Customer Service Are we Exceeding your Expectations?
Service Performance Is More Difficult to Manage than Product Performance Produced at the instant of delivery Cannot be centrally produced, inspected, or warehoused It is delivered by people who are beyond the immediate influence of management The person receiving the service has nothing tangible If improperly performed, a service cannot be "recalled” Quality assurance must happen before production, rather than after Delivery of the service requires human interaction between buyer and seller Quality of service is largely a subjective matter Customers participate in the production (or creation) of the service delivery The focus is on uniqueness rather than uniformity – each service encounter is unique The customer experiences the service through a process as well as an outcome Standards of performance include more qualitative and human factors in performing a service than in producing a product Differences Between Service and Products
Concept of CustomerTraditional Mindset About the Customer • Outstanding organizations approach the service challenge from the view of managing the customer's experience vs. the view of doing things • Things are easier to deal with than humans as they are predictable, replaceable, and controllable: • Issuing merchandise • Processing the customer • Transaction processing • The "doing things" mindset views the customer as a nuisance. There exists a powerful tendency in many organizations to mechanize, depersonalize and dehumanize the service delivery process. There is little patience with customers' quirks, peculiarities, variability and their need for uniqueness. • Tendency to focus attention on "what we do" rather than on the customer who benefits from "what we do” • BIGGEST PROBLEM IN SERVICE INDUSTRY:Loss of focus on the customer as a "human being" • Objectives should be to "customerize" our services and aim for zero "defections"
What Customers Want • Friendly, Caring, and Individualized Service - Customers want to feel as if their business is important to the organization, and to be treated in a friendly, unique way • Flexibility - Customers want you to be able to go around the “system” to make it work for them when the current situation doesn't totally meet their needs • Problem Solving - When customers have problems and/or complaints that need attention, they. want to know that you're able to figure out a solution • Responsive and Timely Service - Customers want you to be responsive to their needs in a timely manner • Recovery - When the organization makes a mistake, customers want it to be taken care of quickly and to their satisfaction
Understanding the Concepts of Internal Customers • If you're not servicing the external customer, your job is to serve someone who is • We should have the same spirit of service toward each other as internal customers that we have toward external customers • Those who serve internal customers need the same clarity of purpose, sense of contribution, and willingness to serve that external customer-contact employees have • Quality of internal service directly impact service quality delivered to the ultimate customer • We need to understand internal customer needs and requirements and levels of satisfaction as we do for external customers • The concept of internal service agreements
The Service StructureCreating a Service Strategy Through Customer Research
Creating a Service Strategy Through Customer Research(Cont’d.) • We must learn what factors the customer values most of all and discover any unexploited opportunities to add value to the experience • A hierarchy of customer value exists with four levels: • Basic - The absolutely essential attributes of the experience • Expected - The associated attributes of the experience that the customer has come to take for granted as part of general business practices • Desired - Attributes the customer doesn't necessarily expect, but knows about and appreciates if the experience includes them • Unanticipated - "Surprise" attributes that add value for the customers beyond typical desires or expectations • You have to perform well on the basic and expected levels just to stay in the game • Differentiation sets in only when you can do something better than your competitors and the customer values the differences • Keep in mind that the unanticipated, once familiar, becomes the anticipated • In establishing a differentiation you have to understand from the customer the distinction between features and benefits, which is the same as the distinction between the objective product characteristics of what you offer and the subjective value derived from experiencing it
Defining the Service Package • There are seven critical components for a "general" customer service package. They can serve as a natural framework for evaluating the appropriateness of the design of any service package: • Environmental - The physical setting in which the customer experiences the product or service • Aesthetic - the direct sensory experience, if any, that the customer encounters • Interpersonal - The interactions the customer has with employees. This dimension includes timeliness, courtesy, helpfulness, and apparent competence at handling certain tasks • Procedural - The procedures you ask the customer to go through in doing business with you. This may include waiting, explaining, filling out forms, and being subjected to other manipulations or treatments • Informational - The aspects of the customer experience that involve getting the information needed to function as a customer • Deliverable - Anything the customer physically takes custody of during the service experience, even if only temporarily • Financial - What and how the customer pays for the total experience • To distinguish yourself, you must reliably and consistently offer something extra, an added value, to distinguish your style of doing business and attract business away from your competitors • Preplanned • Spontaneous
Service Delivery Systems • A service delivery system is the means with which you get service to your customers. From the customers' viewpoints, it is what you put them through to get service from your organization. • An effective service system is not only user (customer) friendly, it should also be employee-friendly as well • It should be designed in a manner that has such clear standards of performance that reliable measures can be used to troubleshoot the system • Done well, the system is so smooth as to be invisible • The experience of feeling, however, is memorable, even unexpected. Its design begins with a clear understanding of the service strategy and is constructed to be both user-friendly as well as employee-friendly • The delivery system is made up of many moments of truth which define the memorable experience
Dimensions of Service Quality • Reliability - Ability to produce the services promised dependably and accurately. • Responsiveness - Willingness to help customers and provide prompt service. • Empathy - Politeness, respect, consideration and friendliness. Treating the customer as an individual. • Competence - Service employees have the skills and knowledge needed to perform the service customers desire and to solve customer problems. • Credibility - The trustworthiness, believability, and honesty of the service provider. • Accessibility - Ease of access and ease of contact. • Communication- Verbal interactions with the customer - the ability to keep customers informed, to use language they can understand, and to listen to them. • Understanding - Finding out the needs, expectations, the customer and satisfaction levels of the customers • Tangibles - The physical facilities in which the service is provided, the equipment used in its delivery, the appearance of the service personnel, and the materials used to communicate. • Ease of Doing - The delivery and interaction processes are Business customer-friendly
Moments of Truth • Scandinavian Airlines (SAS) customers came in contact with an average 5 employees, with each contact lasting an average 15 seconds. • Thus, SAS is created in the mind of the customer 50 million times a year, 15 seconds at a time. • These 15 seconds are the "Moments of Truth" that ultimately determine whether SAS will succeed or fail as a company
Moments of Truth(Cont’d.) Messengers • Top management's task is to control operations by making decisions necessary to run the company. • Middle managers are not managers at all, but "Messengers" of top management's decisions. They convert top management's decisions into instructions, rules, policies and orders • The people at the "bottom" are the ones who have daily contact with customers, but are powerless to respond to individual situations which arise.
Moments of Truth(Cont’d.) • Moments of Truth • Ultimately, service is all about feelings -- the end result of a service experience is a feeling • To get at the issue of subjective value (vs. objective value), we need a way to describe, analyze, and assess the quality of the customers experiences -- Moments of Truth made popular by Jan Carlson of SAS • The Moment of Truth is any episode in which the customer comes into contact with the organization and gets an impression of its service • The customers know nothing of your organization, systems, processes, management systems. They only know what you do for them at that moment of truth • Once you start thinking in terms of moments of truth, you can begin to re-orient your thinking about quality -- away from work processes and outward toward those many episodes that comprise your customers' experience with your organization • By defining the MOT and focusing on the critical ones, you can see things as the customer sees them. The Moment of Truth must be your focus for defining, delivery, and measuring quality • Through an understanding of MOT, we begin to appreciate how things look and feel to the customer T.L.C. = Think Like a Customer • * From Moments of Truth, by Jan Carlson
Employee Handbook • WELCOME TO NORDSTROM • We're glad to have you with our Company • Our number one goal is to provide outstanding customer service. • Set both your personal and professional goals high. • We have great confidence in your ability to achieve them. • Nordstrom Rules: • Rule #1: Use your goodjudgment in all situations. • There will be no additional rules. • Please feel free to ask your department manager, store manager or division general manager any question at any time. • n o r d s t r o m
Service Delivery Quality Priorities • Speed - How time-critical is this? • Personal Touch - How important is it to manage the customer's state of mind? • Accuracy - How important is precision, conformance to specs, information clarity, and error prevention? • Cooperation - How important is it to dovetail with another person's task or with what the customer is doing? • Efficiency - How important is it to minimize the resource cost involved? The sequence of priorities change depending on the process. These can be used to evaluate the performance of a task or process.
The Spirit of ServiceEffective Use of People • Because each customer must be satisfied as an individual, traditional management styles can be ineffective • Each customer presents unique needs that must be met • It is impossible to anticipate every possible problem, question, or suggestion that customers may have • Only your employees can respond to different situations • The way customers are treated is a reflection of management's attitude toward customers as well as toward their own employees • Employee satisfaction = customer satisfaction "We have a belief that our guests will only receive the kind of treatment we want them to receive if the cast members (employees) receive that same kind of treatment from their managers. Walt Disney World Handbook
The Spirit of Service (cont’d.) • An attitude based on certain values and beliefs about people, life, and work, that leads a person to willingly serve others and take pride in his or her work • The heart of the service journey is spiritual rather than mechanical • Spirit in an organization reflects the core values, attitudes, and beliefs that shape the way employees see themselves, their customers, and the business world and cause them to behave the way they do • Many organizations do not have a spirit of service -- they have instead a rational spirit, a technological spirit, a financial spirit, a manufacturing spirit that defines the organization's culture • The spirit of service is an element of giving -- it's going beyond the bare minimum or standard actions. It's responding to the person more than just responding to the need • If the spirit of service is so great, why do so few organizations really have it?
Spirit of Service (Cont’d.) The spirit gets killed, or at least severely injured, in most organizations, due to: • Stress • Pressure • Conflicting priorities • Barriers and constraints • Frustration • Contact overload • Low employee satisfaction and morale • Management indifference • Burnout • Lack of appreciation • Operating procedures • "Overall, a culture that does not support the spirit"
Spirit of ServiceSelf-Esteem • Positive self-esteem is crucial in the effective managing of service • High (or low) self-esteem in relationships is contagious and spreads to other relationships • Managers have enormous power in the way they can affect employees self-esteem • People with high self-esteem tend to be assertive and attentive in their responses to customers. They are pleasant and warm when they converse, and empathetic and concerned if service problems occur. Above all, they go out of their way to make sure the customer gets quality service. They exude pride, confidence, and sensitivity. • People with low self-esteem are either overly passive ("why do I have to deal with all these customers"?) or overly aggressive ("What did you want"?). They act bothered and aloof. If there is a service problem, they are quick to rationalize, blame others, or make it the customer's fault. They are also quick to pass responsibility for correction to someone else.
Spirit of ServiceSelf-Esteem (Cont’d.) • A manager's role is to ensure that your employees have a vision (through the service strategy) and focus (through the standards and expectations communicated to them). These will help increase people's commitment to service and decrease the potential for burnout in the service role. Self-esteem is, in part, determined by the work environment plus the relationship the manager has with the people managed. • How employees are treated is how customers will be treated • The spirit of service comes from very basic personal feelings about self, work, and other people (self-esteem).
Typical Customer Survey Objectives • Dangerous to rely solely on feedback from some customers (e.g., focus groups, from salespeople, from executive visits to customer sites) • Need unfiltered data from a representative sample of the customer population • Customer surveys help to better meet the needs and requirements of your customers with respect to the products and services you deliver, by: • Understanding customer needs and requirements and their priorities -- including expected performance levels (service standards) • Assessing customer reactions to the current level of quality in products and services (including competitive and benchmark comparisons) • Assessing market consequences of customer reactions • Providing an assessment of the key aspects of corporate “culture” as it affects meeting customer needs and requirements • "Listening to customers must become everyone's business. With competitors moving ever faster, the race will go to those who listen (and respond) most intently." - Tom Peters, Thriving on Chaos • Given the uniqueness of being really heard, customers remember long those who listen well
Performance Linkage Model • Overall employee satisfaction consists of satisfaction with the organization and satisfaction with the job • Both are needed • The level of employee satisfaction determines employee behavior in terms of performance • Employee performance impacts customer satisfaction • Customer satisfaction determines customer behavior in terms of purchase decisions
Examples of Areas Measured by Customer Surveys • Product/service design • Product/service quality • Product/service cost • Product/service value • Ease of ordering/Timeliness and accuracy of delivery • Accessibility/Responsiveness to customer questions and complaints
Examples of Areas Measured by Customer Surveys • Billing (clarity, timeliness, accuracy) • Courtesy of customer-contact personnel • Technical competence of customer-contact personnel • Action by customer-contact personnel (resolution of complaints, etc.) • Honesty of communications to customers
Key Design Issues • Defining the customer base to be surveyed: • Consumer • "Business-to-business” • Combination • Competitors' customers (lost and never) • Individuals within organizations (decision-makers and users) • Sampling vs. census • Budget consideration • "Breaks" in the data required • Administration methods • Mail administration • Telephone • Face-to-face • Use of focus groups • Not an either-or decision • Based on usefulness
How Well Do We Manage Customer Relationships? • Support customer-contact employees • Make service accessible • Handle complaints effectively • Set service standards (goals). • Offer guarantees to customers
Customer Complaints Studies indicate: • The average business only receives complaints from about 4 percent of its dissatisfied customers • Each dissatisfied customer tells 15 other people • 90% of non-complainers who are dissatisfied will not buy from you again • Customers whose complaints are satisfactorily resolved are three times more likely to repurchase, and six times more likely to repurchase when complaint resolved promptly than dissatisfied customers who do not complain • Complaining customers who are properly handled can become even more loyal customers (95% vs. 90%) who have never had a problem • Even if complaints are not satisfactorily resolved, complaining customers are twice as likely to repurchase than dissatisfied customers who do not complain
Complaints (cont’d.) Reasons why dissatisfied customers don't complain: • They don't think we care • They don't think anything will happen • We make it difficult to do so • They don't have the courage The message -- make it easy to complain • One of the surest signs of a bad or declining relationship with a customer is the absence of complaints. Nobody is ever that satisfied, especially not over an extended period of time. The customer is either not being candid or not being contacted. - Theodore Levitt, Harvard University
Ingredients for Recovery • There are at least four ingredients for recovery. The first two are imperative for the customer who is annoyed, and all four are needed if the customer feels victimized. • Apology with Empathy - An acknowledgement of error immediately following a breakdown in service. An expression of compassion through empathy is key. The fact that you care is not enough; you must also show that we care about you and how you were affected • When service fails, first treat the person, then the problem • Urgent Reinstatement - The customer must perceive the deliverer as doing the absolute best job possible to-get things back to status quo as soon as possible • Symbolic Atonement - Provide to the customer some symbol which tangibly communicates, "We want to make it up to you.” • Follow-up - It provides a sense of closure and it serves to affirm the authenticity of "we care."
Performance Measurement • Customer Requirements • Service Standards • Process Design • Day to Day Operations • Performance Measurement
Customer Listening Posts • Customer satisfaction surveys • Transaction surveys • Employee Satisfaction Surveys • Formal and informal complaints • Inquiries and comments from customer contact employees • Customer retention rates (market share) • Focus groups • Customer advisory panels • Mystery buying services • Competitor analysis • Face-to-face meetings • Customer hotlines
Key Elements to Improving Customer Satisfaction Executive leadership to: • Set a vision and service strategy focused on satisfying customers • Continually communicate and reinforce the vision • Establish the vision as the way that the organization does business through shared values • Effective use of people through empowerment, teamwork, training and recognition to carry out the vision of satisfying customers in everyday work Building a culture that reinforces and supports the spirit of service Investment in customer research to identify customers' expectations and requirements for products and services and current levels of satisfaction and translate needs into product and service features (Customer surveys)
Exercise: Positive and Negative Customer Experiences • Think of a time when you, as a customer, were treated so well that you will never forget it. As you recall this positive customer experience, identify some of the things that the customer service person did to make it happen. • Now think of a time when you, as a customer, were not treated so well. As you recall this negative customer experience, identify some of the things that the customer service person did (or didn't do) to make it a negative experience. Positive Actions Negative Actions • Which positive actions and which negative actions are frequent practices 'in your organization?
The complete sequence of moments of truth a customer experiences in getting some need met The Cycle of Service