BML207: Managing Customer Service
Dr Andrew Clegg 1
Managing Customer Service
Session 2/3: Developing a Customer Service Strategy Strategy, Business Environment & Vision 2
Customer Service Aims • Develop and sustain a reputa0on for service excellence by crea0ng a customer service strategy • Recognise the value and significance of customer service strategies • Understand the key stages instrumental when developing a customer service strategy • Understand the key external influences, including the main opportuni0es and threats, for your business • Assess the internal strengths and weaknesses of your business
The Service Excellence Model Deliver the Promise
Go the Extra Mile
Service Excellence
Provide the Personal Touch
Service Excellence
Resolve Problems Well
The Service Excellence Model ReputaHon 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
The Importance of Customer Service Customer Service: • Customer sa0sfac0on is declining not improving! • 60% of customers think customer service in the UK is geGng worse, 40% think it is not improving • Only 31% of companies in the UK rate their customer service to be either good or cuGng edge!
The Importance of Customer Service Complaints: • If a complaint is handled well 90% of customers will remain loyal and repurchase • 97% of customers are likely to tell others if their service recovery is good, but 96% will tell other people of their bad experience • 56% of customers expect a complaint to be dealt with immediately or on the same day; 80% of customers expect a wriRen complaint to be resolved within 2 weeks
The Importance of Customer Service Retaining Customers: • 80% of organisa0ons spend too much 0me selling to new clients and only 10% selling to exis0ng clients. Only 10% of organisa0ons get the balance right • 68% of customers defect because of poor service • Major companies now lose – and have to replace – half their customers in 5years, half their employees in 4 years and half of their investors in less than one
The Strategy Process AcHvity 1: To do: • Produce a graphically annotated illustra4on of how you would define strategy
The Strategy Process Customer Service Strategy
Andy’s Customer Service Strategy
Defining Strategy Defining Strategy: • ‘Strategic planning...involves concurrently integra0ng planning and management...the proac&ve approach of planning should be intertwined with the, frequent reac0ve reality of management’ [Source: Hall and Page 1999 cited in Mason, 2003, p. 74]
Defining Strategy Defining Strategy: • What business strategy is all about is, in a word, compe&&ve advantage...The sole purpose of strategic planning is to enable a company to gain, as efficiently as possible, a sustainable edge over its compe0tors. Corporate strategy thus implies an aRempt to alter a company’s strength rela0ve to that of its compe0tors in the most efficient way’ [Source: Grant, 1993, p. 11]
Defining Strategy Defining Strategy: • ‘The principal concern [with compeHHve advantage] is to avoid doing the same thing, on the same baMle ground, as the compe44on...the aim is to aMain a compe44ve situa4on in which your company can:
(a) gain a rela0ve advantage through measures its compe0tors will find hard to follow and
(b) extend that advantage further’
[Source: Ohmae, 1982]
Defining Strategy Key Elements in Strategic Planning: • Environmental Analysis: an4cipa4on of short and long-‐term changes in the opera4onal environment • Resource Analysis: understanding of the significance of the site’s physical and human resource base to successful ongoing environmental adapta4on • AspiraHon Analysis: iden4fica4on of the aspira4ons and interests of the major stakeholders in the des4na4on or tourism development [Source: Hall,2000, pp. 37; 75]
Defining Strategy Key Elements in Strategic Planning: • Environmental Analysis: understanding and an0cipa0on of short and long-‐term changes in the opera0onal environment influencing service excellence • Resource Analysis: understanding of the significance of the site’s physical and human resource base to successful ongoing environmental adapta4on • AspiraHon Analysis: iden4fica4on of the aspira4ons and interests of the major stakeholders in the des4na4on or tourism development [Source: Hall,2000, pp. 37; 75]
Defining Strategy Key Elements in Strategic Planning: • Environmental Analysis: understanding and an0cipa0on of short and long-‐term changes in the opera0onal environment influencing service excellence • Resource Analysis: understanding of the organisa0ons’ physical, financial, opera0onal and human resource base and its ability to deliver service excellence • AspiraHon Analysis: iden4fica4on of the aspira4ons and interests of the major stakeholders in the des4na4on or tourism development [Source: Hall,2000, pp. 37; 75]
Defining Strategy Key Elements in Strategic Planning: • Environmental Analysis: understanding and an0cipa0on of short and long-‐term changes in the opera0onal environment influencing service excellence • Resource Analysis: understanding of the organisa0ons’ physical, financial, opera0onal and human resource base and its ability to deliver service excellence • AspiraHon Analysis: iden0fica0on of the aspira0ons and interests of the major stakeholders involved in the delivery of service experience [Source: Adapted from Hall,2000, pp. 37; 75]
Defining Strategy AcHvity 2: IdenHfy: • What are the benefits of a clearly defined customer service strategy?
Defining Strategy AcHvity 3: IdenHfy: • What are the key ques4ons to consider when developing a strategy?
The Strategy Process The Stages of Strategy What is it we want?
Stage 1 Mission and goals
Where are we now? Competitors External environment Internal environment
Where do we want to go? Market penetration Greater customer focus
How do we get there?
Stage 2 Analysis of business situation (SWOT)
Market research Market characteristics
Stage 3 Objectives
Quality service Product development
Stage 4 Strategy
How are we doing?
Stage 5 Monitoring and evaluation Source: Adapted from Cooper, 1993
The Strategy Process The Stages of Strategy
Where are we now? Competitors External environment Internal environment
Stage 2 Analysis of business situation (SWOT)
Market research Market characteristics
Source: Adapted from Cooper, 1993
Defining Strategy AcHvity 4: The External Environment To do : • Conduct a PESTLE analysis to highlight key factors influencing the customer service environment
Welcome Management – p. 19
Defining Strategy Understanding Customers: Customers
Internal Customers People working within the same business
Customers External Customers Businesses
Defining Strategy AcHvity 5: Your Customer Groups To do: • Highlight the needs and expecta4ons of a specific customer group
Welcome Management – p. 20
Understanding Your Customers 2
1
3 5 4
6
Customer Service Aims • Develop and sustain a reputa0on for service excellence by crea0ng a customer service strategy • Recognise the value and significance of customer service strategies • Understand the key stages instrumental when developing a customer service strategy • Understand the key external influences, including the main opportuni0es and threats, for your business • Assess the internal strengths and weaknesses of your business
The Service Excellence Model Deliver the Promise
Go the Extra Mile
Service Excellence
Provide the Personal Touch
Service Excellence
Resolve Problems Well
The Service Excellence Model ReputaHon 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
The Strategy Process Customer Service Strategy
Andy’s Customer Service Strategy
The Strategy Process The Stages of Strategy What is it we want?
Stage 1 Mission and goals
Where are we now? Competitors External environment Internal environment
Where do we want to go? Market penetration Greater customer focus
How do we get there?
Stage 2 Analysis of business situation (SWOT)
Market research Market characteristics
Stage 3 Objectives
Quality service Product development
Stage 4 Strategy
How are we doing?
Stage 5 Monitoring and evaluation Source: Adapted from Cooper, 1993
Understanding Your Customers AcHvity 6: Valuing Customer Groups To do: • Highlight the value of different customer groups, and consider how this impacts on your strategy
Welcome Management – p. 21
Understanding Your Customers AcHvity 7: Valuing Customer Groups High
7 4
1 = Business and conference
1
2 = Coach tours
8
3 = Couples
Number of customers
4 = Special interest groups 5 = Families
3
6 = Senior market
5
7 = Short break 8 = Walkers
6 2 Low Low
Profitability
High
Understanding Your Customers Customer Lifecycle:
Understanding Your Customers Value Chain Analysis:
Understanding Your Customers The Student Journey Model:
Understanding Your Customers Customer Segmentation: Arkenford Modeling
Understanding Your Customers Customer Segmentation: Arkenford Modeling
[Tourism South East, 2008]
Understanding Your Customers Customer Segmentation: Arkenford Modeling
[Tourism South East, 2008]
Defining Strategy AcHvity 8: The Internal Environment To do: • Highlight the key elements of an internal resource audit that will influence the development of your customer service strategy
Welcome Management – p. 29
Defining Strategy: SWOT
[Source: Evans et al, 2003, p. 199]
Defining Strategy: SWOT
Defining Strategy: SWOT SWOT Guidelines: • Key points so that an overview is quickly gained • Many points may be rela4ve rather than absolute and consequently a maMer of judgement • The SWOT should not concentrate solely on ‘hard facts’ and ‘sober’ factors such as the organisa4onal culture should be included • Priori4se and combine points • Presenta4on should be specific and realis4c in its assessment • A cri4cal and honest evalua4on of the business is required (that not all businesses do!)
Defining Strategy: SWOT SWOT Guidelines: • Factors that impact on past performance • Factors influencing future performance • Dis4nc4ve competencies -‐ skills/characteris4cs that dis4nguish the product from its compe4tors • Key factors for success
Defining Strategy: TOWS
Defining Strategy: TOWS
Defining Strategy The Internal Customer:
• Who you do rely on? • Who relies on you? • What factors influence the nature and effec4veness of the internal customer rela4onship/ environment?
The Strategy Process The Stages of Strategy What is it we want?
Stage 1 Mission and goals
Where are we now? Competitors External environment Internal environment
Stage 2 Analysis of business situation (SWOT)
Market research Market characteristics
Source: Adapted from Cooper, 1993
Mission Statements AcHvity 9: Mission Statements To do: • Evaluate the mission statements provided: • [a] Can you name the company simply from their mission statement? • [b] What makes an effec4ve mission statement? Welcome Management – p. 3
Mission Statements
Mission Statements Writing a Mission Statement:
Evaluate customer feedback • What feedback do you want to hear?
Find the basic values and themes • Look for the common threads by separa0ng out values, words and ideas that keep recurring
Turn the list into a statement • Convert to a simple statement that expresses the company’s commitment to service quality
Don’t forget the employees • Repeat the process but change the focus to employees
Goals, Objectives, Actions WriHng Goals, ObjecHves and AcHons: Goals • General direc4on and focus ObjecHves • A specific statement of intent AcHons • Specific steps to achieve objec4ves
Goals, Objectives, Actions WriHng Goals, ObjecHves and AcHons: Key issues IdenHfy individual goals
For each objecHve idenHfy specific acHons
For each goal idenHfy specific objecHves
Goals, Objectives, Actions ObjecHves: Â
Goals, Objectives, Actions ObjecHves: Â
Competency Development
The Strategy Process The Stages of Strategy What is it we want?
Stage 1 Mission and goals
Where are we now? Competitors External environment Internal environment
Where do we want to go? Market penetration Greater customer focus
How do we get there?
Stage 2 Analysis of business situation (SWOT)
Market research Market characteristics
Stage 3 Objectives
Quality service Product development
Stage 4 Strategy
How are we doing?
Stage 5 Monitoring and evaluation Source: Adapted from Cooper, 1993
Learning Outcomes By the end of this session, you should be able to: • Develop and sustain a reputa0on for service excellence by crea0ng a customer service strategy • Recognise the value and significance of customer service strategies • Understand the key stages instrumental when developing a customer service strategy • Understand the key external influences, including the main opportuni0es and threats, for your business • Assess the internal strengths and weaknesses of your business