With such poor customer service, the business may experience lack of repeat

business and an alarming fall off in several areas of the company (Karakaya et al., 2010).

In this report, therefore, I intend to look at the risks related to non-service culture in the business

and propose mechanisms of tackling such risks or emerging challenges. Additionally, I am going

to outline why it is essential to incorporate an active compliance culture in the business and

finally elaborate why ethical behavior is necessary and how it can lead to a regulatory dividend.

The risks associated with non-service culture

First, non-service culture might damage or destroy the reputation of the organization. The brand

of the business is at risk of damage with such characteristic of non-service mentioned. With such

features of lousy customer service, the reputation of the firm is first to get hit especially with the

current era of internet communication (Karakaya et al., 2010). It is important to note that the

contemporary customer is very quick to post negative reviews after they have had a bad

experience regarding customer services or when their complaints are not promptly handled or

even when they do not get feedback on their inquiries. Moreover, these customers go ahead to

vent their bad experiences on internet news platforms such as social media and to their friends,

family, colleagues and the whole world (Karakaya et al., 2010)

Research shows that 95% of customers who have bad experiences in businesses tell at least a

single person about the experience with the company (Karakaya et al., 2010). The same research

shows that 88% of potential customers get influenced by a review which they find online when

formulating buying decisions. Eventually, the business experiences reduced overall sales and

crucially, a decline in the company’s word of mouth marketing (Jha et al., 2017).

Secondly, the business might develop leads which fail to convert as the poor customer services

offered destroys communication. When leads ask for information and fail to get feedback they

become frustrated and fail to conduct further business with the firm in the future. Thirdly, the

business’ customer lifetime or lifespan value declines or drops. Research shows that getting new

clients is quite expensive compared to retaining the old or current customers (Porter, and

Kramer, 2019). Therefore, it is very important that a business establishes great customer care. It

has been established that nine of ten customers can pay more money to make sure they get great

customer experience while 70% of the current customers are willing to stay and do more

business with the firm when their complaints are resolved (Merlo et al., 2018). It is important to

note that reduced customer lifespan results to more strain on the business’ marketing budget to

pull or attract new or more customers (Merlo et al., 2018).

Further, the risk of unsatisfactory or inadequate customer service can cause the organization to

lose some of its best employees. The effect of bad customer service gets felt in all areas of the

organization. It has become found that the problem of inadequate customer care or service in the

company causes the best employees to pick up the characteristic of the unsatisfactory employees

thereby leading to burnout as well as dissatisfaction from the most relied upon employees. The

best employees might also fear the company’s bad reputation and leave to better firms which

may be their former employers’ competitors (Sha et al., 2017). Lastly, poor customer services

and failure to respond to client’s complaints in addition to other poor or inadequate customer

services might lead the business to experience a cycle of a non-profit or profit-sucking period

(Sha et al., 2017). Evidence shows that a company might suffer a downward profit spiral.

This downward profit spiral occurs after the business acquires a grave reputation followed by

loss of new sales mainly from referrals in addition to when loyal clients leave (Agnihotri et al.,

2017). The business is after that forced to either cut down costs or doubles their marketing

expenses to retain or attract customers (Agnihotri et al., 2017).

How to Remedy These Risks and the damages Caused

The business can handle the damage caused on its reputation by first establishing a principal

figure in the firm to approach the customers who have had bad customer experience and make

amends. After that, the business will make a point of responding publicly to the posted negative

reviews and accepting to be responsible for the misconduct and wrongdoing or damage. Further,

the business should assure its clients that it is working towards making strides to solve the

problems permanently (Cianci et al., 2018). After the customers have been reached externally

regarding negative feedback, the business should address the issues internally by establishing the

highest customer service standards permanently (Cianci et al., 2018).

World Business can also repair the damage done on its leads by establishing a customer

relationship management which will enable its sales representatives to respond promptly to leads

and get all the information they need. The customer relationship management or CRM will also

allow the business to follow up on their customer experiences with the firm to improve services

offered (Rahimi et al., 2017). Further to save damaged leads, the firm can employ smart

marketing methods that are in line with their sales and marketing goals. Reduced customer

lifetime can, on the other hand, become saved by creating a customer retention plan which builds

or establishes brand loyalty (Ong et al., 2017). For a company to retain clients effectively, an

inbound marketing strategy can be used, for instance, employing webinars, FAQ pages,

Newsletters, exclusive or exclusive deals, How-to-articles and videos (Ong et al., 2017).

The organization also needs to handle the risk of losing its best employees. Achieving this can be

done by giving them rewards while the 'bad' employees can be relieved off their responsibilities.

Eventually, this will establish a good culture where non-service among other poor customer

service gets ameliorated. Those employees who are average carry out their duties at a level

regarded as usual in the business culture. When the services offered to customers is at an average

level, these average employees get no drive or need to perform better. However, in a culture

where there is a quick, professional and friendly customer care service, the performance bar is

raised for the average employees (Cascio, 2018).

An ethical culture in the firm is also known to attract the best employees who have reasons to

stay in the firm thereby improving almost all the sections of the business particularly customer

service. Tackling the challenge of downward profit spiral due to poor customer care services

requires the organization can conduct a regular survey on their clients, contact or talk to them as

well as ‘monitor customer service KPIs.’ This strategy is essential particularly in preventing any

possibilities of poor client services (Kerzner, 2017).

Establishing an Ethical Culture in the Business

Once the compliance section gets reorganized when I take over the responsibilities of the

compliance section, my duties will be to act as a CEP or compliance and ethical professional. In

that capacity, I will be careful to identify employees who have a differing opinion on an ordinary

matter. It gets considered that people can have varying opinions and often believe that their

decisions are right as compared to those of other people (Weller, 2017). However, these people

might or need to adopt either an ethical or a compliant way of making decisions. Research shows

that people who make decisions based on the ethics perspective might dismiss the law and its

requirements but follow the organization’s culture which makes their choices or decisions right

(Blome et al., 2017). On the other hand, those that do so based on compliance follow what is

required by the regulations and rules of the organization (Blome et al., 2017).

As a compliance officer, my roles will be to understand, relate to and recognize the reasons

behind differing opinions by the employees (Weller, 2017). The benefit of being able to identify

and manage these philosophical differences in the employees might help reconcile them in case

of disagreements (Weller, 2017). It is the difference in opinions and perspective that make

employees have different choices regarding their behavior and conduct in the firm, which could

be unethical. My job as a CEP will not be to remind employees how they have differing opinions

regarding matters of the business. However, I will thrive to show them how their different views

represent a bona fide trial to support compliance and ethics where they are encouraged to have a

clearer understanding of the matter without trying to prove others wrong or show how they are

right.

A compliance officer is essential for any business as in their capacity they can help employees

understand why both ethics and compliance can work collaboratively to meet the firm’s legal

obligations while at the same time promoting the values of the firm. Research shows that it is

through the proper management of these two elements and how they operate together that causes

a business to grow and sustain their effective ethics and compliance program (Blome et al.,

2017).

The Importance of Compliance

Compliance helps a business to develop brand loyalty and customer trust. Reputation is essential

in any organization and a firm which acquires status as one which fails to fulfill its compliance

requirements can damage its customer’s brand loyalty and trust. Research shows that compliance

is so substantial that it tops the list of reputational risk (Osborne et al., 2017). The same study

shows that reputational risk is essential to the level that when an organization is transparent

about their faults, customer perception on them is improved and can result to a higher rate of

stakeholder engagement. When a firm has a practical and clear compliance plan, stakeholders

consider compliance to be of great importance to the business (Osborne et al., 2017).

Compliance indicates the firm’s commitment to conducting its business deals transparently and

in an ethical way. Top performing business firms do not take lightly social, ethical and

environmental initiatives but make sustainability a crucial part of their businesses by

incorporating it into their esteemed brand. It has become found that many clients, or customers

want to conduct business with suppliers and vendors that share their compliance principles and

values (Perano et al., 2017). For instance, a company which has conflict-free chains of supply

gives stakeholder’s assurances on the compliant nature of the business and make suppliers,

partners and customers confidence which consequently develops a trusted and lasting business

relationship (Perano et al., 2017). Furthermore, developing a good reputation, having a

compelling and distinctly documented compliance plan shows how the business expertise get

connected to all the appropriate regulations and laws (Perano et al., 2017).

Compliance also improves the business’ process of operation. There are several ways in which

compliance can improve how the business runs for example; it can foster employees’ best

practice. Research shows that compliance encourages organizations to employ best rigor practice

particularly in areas where they may be forced to cut corners and cots like good recordkeeping,

privacy protection as well as IT processes (Roy and Pal, 2017). Being compliant makes an

organization not fear an upcoming audit or hefty fine, and they do not get their motivation such

issues for them to improve or review their practice. Besides, compliance enables the business to

have increased awareness regarding supply chain. The business can establish this through ‘third

party compliance risk management’ (Giri and Sarker, 2017).

There are regulations which mandate or give firms that enforce supply chain compliance the

power which makes organizations carefully look into their business’ ‘third party community.’

Research also indicates that compliance does business to develop and maintain better governance

of information through better record keeping (Tippet et al., 2017). Better record keeping is core

to a better compliance plan (Tippet et al., 2017).

Records kept in business provide necessary evidence to show the compliance regulators, the

public, and auditors. With a capable system of information management, the company’s data

assets are kept together or consolidated, analyzed or categorized, resulting in better decision-

making strategies (Merian et al., 2017). Additionally, compliance not only attracts but also keeps

the right employees or talent thereby improving the business. Individuals who look for

employment are also keen to work for organizations which take compliance and ethics seriously

(Merian et al., 2017).

Moreover, compliance boosts the company’s bottom line. Some research shows that firms which

have stronger compliance or governance cultures do better as compared to others which do not

follow strict compliance (Merian et al., 2017). For example, research shows that firms that own

above average governance of their IT procedures, processes, and control as well as whose

employees comply with security and privacy regulations acquired 25% more income or profits as

compared to the business having poor governance (Merian et al., 2017). Another example was

when the Apple Company announced it had become a 100% free of tantalum conflict. Because

of this announcement, the media jumped on the story quickly and featured the company on

several popular technology blogs such as the ‘New York Times.’ Eventually, the bottom line of

the company increased as at the opening of its stocks its price was 535 US dollars which closed

at 544 dollars. Further, the company had 892 million dollars outstanding shares which were an

increase in its market capital to 8 Billion US dollars (Merian et al., 2017).

Besides, firms which can connect their business risks with the organization’s strategic imperative

have the highest chance of acquiring a yearly profit margin higher than 10% in more than three

years as well as good growth in profit margin (Merian et al., 2017). Moreover, research shows

that ten companies that had the highest returns in the recent five years became juxtaposed with a

chosen benchmark known as S&P 500 (Merian et al., 2017).

Studies conducted in the last five years show that companies which employed compliance

software received an average of 247% total returns which is equivalent to 28% ‘compound

annual growth rate (Baker, 2017).’ In the same period of five years, the S&P 500 received a total

of 85% returns, an equivalent of 13% ‘compound annual growth rate.’ Therefore, organizations

which do not spend their time dealing with rules or regulatory infarctions give themselves more

time to concentrate on plans that improve their competitiveness and thus help them acquire more

market share. Further, the companies which avoid compliance penalties run in a healthier way

and bottom line (Baker, 2017).

For instance, in the field of data protection and privacy, it is approximated that non-compliance

requires 2.65 times the amount needed for compliance. One research found that an average data

privacy compliance cost is about 3.5 million US dollars in every organization while the average

expenditure incurred for non-compliance linked issues is approximately 9.4 million US dollars

including business disruptions, penalties, non-legal and legal fees, and lost productivity Baker,

2017.

Conclusion

This report has used a case scenario where a firm known as World Business has been

experiencing lack of repeat customers because their employees, particularly the head of

compliance failed to respond promptly to customer complaints as well as the business had

executives overlooked these problems. Eventually, a culture of non-service became established

in the organization. As a new employee in the position of the Managing Director, I have taken it

my responsibility to deal with such matters. First, I have outlined the risks related to the culture

of non-service. The report has shown that First, non-service lifestyle might damage or destroy

the reputation of the organization.

Further, the report has indicated that the brand of the business is at risk of damage with such

characteristic of non-service mentioned. We have seen that with such features of poor customer

service, the reputation of the firm is first to get hit especially with the current era of internet

communication. Secondly, the report has shown that the business might develop leads which fail

to convert as the poor customer services offered destroys communication. We have seen that

when points ask for information and fail to get the feedback, they become frustrated and fail to

conduct further business with the firm in the future. Thirdly, this report has demonstrated that a

business’ customer lifetime or lifespan value declines or drops because of poor customer care

services. The other area of the business which becomes affected as has been demonstrated by this

report is that the effect of poor customer service gets felt in all areas of the organization.

Therefore, it has become found that the problem of inadequate customer care or service in the

company causes the best employees to pick up the characteristic of the bad employees thereby

leading to burnout as well as dissatisfaction from the most relied upon employees. Lastly, I have

outlined various ways of dealing with such damages caused by a non-service culture as well as

demonstrate the importance of ethics and compliance in a business.

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