Coordinate Implementation of Customer Service Strategies BSBCUS 401

Coordinate Implementation of Customer Service Strategies BSBCUS 401 A

Introduction � This manual is broken into 3 sections: ³ Advise on customer service needs ³ Support implementation of customer service strategies ³ Evaluate and report on customer service

Advise on customer service needs Part 1

Customers � � Every business needs customers They are the life blood of the business Without the customers, there is no revenue, i. e. the business cannot survive/exist Business must ensure it: ³ Attracts the customers and ³ Maintains the customer base as well

Customer service Quality is measured by our customers ‘If you don’t look after your guests, someone else will ‘

Customer service � � � Customer service is a set of activities and programs undertaken by the company to make the experience more rewarding for your customers It is not only the front line staff who have responsibilities with regard to the customer service Everyone in the company has responsibilities

Steps to effective customer service � � � Determine exactly what your customers’ needs are Develop and implement strategies to ensure that their needs are met Monitor the service provided

Providing Service � � � � Identify customer needs Meet time frames Enhance the quality of service Recognize dissatisfaction Manage complaints sensitively Refer difficult problems to senior staff Document issues and action

What Is Quality? � � A high grade of excellence What the customer wants; what the customer expects; what the customer is prepared to pay for Continually satisfying or exceeding ‘reasonable’ customer expectations Quality needs to be applied to each stage of the supply process from the initial call to follow-up of invoicing and payments ³ Quality is NOT an inferior quality of wines to those in the brochure, or a reminder to pay for the bill, actually paid already

What Is Service? � � The interaction b/w 2 human beings: service provider and service receiver (customer) The assistance 1 party provides to another that is expected as a part of contractual relationship

Service is Complex � � � It involves unique social acts Perceptions differ (on both sides) Expectations differ When the production side of service is outstanding it is invisible, a flawless system When the human side of service is outstanding it is visible Quality control in service is much more difficult than it is on a production line

Characteristics of Service Characteristics of service: � Intangible (can’t touch it) � Inseparable (can’t separate it from the provider) � Variable (every interaction unique) � Perishable (can’t keep it and sell it later)

Characteristics of Service � Intangible – cannot be touched (but every service has not only intangible aspect service, but also tangible aspect – food => very few ‘pure’) ³ Customers are often more influenced by intangible elements than tangible => tangible are easy to be replicated by competitors

Characteristics of Service � Inseparable – creation and consumption of the service cannot be separated ³ The service cannot be separated from its provider

Characteristics of Service � Perishable: ³ Cannot be kept and sold later, ³ Cannot be stored for later use ³ Must be used at the same time as they are provided

Characteristics of Service � Heterogeneity (variability) – every service is different/unique => inconsistency of services due to: ³ Quality of service varies from one service provider to another ³ Quality of service varies from one member of staff to another ³ Quality of service varies for the same person on different occasions (different days, different situation, different mood) => person’s performance fluctuates

Characteristics of Service People to people service => ‘high-touch’ service system ® However, ‘High-tech’ service system – with ATMs’, vending machines’ performance will not vary that much, but we don’t want to talk to machines (robots), we prefer people => that’s why we are tolerant to some service performance variables, but unlike machines, people can exceed their customer’s expectations ®

What Is a Quality Service? � � � Customer’s perceptions of the service experience consistently meet their expectations => quality Should even exceed customer expectations (stand out against competitors) => give them more than they expect => quality is higher It is defined by customer (from their perspective) It matters little if the provider feels the service delivered is excellent, if the customer does not see it this way Experience for the customer leaving good impression

What Quality Is NOT? � � � � When expectations exceed what is delivered => no quality, or very low quality Customer dissatisfaction due to mediocre service Defects or errors Delays, late or wrong deliveries Re-doing jobs => Wasted time Inconsistency Unreturned phone messages Broken or unfulfilled business promises

What Quality Is NOT? � � � Lack of trust, poor motivation to perform, poor attitudes to staff, customers Problems at work Lack of customer service => complaints ³ Waiting for 10 minutes ³ No towel in bathroom ³ Waiting for 10 minutes ³ Coffee is cold ³ I booked a double room, not a twin bedded room ³ My chicken is undercooked ³ This steak is overcooked ³ Nobody ever answers your phone

Customers � External customers ³ � Come from outside of the company and buy our goods and services Internal customers ³ ³ Come from within the company Include your co-workers, contractors, suppliers

Knowing your customers � � Knowing exactly who your customers are (whether external or internal) is crucial to the success of your company If you are not able to identify and meet your customers’ expectations – the quality of service that you provide will fail their expectations

Customer’s Needs & Expectations Understanding customers’ needs and expectations � We don’t want just cheap and convenient products and services � We want sincere smile, genuine show of concern or interest, listening, we want to be recognized as individuals = personalized service – designed just for us not for masses, we want to be different, interacting = attention at our need of time � We want experience = key driver of value and profit in service organization (more than physical product)

Customer’s Needs & Expectations Identifying customers’ needs � What do they want? � What do they need? � What do they think? � What do they feel? � Are they satisfied? � Will they return?

Customer’s Needs & Expectations Anticipating customers’ needs => constantly ask these questions � Have we considered their needs? � What will they need next? � How can we improve our service? Situation => anticipated need � Customer waiting longer than usual => an extra warm smile, comment of appreciation for waiting is anticipated

Four Basic Needs � The need to be understood � The need to feel welcome � The need to feel important � The need for comfort

Four Basic Needs The need to be understood � Feeling they are communicating effectively � Language and emotions can cloud the accurate understanding of the message The need to feel welcome � Pleased to see the customer � Value the business with the customer � Not an outsider => not return

Four Basic Needs The need to feel important � Ego and self-esteem � Make your guest feel special The need for comfort � Physical – place to wait, rest, talk, to do business � Psychological – confidence they will take care of you appropriately

Levels of service � � Within the company, there are levels of service we provide to the customer based on their needs A simple problem or request does not require the same level of service as a complex problem

Levels of service � � Basic Expected Desired Sensational (Unanticipated)

Basic level of service � � � Minimum acceptable standard of customer service that will meet their expectations Things taken for granted If taken away, customers will not come back

Expected level of service � � � What the customers expect from you If you provide such service, the customer will be satisfied If your competition offers more (higher level of service), the customer will prefer the other business

Desired level of service � � Customer would like to have such service If you provide such service, your customer will be satisfied and will become a regular and shop with your company on a preferential basis

Sensational level of service � � The highest level of service the company can provide Service will impress the customer as it is unanticipated Customer will keep coming back You will win loyalty and build a solid customer base through word-of-mouth (the most potent form of advertising)

Advise on customer service needs Good service attributes � Know the products and services you offer � Give the customers your full attention � Be helpful � Show empathy with the customer � Resolve problems and fix mistakes quickly

Advise on customer service needs Poor service attributes � Do not address a customer appropriately � Incorrectly place an order � Deliver an incorrect product or service � Give poor advice

Determine the customer needs � � � � Direct observation Interaction with the customers/MBWA Customer complaints/feedback Feedback from employees Comprehensive studies/survey questionnaire Interviews and consumer panels Examine individual transactions

Question for students to think about. . . Is it sufficient for the business success to collect the information about the customers’ perceptions and expectations?

Communicate and use customer information � � Collecting information about customer expectations and perceptions is not enough You must use the information in order to improve the customer service once any gap in service is identified

Communicating and using information on customer needs � � Providing information on customer needs Creating a service plan ³ ³ � � Determine and communicate the objectives Involve the team (increase motivation, decrease resistance) ‘Moment of Truth The customer service cycle

Provide information on customer needs � � � Feedback on service performance must be provided to employees in a timely manner Otherwise, it might be too late and hard for employees to reflect on the reasons for reported performance Emphasize the fact that the management is committed to providing an excellent customer service

Create a service plan � Determine the objectives: ³ ³ Base point for all service = minimum acceptable service level that can be provided Sensational level of service should be an overall aim for any company, however, note it costs tremendous amounts of time, money and other resources, so sometimes it is not the most appropriate level of service to provide

Create a service plan � � Communicate the objectives to the team Involve the team in the planning; it will increase their motivation, decrease their resistance towards change and it will increase the chances of plan success

Create a service plan � Start with thinking about ‘Moments of Truth’ ³ � � � Critical moment upon which much depends Think about your quality of service you are providing Examine your customers’ experiences through the eyes of your customers If you can see things as the customers see them, then you have arrived at a moment of truth

Create a service plan � � A moment of truth in customer service occurs any time a customer comes in contact with your organization and gets an impression of your service (perception) When a customer has a moment of truth with your company, you will either: ³ ³ ³ Meet, Exceed, or Fall below the customer expectations

Service cycle � � � Service cycle is a map of your company’s systems, broken down to steps, decisions, duties, and activities designed to take the customer from the front door to the company and back out the front door again We hope customer will repeat the process Consists of moments of truth

Service cycle � � The power behind the service cycle is the way it helps you see things that are unique from the customer’s point of view The more you can see, understand experience the same things as your customer, the better equipped you’ll be to fix what needs fixing or adjust what’s working well

Service cycle � � � When a company exceeds our needs or expectations, we are pleased and often shocked Usually our service experiences run at acceptable level When a company goes beyond the call of duty to make us feel special, it is a nice surprise

Service cycle � � � When a company fails to meet our needs or expectations, we are displeased and again very shocked It is an unpleasant experience to see rude, apathetic and discourteous employees We keep all experiences (moments of truth) in our memory and definitely do not return to such place ever again

Question for students to think about. . . What do you think are the common service problems?

Common service problems � � � � The big wait ‘I just work here’ (lack of authority) True lies (dishonesty, unfairness) Broken promises Companies who think about the customers that they are stupid or dishonest Don’t ask Automatic pilot (impersonal and unfriendly staff – no eye contact, no smile)

Common service problems � � � Suffering in silence (employees who do not respond to customers, who ignore them) Misplaced priorities (sales assistants talking to each other) Lights on, no one is home (staff who do not know the answers for the common questions)

Service failures � � � Delivery of customer service is inconsistent by its very nature Service failures are going to happen and thus customers are going to complain By encouraging complaints and handling the problems you will have an opportunity to strengthen your relationship with your customers

Service recovery � � � Customer complaints as an excellent source of information about the products and services Armed with this information you can make changes to increase customer satisfaction Service problems enable an organization to demonstrate its commitment to providing high quality customer service

Service recovery � � � Customer complaints provide a company with an opportunity for improvement By analysing the service cycle, we can identify any problems that may exist in your company and the provision of the service The cycle will allow us to ascertain exactly where the problems in service delivery exist and by analysing the problems we can establish solutions

Service recovery � � � Most companies have standard policies and procedures for handling problems Correctable situation Situation is not correctable, or is a result of unusual circumstances, or the problem is hard to identify

Service recovery � If the situation is correctable (e. g. a defective product), the company will: ³ Apologize for inconvenience and ³ Offer: ® Cash refund, ® Replacement, or ® Future credit

Service recovery � If the problem is hard to identify, the situation is not correctable, or is a result of unusual circumstances, the service recovery might be more difficult , e. g. : ³ Staff insulted the customer ³ Store was closed due to bad weather ³ Client did not like the haircut

Support implementation of customer service strategies Part 2

Repeat Business Customer retention � � � Quality is customer driven Customer satisfaction is the ultimate measure of the success The key to success of the business is to ensure the repeat business with the customers

Question for students to think about. . . Why do so many people fail to return?

Repeat Business Customer retention Why do so many people fail to return? � 1% of lost customers die � 3% move away � 4% just naturally float � 5% change on friends recommendations � 9% can buy it cheaper somewhere else � 10% are chronic complainers � 68% go elsewhere because the people they have been dealing with were indifferent to their needs

Ways of Customer Retention � � Marketing strategies: ³ Frequent buyer programs ³ Thank you cards ³ Customer reward and recognition program ³ Customer special events ³ Newsletters / personal letters ³ Telephone recalls Total Quality Management and continuous improvement

Total Quality Management � � Management approach to long-term success through customer satisfaction All members of organization participate in improving processes, products, services and the culture in which they work

Total Quality Management The aim is to: � Resolve quality problems � Prevent problems from re-occurring � Prevent problems from occurring = aim for ‘zero defects’ � TQM is focused on prevention rather than detection � Is to perform a TQM process in the best way possible

Total Quality Management The aim is to (cont): � People are a very important part of TQM process � Emphasis is on how things are done, not the end result � TQM focuses on being proactive and creative, ‘think outside the box’, be a ‘creator’ and not a ‘competitor’ � Do things better every time � Teamwork � Constant improvement

Quality Management Monitor service Provide service Improve service

Basic Principles of TQM 1) The Approach - Quality begins at the top � TQM must be management led => lead by an example => cannot expect something from staff if the management doesn’t take it seriously 2) The Scope - TQM must be organization-wide � Constant improvement of all areas of the business, not just one 3) The Scale - Everyone is responsible for quality � Traditionally, quality assurance department was responsible for quality � Now, everyone should be involved in process and focus on quality => Quality is critical to the future security of everyone’s job.

Basic Principles of TQM 4) The Philosophy - The focus is on prevention not detection � Past => mass production => little time => low quality => errors/defects � Quality inspections can stop faulty products going to customers � Quality inspections have little opportunity for stopping errors occurring in the first place � Quality inspections don’t reduce the number of errors or costs � Quality inspections encourage people to expect errors and provide ‘safe net’ to detect defective goods

Basic Principles of TQM 5) The Means - Control the process � Set the standards, check and measure against these standards, ensure that any shortfall is answered/acted upon swiftly

Basic Principles of TQM 6) The Standard - Get it right first time, every time => zero defects � Telling people to produce quality is not efficient = like spreading a message by whispering => no one hears you � You need to provide information, clear instructions, training, tools, environment that make it possible = practical to achieve the quality � Create environment where people take responsibility for the quality of tasks they do ³ End traditional autocratic style of management ³ Manager delegates responsibility for quality to people doing the work => requires skills and knowledge => training and supervision

Basic Principles of TQM 7) The Measure - The cost of poor quality � � � ‘Defects are not cost free. Someone makes them and gets paid for making them’ It’s much cheaper to get it right first time Measurement has two aspects: ³ Money that could have been saved had things been produced right the first time ³ Money that could have been made from missed business due to poor quality or missed opportunities (important to recognize, but difficult to evaluate)

Basic Principles of TQM Efficiency of the business (health) is measured in financial terms Categories of these costs: ®Failure costs ®Appraisal costs ®Prevention costs ®Other costs of poor quality �

Basic Principles of TQM ³ Failure costs: ®Internal failure costs: sorting, inspection, re-work, re-test, scrap ®External failure costs: complaints, faults, warranty charges, refunds to customers ®Intangible quality costs: loss of morale, production delays

Basic Principles of TQM ³ Appraisal costs: ®Involved in discovering state of the product or service ®Inspection through observation ®Customer and employee appraisal ®Quality and reliability audits

Basic Principles of TQM ³ Prevention costs: ®To keep failure and appraisal costs at a minimum ®Include quality planning, quality training, supplier appraisal, contracts procurement ®Small increase in prevention and appraisal costs will reduce failure costs by a greater amount, thus reducing the total costs

Basic Principles of TQM ³ Other costs of poor quality: ®Free meals, drinks ®Loss of reputation ®Loss of customers ®Wasted time and effort by everyone involved

Resistance to TQM Reasons for a resistance to TQM � Waste of time � Waste of costs � Waste of energy � Interesting fact is that they resist TQM even when the mediocre service is the top reason for customer complaints

Continuous Improvements � � What is good enough today, may not be as good tomorrow Products are important (e. g. TV, notebook, clothes, food, drink, accommodation, clean premises), but the most important issue regarding quality in any industry is the interaction b/w customers and staff.

Service Recovery � � Not all customers are happy customers => complain We should accept the fact that at some time, our customer will be unhappy, dissatisfied, or upset with product or service => solve it asap to customer satisfaction Recovery means action to tell customer we will take care of their problems Restitution means something you give your customers to compensate them for their inconvenience

Question for students to think about. . . How would you deal with a customer complaint?

Effective service recovery � � � Listen to the customer Provide a fair solution Resolve the problem quickly

Listen to the customer � � � Actively and carefully listen to the customer Customers can be very emotional Do not interrupt them, let them speak without any interruptions Be sympathetic with the customer and express your gratitude that the problem has been brought to your attention Listen to find out what the customer complains about and perceives as a fair solution Ask what were their needs at a time of purchase and how they have not been met

Provide a fair solution � � Your task is not only to solve the problem, but also how to get the customer back The customer will be impressed if they think they have been treated fairly ³ ³ Distributive fairness Procedural fairness s

Distributive fairness � � This is the customer’s perception of the benefits compared to their costs They want to get what they paid for Sometimes we need to compensate them for bad service or a bad product They prefer tangible resolutions to intangible: ³ A low cost reward, a small discount can communicate more concern to the client than a verbal apology ³ Let the client see that something will be done about the problem to prevent it from happening again in the future, or write a note in front of the client to the manager

Procedural fairness � � Perceived fairness of the process used to resolve complaints Customers usually feel they are dealt with fairly when employees follow the company guidelines

Procedural fairness � Customers consider 3 questions when evaluating procedural fairness: ³ ³ ³ Did the employee collect the information about the situation? Was the information used to resolve the complaint? Did the customer have some influence over the outcome?

Resolve the problem quickly � � Customer satisfaction depends also on the time it takes to get an issue resolved For faster communication, use telephone, or email ³ � � � Sending letters is very time consuming Reduce the number of people the client has to contact (self-sufficient staff with authority) Provide clear instructions Speak in customer’s language ³ No jargon, ‘e. g. on the rounder next to the four ways’ = ‘on the round stand up isle four’

Resolve the problem quickly � � � Do not resolve problems too quickly The customer might feel dissatisfied as they have not received the personal attention Take time to listen and show concern for the customer

Customer service strategies � 2 approaches that companies use to develop a sustainable customer service advantage over their competitors: ³ Customization ³ Standardisation

Customization � Customization strategies encourage service providers to tailor the service to meet each customer’s expectations and personal needs ³ ³ Sales assistants helping the customers Online services – human touch, instant messaging

Customization � � Advantage is that the customers receive superior service Disadvantages are: ³ ³ The service provided might be inconsistent because it depends on the judgment and capabilities of the service providers High costs (customizes service is costly since more well trained service providers or complex computer software is required)

Standardization � � Standardized approach is based on establishing a set of rules and procedures and making sure they are implemented consistently Advantage is that by strict enforcement of these rules and procedures you can ensure that inconsistencies are minimized ³ Do you know any example of standardization in business?

Standardization � Examples: ³ Through standardization, customers receive the same food and level of service in Mc. Donalds’ across the globe ® ³ The food may not be exactly what the customer wants, but it is consistent and served quickly at a low cost Kmart tries to build the same layout in all their stores, so that the customers feel instantly at home and where to look for certain product

Communicating the strategies � � It is vital to develop the strategies for your customer service, however, in order to implement them successfully, it is equally important that these strategies are communicated to staff There a range of methods that can be used to promote customer service strategies within your organization

Communicating strategies � � � Posters in prominent positions in your company Staff newsletters (releasing articles and information) E-mail messages to remind staff of customer service strategies Meetings with staff where presentations about customer service strategies are given Training (induction, coaching – assistance with specific skills, training for large groups)

Communicating strategies � The method that you choose and use will depend on: ³ ³ ³ The nature of the organization Its size Level of resources available

Budgeting for customer service � � High quality of service comes at a cost But when you look at these costs and you compare them with the increased profits, you should find out that your customer service strategies will help to improve your bottom line

Budgeting for customer service � � Like any other process in an organization, these costs must be carefully planned and budgeted for It is no use to an organization to add service strategies when the costs outweigh any benefits that those strategies may bring about

Budgeting for customer service � Consider the following costs: ³ ³ ³ ³ How many extra staff will be required? Will staff be required to work longer hours? The time taken by the managers to develop the plan The cost of any consultants The cost of the consumer research The cost of uniforms for staff The cost of any new technology introduced Any other resources

How to C. A. R. E. for Your Customers � � � You must show your customers you CARE for them If you CARE, they will reward you with their loyalty Credible: reputation, they must believe in your business, products and services Accessible: quickly, easily and customer friendly; they are already distressed, don’t make them more by passing the bug = them from an employee to an employee Reliable: consistent in the performance to ensure satisfaction (they know what to expect) Excellent: your customers want excellence, so should you ³ ³ Excellent customer service = excellent retention of customers Excellent training programs for staff = excellent performers who will ensure the retention of customers

How to C. A. R. E. for Your Customers Training: � Untrained employees present a bad image for your companies � Language difficulties, or no knowledge about the business create a bad image for the business, too � Rapport and effective communication ³ Opportunity to represent your company positively � Training: ® How to do the job ® How to interact with customers

Benefits of Good Service Benefits of good service: � Time saved � Fewer mistakes � Accurate expectations (there will be a half hour wait) � Increased customer satisfaction � Increased customer retention � Increased sales � Increased employee morale

Evaluate and report on customer service Part 3

Question for students to think about. . . What are customer’s expectations based on?

The role of expectations � � The customer’s expectation are based on a customer’s knowledge and experiences E. g. When they send a letter, they do not expect an immediate response, but when they send an e-mail, they expect an answer would be there the next time they turn the computer on

The role of expectations � � � Customer’s expectations vary from store to store Customers might be satisfied with low levels of the service in some store and dissatisfied with higher level of service in another store If you offer your customers unexpected service you increase their satisfaction

Perceived service � � � The customers evaluate the service based on their perceptions They are affected by the actual service provided, however, due to its intangibility it is often hard to evaluate it accurately Employees play an important role in customer perceptions of service quality

Factors affecting customer perceptions � � � � Tangibles Understanding and knowing customers Responsiveness Reliability Access Security Competence

Tangibles � � Appearance of sales people Display of the products Appearance of the store Design of the website

Understanding and knowing customers � � Providing individual attention Recognizing regular customers Notes and e-mails sent to clients to inform them of sales and new products / merchandize Personalization of the website or service (e. g. using names)

Responsiveness � � Returning calls to the customer Giving prompt attention

Reliability � � Accuracy in billing Delivery when promised

Access � � � Convenient store locations Adequate car parking Convenient operating hours Short waiting lines Providing information on order status

Security � � � Feeling safe in the car park Internet security for e-commerce Policies in place for confidential information

Competence � � Knowledge and skill of employees Depth of information provided

Situations producing good and bad outcomes � � � Most of our experiences as customers with retailers are quite ordinary They are uneventful, so they do not stimulate the evaluation of the service However, an unexpected, or unusual event motivates us to evaluate the service, e. g. : ³ ³ We cannot find the product We need or request special attention

Situation 1 � Customer is attempting to log onto an online website, but finds that their information was not registered How would you deal with this situation?

More satisfying experience � An e-mail reply apologizes for losing the account information and immediately resolves the problem providing the customer with their log in information

Less satisfying experience � � � No explanation No apology No assistance

Situation 2 � Customer finds a frayed cord on a lamp they purchase and returns it asking for a replacement How would you deal with this situation?

More satisfying experience � Employee immediately provides a replacement

Less satisfying experience � � Employee suggests that the cord was not frayed when purchased Employee suggests the customer is trying to rip the store off

Situation 3 � Customer wants a toaster oven, but the size they want is not in stock How would you deal with this situation?

More satisfying experience � Employee locates the toaster oven in another store and has it delivered

Less satisfying experience � Sales person suggests that the customer checks with other stores

Situation 4 � Customer walks into a store and asks for some help How would you deal with this situation?

More satisfying experience � � � Sales person treats the customer well Sales person answers the questions/finds the products Sales person is polite and courteous

Less satisfying experience � � Sales person acts like the customer is bothering them Sales person provides a short answer and walks away

The GAPS model � � � The GAPS model indicates what retailers need to do to provide high quality customer service When customer expectations are higher than their perceptions of the delivered service, customers feel dissatisfied and they feel the quality of the service is poor Thus, the retailers must reduce the service gap to improve customer’s satisfaction with their service

The factors affecting service gap � The factors that will affect the service gap are: ³ ³ � Knowledge gap Standards gap Delivery gap Communication gap Objectives are to reduce the service gap by reducing each gap as much as possible

Knowledge gap � � � The difference between the customer expectations and retailers perception of customer’s expectations Retailers often lack the accurate information about the customer needs and expectations This can lead to poor decisions, e. g. : ³ ³ A supermarket can hire extra staff for stocking the shelfs (customer always finds what’s needed) However, the customers would prefer extra staff for checkout lines (faster exit)

How to reduce knowledge gap � Develop better understanding of customer expectations by: ³ Undertaking consumer research ³ Increasing interactions between retail managers and customers ³ Improving communication

Standard gap � � � The difference between the retailer’s perceptions of the customer’s expectations and the customer service standards it sets Gather information and use the information to set the standards and develop systems for delivering high quality customer service Standards should be based on the customers’ perceptions rather than internal operations

How to reduce standards gap � � � Commitment to service quality (top management’s leadership and commitment) Developing solutions to service problems (increase satisfaction, reduce costs) Using technology (simplify and improve customer service) Setting service goals (better understanding and greater acceptance) Measuring service performance (surveys, mystery shoppers)

Delivery gap � The difference between the retailer’s standards and the actual service provided

How to reduce delivery gap � � � To reduce delivery gap and provide service that exceeds standards: Information and training (product info , interpersonal skills; confidence, competence) Instrumental and emotional support (equipment; understanding atmosphere, support from colleagues, supervisors as dealing with angry clients is psychologically demanding) Improving internal communication (e. g. no questions asked refund policy) Empowering employees (authorize them to make important decisions)

Communication gap � � The difference between the actual service provided and the service promised in the retailer’s promotional program Overstating and raising expectations too high might bring in more customers initially, but it can also create dissatisfaction and reduce repeat business

How to reduce communication gap � � The communication gap can be reduced by: Realistic commitments ³ � Poor communication b/w marketing department and store operations can result in mismatch b/w the service advertised and actual service Managing customer expectations ³ ³ Providing accurate information can increase customer satisfaction Informing the customers about their roles and responsibilities in getting good service

Ethics and Morals Standards and Benchmarks � � � � What we ought to do What is right to do What is fair What is legal (advertising fresh and serving frozen) Does it hurt anyone Are we honest Can we personally live with a clear conscience

Ethics of Interpersonal Relationships � � Hierarchical ethics = up and down the organizational chart Promotional ethics Transactional ethics = all relationships b/w employee and customer and b/w physical property and the customer Contractual ethics = interaction b/w the company and outsiders doing business with, providing services for

Ethics of Interpersonal Relationships Hierarchical ethics � Management has responsibility to care for its employees � Employees have responsibility to perform properly in their work and in their relationships � Mistakes: managers overly impressed by their own importance � Management must ask these questions: ³ ³ Are my employees well trained Do they have proper tools/proper working environment Are they known as individuals or as names and number only Do I truly care about them or am I too caught in the bureaucracy of success to worry about them

Ethics of Interpersonal Relationships Promotional ethics � Promoting special prices and charging standard rates customer not aware about specials

Ethics of Interpersonal Relationships Transactional ethics = all relationships b/w employee and customer and b/w physical property and the guest � Health and safety considerations � Service considerations � Consideration about comfort � Interactions b/w customers and staff

Ethics of Interpersonal Relationships Contractual ethics = interaction b/w the company and outsiders doing business with, providing services for � Strongly developed relationship with the fire inspector => improperly stored flammable hazardous materials => he is not strict

Quality Customer Standards � � � Standards: Required level of performance For effective quality assurance: it is better to have fewer standards, but have each of those rigidly enforced Setting Quality Customer Standards and compare them with actual performance

Quality Customer Standards � � Quality standards: ³ Clear ³ Concise (short) ³ Observable (seen and measured) ³ Realistic (practical and obtainable) If they are too general, they are weak and not effective

Benchmarking � � Management tool that compares how well certain business is performing in relation to industry ‘best practice’ = similar, very successful business Asks questions ³ What is it that makes this business successful? ³ What do they do that we don’t? ³ How do they do it?

Benchmarking � � � Then begin setting standards that meet or surpass those of the best in the business Used to encourage the improvement and setting of standards throughout the business Process of: ³ Comparing the cost, time, quality of what one company does against what another does => making changes in order to make improvements ³ Evaluating various aspects of their processes in relation to best practice

QCS Measuring Auditing and Feedback Systems � � � Who will measure quality? What must be measured? When must you measure? Where do you measure? How do you measure? Why do you measure?

Reasons for Measuring Quality � � � To learn about customer perceptions – what they think and feel To determine customers needs, wants, requirements, and expectations To find out how you are doing and where you go from here To continuously improve quality customer service (QCS) To increase profits through improved performance

Reasons for Measuring Quality � To close the gaps ³ ³ ³ B/w what business thinks customer wants and what the customer really wants B/w what business thinks customer has bought and what a customer perceives he has received B/w the quality of the service the business believes it is providing and what the customer perceives is being provided B/w customer’s expectations of service quality and actual performance B/w marketing promises and actual delivery

Service Audit Service audit is used for: ³ Identifying, recognizing, reinforcing and rewarding desired behaviour � Service audit requires: ³ MBWA – Management By Walking Around ³ Careful observation, examination, and scrutiny of each step and function Warning: � Don’t misuse service audit for using it as a vehicle for criticizing and casting blame �

Customer Feedback System � � What our customers think about our performance It is not collected haphazardly (coincidence) => it is proactive, not reactive It is planned, organized Intention to optimise customer information flow into the company

Customer Feedback System Beneficial information: � To what extent are they satisfied � What they really think � What they like about your service � What they dislike about your service � What are their most common complaints � What suggestions they have for improvement of your service

Customer Feedback System � Roadblocks to customer feedback ³ They don’t believe it will make a difference ³ They don’t have easy access to people that can make a difference

Employee Feedback System � � Customer service behaviour = what the employee does, how he acts Sharing of information = principle of ‘no surprises’ => information about performance and productivity is openly shared with employees Mutual give and take of ideas = two-way exchange of ideas and perceptions b/w the manager and customer service employee Employees are constantly aware of their performance and any changes needed or expected

The keys to improving service quality � The keys to improving service quality are: ³ ³ Understand the level of service customers expect Set standards for providing customer service Implement programs for service delivery that meets the standards Undertake communication programs to inform customers about the service offered

Summary � � Providing high quality customer service is a challenge (due to intangibility and inconsistency of service) However, the customers can provide the company an opportunity to develop a strategic advantage Inconsistency and service failures are bound to happen These lapses in service provide an opportunity to build even stronger relationships with clients

End of the presentation Thank you very much for your attention Do you have any questions?