Learning Objectives

5.1 Define customer service and identify the manager’s role in customer service.

5.2 Describe the importance of each of the key components of the customer service environment.

5.3 Recognize the elements that contribute to a successful service culture and explain how they support a customer-centric organization.

5.4 Describe the causes of service breakdowns and how they can be prevented.

5.5 Explain why customers defect and the impact it has on an organization.

5.6 Discuss the pros and cons of using technology to facilitate customer service delivery.

Defining

Customer Service

• Customer Service is the ability to deliver products and services to internal and external customers in a manner that satisfies identified and unidentified needs.

• Customer-focused organizations spend their energy and effort on satisfying internal and external customers by identifying needs, establishing policies, procedures, and management and reward systems to support excellence.

Common Characteristics of Customer-Focused Organizations

• Have internal customers

• Focus on determining and meeting the needs of customers

• Management and systems support and reward employee efforts to serve customers.

• Reevaluation and quantitative measure of the way business is conducted and customer are served

• Continual benchmarking or comparison with competitors and related organizations to determine service effectiveness

• Latest technology is used to connect with and provide service to customers, vendors, and suppliers

• Build relationships through customer relationship management (CRM) programs.

Customer Service Environment

• There are six components of the customer service environment, which includes:

• Customers (internal and external) • Organizational Culture

• Human Resources

• Products/deliverables

• Delivery Systems

• Service

How important are

Customers?

• The customer is the main component in a customer-focused environment.

• There are two types of customers that employees and managers must deal with:

– External Customers

– Internal Customers

External Customers

• External customers are current or potential customers or clients. They are the ones who actively seek out, research, and buy, rent, or lease products or services offered by your organization.

• External customers are the main source of revenue stream for most organizations.

Internal Customers

• Internal customers are co-workers, employees of other departments or branches, and other people who work within the same organization.

• Internal customers are an essential group, because at times they are customers and other times they are suppliers.

• Internal customers must be taken care of like external customers. When serviced effectively internal customers are better able to provide exceptional service to their customers.

What is Organizational Culture?

• Organizational culture is what the customer experiences or encounters.

• Culture includes the dynamic nature of the organization and encompasses the values and beliefs that are important to the organization and its employees and managers.

What is Human Resources?

• Human resources refers to the employees of an organization

• Without motivated, competent workers, any planning policy, and procedure change or systems adaptation will not make a difference in customer service.

What are Products/Deliverables?

• Deliverables may be tangible items manufactured or distributed by the company, or a service available to the customer.

• There are two potential areas of customer satisfaction or dissatisfaction related to deliverables, quality and quantity.

What are Delivery Systems?

• Delivery systems are the methods used by an organization to provide services and products to its customers.

• Organizations examine the following factors to select an appropriate delivery system:

– Industry standards– Customer expectations – Capabilities – Cost– Current and projected requirements

• Service is the manner in which managers and employees treat customers and each other to deliver a company’s deliverables.

What does Service mean?

• Service – the manner is which managers and employees treat customers and each other to provide a company’s deliverables.

• A service philosophy and/or service standards traditionally guide the manner in which service is delivered.

What is aService Culture?

• A service culture includes the values, beliefs, norms and practices of an organization as they relate to customer service.

• No two organizations have the same service culture, because no two organizations operate in the same manner.

• A service culture starts at the top of an organization and filters down to its frontline employees.

• Service culture also encompasses products and service, and the physical appearance of the organization’s facility, equipment, or any other aspect of the organization with which the customer comes into contact.

Empowerment

• Managers must empower employees with the authority to respond to customer needs or requests.

• Empowerment is the giving of decision-making and problem-resolution authority to lower-level employees in an organization. This precludes having to get permission from higher levels in order to take an action or serve a customer.

Hierarchical and Customer-Centric Organizations

• Hierarchical Organization

• Also called top-down-oriented organization. • Upper management is located at the top of the hierarchy and

customers are at the bottom.

• Many companies are top-down-oriented.

• Customer-centric Organization

• Customer-centric organizations are service providers and organizations that put their customers first.

• Customer-centric organizations are focused on building long-term relationships and customer loyalty rather that simply selling a product or service and moving on to the next customer.

Elements of a Service Culture

• An organization’s service culture is made up of many elements, each of which affects the customer and helps determine the success or failure of customer service initiatives.

• Elements of a service culture include:

• Service philosophy or mission: The direction or vision of an organization that supports day-to-day interactions with the customer.

• Without a clearly planned and communicated service philosophy, the service ethic ends before it reaches the frontline, where most customer service is delivered.

• Managers are responsible for ensuring employees are aware of customer service policies and their implementation.

Elements of a Service Culture - Continued

• Employee roles and expectations: The specific communications or measures that indicate what is expected of employees in customer interactions and that define how employee service performance will be evaluated.

• Delivery systems: The way an organization delivers its products and services.

• Policies and procedures: The guidelines that establish how various situations or transactions will be handled.

• Management support: The availability of management to answer questions and assist front-line employees in customer interactions when necessary.

Elements of a Service Culture - Continued

• Motivators and rewards: Monetary rewards, material items, or feedback that prompts employees to continue to deliver service and perform at a high level of effectiveness and efficiency.

• Training: Instruction or information provided through a variety of techniques that teach knowledge or skills.

Tools for Service Management

Organizations can use many ways to find out how they are performing including:

•Employee focus groups. In focus groups employees are asked to comment or develop ideas on various topics related to customer service or employee and organizational issues.

•Employee opinion surveys. Surveys are done to gain employee perspective on how well policies, procedures, management, technology, and other systems perform.

•Customer focus groups. Customer focus groups are brought together to answer specific questions related to some aspect of product or service.

Tools for Service Management - Continued

• Mystery shoppers. Mystery shoppers are internal employees, or external consultants who pose as customers to determine how well customers are being served.

• Customer satisfaction surveys. Surveys can be written, oral or computer based. Two important questions frequently asked on a customer survey are:

• How likely are you to use the product or service again?

• Would you recommend the product or service to a colleague?

Tools for Service Management - Continued

• Customer comment cards. Customer comment cards are used to get immediate reactions and comments from customers after a visit.

• Profit and loss statement or management reports. These reports are invaluable in spotting trends or dramatic changes in profits or losses that might indicate or lead to a service breakdown.

• Employee exit interviews. These interview are typically administered by the human resources department or personnel department for employees that are departing a company.

Tools for Service Management - Continued

• Walk-through audits. Walk-through audits are checklists used by supervisors or managers as they walk through a store or service facility to view the operations from a customer’s perspective.

• On-site Management visits. These visits provide firsthand observation of service practice and allow interacting between managers, employees, and customers.

• Management inspections. A follow-up to employee service delivery, managers follow up on service performed by checking the work or asking the customers how they liked the service.

Differentiating Factors in Customer Service

• The following factors can demonstrate an organization’s level of service commitment and can help determine what type of service culture exists at an organization.

• Managers spend time with the customers.

• Managers spend time talking to frontline service providers.

• Customer feedback is regularly asked for and acted upon.

• Innovation and creativity are encouraged and rewarded.

• Service is benchmarked with similar type organizations.

• Service technology is current and used effectively.

Differentiating Factors in Customer Service - Continued

• Regular training keeps employees up-to-date on trends and issues.

• Frontline employees and management have open communication.

• Employees are empowered to satisfy customers.

• Service standards guide consistent customer interactions (i.e. listen, assess, act, and follow-thru).

• The status quo is not acceptable

Service Breakdowns &Customer Expectations

• Service breakdowns are situations when customers have expectations of a certain type or level of service that are not met by a service provider.

• Customer expectations are perceptions that customers have when they contact an organization or service provider about the kind, level, and quality of products and services they should receive.

• Customer expectations can affect how service is delivered and received.

Customers Typical Expectations

• Customers typically expect the following as it relates to people:

• Friendly, knowledgeable service providers

• Respect

• Empathy

• Courtesy

• Equitable treatment

Customers Typical Expectations

• Customers typically expect the following as it relates to products and services:

• Easily accessible and available products and services• Reasonable and competitive pricing • Products and services that adequately address needs • Quality• Ease of use• Safe• State-of-the-art products and service delivery • Easy-to-understand instructions • Ease of return or exchange • Appropriate and expedient problem resolution

Difficult Customers

• Difficult Customers are those who challenge a service provider’s ability to deliver service and who require special skills and patience.

• Some difficult customers may include customers that are:

• Dissatisfied with a service or product

• Indecisive or lacking knowledge about a product, service, or policies

• Rude or inconsiderate of others

• Talkative

• Internal customers with special requests

• Speak a different primary language

Dealing with Difficult Customers

• A key to successfully serving all types of customers is to treat each person as an individual, and to not categorize people into groups according to how they speak, act or look.

• A strategy for dealing with difficult customers is as followed:

• Listen• Remain positive and flexible • Smile and offer assistance • Be compassionate and empathize • Ask open ended questions • Take appropriate action • Follow-through and follow-up

• The ability to focus on the problem or situation rather then the person is very important in being able to handle difficult customers.

Customer Defection

• Customer Defection is when customers take their business to competitors when they feel that their needs or wants are not met or if they encounter breakdowns in customer service or poor quality products.

• It costs five to six times as much to win a new customer as it costs to retain a current one.

• Reasons for customer defection include:

• Poor service and complacency • Inappropriate complaint resolution • Unmet needs

Preventing Dissatisfaction

• The best way to deal with a service breakdown is to prevent it from occurring.

• Strategies for preventing dissatisfaction are techniques used to prevent a breakdown in needs fulfillment when dealing with customers.

• Some specific strategies for preventing dissatisfaction include:

• Think like the customer • Pamper the customer • Respect the customer • Exceed expectations

Strategies for Preventing Dissatisfaction

• Think like the customer

• Discover what customers want by observing nonverbal behavior, asking specific questions, and listening to their comments and responses.

• Think about how you would like to be served under the conditions you are dealing with and act accordingly.

• Pamper the customer

• Managers should attempt to provide products and services as promised, and provide the best quality service that they can deliver, and address customer concerns professionally.

• Make customers feel special and important. Treat them as if they are the center of attention and that you are there for no other purpose than to serve them.

Strategies for Preventing Dissatisfaction - Continued

• Respect the customer

• Before focusing on the customers’ problems, managers should take the time to listen and show support for the customers’ viewpoint.

• By using a people-centered approach to problem analysis and problem solving, a manager can with the customer over.

• Exceed expectations

• Managers should constantly look for ways to go beyond the expected or what the competition provides.

• Do things for customers that set your service attitude apart from that of other providers.

Advantages and Disadvantages of Technology in Customer Service

• The following issues can be a result of the use of technology with customer service:

• Organizational issues

• Employee issues

• Customer issues

• Security issues

Organizational Issues

• Through the use of computers, software, and various telecommunication devices, a company can extend its presence without physically establishing a business site and without adding staff.

• The challenge for organizations is to have well-maintained, state-of-the-art equipment and qualified, competent people to operate it.

• Staying on top of technology is an expensive venture. If a company is using systems that are six months old, these systems are on their way to becoming obsolete.

• New technology also brings the need to train or retrain staff. Training essentially takes employees away from their everyday job.

Employee Issues

• Technology frees employees from mundane tasks such as taking information and mailing out forms, information, or other materials.

• Technology allows employees to serve more people in a shorter period of time and to do it better.

• Many organizations see technology as a way to reduce staff costs and overhead related to employees and therefore eliminate positions.

• Some people have difficulty using technology and are not able to master it, which can lead to stress, reassignment, or dismissal of the employee.

Customer Issues

• Technology can be a blessing at times for the customer, because it allows them to access products and services from almost anywhere, using a variety of different devices.

• Technology can at times not always work as it is supposed to. When technology does not work, customers can become frustrated and see out a competitor or another product that does not have the same issues.

• Technology should not supersede the delivery of “customer friendly” service.

Security Issues

• Technology, especially the Internet, has spawned a new era of fraud and manipulation, which is a major concern for consumers and organizations.

• Informed consumers go to great lengths to protect credit card, merchant account, social security numbers, addresses, and personal data.

Reassuring Customers about Technology Security Concerns

• Some approaches companies can take to reassure the customers about the security of technology is:

• Emphasize the organization’s policy on security and service

• Stress participation in consumer watchdog or community organizations (e.g., Better Business Bureau or Chamber of Commerce).

• Direct customers to areas on your website that show digital certificates or security levels (e.g., a Secure Socket Layer [SSL] logo or a third-party certifying source like VeriSign or Thawte)

Reassuring Customers about Technology Security Concerns - Continued

• Point out any website page that shows the organization’s history and show how long you have been in business. The longevity of a company can help alleviate fears from customers.

• Ask only for pertinent information.

• Answer questions quickly and openly.

• Avoid asking for personal and financial account information when possible.

• Offer other options for data submission, if they are available.

Reassuring Customers about Technology Security Concerns - Continued

• When using a telephone, smile and sound approachable in order to establish rapport.

• Listen carefully for voice tones that indicate hesitancy or uncertainty and respond appropriately.

• Communicate in short, clear, and concise terms and sentences. Avoid technical or legal language that may confuse the customer.

• Explain how personal information will be used or stored.