BSBCUS501CMANAGE QUALITY CUSTOMER SERVICEPRESENTATION 1

PRESENTATION OBJECTIVES

At the end of this presentation you will be able to:

• Investigate, identify, assess and include the needs of customers in

planning processes

• Ensure plans achieve the quality, time and cost specifications

agreed with customers

WHAT IS CUSTOMER SERVICE?

Customer service is the service provided to customers before, during

and after purchasing goods and services.

Good customer service provides an experience that meets customer

expectations. It produces satisfied customers.

Bad customer service can generate complaints. It can result in lost

sales, because the customer might take their business to a

competitor.

Some organisations are predominantly service providers –legal firms,

doctors or accounting organisations.

Other organisations provide customer service and physical products –

retail businesses.

WHAT IS QUALITY CUSTOMER SERVICE?

Service quality is measured by comparing customer expectations with

service performance. A business with high service quality will meet

customer needs whilst remaining economically competitive. Improved

service quality may increase economic competitiveness.

Organisations often assess the quality of service they provide to their

customers in order to improve their service, identify problems, and to

assess and understand client satisfaction drivers.

Quality customer service is about meeting or exceeding the needs and

expectations of customers in regard to:

• Characteristics and specifications of products

• Manufacturing quality of the product itself

• Delivery times

• Time taken to process orders, enquires and complaints

EXTERNAL CUSTOMERSExternal customers are the people that you usually think of when you use

the expression “customers”.  They are the visitors that visit the attractions,

the guests that stay in resorts, the diners that eat in restaurants. 

They are called “external customers” because they come from outside the

organisation for which you work.  

Examples of external customers may include:

• Clients, purchasers of services

• Members of the general public who make contact with the organisation,

such as prospective purchasers of services

• Potential funding bodies

• Suppliers of goods and services

• Contractors providing goods and services

EXTERNAL CUSTOMERS AND REGULATIONSThere are bodies that exist to protect consumers and promote fair trade.

The main regulatory body is the Australian Competition and Consumer Commission,

there are also state run officers of fair training or consumer affairs as well as other

government and private organisations that protect customers.

On 1 January 2011 the Australian Consumer Law (ACL) commenced. The ACL

includes:

• A national unfair contract terms law covering standard form consumer contracts

• A national law guaranteeing consumer rights when buying goods and services

• A national product safety law and enforcement system

• A national law for unsolicited consumer agreements covering door-to-door sales

and telephone sales

• Simple national rules for lay-by agreements

• New penalties, enforcement powers and consumer redress options

 

INTERNAL CUSTOMERSThese are the people that work within your organisation.

They may also include people in other organisations that work with your

organisation to provide your products or services.

Internal customers are easy to overlook, take for granted, and generally not

treat as well as external customers.

Employees of any organisation are key to its success and should be treated well

and respected.

Encourage excellence in internal customer service so the organisation works

together as a whole.

 Examples of internal customers may include:

• Co-workers, peers and fellow frontline managers

• Supervisors

• Board members

QUALITY INTERNAL CUSTOMER SERVICE

To encourage quality internal customer service you can:

• Create an environment to ensure that information is shared by:

• Issuing staff newsletters

• Holding regular meetings

• Setting clear team goals

• Practice pro-active information sharing

• Reward employees who freely share information

CUSTOMER REQUIREMENTS

Your customer’s requirements will vary so it is important to ensure

that all the information you provide them is:

• Accurate

• Responsive

• Specific and clear

QUALITY SERVICE MODELS

There are many models available to identify what a customer needs.

One of the most common models is the RATER model:

Dimension Description

Reliability Dependability and accuracy of goods and service

Assurance Employees’ courtesy, knowledge, confidence and trust

Tangibles Appearance of employees, building, equipment, communication

Empathy Care and attention paid to customer

Responsiveness Provision of help, service and problem solving

By measuring the quality ratings for these five areas a business can establish where they may be lagging in meeting their customer’s needs. This multidimensional approach helps businesses to measure and improve their service quality.

CUSTOMER BEHAVIOURCustomer behaviour can be thought of as both the decision-making process and the physical activity undertaken to purchase and use a product or service.

The following is a common model of consumer decision-making:

Problem

identification

Research into produc

t or service solutio

ns

Evaluation

of alternatives

Purchase/use

Post purchase/use

The theories behind marketing of products and services, however, are based on the idea that although individual customer needs vary widely from one another, when it comes to making decisions and purchasing behaviour, consumers act in similar ways.

CUSTOMER BEHAVIOUR IN RELATION TO CUSTOMER SERVICE

According to Shail Patel and Antoine Schlijper in Models of Consumer

Behaviour, there are three factors which influence behaviour across

288 possible models of behaviour:

• Loyalty - without loyalty decisions would be made solely on

current availability

• Sociology - customers make decisions influenced by the decision

of others

• Psychology - what and how aspects of product and services affect

decision making

What do you think about when you make a buying decision?

Do you look at what others have brought?

Is your decision unemotional?

EXAMPLE: BUILD A BEAR WORKSHOP

This is a great example of selling an experience built around a

product:

Available in over 20 countries - the customer (normally a child)

selects a bear; stuffs it; accessorises it; and for the pleasure of this,

the parent gets to pay!

It is the experience that is being sold:• The customer service is friendly and inviting• The staff training is excellent• The customer will blow a kiss on the bear’s heart, before inserting it into the bear• The customer can choose from approximately 15 different sounds, for the bear; or

make their own unique sound• The customer can choose a scent for their bear• The customer receives a birth certificate for their bear

CUSTOMER SERVICE CHANNELS

A customer service channel is the medium in which the transaction

takes place. Customer service channels include:

• Face to face

• Email

• Telephone

• Online

Increasingly a business will not get an opportunity to interact with

their customer face to face or by telephone, as purchases are made

over the internet.

The design of webpages and e-commerce processes are important

factors in ensuring a quality service.

IS CUSTOMER SERVICE OF ANY SIGNIFICANCE FOR E-COMMERCE?

The customer has a huge impact on E-commerce - customers are more

educated, easily connected, web savvy and fiercely disloyal.

They are enjoying a growing array of product and brand choices all at their

fingertips online all the time.

Web stores are competing primarily on customer service!

The way to win this battle is to provide a seamless, effortless, enjoyable

customer experience where the customers’ needs are met.

A secret to winning is effective conversations through live chats.

The implications of poor customer service online are just as significant as

face to face - recent studies show that 45% of shoppers will abandon an

online transaction if their questions or concerns are not addressed quickly.

Consumers are demanding instant (and 24/7) gratification.

CUSTOMER VALUE

For the customer perhaps the most important influence on their

buying decision is perceived value. Consumers balance cost against

perceived value.

Perceived value includes satisfaction of all needs, such as:

• Satisfaction of external needs, such as the real need for product

features, speed of service, etc.

• Satisfaction of sociological needs, such as the need to be seen as

part of a social group

• Satisfaction of psychological needs, such as emotional validation

Customers will perceive value differently depending on their needs.

Know your customer!

THE DISSATISFIED CUSTOMERConsider the following statements: 

• Majority of unhappy customers don’t complain - they don’t want the stress

associated with complaining or they think their complaint won’t do any good

• As little as 5% of unhappy customers complain

• If the complaint is resolved, more than half will continue to do business

• Unhappy customers tell about ten others of their experience

• Customers who complain and have their complaint resolved tell approximately

five others

• On average, it is much cheaper to keep a customer than to find a new one

• Customers often behave with the herd mentality. If customers start to leave

you, others will follow them just to be part of the herd

• It takes 12 positive experiences to make up for one unresolved negative

experience

COMPLAINTS

Consider - for every customer who complains, there are likely many

others who are unhappy, but do not complain.

A complaint therefore is gold!

• The perceived value of customer service shapes purchasing

behaviour and custom

THE MARKET

Typically businesses will first conduct marketing research to

determine who is likely to want a particular product or service.

During the marketing process, businesses identify target markets or

segments of the total market containing potential consumers with

common characteristics.

Market segmentation “is the identification of portions of the market

that are different from one another.

Segmentation allows organisations to better satisfy the needs of its

potential customer.”

SEGMENTATION IN CONSUMER MARKETS

Consumers can be segmented by the following customer

characteristics such as:

• Behaviouristic Segmentation

• Demographic Segmentation

• Geographic Segmentation

• Psychographic Segmentation

Once a target market is identified marketers can then analyse the

data and refine their knowledge of the customer segment. This is

called segment profiling.

Profiling customer segments allows for the development of “value

add concepts” designed to meet the needs of the target segment.

TYPES OF DATA COLLECTION METHODS

• Primary Data Collection: this is information you collect

specifically for the purpose of your research project. Data

specifically tailored to your needs.

• Secondary Data Collection: can be obtained through company

records, archives, government publications and industry analysis

offered by the media. Secondary data tends to be readily available

and is often inexpensive.

The information gathered from these collection methods can then be

transformed into qualitative and quantitative data.

QUALITATIVE AND QUANTITATIVE DATA

Qualitative data is based on opinions, attitudes, beliefs and intentions.

This kind of research deals with “Why?” “Would?” “How?” questions.

Qualitative research aims to understand why customers behave in a

certain way or how they may respond to a new product. Given that these

opinions are often obtained from small numbers of people, the findings are

not necessarily statistically valid. However, such data can highlight

potential issues which can be explored in quantitative research.

Quantitative data is information generally in the form of numbers. It is

concerned with “How many?” “How often?” “Who?” “When?” “Where?”

questions.

This is research based on larger samples and therefore more statistically

valid.

The type of data collection method you use will be determined by the type

of information your business is trying to gather.

INVESTIGATE, IDENTIFY AND ASSESS CUSTOMER NEEDS

Some ways to investigate customer needs include:

• Informal face to face discussions

• Telephone interviews

• Paper surveys

• Internet surveys

• Email surveys

• Telephone surveys

• Suggestion boxes

• Point-of-contact questioning

• Focus groups

Some businesses opt for a less direct method in sourcing customer information,

which may involve analysing customer interaction recordings and observations;

sales data; market research by external providers.

ASSESS CUSTOMER NEEDS

Look at the reasons for the customers’ expectations not being met, what is

the root cause?

When you are sure about the reasons, investigate possible solutions and

implement changes to close this performance gap.

Once you have gathered data on customer

needs

Analyse it

identify the gaps between customer

expectations and the reality of the

customer service being provided

CUSTOMER SERVICE PLANS

To manage quality customer service ensure plans achieve the quality,

time and cost specifications agreed with your customers.

Customer service plans will contain:

• Customer service vision and mission

• Product and/or service standards

• Policy and procedures for

• Identifying customer needs

• Gaining customer feedback

• Managing record keeping

• Strategies for continuous improvement

• A customer service charter

CUSTOMER SERVICE VISION AND MISSION STATEMENTS

A customer service vision is usually a short statement that describes

the future of customer service provision.

The mission statement normally describes how to achieve the vision.

Example

Vision: “To be the best online retailer”

Mission statement “We intend to provide our customers with the

best online shopping experience from beginning to end, with a smart,

searchable website, easy-to-follow instructions, clear and secure

payment methods, and fast, quality delivery.”

TELSTRA

Telstra took a different approach:

Vision: To create a brilliant connected future for everyone.

Mission: To create is our responsibility. The brilliant connected future

won't happen on its own. It has to be delivered — and only Telstra can

bring together all the parts to create it.

A brilliant connected future is our aspiration. It's what we need to

build for every one of our customers. It's our responsibility to the nation

and every market we work in.

For everyone is crucial. We serve everyone. Change doesn't happen if

only a chosen few benefit. Transformation happens when enough people

get the technologies that create social, economic and cultural change.

This all adds up to a single, guiding fact: it’s why we do what we do.

WHY SHARE YOUR VISION AND MISSION?

By sharing your vision and mission

with your customer you create a

powerful tool to guide your customer

service delivery and establish

customer expectations.

PRODUCT AND/OR SERVICE STANDARDS

A clear description of the product or service

is essential to respond to customer queries

and complaints.

This description would normally include

accepted norms, guarantees, delivery

times/deadlines etc.

ORGANISATIONAL POLICIES AND PROCEDURES

A policy - written plan describing what an organisation aims to

achieve and its acceptable standards.

Procedures outline tasks to be done to achieve this outcome or

standard.

Your customer service vision and mission statements should drive

your policy and procedures.

Stand true to your vision! Provide a framework of policies and

procedures that are consistent with your vision.

Example if your vision involves creativity and innovation; your policy

and procedures should allow for flexibility to enable your employees

to exercise creativity and innovation. Your performance management

system (HR policies and procedures) should reward this behaviour.

CONTINUOUS IMPROVEMENT

There should be a process of continuous

improvement in place to ensure you are:

• Updating your customer service plan

• Acting on customer feedback

• Continuing to meet the changing needs of

your consumer

CUSTOMER SERVICE CHARTER

A customer service charter is produced to inform

customers of the relevant parts of your customer

service plan.

It does not include procedures for staff, but rather

sets out expectations for customers.

You can see examples of charters on this link http://

www.csia.com.au/service-standards-iccs-certification/icss/developing-a-customer-charter/sample-charters

PLAN TO MEET INTERNAL AND EXTERNAL CUSTOMER REQUIREMENTS

When you gather data, analyse it to identify:

• The changing needs of the customer

• The changes in what the customer determines is quality customer

service

• Any new opportunities and markets

• The need for change

Change in buying trends

• Data is collected to provide you with the information that you

need

• Data keeps you in touch with the market and the changing needs

of the customer

PLAN TO MEET INTERNAL AND EXTERNAL CUSTOMER REQUIREMENTS

Quality, time and cost specifications agreed with customers

No matter what type of business you operate, the customer is there for a

reason. It may be because they are happy with the quality of your

service or product, price, product itself, the business location,

what the business says about the customer and their individual

needs.

The success of businesses relies in their ability to add value to the

customer’s experience. Value added selling is a series of creative

improvements that will enhance the customer’s experience.

Managers must provide support and foster customer relationships

between the customer and the staff. This relationship must be built

within the policies and procedures of the organisation. Managers must

make sure information flows freely through the organisation so a

customer focused workplace culture can be developed and supported.

PRESENTATION SUMMARY

Now that you have completed this presentation you are able to:

Investigate, identify, assess and include the needs of customers in

planning processes

Ensure plans achieve the quality, time and cost specifications agreed

with customers