Quality service delivery and customer loyalty at CH2M Hill

Competitor Analysis

Customer loyalty

In this paper, we evaluate the impact of quality service provision on the maintenance of customer loyalty at CH2M Hill. We perform an analysis of the impact of quality service delivery (as a consequence of implementing the outperformance TM model) on the level of customer loyalty at the company. A convenient sample of 59 customers was obtained and then their opinions and feelings recorded. An analysis was conduced which provide results confirming the hypothesis that indeed the outperformanceTM philosophy improves customer loyalty at CH2M Hill

Overview of Chapter 2 M. Hill

CH2M Hill is a company that prides itself in being the global leader in the domain of full service engineering constructions as well as operations. The company differentiates itself from its competitors by its strong commitment in partnering with its clients in order to realize a full strategic as well as operational agenda. The company's commitment to strive for what they call "outperformanceTM" in the delivery of innovative, very practical and sustainable solutions a factor that has seen it gain customer loyalty has seen it retain 95% of its customers worldwide (Baldridge,2011).The company has its headquarters in Englewood, Colorado, United States.The year 2010 saw the company employ a total of 23,000 people in a total of 130 offices globally. It also generated $6.3 billion in regard to its annual revenue (CH2M Hill,2011).The aim of this

Competitor analysis

CH2M Hill, a company that provides various services in the environmental, energy and other diverse markets has been very successful in the proves of securing as well as completing various projects worldwide. It is however faced with stiff competition from other companies. This competition means that the company has to work hard in ensuring that it delivers quality services to its clients. A review of literature indicates that so far so good. The company has managed to maintain customer loyalty through the provision of services by applying the outperformance TM.

Customer loyalty

The aim of this study is to evaluate the influence that the CH2M Hill's outperformance TM model has on customer loyalty. Te company uses outperformance (TM) in the delivery of innovative, very practical and sustainable solutions.

Customer loyalty is a term that denotes the level of customer commitment to doing business with a certain organization by purchasing their goods and services in a repeated fashion and recommending their products and services to friends and other associates (McIlroy and Barnett, 2000).

In an effort of investigating the idea of customer loyalty, several frameworks have been proposed. Dick and Basu (1994) for instance created a framework consisting of 4 different categories of loyalty. These were however derived on the basis of factors of behavior and attitude. This framework was modified by Sopanen (1996) to include 6 different types of customer loyalty.

1. Emotional loyalty, in which a customer is influenced by certain factors such as brand

2. Inertia loyalty, in which a customer does not in an active manner seek substitutes

3. Price loyalty, a form of loyalty in which a customer is influenced by the seller offering the lowers price

4. Monopoly loyalty in which the customer has no choices available

5. Incentivised loyalty, a type of loyalty in which the customer relayes to the actual benefits that are derived from programmes and reward cards

6. Convenience loyalty, a form of loyalty which is derived from location.

This therefore indicates that CH2M Hill customers are influenced by a combination of emotional and inertia loyalty. Customer loyalty is indicated to be achievable by employing various tactics. Some of these are, banking on location, price, quality and convenience. These are noted by Wright and Sparks (1999) as the main factors that drive consumer to patronize a given retailer (p.431). Other scholars have examined the role of other salient factors on customer loyalty. Salanova et al. (2005) for instance talked about the influence of organizational staff on customer loyalty. Uncles (1994) on the other hand studied the concept of customer value as well as a general feeling of a "sense of belonging." The creation of a rather meaningful relationship is also studied by Barnes (2003). This therefore indicates that the "outperformance TM" model a means of affectively strengthening the already existing bond.

Hypothesis

H1: Quality service delivery (attribute to the outperformanceTM philosophy ) leads to increased customer loyalty at CH2M Hill

H1: Quality service delivery (attribute to the outperformanceTM philosophy does not leads to increased customer loyalty at CH2M Hill

Methodology

The study involved surveying by means of questionnaires, a total of 59 customers. The objective was to evaluate the impact of CH2M Hill's outperformanceTM model on their loyalty using a sizeable sample so as to demonstrate dependable and meaningful outcomes. The study employed probability sampling in which the various respondents were selected due to being members of a cohort. In this case the customers of CH2M Hill. The sample size, 59 was chosen as the convenient sample prior to the initiation of the study. As outlined by Saunders et al. (2003), in the process of choosing a convenient sample, the process is repeated until the requisite samlpe size is obtained (p.177).

Open and closed questionnaires were used in the study. This means that the questionarres had both open and closed questions. The benefit of this approach is that all each one of the respondent could provide their personal response as well as opinion in their own words as indicated by the work of Collins and Hussey (2003). This effectively adds to the chance and opportunity that the investigator would obtain unforeseen and yet insightful responses. Multiple choice answers format was used for the closed questions. This employed the Likert scale too. The 5-point Likert scale was chosen due to the need to provide very sufficient choices for the respondents.

Discussion

The outcome indicate that from the total sample of 59 respondents, a total of 94% (56 out of 59) respondents perceived the high level of quality of service that is obtained by the company's application of the outperformanceTM model.

The outcome indicated that the quality service that the company provides is attributed to the application of the outperformance TM model which enables it to have and increase its customer loyalty.

The main aim of this study was to investigate whether the "outperformanceTM" model has an impact of CH2M Hill's customer loyalty.

The impact as well as the correlation between customer loyalty and the "feeling valued" variable indicated that indeed there is a factor of opinion in regard to loyalty at CH2M Hill.

This therefore highlights that the fact that customer loyalty reacted closely with customer satisfaction (Ravald and Gronroos, 1996).

Consumer loyalty behaviors include relationship continuance (95% at CH2M Hill), increase scope of relationship, as well as recommendation that results from the belief of customers that the value of service that is received by the company is much greater than the one received from other providers. Loyalty leads to an increase in profitability, reduction in costs used in acquiring customers, (Reicheld and Sasser, 1990). Customer satisfaction has been noted to impact customer loyalty profoundly. This is because customer satisfaction has a great influence on purchase intention and post-purchase attitude (Yi,1990,p.104).

Marketing literature also suggests that customer loyalty has two broad definitions (Jacoby and Kyner, 1973). The first one defines customer loyalty as a kind of attitude that is developed by the customers.The second one is behavioral (Yi,1990). Customer satisfaction, loyalty and profitability are therefore intertwined (Storbacka et al., 1994).

Conclusion

This study has attempted to the factors that create and fuel customer loyalty at CH2M Hill. The study found a string correlation between quality service deliveries (based on the principles of outperformanceTM) with increased customer loyalty. We can therefore conclude that the outperformanceTM model effectively improves the level of customer loyalty at CH2M Hill.