Small Business Versus large Enterprises in Customer Satisfaction
Business Administration/ Reading and writing class
Small Business Versus large Enterprises in Customer Satisfaction
Customer satisfaction is at the heart of every business as it guarantees success, whether to a small or large organization. Both business levels have similar ultimate goals of customer satisfaction, but how they achieve it is different from each other. Small and large enterprises are also different in many aspects, making them differ in offering similar comprehensive services to their customers. Large business organizations achieve success mainly through economies of scale. This means that they focus on the amount being sold to consumers to get more income either through retail or wholesale (Hill & Brierley, 2017). The small and medium businesses mainly rely on personalized services with their customers and utilize every interaction made to enhance loyalty. This means that their success relies on the number of customers who visit their shops on a daily basis. This paper focuses on the differences between small-scale businesses and large-scale businesses and their advantages and disadvantages in attaining customer satisfaction.
Advantages of Small Business over Large Organizations
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There are several aspects that small businesses possess and make them advantageous over large companies. However, it is every small business owner’s dream to have it grow to a huge enterprise that is known all over the world. This is mainly due to the large finances that these organizations make annually. .small businesses have key benefits to their employees and customers as compared to large companies. One of these benefits is the culture that is developed within the business firm (Grigoroudis & Siskos, 2009). When a business has been run by the same people over a long period, the employees develop some commonness in their behavior at work. They become part of the company and live under a common culture like a singular family. The employees take pride in being part of the story of the origin and growth of the business. As a result, culture could result in becoming a significant influencer to the brand name and thus attract more customers.
Large business organizations also have cultures that they require their employees to follow while offering services to their customers. However, it is relatively difficult to maintain a culture in these organizations due to the regular changes and new employees being employed. There are few people in most organizations that have been there since inception or over ten years in the company to enhance the maintenance of culture. Due to this, most cultures are altered, resulting in a lack of uniqueness in service delivery (Hill & Brierley, 2017). It is difficult to educate a large number of employees on the culture of a large organization, and it would cost a lot of finances and time on them. Therefore, large organizations rely on existing employees to teach new workers about the culture that is followed there. For these large companies, they develop policies to be followed, making the worker appear to be following a culture.
Communication is an integral part of the development of any business towards attaining its goals. It is enhanced by the kind of management being followed. For small and medium businesses, they mainly use the bottom-up management system where the employees provide solutions or ideas to the manager for improvement and efficiency of service delivery. Small businesses operate as a family, and the employees have direct access to the managers. This enables the communication between the boss and the workers (Grigoroudis & Siskos, 2009). Customers appreciate such a model where they can get an immediate response from the business owner on the needs and gain satisfaction. Issues are easily addressed with immediate effect, unlike the large corporations.
Large companies have a top-down approach due to the many levels of management. Employees do not have direct communication with senior management, and thus, it is difficult for their ideas or demand to be heard immediately. In most cases, the bosses dictate what is to happen, and the workers do not have anything to say. This makes the employees consider a job like any other and not like a family. Customers usually interact with employees, and this is where they raise their grievances. Since there is a hierarchy of management levels, the grievance takes a long from the employee, supervisor, department manager, coordinator, up to the top management. Due to this, customer satisfaction is fairly difficult.
The growth of a business comes with more duties and expansion of the services. This leads to compartmentalization, where there are different departments are formed to function differently. As a result, new positions are formed, and workers are placed in specified duties different from other departments. Multiple layers of management are developed from the supervisor to the boss. The departmentalization helps to increase the efficiency of service delivery on a large scale (World Bank, 2015). However, it denies employees flexibility and agility in different areas of the business. They only do one job and become experts in that but become unfamiliar with any other task in the organization. For instance, if an employee works as a storekeeper, he will not be familiar with where different products are kept on the shelves in a hypermarket.
For small-scale businesses, every employee is engaged in almost all areas of the business, from storage to the point of sale. The worker is more flexible and agile to work in any department when a need arises. A customer can get all the answers from one employee instead of constantly being directed from one person to another for each service being sought. It is relatively easy to make changes rapidly and thus meet the demands of the customers. For instance, the business owner can easily convene an emergency meeting and get a solution from his employees without wasting much time (Grigoroudis & Siskos, 2009). The proposed changes can be implemented immediately. When there are markets changes, small businesses adapt faster as they do not have to relay the information to the different departments and wait for implementations.
As indicated earlier, large business organizations are highly departmentalized, leading to specialization for the employees. These workers gain experience in only one department and have little to none for the other departments. Due to a lack of engagement with other key departments, they have a challenge when transitioning to another job in the same or different business firms. In a small business setup, the employee works in almost all departments of the business leading to expounded experience and expertise. Such an employee has an easy time going to another large organization that has departments (Hill & Brierley, 2017). He can work in any of the departments with ease and be more productive. In managerial positions, employees who have been working in small businesses are better at performing as managers than their counterparts as they understand how each sector operates. They have a strong experience background to enable them to deliver what each department wants.
Why Customers Prefer Small Businesses
Debates on why customers prefer to visit and make purchases on small businesses, have been on the rise. Large businesses such as malls and supermarkets provide customers with almost everything they are looking for. These organizations provide a one-stop-shop to their consumers and offer products at a discounted price. There are several reasons for the preference of small and medium enterprises, one of them being convenience. Small businesses are found in almost every corner of the country. Unlike them, large enterprises are less in number and offer a wide variety of products (Grigoroudis & Siskos, 2009). However, customers prefer small businesses as they are closer to them, and they do not have to queue in long lines so that they can pay for what they require. Customers get exactly what they want and do not have to take long searching for the shelves where the products are. Sometimes, large organizations frustrate customers with a variety of similar products, and the consumer may purchase the wrong product.
The kind of services offered in small businesses is different from large businesses, and this makes customers prefer to shop there. When a customer visits a shop, she gets attended to by one person. The employee is vastly knowledgeable about different products, and thus he can offer advice on the best product to buy and the reasons for that. For large business organizations, due to departmentalization, it is difficult for one employee to respond to all the questions about various products. This leads to seeking assistance from other employees, and ample time is lost. Due to this, customers may view the employees in large businesses as incompetent with their work, but it is as a result of being skilled in one area only. With small businesses, the employees appear to be highly competent, and thus, the customer will likely come back for more services.
Since the owners of the small business are mostly available and interact with the customers, these consumers gain some sense of acceptance of the business as belonging to one of theirs. This leads to the development of loyalty, and they will usually come back more often. Most of the workers in the small-scale businesses are normally the locals, and thus the society appreciates having their own working closer to them. For large organizations, the owners are rarely seen as they are only involved with decision-making processes for the organization and not the day-to-day activities. Due to this, the owners of these businesses are considered to be proud and socially distancing themselves from society, which gives the customers. The businesses usually source for managers from outside the community, and this influences the preference of the customers (Grigoroudis & Siskos, 2009). It makes customers view the business as intended to get their money and invest elsewhere. Without proper care in employing the workforce, large businesses face the challenge of being boycotted.
In small scale businesses, customers have the bargaining power for various products they wish to purchase. The small businesses place slightly higher prices than large enterprises, but due to the ability to seek the lowering of the prices, they feel that they are in control of the pricing. Most of the products do not have fixed prices, and having a price cut is enticing to many customers. For large enterprises, their products have fixed prices, and you cannot bargain with anyone (Hill & Brierley, 2017). Their consumers only have the ability to choose from a variety. However, the prices are slightly lower, and hence the consumers visit them to economize on what little they have. However, they employ some marketing strategies such as discounts and free gifts on different goods and services so that the customers can be attracted to buy more and return in the future.
Importance of a Good Customer Service to a Business
The market is full of competition as every business tries to attract more customers than the other. With a good marketing plan, it is easy to capture the eye of the customer and make her come to purchase your products. However, the kind of service that she will receive determines the satisfaction level experienced. Poor customer service will result in dissatisfaction, and the customer will not buy from you again (World Bank, 2015). Therefore, it is essential for every business, whether large or small, to ensure that customer satisfaction is given the first priority at all times. There are various reasons that explain why the services offered to customers are essential in attaining satisfaction.
When customer service provision is enhanced, the consumers are satisfied and gain trust with the business. This leads to retention and loyalty to the business brand as they come back to get the experience again. In large businesses such as supermarkets, their customers get serviced well when the payment process is fast. If there are long queues, the customers will likely not come back and waste their valuable time there. Small businesses have an easier time providing the best time and service to their customers. The employees dedicate ample time to each customer, responding to every request (Grigoroudis & Siskos, 2009). Due to clear explanations given to the customer, he makes the right decision on a product. When the product meets the expected results as advised, the customer will gain trust in the small business and will likely come back for more services. A large enterprise cannot manage that as there are many people who would require exactly the same treatment.
Another reason is to increase the chances of customer referrals to the business. The increased interest in the small businesses by many customers over the large enterprises has been accelerated by the number of referrals other regular customers have been making. When a potential customer tells a friend of a bad experience she had in a large business, she is likely to be given an alternative choice is usually a small business venture offering similar products. Referrals are essential for the growth of small businesses as they increase sales and thus raise the financial levels of the business. They cost almost nothing to the business as it is normally done by word of mouth (World Bank, 2015). However, a business venture can provide their loyal customers with gifts or discounts for every referral they make successfully.
Good customer service is enhanced by a good culture. As stated earlier, culture is highly promoted and maintained in small businesses as compared to large enterprises. The culture is translated in how the employees handle their clients to ensure that they get what they want. When customers understand that they will get a service in a certain manner they like from a business, they are likely to become more often. Happy employees at the workplace are highly productive, and this is due to the culture that exists (Hill & Brierley, 2017). The happiness is transferred to their customers who feel appreciated and deserving to be there. When customers are happy, the business’s reputation is built. Experts term small-scale businesses as small companies with big services. Their services are what make them make more profit through increased upsell opportunities.
How to Improve Customer Satisfaction
Since all businesses, whether small, medium, or large, are competing to attain maximum customer satisfaction through their services, it is necessary to understand how to improve satisfaction. Listening to customers is crucial as it allows you a chance to understand what they need. It has been found that 65% of customers are likely to talk ill about the experiences they get from a business. These negative talks can be used by managers as a source of information on what satisfies different customers and thus develop appropriate strategies (Grigoroudis & Siskos, 2009). It is difficult for large businesses to listen to their customers as the management rarely interacts with their customers. For small businesses, the manager is always there working with the other employees. He is able to monitor what customers are saying and take immediate action.
It is necessary for the management of any business to be proactive in handling various issues raised by the customers and those caused by changes in the market. If a customer requests for a product that has not been stocked, it is important to honor that request and ensure that the good reaches the client in good time. Being dishonest and lying to customers leads to a lack of trust and dissatisfaction. Practicing honesty is critical in gaining trust and getting more referrals and thus sells more. Customers have different personalities and demands, and it is the role of the business owner to understand his customers (Hill & Brierley, 2017). Customer satisfaction is attained when they are understood, and their demands are met either partially or completely. Any efforts that are made with the intention of meeting the demands of the customers make them feel that they have a significant role in the business, and thus, they will draw closer.
Businesses have heightened their operations to feature them on online platforms. These platforms have become vital branches in the growth of any business, whether small or large. Customers are migrating to the ecommerce, and thus the need to incorporate technology in the operations. Through the internet, it is possible to understand what customers want or are saying. Providing them a chance to give their views while retaining anonymity is detrimental in enhancing their satisfaction (Grigoroudis & Siskos, 2009). It is easier to analyze the online comments as they can give good ideas to implement in your business and thus satisfy your customers with good services. Through online platforms, business owners can ask people some questions about the services offered. From the feedbacks, they can identify what they are doing right and wrong and make appropriate adjustments.
Customer satisfaction attainment is a major challenge to most businesses, especially large enterprises. However, small businesses are able to achieve satisfaction relatively easily due to the simplicity of management and departmentalization. They are also able to maintain a strong culture as compared to large enterprises and thus attract more customers. Communication in small-scale businesses is direct between the boss and the employees, but in large businesses, it has to go through several levels of ranks to reach the top management. This causes inefficiency in relaying what customers are demanding. The convenience in small businesses has led to increased preference by customers. The interactions between the employees and the customers have also led to the shift. Customer services require be enhancing and promoting as they lead to satisfaction or dissatisfaction. Attaining customer satisfaction is achieved by keenly listening to the customers’ feedbacks and takes the necessary actions immediately. Delays in this lead to loss of customers to the competitors.
Grigoroudis, E., & Siskos, Y. (2009). Customer satisfaction evaluation: Methods for measuring and implementing service quality. Springer Science & Business Media.
Hill, N., & Brierley, J. (2017). How to measure customer satisfaction. Taylor & Francis.
World Bank. (2015). The big business of small enterprises: Evaluation of the World Bank group experience with targeted support to small and medium-size enterprises, 2006-12. World Bank Publications.