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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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Common Customer Services
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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Common Customer Services
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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