Managing Customer Service by Andrew Clegg

BML207: Managing Customer Service

Dr Andrew Clegg

Learning Outcomes By the end of the module you should be able to: • Dis%nguish between the ways in which customer service and quality has been defined and conceptualised • Debate the factors influencing the emergence of quality as a management tool • Prac%cally apply the tools and techniques that can be used to cri%cally assess customer service and to facilitate service enhancement • Apply the key stages in developing a customer service strategy to a customer service strategy for a specific business environment • Communicate effec%vely in wriBen and verbal form • Display appropriate IT skills

Managing Customer Service

Session 1: IntroducAon to Quality and Customer Service

IntroducAon to Customer Service Aims • To deﬁne quality and iden%fy quality indicators; • To discuss the rela%onship between quality and the nature/character of the service sector • To discuss the factors inﬂuencing the emergence of quality as a management tool • To introduce the no%on of the ‘experience economy’ and ‘experience realms’ • To iden%fy the key elements of service excellence

IntroducAon to Customer Service The Current State of Customer Service: QuesAon 1: What percentage of UK customers stopped doing business with a company within the last six months due to a bad customer experience? a: 10% b: 24% c: 33% d: 46%

IntroducAon to Customer Service The Current State of Customer Service: QuesAon 2: What percentage of consumers believe that UK high street retailers oﬀer great customer service? a: 3% b: 15% c: 23% d: 38%

IntroducAon to Customer Service The Current State of Customer Service: QuesAon 3: What percentage of UK consumers believe that ‘customer experience generally exceeds expecta%ons’? a: 2% b: 9% c: 16% d: 37%

IntroducAon to Customer Service The Current State of Customer Service: QuesAon 4: What percentage of UK consumers refuse to even enter a store if they spy a queue? a: 18% b: 27% c: 39% d: 51%

IntroducAon to Customer Service The Current State of Customer Service: QuesAon 4: What percentage of UK consumers refuse to even enter a store if they spy a queue? a: 18% b: 27% c: 39% d: 51% [Source: Barclaycard, 2010]

IntroducAon to Customer Service The Current State of Customer Service: QuesAon 5: What percentage of customers regard personal recommenda%ons from friends, family or colleagues as the most trustworthy source of informa%on? a: 25% b: 37% c: 49% d: 58%

IntroducAon to Customer Service The Current State of Customer Service: QuesAon 6: What percentage of UK holidaymakers use TripAdvisor before they book their holiday? a: 15% b: 22% c: 25% d: 38%

IntroducAon to Customer Service The Current State of Customer Service: QuesAon 6: What percentage of UK holidaymakers use TripAdvisor before they book their holiday? a: 15% b: 22% c: 25% d: 38% [Source: WTM Industry Report,2010]

IntroducAon to Customer Service The Current State of Customer Service: QuesAon 7: What percentage of customers would be prepared to pay more for a product if it came with beBer service? a: 35% b: 47% c: 62% d: 74%

IntroducAon to Customer Service The Current State of Customer Service: QuesAon 8: How much is poor customer service cos%ng UK businesses? a: £3.5bn b: £5.2bn c: £11.7bn d: £15.3bn

IntroducAon to Customer Service The Current State of Customer Service: QuesAon 8: How much is poor customer service cos%ng UK businesses? a: £3.5bn b: £5.2bn c: £11.7bn d: £15.3bn [Source: Genesys Telecommunica%ons Laboratory Report: The Cost of Poor Customer Service, 2010]

IntroducAon to Customer Service The Current State of Customer Service: • In a business to business engagement, ‘delighted’ customers are FIVE TIMES more likely to plan on repurchasing than merely sa%sﬁed customers [Source: Ipsos Loyalty Report: The Role of Customer Delight in Achieving Customer Loyalty, 2010]

• When asked how companies can encourage them to spend more, 61% of customers said accessible informa%on and availability for ques%ons before making a purchase, 66% said improved customer service, 23% said a ‘tailored’ experience. [Source: Right Now Report – Customer Experience Impact, 2010]

IntroducAon to Customer Service AcAvity 1: IdenAfy: • Two situa%ons where you have been impressed by the quality of customer service • Two situa%ons where you have been disappointed by the quality of customer service • For what speciﬁc reasons has the customer service been good or bad?

IntroducAon to Customer Service AcAvity 2: Customer Service PrioriAes • From your own experiences and reﬂec%ng on approaches to customer service within your own business or organisa%on develop a list of top ten customer service prioriAes

IntroducAon to Customer Service 10 Rules for Customer Service • 1: Commit to Quality Service/Exceed ExpectaAons – Create a posiAve experience for the customer • 2: Know Your Products – Product knowledge = conﬁdence • 3: Know Your Customers – Tailor your approach to customer needs • 4: Treat People with Courtesy and Respect – Tailor your approach to customer needs

IntroducAon to Customer Service 10 Rules for Customer Service • 5: Listen to Your Customer and Handle Complaints EﬀecAvely – Be soluAon rather than problem-‐focused • 6: Be Responsive to Customer Enquiries – Be prompt and never leave a customer hanging on • 7: Focus on Making Customer, Not Sales – QuanAty rather than quality of sale • 8: Develop Customer Orientated Systems for Service Excellence

IntroducAon to Customer Service 10 Rules for Customer Service • 9: Develop a Culture of ConAnuous Improvement – Engage with staﬀ in the quality enhancement process • 10: Monitor, Reﬂect and Act on Customer Feedback

IntroducAon to Customer Service AcAvity 3: Consider the following: • What is quality? • When measuring the quality of a tourism or service product or service what do you consider? • Does the expecta%on of quality diﬀer depending on the type of product/sector/audience? • How does the character of the industry/product inﬂuence quality management? • The emphasis on quality is designed to meet what wider goals?

Defining Quality InternaAonal OrganisaAon for StandardisaAon Quality:

‘the totality of features and characteris%cs of a product or service that bears on its ability to sa%sfy stated or implied needs’

Quality Indicators Zeithamal (1990): • Tangibles: The appearance of physical faciliAes; equipment and personnel • Reliability: Ability to perform the promised service dependably and accurately • Responsiveness: Willingness to help customers and provide prompt service • Assurance: Knowledge and courtesy of employees and their ability to convey trust and conﬁdence • Empathy: Caring, individualised agenAon the provides its customers

Quality Management & Services Points to consider: • The service product is not standardised and is influenced by a variety of variables -‐ [e.g. staff delivery and customer expecta%ons] • The service product is produced and consumed simultaneously -‐ therefore it can be different for every customer • Emphasis on the ‘moment of truth’ • The product is intangible and perishable

IntroducAon to Customer Service Points to Consider: • The product cannot be tested • Many services are complex products which involve a high degree of interdependance and inseparability of the elements of the product • Quality can be viewed as set of outcomes (i.e. the product) or as a process (i.e the process by which the product is produced and delivered to the customer)

IntroducAon to Customer Service The AgracAon Product: • The physical environment of the aBrac%on • The price the customer pays/percep%on of value for money • The service oﬀered by aBrac%on staﬀ • The reliability of the product • Customer safety

IntroducAon to Customer Service The AgracAon Process: • Human resource management -‐ recruitment, mo%va%on, training, reward and recogni%on • The organisa%on’s culture and hierarchy/style of management • The marke%ng func%on and the impression that is presented to poten%al visitors • Purchasing policies and links to suppliers • Procedures for an%cipa%ng and responding to changes in the business environment

Quality: Internal & External PerspecAves

Quality as a Management Tool AcAvity 4: IdenAfy: • What factors have inﬂuenced the emergence of quality as a management tool?

Quality as a Management Tool Increasing Customer Expectations POTENTIAL AUGMENTED EXPECTED Excellence gap

CORE

Market Leadership gap

High

Levels of service

The Experience Economy

Entertainment ‘to sense’ • Improves the par%cipant's mood/ experience absorbed through senses • Par%cipa%on can be passive and/or ac%ve • Can be added to other realms to improve experien%al quality

The Experience Economy

EducaAon ‘to learn’ • Expands par%cipant's knowledge and/or skills • Par%cipa%on is ac%ve • Can be fused with educa%on to create "edutainment."

The Experience Economy

EstheAc ‘to be there’ • Enriches par%cipant through improved design, comfort and beauty of space and furnishings • Immersion in the event or environment but having liBle impact on it

The Experience Economy

Escapist ‘to do’ • Par%cipa%on tends to be ac%ve • Par%cipant tends to be actor in the performance

The Experience Economy The Branded Customer Experience

Profitable growth Branded experience Predictable experience Random experience • Inconsistent • Unintentional

• Consistent • Intentional • Not differentiated • Not valuable

• Consistent • Intentional • Differentiated • Valuable

• The goal

The Service Excellence Model Deliver the Promise

Go the Extra Mile

Service Excellence

Provide the Personal Touch

Resolve Problems Well

The Service Excellence Model ReputaAon for Service Excellence Committed staff

A service culture

A service personality

Easy to do business with

Financial benefits

Customerfocussed systems

Professor Robert Johnston, “ Service Excellence = Reputation = Profit : Developing and sustai ning a reputation for service excellence ” , Institute of Customer Service, 2001

Learning Outcomes By the end of this session, you should be able to: • Deﬁne quality and iden%fy quality indicators • Discuss the rela%onship between quality and the nature/character of the service sector • Iden%fy the factors inﬂuencing the emergence of quality as a management tool • Explain the no%on of the ‘experience economy’ and ‘experience realms’ • Iden%fy the key elements of service excellence