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8/12/2019 Customer ServiceCustomer ServiceCustomer ServiceCustomer ServiceCustomer ServiceCustomer ServiceCustomer ServiceCustomer ServiceCustomer ServiceCustomer Servic

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CUSTOMER SERVICE

ANISH YOUSAFASSISTANT PROFESSOR

SCHOOL OF BUSINESS


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Definition

Customer service is a task, other than proactive selling,that involves interactions with customers in person or by

telecommunications, mail or automated processes.

(Lovelock)

All the activities performed by retailers and their

personnel to attract, retain, and enhance a customers

shopping experience. (Levy & Weitz)

It is designed, performed and communicated with two

goals in mind: operational productivity and customer

satisfaction.


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Customer Service

It consists of all those activities performed by

the retailer that influence:

the ease with which a potential customer can

shop or learn about the storesoffering.

the ease with which a transaction can be

completed once the customer attempts to make a

purchase. the customerssatisfaction with the retailer.


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Customer service vs

Customer Satisfaction Customer service focuses on measurement of

how well a firm meets the established

performance standards that are viewed asimportant to meeting customersneeds.

Customer satisfaction is how the customersmeasure externally the service performance

of a firm.


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Customer Service

High-quality service - A service that meets orexceeds customersexpectations.

A way in which retailers provide the high-quality

service expected and reduce customer defections

is through relationship retailing programs.

Relationship retailing programs - The activities

designed to attract, retain, and enhance long-

term relationships with customers.


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Three Basic Tasks of Retailing


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Common Customer Services

Pre-transaction services

Provided to the customer prior to entering the

store. Convenient hours

Information aids


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Transaction services

Provided to customers when they are in the

store shopping and transacting business.

Credit

Gift wrapping and

packaging

Check cashing

Gift cards

Sales-persons

Merchandise availability

Personal selling

Sales transaction


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Post-transaction services

Provided to customers after they have

purchased merchandise or services.

Complaint handling

Merchandise returns

Exchanging defected

productsAcknowledging

Fraudulent employee

actions

Price switching

Servicing, repair, and

warranties

Delivery

Post-sale follow-up


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Importance of Customer Service

Put the customer at the heart of your business.

Manage the business from customers point of

view. Manage quality.

Keep the relationship vibrant.

Manage service recovery.

Increasing customer satisfaction.

Increasing Customer Loyalty and Profits.


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Principles of Distinctive Service

1. Identify key customers and listen and

respond to them.

2. Define superior service and establish a

service strategy.

3. Set standards and measure performance.

4. Select, train and empower employees to

work for the customer

5. Recognize and reward accomplishment.


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1.Identify key customers

Different customers have different expectations.

Identify the customers and prioritize them.

Understand their buying habits and service

them. Monitor the changes affecting their behavior.

Lifestyle

Age income

Listen to the customers.


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2.Establish a service strategy.

Have specified goals and objectives.

Define the parameters clearly and

communicate them within your organization.

E.g McDonald

Visionbest quick service restaurant experience.

Outstanding quality, service, cleanliness and value.

Make customers smile.


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3.Standards and measure

performance Set standards for your organizations which can

be measured.

Enhances image and credibility in long-run. Inability to meet targets identify gaps and

problems which can be rectified later.

E.g Dominos Pizza - 30 minute deliverycommitment.


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4 & 5.Empower employees,

Recognize and Reward Create a workforce which is dedicated and

empowered to make decisions.

Monetary rewards are important butrecognition and acknowledgement are also

important.

Non-monetary benefits like holidays, specialnametags etc can be provided.


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Customer Loyalty Customer Loyalty - Customers are committed to

purchasing merchandise and services from theretailer and will resist the activities of

competitors attempting to attract them.

They have a Emotional Bond with the retailer

which is based on more than positive feelings

about him.

Emotional connections develop when customers

receive personal attention.


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Customer Relationship

Management CRM is a business philosophy and set of strategies,

programs and systems that focuses on identifying and

building loyalty with a retailersmost valued customers.

CRM refers to all the marketing activities directed

towards establishing, developing, and maintaining

successful exchanges with the customer.

CRM has emerged in the 1990s and has become an

important marketing tool.


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Contd

Based on CRM, retailers can increase their

profitability by building strong relationships

with their better customers.

Aim of CRM is to develop a base of loyal

customers who patronize the retailer.


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Transactional Marketing vs CRM

Transactional Marketing CRM

Focus on single sale Focus on consumer retention

Short-time scale Long-time scale

Little focus on customer service High customer service

emphasis

Limited customer commitment High customer commitment

Moderate customer contact High customer contact

Quality is a concern of production Quality is the concern of all


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CRM Process

1. Collecting Customer Data

2. Analyzing Customer Data and Identifying

Target Customers

3. Developing CRM programs

4. Implementing CRM Programs


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1. Collecting Customer Data

Customer Database Transactions Complete history of purchases

Customer contacts with the retailer

Customer preferences Likes and dislikes Descriptive information Demographic and

psychographic data for market segmentation.

Responses to marketing activities Identifying Information

Asking for identifying information

Offering frequent shopper card


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2. Analyzing Customer Data &

Identifying Target Customers Identify Market Segments

Identifying Best Customers

Customer Lifetime Value Expected Contribution from the customer over his/her

entire relationship with retailer.

Customer Pyramid 80:20 Rule can be applied. Platinum Segment (Most Profitable Customers)

Gold Segment

Iron Segment

Lead Segment (Least Profitable Customers)


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3. Developing CRM programs

Customer Retention Frequent Shopper Programs

Rewards as per Volume purchased

Offer Choices of Rewards

Reward all Transactions with Transparency Special Customer Services

Personalization (1-to-1 Retailing)

Developing Communities

Converting Good customers into Best Customers

Cross Selling

Add-on Selling

Dealing with Unprofitable Customers


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4. Implementing CRM Programs

Appointing CRM manager.

Close coordination of activities by different

functions in a retailersorganization.

MIS needs to collect, analyze, and make

relevant information accessible to employees

implementing the programs.

Proper Human Resources needs to be hired for

delivering on the promises.


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