- August 29, 2012
- Posted by: essay
- Category: Free essays
Today, the customer-company relationships are crucial for the overall success of the marketing performance of any company. In this respect, such as companies as Barclays, Plc are particularly concerned with the development of a positive company-customer relationship because the confidence of customers in the company’s reliability, customer loyalty to the company and customer satisfaction are essential for the ongoing progress of Barclays Plc. At the same time, on analyzing relationships of the company and customer in the context of Barclays Plc, it becomes obvious that customers are stakeholders as well as the management and personnel of the company because the failure of the company will affect the financial position of its customers, while distrust of customers in relation to the company is likely to lead to the downfall of the company or, at least to a profound crisis. In such a situation, the company has launched a long-term strategy focused on the development of positive company-customer relationships, which is known as the customer centrality. In fact, this strategy aims at the satisfaction of customers, formation of their loyalty to company and development of positive relationships between the company and its customers. In actuality, this strategy is highly effective and opens good prospects for the company in the future meeting interests and needs of major stakeholders.
Traditionally, the company’s administration and personnel are viewed as major stakeholders, especially in regard to the company-customer relationship. However, today, such a view on stakeholders shifts toward the extension of the concept of stakeholders since customers can also be stakeholders, as it is the case in relation to Barclays Plc. The development of the modern marketing is characterized by the appearance of new trends and traditional approaches, which were considered to be effective in the past, prove to be ineffective in the present epoch. In this respect, it should be said that customers were traditionally in the focus of attention of all companies operating in any market because it is the customers companies strived for because customers defined the extent to which the company was successful.
Basically, the situation has not practically changed at the present moment. However the attitude to customers has changed dramatically, because, nowadays, one of the major goals of many companies are not just to sell their products or services to customers, but rather to attract the customer to their services and products and to retain him/her. In fact, the customer became the central figure in the marketing strategies of companies and it is the customer who plays probably the key role in the functioning of companies. Moreover, customers have become important stakeholders, whose role is comparable to the role of primary stakeholders, such as employees, or even to the role comparable to that of owners and managers, although owners and managers are apparently key stakeholders. At this point, it is worth mentioning the fact that stakeholders are normally defined as an individual or group of individuals that affect or can be affected by the actions of the business as a whole (Traverso, 2000). Alternatively, stakeholders can be defined as an individual or group of people who have an interest in an organization’s mission, cause or program and in outcomes of a program or project. In such a situation, companies perfectly realize the important of customers’ positive experience and loyalty and this is why they attempt to attract customers using all available means and this trend is known as customer centrality. This is why it is necessary to discuss the problem of customer centrality, its essence and practical application, analyze and critically evaluate it in order to better understand the perspectives of this approach.
Barclays Plc company-customer relationship
Barclays Plc is one of leading companies operating in the banking industry. In fact, the company’s stakeholders are owners and managers, on the one hand, and customer as well as employees, on the other. What is meant here is the fact that customers have started to play a consistently more important role in the functioning of the company than used to do in the past. In such a situation, their role as stakeholders increased to. At the same time, it is important to lay emphasis on the fact that it is possible to trace substantial difference between owners/managers and customers as stakeholders. In this respect, it should be said that owners and managers have the power in the company and they are stakeholders that can take decisions and define the future development of Barclays Plc. In contrast, customers do not have the formal power in the organization, but similarly to employees of the company, they are interested in its normal functioning because it is their money that are at stake in case of problems, which the company may potentially face.
On analyzing the relationships of stakeholders and strategies of the company, it should be said that the company tends to use a traditional input-output approach. What is meant here is the fact that, in terms of input-output approach, the company converts the inputs of employees, owners and managers of the company into usable outputs, which customers use for their own benefits. Simultaneously, customers bring benefits to the company. In such a context, the application of the customer centrality strategy is a logical choice of the company which reveals the essence of the input-output stakeholder theory. To put it more precisely, the customer centrality strategy implies that the company uses successfully input-output model since stakeholders cooperate effectively since owners, managers and employees convert input, their work, into output, services they provide to customers. In such a way, all of the aforementioned stakeholders, including owners, managers, employees and customers, cooperate together for the mutual benefit and overall success of the company.
Basically, customer centrality implies that the customer is the primary concern of a company and needs, demands and interests of the customer should be met and satisfied. At the same time, it is not an altruistic desire of a company to satisfy the customer’s needs and interests. This strategy primarily targets at the formation of the loyalty of the customer to the company. It should be pointed out that in recent years this trend has become very strong and, at the present moment, it can be viewed as the dominant trend in the modern marketing. At the same time, this trend is quite different from the traditional attitude to customers.
To put it more precisely, as a rule, customers were viewed just as potential consumers which should buy a product or service of a company and simply disappear. At any rate, in the past, the fact of the sale of a product or service to customers was the ultimate goal of company-customer relationship. At first glance, it was quite a logical and natural scheme because the company, in such a situation, gained its major goal since it sold a product or services produced, while customer’s needs and demands were also satisfied. In principle, the sale itself is still the major goal but what is more important nowadays is the necessity of customers’ retention. In actuality, modern companies cannot achieve significant successes in the current market situation, if they do not have loyal customers that are devoted to a particular brand and that can be viewed as the major consumers of products and services of a company. The company cannot ignore the fact that customers need to develop a positive experience of buying products or service of this particular company, because, otherwise the company will lost its market position and will gradually degrade. To a significant extent, such a situation is determined by the growing competition in the market that increases the competition and rivalry between companies for clients. The higher is the level of customer’s loyalty to the company the more successful the company can be because customers will return over and over again and buy products or services of the company.
Consequently, the development of customer centrality is quite logical in such a market situation and practically inevitable. Specialists point out that it is quite surprising that ďbusinessmen have concentrated far more on how to attract customers to product and services than on how to retain customersĒĚ (Hamel & Prahalad 1994, 154). In fact, the problem of retention of customers became one of the major goals of modern effective marketing strategies. The customer centrality provides an opportunity to focus on the needs of the customer and through the customer’s satisfaction retain him/her. In such a way, the company can develop customers’ loyalty.
The need develop and implement the concept of customer centrality in the modern business became obvious for many companies operating in different fields. Even the large companies have to implement customer centrality as an effective tool to improve its market performance and increase its profitability. In this respect, it is possible to name Barclays Plc. In fact, Barclays Plc is the largest financial services provider in the world. This company operates worldwide and is represented in many countries. It operates through its subsidiary Barclays Bank Plc. Potentially, this company should not have serious problems with customers because it was and still remains one of the largest companies in the world. However, it could hardly preserve its leading positions in the world financial services market without the effective implementation of customer centrality strategy.
In this respect, it is necessary to point out that this implementation of this strategy was basically determined by the considerable changes in the financial markets in global terms. Under the impact of the process of globalization, the world financial markets started to integrate rapidly. The financial barriers between countries gradually disappeared and companies got new opportunities for the international cooperation and development of business in different parts of the world. In such a situation, the movement of capital was also relatively free. At any rate, there were no serious obstacles at such a scale as they used to be in the past epochs, when it was quite difficult to overcome national borders and enter a new market. As the matter, financial markets are currently viewed as extremely liberal and open for international cooperation (Peters 2007, p.221).
Naturally, as the boundaries and fiscal barriers became weaker and less significant many financial service providers attempted to gain a better position in the market. As a result, companies got larger opportunities to develop their business abroad and they got a chance to increase their profits consistently entering new perspective markets. At the same time, such a situation contributed consistently to the growth of the competition between financial services providers. Many banks started to offer their services on better conditions to their customers that their competitors. However, such a policy threatened to the stability of banks and even their reliability.
Barclays Plc also perfectly understood the possible threat of the growing competition and the gradually decreasing profits because of the deteriorating conditions of functioning of the company in the international market. In such a situation, the question concerning the necessity of the implementation of new, more effective strategies in relation to customers has aroused. On attempting to find the most effective way of the gaining a better competitive position in the market Barclays Plc started to implement widely the strategy of customer centrality. In actuality, the realization of this strategy implied the concentration on the needs and interests of customers and the major task of the company was to satisfy these needs and interests. In fact, the implementation of such a strategy was accompanied by certain difficulties because the company had to develop strategies for the research of the interests, preferences, demands and expectations of its customers.
Nevertheless, the company started to implement changes in relation to its customers making them more customer-oriented. The company attempted to make its services not only available to customers but it also to make the company closer to customer. To put it more precisely, the company introduced the practice of the direct communication of company’s managers with its customers in questions which were really important to customers. Moreover, the company attempted to stimulate its loyal customer making them better offers compared to other customers. For instance, the company could credit its customer and the loyal customer could spend less cost to pay off the credit than other customers. In other words, credits could be less expensive to loyal customers than others. But it does not mean that the company totally ignored the interest of other customer. In stark contrast, it was just one the means to stimulate the retention of customers. In fact the company viewed each customer as the partner that should remain with the company. This was the strategic policy of the company to stimulate the retention and increase loyalty of customers.
In such a way, customers gradually became primary stakeholders of the company. At this important to lay emphasis on the fact that primary stakeholders are those who are ultimately affected directly or indirectly by the change in the strategy and policies of the company. Employees of Barclays Plc can also be defined as primary stakeholders, while owners and managers of the company are key stakeholders, since they can significantly influence the development of the company and are important for the overall success of the project.
In this respect, it should be said that gradually such a policy gave positive results because it contribute to the growth of loyal customers and, what was probably even more important, it increased the popularity of the brand and made the company quite popular in different countries of the world. In fact, nowadays Barclays Plc is an international brand that is recognizable in different parts of the world.
At the same time, it is worth mentioning the fact that the distribution of forma power between the stake holders is different because owners and managers apparently have the most of formal power in organization, while employees and customers have rather indirect power to influence the policy and strategy of the company. Nevertheless, all of them are interested in the effectiveness and success of the strategy applied by the company.
Finally, on analyzing the current situation in Barclays Plc, it should be said that owners and managers have the power in the company, but they cannot ignore the position of other stakeholders, especially employees and customers, because they are also extremely important for the normal devleopment of the company and without them the company cannot perform successfully.
In such a way, through the implementation of the customer centrality strategy, Barclays Plc can solve the problem of the disparity between owners/managers of the company and customers making them closer to the company and, thus, more influential. At the same time, the increased influence of customers naturally leads to their larger contribution in the stability of the company because the company can rely on customers whose loyalty actually maintains the positive marketing performance of the company.
Effects of the customer centrality strategy
Obviously, customer centrality has a number of advantages compared to traditional strategies, which were applied by companies in the past. First of all, it should be said that the company can benefit considerably from such a strategy because it increases customers’ loyalty. The latter is very important in the modern world. It is necessary to understand the fact that in a highly competitive environment the customer’s loyalty is one of the major tools that can give a company a serious competitive advantage compared to its rivals. It is obvious that a company can rely on its loyal customers and, therefore, it can have a stable sales rate. In addition, loyal customers can stimulate the increase of sales rate since they can share their positive experience of using service or buying products of a particular company. New customers that buy products or services of the company could also become loyal customer and attract new customers in their turn. Thus, the cycle may be repeated and the number of customers of a company can steadily grow.
At the same time, it is also obvious that the company could hardly maintain the interest and loyalty of customer, if it fails to implement effectively customer centrality strategy. What is meant here is the fact that if a customer is not in the center of attention of the company this may lead to the dissatisfaction of a customer with services or products of the company. Consequently, this customer will not return to the company again. In contrast, if products and services of the company meet the expectations of the customer than he/she will be more likely to become a loyal customer and return to this company and, as it has been already said above, he/she can even bring new customers to the company.
Another positive effect of the customer centrality is its contribution to the growing popularity of the brand of a company. Nowadays, the popularity of the brand is extremely important. It is not a secret that brand constitutes a part of the market value of the company and, in this regard, the example of Barclays Plc is quite noteworthy because it is one of the most recognizable brands of the financial services provider (Volti 2005, p.247). In such a situation, it is hardly possible to underestimate the significance of customer centrality for the popularity of the brand of a company that leads to the improvement of the position of the company in the market.
On the other hand, it should be pointed out that the development of customer centrality leads to the change of relationships between customers and company that may naturally lead certain problems within the company. To put it more precisely, the development of the concept of customer centrality and the realization of this strategy in the functioning of the company makes the company highly dependent on its customers and decreases the attention of its administration to needs and interests of employees that may to the internal conflict within the organization. For instance, a company can totally concentrate on the customer satisfaction and customer centrality, but its employees apparently need some time to change their style of work and attitude to customer, to develop new habits, etc. In the process of this change an employee or employee cannot always fully meet the expectations of the administration that may lead to the growing dissatisfaction from the part of administration and the decrease of self-esteem from the part of employees who could feel being unable to change their style of work.
Moreover, the situation may be consistently more difficult when the personnel of the company does not accept the change and sabotage the implementation of customer centrality strategy. Naturally, the opposition of the personnel may be not very obvious but still it will prevent from the effective implementation of this strategy. Anyway, it is obvious that the change of the traditional approach to customer, which, for instance, targets at the attraction of customer solely, to customer centrality may be very difficult and cause internal conflicts within the company that will deteriorate its performance consistently. Also, it is necessary to remember about the fact that a company, especially such a large one as Barclays Plc, is a very complicated organization, which needs its specific goals, problems, its own needs and even culture. In such a situation, customer centrality may lead to the ignorance of some of the problems of the company in the result of the total concentration on customers. It proves beyond a doubt that a company cannot be absolutely focused on customers’ needs and interests. In fact, it is possible to influence customers’ interests and needs that can make the use of customer centrality practically ineffective. For instance, if a company can influence the customers’ needs and interests and, thus, manipulate their behavior, which is defined by needs and interests, than the company can provide customers with products and services which it produces, while its competitor that is totally focused on the customer centrality, will attempt to adapt its production or its services not to the actual needs and interests of customers, but rather to the needs and interests shaped by another company that puts the latter into the advantageous position compared to its rivals.
Thus, taking into account all above mentioned, it is possible to conclude that customer centrality is a very popular trend in the modern marketing. In fact, many companies widely implement this strategy in their practice in an attempt to increase the number of loyal customers and improve its market position. In addition, customer centrality may increase the popularity of the brand of a company and assist to the maintenance of the high sales rate that is also very important in the modern market situation when the competition is very serious in practically all industries. Moreover, in the context of economic globalization, customer centrality may play a very significant role since it contributes to the formation of a positive customer experience and popularity of the brand. As a result, the company acquires a positive public image and becomes recognizable among customers that makes its products and service reliable not because of their superior quality but rather because of the positive customer experience.
However, the possibility of the development of serious problems within the company in the result of the implementation of customer centrality strategy is also very high because it can provoke the opposition of the personnel and ineffective functioning of the company in the result of its total concentration on needs, interests and demands of customers.¬† This is why it is possible to estimate that the implementation of this strategy should very careful and supported by the personnel of the company. Moreover, the customer centrality is an effective strategy which meet interests of the major stakeholders, which are not only the administration and personnel of the company but also customers. In this respect, it is important to lay emphasis on the fact that the company and customers are interdependent and interested in each others’ success, while the deterioration of the company-customer relationship would deteriorate the position of both the company and customers.
The project was focused on the study of Barclays Plc and its current strategy which is applied by the company to maintain its positive marketing performance. One of my major goals was to identify stakeholders and analyze their role and the impact on the overall marketing performance of the company. I attempted to focus on major stakeholders, which apparently are the most influential for the company. On conducting the study of the Barclays Plc customer centrality strategy, the definition of stakeholders and the assessment of their significance for the company were carried out. It proves beyond a doubt that, in the contemporary business environment the position and interests of stakeholders cannot be ignored because if the policy of the company and interests of stakeholders come into clashes the company is likely to face serious problems which may outgrow into a profound crisis. In such a context, the definition of stakeholders was crucial in the case study because if some stakeholders, who can influence the position and development of the company, are omitted it is impossible to adequately assess the current position of the company and its future prospects. This is particularly important for the company operating in the banking industry, such as Barclays Plc because these companies need the stability, while shocks and stir concerning the company can deteriorate its marketing performance consistently and undermine its position in the market.
Thus, the primary stakeholders of Barclays were defined as follows: employees of the company and its customers, while owners and managers were defined as key stakeholders of the company. At this point, it is possible to refer to the definition of the concept of stakeholder proper. In fact, traditionally, the concept of stakeholder is defined as a party that affects and is affected by the actions of the business as a whole (Brown, 2003). In this respect, it is important to explain that the administration of the company as stakeholders should be divided into two groups: owners of the company and managers of the company. In fact, both these groups determine the policy of the company and its future development, including strategy, goals, etc. This is why they were united into one category of stakeholders. At this point, the inclusion of employees was probably the most logical because they are interested in the normal functioning of the company.
Otherwise, they would face a risk of losing their job, while unemployment is a direct threat to their well being. In such a situation, customers were included as one of the major stakeholder group because they play practically equal role compared to the entire company, including its administration and the staff.
I have a feeling that customers are viewed by the company as commodities but not as the stakeholders that can influence decisions of the company and, thus, be the primary concern of the company’s owners. The reason was quite simple since I stood on the ground that the overall goal of Barclays Plc was the maximization of its profits. Hence, it was logical to presuppose that customers should be viewed as means of earning money. However, in the course of the work on the case study, I have found out that my initial feelings and assumptions were wrong since the attitude of the company, namely its owners and managers, toward customers was quite different from what I expected. In fact, the company applied customer centrality strategy, which turned out to be highly efficient, in the contemporary business environment. In addition, I found out that employees, even though they had less power in the organization, also influenced the policy of the company and its strategy. In fact, it was employees who actually carried out the strategy of customer centrality. Therefore, I apparently underestimated the significance of employees as stakeholders in my initial assumptions made in regard to Barclays Plc. At the same time, overestimated the power and significance of owners and managers of the company, although they have proved to be key stakeholders.
Basically, I analyzed the role of stakeholders and their impact on the company and I focused my analysis on the effects of the customer centrality strategy on stakeholders and company at large. At the beginning of my analysis, I arrived to the idea that the distinction between the administration and employees of the company, on the one hand, and employees, on the other, was essential since the former represent the major internal stakeholders of the company, while the latter represent external stakeholders. In this respect, the entire study was destined to reveal the close interdependence between internal and external stakeholders. In this regard, it should be said that often the position of external stakeholders and their interests are considered to be unimportant, especially in relation to customers. Specialists (Schumacher, 2003) believe that customers cannot always play the determinant role because companies always struggle for customers and they manipulate their opinion and choices, while customers practically become a kind of puppets in hands of companies, which perform the role of puppeteers.
However, such a view on customers and their role as stakeholders proved to be erroneous. In fact, the customer centrality approach used by Barclay Plc perfectly proves the fact that customers are extremely important to companies in the contemporary business environment. In actuality, customers are important stakeholders, especially in banking industry, because they maintain the normal development of such companies as Barclays Plc, while, in the situation when the competition is constantly growing, the contribution of customers in the stability and progress of the company can hardly be underestimated. Basically, customers play the central role in the development of the company because it is due to customers the company maintains its marketing performance, while if it loses the confidence of its customers and their loyalty the company will be doomed to failure.
Obviously, customer centrality is a very popular, modern trend but the question concerning its future arises after the analysis of customer centrality and its practical implementation. In fact, customers were traditionally important to companies and without them companies cannot survive but, in actuality, it does not necessarily mean that all the efforts of the company should be focused on the satisfaction of needs of customer. In this respect, it is necessary to remember about the fact that customers’ needs and interests can also be influenced.
For instance, media, some modern trends in fashion, the dominating ideology, some natural disaster or catastrophe, and many other factors can affect the customers’ behavior and preferences. In such a situation, it is practically impossible to immediately react on such changes and, what is more, there still remains the opportunity for the formation of customers’ interests and demands, especially due to the development of new technologies, which facilitate our life and evoke new needs and demands.
In such a context, it is obvious that the customers of Barclays Plc can chose any other company, if they are dissatisfied with the quality of services or the attitude of the company toward customers. As a result, the loss of customers will naturally lead to substantial financial losses, the company will be unable to bear, especially in the current situation, when the financial problems affect practically all leading companies operating in the banking industry. In addition, the loss of customers would mean the strengthening of competitors of Barclays Plc since its customers would choose another company instead of Barclays Plc. Consequently, the company should be concerned with customers as its major stakeholders.
On the other hand, customers are also interested in the positive marketing performance of Barclays because their own well being depends on it. At any rate, the failure of the company can affect their own financial position. Naturally, customers are unwilling to suffer financial losses. In addition, they do enjoy the customer centrality strategy the company applies since this strategy has great prospects as it contributes to the formation of customer loyalty and increases customer satisfaction. In such a way, the company can count for its customers and, therefore, it can develop steadily.
All these findings made me convinced that my first impression of the company was erroneous and I did not take an in-depth analysis of prospect and potential effects of the customer centrality strategy, which was applied by Barclays Plc. Such underestimation of the role of the new strategy of the company as well as the role of stakeholders, especially customers and employees was apparently a considerable drawback of my approach to the case study. I definitely needed to evaluate the potential of the strategy and analyze carefully the role of stakeholders first. At the same time, I have managed to find out positive effects of the new strategy applied by Barclays Plc. In addition, I have managed to conduct an in-depth research of the relationships between the company and customers, namely owners and managers and employees of the company, on the one hand, and customers, on the other hand. As a result, I have revealed the close relationships between them that helped me to identify customers as primary stakeholders, while I used to think of them as secondary stakeholders at the most.
At the same time, the analysis of the case study contributed to my understanding of importance to view the subject of the study from different angles. Due to the case study, I understood that it is impossible to extrapolate existing biases, stereotypes and prejudices on the real life companies and specific cases. Instead, it is necessary to ground my judgments on the basis of a detailed analysis focusing on the role and significance of major stakeholders involved in the case. In this respect, I would like to lay emphasis on the fact that the research of the case study was important in terms of the development of my analytical skills since I had to evaluate and analyze the information I got about the company and its relationships with employees. In addition, due to the case study I have found out a very prospective strategy which can be applied successfully in modern business. At this point, I believe that the customer centrality strategy can be applied not only in the banking industry but in any other business since company-customer relationships prove to be of the utmost importance for the modern business.
However, I am conscious of the fact that my case study has a number of drawbacks which could be eliminated to improve the case study. In this respect, I would like to single out the wider analysis of stakeholders. In fact, as I have found out that I was wrong in regard to the role of customers as stakeholders and the relationships between stakeholders discussed in the case study, I now believe that a more detailed analysis would be more useful for the understanding of the effectiveness of the customer centrality strategy applied by the company and its impact on the development of Barclays Plc and other stakeholders, which have not been taken into consideration in terms of this case study. Hence, the analysis of more stakeholders would provide more accurate information on the current position of the company and effectiveness of its strategy.
Obviously, if I conducted the case study again I would avoid my errors and make certain improvements. First of all, I would start with the detailed analysis of the major concepts which I supposed to discuss and analyze in terms of the case study. The understanding of key concepts and their objective evaluation is important for their adequate application in the case study. In addition, I would refer to similar studies and researched views of specialists on the problem I was going to study. Furthermore, I would view the problem I studied from different angles in order to gather as much information and positions in regard to the subject of the study as possible. The diversity of positions and ample information on the subject of the study would provide me with a substantial material for the analysis and further evaluation. On the basis of the analysis and evaluation I would be able to make reliable and accurate conclusions of my case study.