CUSTOMER SERVICE

ANISH YOUSAF
ASSISTANT PROFESSOR SCHOOL OF BUSINESS

Listening to customers must become everyones business. With most competitors moving ever faster, the race will go to those who listen (respond) most intently.

Tom Peters

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.

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 stores offering. the ease with which a transaction can be completed once the customer attempts to make a purchase. the customers satisfaction with the retailer.

Customer service vs Customer Satisfaction

Customer service focuses on measurement of how well a firm meets the established performance standards that are viewed as important to meeting customers needs. Customer satisfaction is how the customers measure externally the service performance of a firm.

Customer Service
High-quality service - A service that meets or exceeds customers expectations. 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 longterm relationships with customers.

Three Basic Tasks of Retailing

Common Customer Services

Pre-transaction services Provided to the customer prior to entering the store.
Convenient hours Information aids

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

Common Customer Services

Post-transaction services Provided to customers after they have purchased merchandise or services.
Complaint handling Merchandise returns
Exchanging defected products Acknowledging Fraudulent employee actions Price switching

Servicing, repair, and warranties Delivery Post-sale follow-up

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.

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.

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.

2.Establish a service strategy.

Have specified goals and objectives. Define the parameters clearly and communicate them within your organization.
E.g McDonald Vision best quick service restaurant experience. Outstanding quality, service, cleanliness and value. Make customers smile.

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 delivery commitment.

4 & 5.Empower employees, Recognize and Reward

Create a workforce which is dedicated and empowered to make decisions. Monetary rewards are important but recognition and acknowledgement are also important. Non-monetary benefits like holidays, special nametags etc can be provided.

 Customer Loyalty - Customers are committed to purchasing merchandise and services from the retailer and will resist the activities of competitors attempting to attract them.

Customer Loyalty

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.

Customer Relationship Management

CRM is a business philosophy and set of strategies, programs and systems that focuses on identifying and building loyalty with a retailers most 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.

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.

Transactional Marketing vs CRM

Transactional Marketing
Focus on single sale
Short-time scale Little focus on customer service Limited customer commitment Moderate customer contact Quality is a concern of production

CRM
Focus on consumer retention
Long-time scale High customer service emphasis High customer commitment High customer contact Quality is the concern of all

CRM Process
1. Collecting Customer Data 2. Analyzing Customer Data and Identifying Target Customers 3. Developing CRM programs 4. Implementing CRM Programs

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

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)

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

4. Implementing CRM Programs

Appointing CRM manager. Close coordination of activities by different functions in a retailers organization. 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.