Understand the customer service environment Understand the customer service environment What’s included? The customer journey Service profit chain Customer service models and standards Legislation and customer service delivery Customer service as a competitive tool Great customer service is at the heart of building a successful long-term relationship with your organisation’s customers. A business can gain customer loyalty and support by out doing other business’s that offer similar products and services, by offering the highest level of customer service and ensuring that this level of quality is synonymous with the company. Customer service is a valuable tool, it can set the organisation apart from others through the skills and knowledge of its staff and the meeting or exceeding of customer expectations. Customer journey Think of the customer journey as a road map that details how a customer becomes aware of your organisation, their interactions with your organisation and beyond. It is the complete sum of experiences that a customer goes through when they interact with your company and its brand. Knowing your customer journey enables you to nurture and improve the customer experience. The customer journey is like a road map.
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Babcock International Group
Understand the customer service environment
What’s included?
The customer journey
Service profit chain
Customer service models and standards
Legislation and customer service delivery
Customer service as a competitive tool
Great customer service is at the heart of building a successful long-term relationship with your organisation’s customers. A business can gain customer loyalty and support by out doing other business’s that offer similar products and services, by offering the highest level of customer service and ensuring that this level of quality is synonymous with the company. Customer service is a valuable tool, it can set the organisation apart from others through the skills and knowledge of its staff and the meeting or exceeding of customer expectations.
Customer journey
Think of the customer journey as a road map that details how a customer becomes aware of your organisation, their interactions with your organisation and beyond. It is the complete sum of experiences that a customer goes through when they interact with your company and its brand.
Knowing your customer journey enables you to nurture and improve the customer experience.
The customer journey is like a road map.
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A customer journey map is a framework that enables you to improve your customers’ experience based on the customer journey. It shows the customers’ experience from their perspective, helping you to understand how customers interact with you. It identifies areas where you can make changes to improve the experience and customer retention, so increasing your organisation’s efficiency and effectiveness.
Stages within the customer journey mapping process:
• Identify the key journey steps in sequence.
• For each step, identify the customers’ response (what they do and how they feel) against your organisation’s intended response.
• Identify points of interaction in the journey (face-to-face, verbal and physical).
• Identify those points in the customer service process that have the most impact on the customer experience.
• Identify those points in the customer service process that could have potential negative impact and eliminate them.
Service failure
A service failure is service performance that fails to meet customer expectations. When a service failure occurs the customer will expect some form of compensation which may be a refund, credit, discount and apology.
There are a number of ways in which you can identify service failures:
• Analysis of customer feedback, which will identify negative feedback and specific areas or issues where poor service has been cited.
• Monitoring customer service by carrying out quality checks with staff and observing staff with customers to reveal any potential trends in service failures.
• Benchmarking against competitors.
• Benchmarking against organisational standards such as service level agreements.
• Auditing of the supply chain to assess the quality of service provided by suppliers and service partners.
It is important to recover from service failures in order to resolve customer dissatisfaction at the time and take preventative measures in the future.
Service profit chain
The service profit chain establishes the relationships between customer loyalty and customer satisfaction, profitability and revenue growth, together with the value of the service offered by loyal and productive employees. The links in the chain can directly strengthen or weaken the next link.
A service failure is service performance that fails to meet customer expectations.
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For example:
• Internal Service quality affects employee satisfaction. It is important to ensure that your organisation engages with its employees. This will ensure their satisfaction through employee rewards and recognition, effective recruitment and selection, employee development, job design and providing the right tools for serving customers. This can assist the organisation in increasing its financial performance and competitiveness.
• Employee satisfaction affects employee loyalty. Employee loyalty will be driven by how satisfied they are in their job.
• Employee loyalty affects employee productivity. Satisfied and loyal employees are more productive, customer focused and provide a high level of customer service.
• Employee productivity affects external service value. This is important as it is associated with customer satisfaction and the organisation’s ability to create value for the customer.
• External service value affects customer satisfaction.
• Customer satisfaction affects customer loyalty. Customer satisfaction is related to the service design and delivery to meet targeted customer needs and encourage customer loyalty.
• Customer loyalty affects growth and profitability. Customer loyalty is aligned with profit and growth such as customer retention, repeat business and referrals.
Measuring organisational effectiveness in the delivery of customer service
Good customer service is crucial for most organisations. But how do you know that you are delivering good customer service to both your external and internal customers and that you are delivering it to meet and exceed your customers’ expectations?
Measuring your customer service is an important step to ensuring consistency and quality.
There are a number of methods that your organisation can use to measure the effectiveness of their customer service delivery:
• Monitoring policies and procedures – This includes reviewing customer service policies to ensure they are effective, reviewing codes of practice for dealing with customers, monitoring the outcome of customer problems and analysing against organisational service standards.
• Analysing customer feedback – Looking at the compliments and complaints you receive, looking at data to identify trends and types of complaints, reviewing your organisation’s performance targets and service level agreements.
• Benchmarking – This requires the monitoring of customer service against key performance indicators both internally and externally. It may include looking at your staffs’ knowledge of products and/or services, achievement of sales targets and attendance and continuity of staff.
Each link in the service profit chain directly strengths or weakens the next link.
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• Comparability research – Knowing what your competitors are offering in terms of customer service and the types and range of products and services can help you keep on track with your own level of service and identify if it needs to be improved.
• Evaluation – Including evaluations of communication of service standards, performance, training and support of staff.
• Strategic review – Including reviews of strategic objectives for service offer and standards, organisational objectives for customer service and staff, operational plans for dealing with customers and risk assessments against service failure.
The importance of a Brand
Organisations who work towards establishing an organisational brand are developing or meeting the expectations of customers in what can be delivered. Think of a well-known brand and ask yourself what impression that a brand gives you regarding a product or service.
The brand must have certain qualities or characteristics that make it special or unique. A brand is therefore one of the most valuable features within a marketing exercise.
Good brand management and a carefully planned out advertising campaigns can be very successful. In some situations, customers can pay very high prices for products or services which are inexpensive to produce. Well-known brands can command high prices and sometimes irrational customer loyalty. This is known as brand recognition.
One of the main objectives of brand recognition is that the customer can recognise a brand without the name of the company present. For example the name Nike is a well-known sport wear company which takes its name from the Greek goddess of the same name. The symbol used by this company is instantly recognisable. Often when two products resemble each other, customers may select the more expensive, branded product because they perceive it to be of a higher quality brand than the product with no associated branding (such as popular make over a store branded product).
Customers often associate a brand with memories and personal experiences and it can influence customers’ perceptions and their expectations. It can instil trust and reliability and a feeling of professionalism. Customer service can have a huge impact on a brand:
• Brand loyalty – Maintained or increased with good customer service and decreased with poor customer service.
• Reputation – Maintained or increased with good customer service and decreased with poor customer service which is more likely to be shared than a good experience.
• Brand image – Positive for good customer service and negative for poor customer service.
Did you know?Iceland consumes more Coca Cola per capita than any other country.
A brand is one of the most valuable features within a marketing exercise.
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• Revenue – Maintained or increased with good customer service and customers are often willing to pay more for a reputable brand but revenue reduces with poor customer service.
Customer service models and standards
A good customer service model focuses on increasing customer satisfaction and decreasing customer conflict. Customer service models should include strategies for obtaining customer feedback, retaining dissatisfied customers and continually updating polices and procedure to meet customer needs.
Features of customer service models:
• Increasing customer satisfaction by being responsive, helpful, courteous, increasing the range of products and services to meet customer needs, and providing value for money.
• Decreasing customer complaints by ensuring accurate information is given and resolving customer queries and problems efficiently and effectively.
• Creating an atmosphere of service to both internal and external customers through staff training, effective leadership and management and adhering to organisational policies and procedures.
• Providing excellent customer service by being attentive, meeting and exceeding customer needs and expectations. Also by ensuring staff are knowledgeable and able to give assistance and advice to customers.
Service standards are important for customers, potential customers, employees and managers of the organisation. They help to define what a customer can expect and remind staff and managers of the obligations they need to meet.
Service standards are usually defined in terms of:
• Timeliness - For example, telephone calls answered in 20 seconds or delivery within 3 days of placing your order.
• Accuracy – Customers expect to receive accurate information and accurate deliveries.
• Appropriateness – Ensuring that the customers’ expectations have been met.
Features of customer service standards:
• Continual updating of policies and procedures to meet customers’ needs. For example, conforming with equality and diversity, handling customer problems and complaints, dealing with angry or dissatisfied customers.
• Implementing strategies to obtain and use customer feedback, provide new and additional services, have continual dialogue with customers and to retain dissatisfied customers.
The relationship between customer service and operational areas of the organisation
Customer service is an integral part of the operational areas of an organisations business. So what is the relationship between customer service and operations?
A good customer service model focuses on increasing customer satisfaction and decreasing customer conflict.
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In order to operate effectively and meet the needs of customers operational areas, you will require:
• Standards of customer service.
• An understanding of customer expectations.
• Knowledge of products and/or services.
• Product and/or services specialists.
• Visual signing and directions.
• A good customer environment.
If we look at the different areas within as organisation we can identify that:
• Human resources is responsible for the recruitment and selection of staff that will work in a customer service role and for their training and development.
• Finance provides resources, financial services and payment advice for customers and deal with warranties and insurance for products.
• Customer service will deal with telephone and online support, face to face dealings with customers, exchanges and refunds, deliveries and after-sales services.
• Marketing will produce marketing materials, sales information and develop marketing strategies. Customer service is one of the most important aspects of the marketing mix.
Continuous improvement processes
Continuous improvement is all about consistently striving to improve your products and/or services to ensure that they are of the highest standard.
It will help to achieve:
• Customer focus.
• Quality of the service delivery.
• Simplified processes and procedures.
• Good attitudes.
• Recognition of both internal and external customers.
Through the continuous assessment and enhancement of products, services, processes, procedures and attitudes, an environment can be developed where all staff strive for greater levels of quality and customer service.
The relationship between customer service and continuous improvements processes can be seen in communications and interaction with customers:
Communications - This may be face-to-face, in writing online or by telephone. This relationship provides organisations with information on good or bad customer service; the provision of advice and guidance and staff knowledge of products and/or services. It enables revisions to be made to support improvements on protocols when dealing with customers and/or to policies and procedures supporting the service offer, as well as service standards.
Customer service is an integral part of the operational areas of an organisation.
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Interaction with customers - This establishes their needs, wants and expectations and provides information about the products and services customers require. Information gained from the review of interactions and customer feedback supports improvements in the customer journey, quality of the service offer, service standards, resolving of customer problems, staff training and process and procedures.
Costs and benefits of customer service
Searching for new customers can be an expensive business so delivering a high level of customer service can build a lasting and profitable business relationship with existing customers. Customer service does involve costs for a business but these in turn will also provide business benefits.
Costs of customer service comes in terms of financial and resource costs and include:
• Providing customer service requires the recruitment and selection of customer service staff, together with their induction and training costs.
• The customer service environment requires having a premises with good design décor and ambiance, together with promotional requirements such as websites and advertising costs.
• Providing information and advice which may be verbal or written, together with delivery of products and/or services.
Benefits of customer service to the organisation:
• Satisfied customers.
• New and additional customers.
• Good staff morale and staff retention.
• Customer loyalty.
• Increased revenue.
• Competitive edge.
Organisational values
Vision and mission statements, service offers and the brand are all organisational values that may be at the heart of any organisation. Each of these values will have an impact on how customers create their expectations of the products and/or service provided by the organisation.
• Vision and mission – A vision outlines what a company wants to be. A mission is the core purpose of the business i.e. its reasons to exist. Customers’ perceptions should make a positive connection with these values.
• Service offer – These are values based on customer charters and codes of practice, together with ethical beliefs and a commitment to the quality of products and/or services.
Continuous improvement is about striving to improve your products and services.
Did you know?If you resolve a customer complaint in the customers favour they will do business again with you 70% of the time.
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• Brand – Brand image, identity and awareness gives customers a perception of a quality product and/or service, which it has a place in the market and offers value for money.
Customers will create their expectations of an organisation, based on their perception of these values and how they meet with their personal preferences and views:
• Their perception of a brand.
• Their perception of the customer experience.
• The values that are related to customer service.
• Quality of products and services.
• Their preference for access to additional services.
• Personal lifestyle and ethical values.
• Personal views of the integrity of transactions.
• Customer recognition and reward.
Organisational values will also have an impact on actually meeting those customer expectations.
Meeting customer expectations will include:
• Customer service – Providing a quality customer service with knowledgeable, experienced and well trained staff who are able to communicate effectively with customers.
• Products and/or service – Providing a quality product and/or service with staff who have good knowledge and are able to offer advice and guidance or technical support.
• Additional services – Providing online support, help desks and after sales service.
• Flexibility – Such as late night opening, weekend opening or online options.
• Payment – Offering varied and flexible payment options which may even be interest free or a low interest rate.
Legislation and customer service delivery
There are rules in organisations that limit what you can and cannot do for your customers. Some rules are set by your organisation and some are defined by law. These rules apply to everybody’s job role. Other rules are set by regulations that apply to particular industries. You need to know your organisational rules and procedures and how these limit what you can do for customers. You also need to be aware of the wider laws and regulations which are set outside of your organisation and how they apply to you and your job role.
Organisational values impact on how customers create their expectations of products and services.
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How your organisation runs its business is also monitored by external regulations. These regulations influence your organisation’s procedures in the way they:
• Keep records.
• Deal with enquiries.
• Handle sales transactions.
• Develop their refund policy.
• Produce contract agreements with your customers.
External regulations also affect your organisation by adding cost, time and work. Products and/or service provided must meet regulations and legislation. Failure to comply could result in prosecution, fines or imprisonment. The organisation must have clear procedures in place and staff need to be trained in these and follow clear them in order to remain compliant. The benefits of complying include an improved image, higher levels of professionalism and protection from litigation.
Legislation that relates to customer service delivery includes:
Sales of Goods Act 1979 - This law refers to the goods that the consumer is buying. Once a seller has accepted the offer to buy, a legal contract has been made between them. This gives rights to the seller and the customer. You may for example, be entitled to a full refund if there is a hole in your new shoes but not if you simply change your mind. In this situation the seller can legally refuse to refund your money. The law says that the goods should comply with the following requirements. Goods must be:
• Of satisfactory quality.
• Fit for the purpose.
• As described by the seller or advertiser.
• Safe to use.
If any of these points are not followed by the seller, the customer is entitled to a refund.
Supply of Goods and Services Act 1982 - This Act is civil law and covers goods that are:
• Given in part exchange.
• Hired out.
• Supplied as part of a service.
• Sold in exchange for sales promotional coupons, vouchers or stamps.
The Supply of Goods and Services Act 1982 covers goods that are being supplied as part of a service and should be covered by the same standards laid down by the ‘Sale of Goods Act’. Any service must be carried out:
• With reasonable care and skill.
• Within a reasonable time.
• For a reasonable price.
Complying with legislation and regulations has benefits for an organisation.
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The Consumer Protection Act 1987 - This protects the public by:
• Prohibiting the manufacture and supply of unsafe goods.
• Making the manufacturer or seller of a defective product responsible for the damage it causes.
• Allowing local councils to seize unsafe goods and suspend the sale of suspected unsafe goods.
• Prohibiting misleading price indications.
The Trade Descriptions Act 1968 - Under this Act it is an offence for a trader to make false or misleading statements about goods or services. It carries criminal penalties and is enforced by Trading Standards Officers, making it an offence for a trader to:
• Apply a false trade description to any goods.
• Supply or offer to supply any goods to which a false trade description has been applied.
• Make certain kinds of false statements about the provision of any services, facilities or accommodation.
The Consumer Credit Act 2006 - Intended to increase consumer protection when borrowing money, the main provisions of the Act is to extend the scope of the 1974 Act, to create an Ombudsman scheme and to increase the powers of the Office of Fair Trading in relation to consumer credit.
Consumer Contracts Regulations 2014 - This legislation applies to items bought online at a distance or away from a traders premise. They also make it an obligation for traders to give consumers certain information and set out:
• The information which a trader must give to a consumer before and after making a sale.
• How that information should be given.
• The right for consumers to change their minds when buying at a distance or off-premises .
• Delivery times and passing of risk .
• A prohibition on any additional payments which appear as a default option .
• A prohibition on consumers having to pay more than the basic rate for post-contract customer helplines.
The Consumer Protection from Unfair Trading Regulations 2008 - These regulations ban traders in all sectors from unfair or misleading trading practices towards consumers, misleading omissions and aggressive sales tactics.
Legislation and regulations affect the delivery of customer service as they establish a customer’s legal and statutory rights and the organisations legal and statutory responsibilities.
Legislation and regulations affect customer service delivery.
Did you know?One of the most cringe worthy phrases customers do not want to hear is “ Your call is important to use. Please continue to hold”.
R7903bv1 - 15.09.2015Understand the customer service environment L3
Organisations build policies and procedures around the requirements of the law.
Products and services must meet the requirements of regulations and legislation and organisations must have clear procedures in place. Staff should be trained in these procedures and follow them closely in order for them and the organisation to remain compliant.
The Data Protection Act 1998
Information about you and your customers is often stored on computer databases and this information is protected under the Data Protection Act 1998. Personal information about your customers could be used illegally and information about your organisation could give a rival company an unfair advantage over yours. Therefore, treat confidentiality seriously and never allow any unauthorised person access to customer, or organisational information.
Your organisation will have built their policies and procedures around the requirements of the law. Therefore, if you do not follow your organisation’s procedures, you could be putting your organisation and yourself at risk of prosecution e.g. Data Protection Act 1998. The key principles of the Data Protection Act include:
• Data should be obtained fairly and used only in connection with the purpose it was originally intended.
• Data should be accurate and up-to-date.
• Data should not be kept longer than necessary.
• Data should be kept securely.
• Data should not be transferred outside the European Economic Areas unless that country had adequate levels of protection.
These principles will affect the use and storage of customer information as it must be stored in line with legislation whether it be in paper or electronic format, no longer than necessary. It also restricts the sharing of information which must be restricted and controlled within the organisation, customers and to external organisations, requiring the use of passwords and security questions.
Legislation and regulations establish customer’s legal and statutory rights and the organisation’s responsibilities.
