The success of a company
The base of the success of a company can easily be associated with the customer satisfaction which is also a critical component of the profitability of the company. In this context a customer can be defined as anyone who receives the product or service produced or marketed by any individual or organization that has a ‘value’. The customer expectations and preferences are changing constantly. While ‘brand loyalty’ is a phenomenon of yester years presently the customers seek out those products and companies that have the ability to satisfy the customers.
It is not necessary that the customer’s rate the products high in all dimensions but the products should meet their requirements in those aspects what they think are important. It is a normal thing that “exceptional customer service results in greater customer retention which in turn results in higher profitability” . A sustainable growth in the profitability is assured by customer loyalty. To ensure organizational success the firm must make a superior customer service as the second quality of the company.
“A seamless integration of all components in the service-profit chain – employee satisfaction, value creation, customer satisfaction, customer loyalty, and profit and growth – links all the critical dynamics of top customer service. ” Positioning can help the company in identifying the optimal location of a it’s brand vis-a-vis the position of its competitors so that the company can improve its image among the customers. This way the company can maximize its profitability and be successful.
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Financial World magazine calculated with company sales and, based on expert estimates of margin, the resulting operating profits. Next, it deducted from operating profits an amount equal to what would have been earned on a basic unbranded or generic version of the product. For example, it estimated, the amount of capital required to generate a brand’s sales, multiplied that amount by the net return on that capital (e. g.
it assumed a generic version of the product would generate a 5 percent net return on capital employed) and subtracted that figure from operating profits to determine the profit attributable to the brand name alone. After adjusting for taxes, the remainder was deemed to be net brand-related profits. In 2001, Coca Cola’s brand value figure rose to US$68. 95 billion, and it was deemed the world’s most valuable brand, and that is the most successful financial company in the world.
“A Harvard Business Review article outlines the internal process required to drive growth and increase profitability. The article describes the ways in which service quality contributes to success, outlining the steps in the “service-profit chain:” Considered over a lifetime, each loyal customer can account for substantially more revenue and profit than suppliers see in any single transaction. Successful company leaders work to build an organization which fosters such long-term relationships.
As the above graphic illustrates, each step is important to ultimately realizing profitability and growth. ” Thus it can be observed that a successful company keeps the objective of customer satisfaction at the forefront. The customer satisfaction can be improved by building up a brand image which ultimately improves the profitability of the company. Hence how the customer perceives success of a company is how well the company is able to satisfy its customers.