Customer Care

IACT 918 July 2004

Gene Awyzio

SITACS University of Wollongong

2

Overview

• Service success and customer satisfaction comes from the benefits that the enterprise is constantly able to provide to its customers, including design and features of its products and services, quality, service-courtesy, friendliness, having what the customer needs when needed – and image. Value is real, and hard-won: it is not created by advertising campaigns or hype…

Hilmer (1989)

3

Customer Needs• Service should be determined by customers’ wants &

needs. Therefore, all enterprises must research and understand:

– Which products, services and service characteristics are important to the customer

– The relative importance of these customer wants

– The level of performance on each product and service characteristic which will meet customer expectations

• Without a clear understanding of these, there will be a ‘gap’ between customer expectations and the products/services delivered by the enterprise

4

Cost of service failure

• Costs much more than the loss of just one customer• Technical Assistance Research Program (TARP)

(Clemmer 1992) results indicate that a dissatisfied customer tells 16 others, whereas a satisfied customer only tells 8 others!

Clemmer 1992

The original customer who wont return 1Potential customers lost because the original customer told them how dissatisfied they were 16Potential customers NOT gained because the original customer didn’t tell them how satisfied they were 8

Total customers lost from ONE unhappy customer 25

5

Customer service gaps

Company

Customer

Source: Zeithaml (1996)

Expected service

Perceived service

Service delivery

Customer-drivenservice designs and

standards

Company perceptions of Customer expectations

External communications

to customers

6

Gap 1: Customer & Company expectations of service

Source: Zeithaml (1996)

Expected service

Perceived service

Service delivery

Customer-drivenservice designs and

standards

Company perceptions of Customer expectations

External communications

to customers

Company

Customer

Gap

1

7

Gap 1: Customer & Company expectations of service• Inadequate marketing research

orientation

– Insufficient market research

– Research not focussed on service quality

– Inadequate use of market research

Source: Zeithaml (1996)

8

Gap 1: Customer & Company expectations of service• Lack of upward communication

– Lack of interaction between management and customers

– Insufficient communication between contact employees and managers

– Too many layers between contact employees and upper management

Source: Zeithaml (1996)

9

Gap 1: Customer & Company expectations of service• Insufficient relationship focus

– Lack of market segmentation

– Focus on transaction rather than relationships

– Focus on new customers rather than relationship customers

Source: Zeithaml (1996)

10Source: Zeithaml (1996)

Expected service

Perceived service

Service delivery

Customer-drivenservice designs and

standards

Company perceptions of Customer expectations

External communications

to customers

Company

Customer

Gap 2

Gap 2: Customer & Company standards of service

11

Gap 2: Customer & Company standards of service• Absence of customer-driven standards

– Lack of customer driven service standards

– Absence of process management to focus on customer requirements

– Absence of formal process for setting service quality goals

Source: Zeithaml (1996)

12

Gap 2: Customer & Company standards of service• Inadequate leadership

– Perception of infeasibility

– Inadequate management commitment

Source: Zeithaml (1996)

13

Gap 2: Customer & Company standards of service• Poor service design

– Unsystematic new service development process

– Vague undefined service designs

– Failure to connect service design to service positioning

Source: Zeithaml (1996)

14

Gap 3: Customer standards & delivered service

Source: Zeithaml (1996)

Expected service

Perceived service

Service delivery

Customer-drivenservice designs and

standards

Company perceptions of Customer expectations

External communications

to customers

Company

Customer

Gap 3

15

Gap 3: Customer standards & delivered service• Deficiencies in human resource policies

– Ineffective recruitment

– Role ambiguity and role conflict

– Poor employee / technology job fit

– Inappropriate evaluation and compensation systems

– Lack of empowerment, perceived control & teamwork

Source: Zeithaml (1996)

16

Gap 3: Customer standards & delivered service• Failure to match supply and demand

– Failure to smooth peaks and valleys of demand

– Inappropriate customer mix

– Over-reliance on price to smooth demand

Source: Zeithaml (1996)

17

Gap 3: Customer standards & delivered service• Customers not fulfilling roles

– Customers lacking knowledge of their roles and responsibilities

– Customers negatively impacting each other

Source: Zeithaml (1996)

18

Gap 4: Delivered and ‘advertised’ service

Source: Zeithaml (1996)

Expected service

Perceived service

Service delivery

Customer-drivenservice designs and

standards

Company perceptions of Customer expectations

External communications

to customers

Company

Customer

Gap 4

19

Gap 4: Delivered and ‘advertised’ service• Ineffective management of customer

expectations

– Failure to manage customer expectations through all forms of communications

– Failure to educate customers adequately

Source: Zeithaml (1996)

20

Gap 4: Delivered and ‘advertised’ service• Overpromising

– Overpromising in advertising

– Overpromising in personal selling

– Overpromising through physical evidence cues

Source: Zeithaml (1996)

21

Gap 4: Delivered and ‘advertised’ service• Inadequate horizontal communications

– Insufficient communications between sales & operations

– Insufficient communications between advertising & operations

– Differences in policies and procedures across branches or units

Source: Zeithaml (1996)

22

Gap 5: Expected and perceived service

Source: Zeithaml (1996)

Expected service

Perceived service

Service delivery

Customer-drivenservice designs and

standards

Company perceptions of Customer expectations

External communications

to customers

Company

Customer

Gap 5

23

Gap 5: Expected and perceived service• The ‘gap’ between the service which the

customer expected and that perceived by the customer to have been delivered

Source: Zeithaml (1996)

24

Gap 5: Expected and perceived service• This ‘gap’ is directly attributable to, and

results from any and all of the other four ‘gaps’

• Addressing each of the other ‘gaps’ (which the enterprise can control) will narrow the all-important “service gap” which is not itself directly within enterprise control

Source: Zeithaml (1996)

25

Service quality in telecoms

• In telecommunications, there are four principal areas where customer satisfaction can be gained or lost

Technical Performance

• Network response time• Signal to noise ratio• Call completion rate• Fault clearance time

Customer Interface• Busy signal• Wrong numbers• Timed out before call completed

Service to the Customer

• Call answered promptly• problems dealt with on first contact

Service Comparison• Range of products• ‘Spread’ of network

FAULTS are a large factor in customer satisfaction!

26

Who are your customers?

• What is the product/service of a network?

• The Users of your network are your customers

• Sometimes the Users are internal members of your organisation …

ie: STAFF & EMPLOYEES