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Learn what truly sets the UC Riverside MBA apart and how it helps in your professional growth
Someonelse
17 May 2017, 09:40
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This is my last AWA exercise. Thanks for your help gmatclub and wish me luck tomorrow!
The following appeared in a memo from the customer service division to the manager of Mammon Savings and Loan:
“We believe that improved customer service is the best way for us to differentiate ourselves from competitors and
attract new customers. We can offer our customers better service by reducing waiting time in teller lines from an
average of six minutes to an average of three. By opening for business at 8:30 instead of 9:00, and by remaining
open for an additional hour beyond our current closing time, we will be better able to accommodate the busy
schedules of our customers. These changes will enhance our bank’s image as the most customer-friendly bank in
town and give us the edge over our competition.”
The argument states that the bank Mammon Savings and Loan could gain more customers by being better customer service. In order to attain this goal, the customer service division recommends that the waiting time be reduced and that the business hours be extended. Hence, these actions will improve the perception of the brand in the eye of customers and make the bank more competitive.
At first glance, this argument may seem somewhat convincing, though further examination reveals ill-founded assumptions, lack of evidence and poor reasoning. For instance, the proposed actions may not be the best way to improve customer service. Additionally, improved customer service may not attract more clients. And finally, the benefits of the proposal may be overshadowed by its cost. Thus, the argument is rather weak, dubious and unconvincing.
First, the argument relies on the assumption that reducing the times that customers need to wait in line and being open from earlier in the morning to later in the evening will help to improve the customer service. On the one hand, it is reasonable to believe that customers will view these changes positively. On the other hand, the assumption that is the best way to improve customer service is far-fetched. There is a multitude of ways that customer service can be improved. For example, the bank could help customers with other financial decisions besides savings and loans, such as insurance and investment. Furthermore, there is no guarantee that these changes will have the intended effect. It is possible, that the employees will be unhappy if they need to work longer. Consequently, the interactions between employees and clients could be adversely affected. Clearly, it can not be taken at face value that extending business hours and reducing waiting times is the best course of action. To make the argument more convincing, the author should add supportive evidence for his assumption.
Second, the argument assumes that good customer service is the key to attaining new customers. While this is a tempting assumption, its truth is by no means obvious. To illustrate, in Germany, the banks which have the highest growth in their client base are internet banks that barely offer any customer service at all. Instead, savers choose these banks because they offer their products and services at the cheapest price. Therefore, the author fails to make a convincing case for his conclusion. The argument could be considerably strengthened if it explicitly stated why better customers helps to attract new customers.
Finally, it is dubious that increasing customer service makes the banks more competitive. Customer service is very costly and and today banks have lower margins than a decade ago. If the business hours are extended by one and a half hours each day, then the operating costs will increase considerably. There is no reason to believe that the better service will attract enough new clients to outweigh these expenses. Without a detailed cost-benefit analysis, this claim seems more like a wishful thinking rather than substantive evidence.
In conclusion, the argument is not completely well-reasoned as it stands. In order to allow for a better evaluation of the argument, the author needs to explain why he believes that reducing waiting times and extending hours are effective in improving the customer service, why an improved customer service will attract more customers and whether this increases the profits of the bank.
The following appeared in a memo from the customer service division to the manager of Mammon Savings and Loan:
“We believe that improved customer service is the best way for us to differentiate ourselves from competitors and
attract new customers. We can offer our customers better service by reducing waiting time in teller lines from an
average of six minutes to an average of three. By opening for business at 8:30 instead of 9:00, and by remaining
open for an additional hour beyond our current closing time, we will be better able to accommodate the busy
schedules of our customers. These changes will enhance our bank’s image as the most customer-friendly bank in
town and give us the edge over our competition.”
The argument states that the bank Mammon Savings and Loan could gain more customers by being better customer service. In order to attain this goal, the customer service division recommends that the waiting time be reduced and that the business hours be extended. Hence, these actions will improve the perception of the brand in the eye of customers and make the bank more competitive.
At first glance, this argument may seem somewhat convincing, though further examination reveals ill-founded assumptions, lack of evidence and poor reasoning. For instance, the proposed actions may not be the best way to improve customer service. Additionally, improved customer service may not attract more clients. And finally, the benefits of the proposal may be overshadowed by its cost. Thus, the argument is rather weak, dubious and unconvincing.
First, the argument relies on the assumption that reducing the times that customers need to wait in line and being open from earlier in the morning to later in the evening will help to improve the customer service. On the one hand, it is reasonable to believe that customers will view these changes positively. On the other hand, the assumption that is the best way to improve customer service is far-fetched. There is a multitude of ways that customer service can be improved. For example, the bank could help customers with other financial decisions besides savings and loans, such as insurance and investment. Furthermore, there is no guarantee that these changes will have the intended effect. It is possible, that the employees will be unhappy if they need to work longer. Consequently, the interactions between employees and clients could be adversely affected. Clearly, it can not be taken at face value that extending business hours and reducing waiting times is the best course of action. To make the argument more convincing, the author should add supportive evidence for his assumption.
Second, the argument assumes that good customer service is the key to attaining new customers. While this is a tempting assumption, its truth is by no means obvious. To illustrate, in Germany, the banks which have the highest growth in their client base are internet banks that barely offer any customer service at all. Instead, savers choose these banks because they offer their products and services at the cheapest price. Therefore, the author fails to make a convincing case for his conclusion. The argument could be considerably strengthened if it explicitly stated why better customers helps to attract new customers.
Finally, it is dubious that increasing customer service makes the banks more competitive. Customer service is very costly and and today banks have lower margins than a decade ago. If the business hours are extended by one and a half hours each day, then the operating costs will increase considerably. There is no reason to believe that the better service will attract enough new clients to outweigh these expenses. Without a detailed cost-benefit analysis, this claim seems more like a wishful thinking rather than substantive evidence.
In conclusion, the argument is not completely well-reasoned as it stands. In order to allow for a better evaluation of the argument, the author needs to explain why he believes that reducing waiting times and extending hours are effective in improving the customer service, why an improved customer service will attract more customers and whether this increases the profits of the bank.
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