Customer Service Excellence - Lecture 1

Customer ServiceCustomer ServiceExcellenceExcellence

Katherine Mutter and Mary HeddermanWeek One Week One

Learning ObjectivesLearning Objectives

To demonstrate knowledge and understanding of To demonstrate knowledge and understanding of the importance of customer service excellence in the importance of customer service excellence in all contexts. (b2b, b2c, services, nfp and sme)all contexts. (b2b, b2c, services, nfp and sme)

To solve complex customer service problems To solve complex customer service problems focussing on key stakeholders focussing on key stakeholders

To critically analyse, evaluate and synthesise To critically analyse, evaluate and synthesise information to explore key issues in businesses’ information to explore key issues in businesses’ aspirations to adopt a customer-centric aspirations to adopt a customer-centric philosophy.philosophy.

Customer service excellence? 2RCustomer service excellence? 2R FedexFedex Banking customer serviceBanking customer service

Value-Based MarketingValue-Based Marketing

““With today’s fierce global competition, With today’s fierce global competition, unless a business can create a unless a business can create a differential advantage, in terms of either differential advantage, in terms of either low total cost or a superior product or low total cost or a superior product or service that command a price premium service that command a price premium from customers, it will not earn an from customers, it will not earn an adequate return.”adequate return.”

Doyle Value-Based Marketing (2004)Doyle Value-Based Marketing (2004)

StakeholdersStakeholders EmployeesEmployees CustomersCustomers IntermediariesIntermediaries SuppliersSuppliers PartnersPartners InvestorsInvestors GovernmentGovernment RegulatorsRegulators Pressure groupsPressure groups CommunityCommunity MediaMedia

Key Relative Weighting

TheGeneralPublics

PressureGroup

Publics

GovernmentPublics

MediaPublics

FinancialPublics

CommunityPublics

InternalPublics

Kotler’s7 Types

of Publics

Different business contextsDifferent business contexts

B2CB2C B2BB2B NFPNFP CharityCharity Public SectorPublic Sector ServicesServices

2D Jobber 2006

Marketing Concept

The achievement of corporate goals through meeting and exceeding customer needs better than the competition

The Marketing ConceptThe Marketing Concept

Customer orientation

Corporate activities are focused upon providing customer satisfaction

Integrated effort

All staff accept the responsibility for creating

customer satisfaction

Goal achievement

The belief that corporate goals can be achieved

through customer satisfaction

ProductionorientationProductionorientation

Increase productionCost reduction and control Make profit through volume“any colour as long as it’s . . . .”

Increase productionCost reduction and control Make profit through volume“any colour as long as it’s . . . .”

Productorientation

Productorientation

Quality is all that mattersImprove quality levelsMake profit through volume“Look at the quality of that paint work”

Quality is all that mattersImprove quality levelsMake profit through volume“Look at the quality of that paint work”

Salesorientation

Salesorientation

Aggressive sales and promotion Profit through quick turnover of high volume“You’re keen on the black – what if I include a sun roof”

Aggressive sales and promotion Profit through quick turnover of high volume“You’re keen on the black – what if I include a sun roof”

MarketingorientationMarketingorientation

Integrated marketingDefining needs in advance of production Profit through customer satisfaction and loyalty “Let’s find out if they want black and will pay more”

Integrated marketingDefining needs in advance of production Profit through customer satisfaction and loyalty “Let’s find out if they want black and will pay more”

7D Jobber 2006

Production OrientationProduction Orientation

Customers

Production capabilities

Manufacture product

Aggressive sales effort

8D Jobber, Principles and Practice of Marketing, McGraw-Hill 2006

Marketing OrientationMarketing Orientation

Customer needs

Potential market

opportunities

Marketing products

and services

Customers

Performance measurement -Performance measurement -Why Measure ?Why Measure ?

A few maxims …A few maxims …• ‘‘You can’t manage what you can’t measure !’You can’t manage what you can’t measure !’• ‘‘What gets measured, gets done !’What gets measured, gets done !’

And, of course …And, of course …• We operate in an increasingly tough marketing environmentWe operate in an increasingly tough marketing environment• Need to continuously assess and deliver superior/added valueNeed to continuously assess and deliver superior/added value• We have limited resources and need to use them wiselyWe have limited resources and need to use them wisely• We have a number of stakeholders interested in our progressWe have a number of stakeholders interested in our progress• We need to know if we are doing things right (efficiency) and We need to know if we are doing things right (efficiency) and

doing the right things (effectiveness)doing the right things (effectiveness)

The real value of measurement comes from the action The real value of measurement comes from the action which follows it !!!which follows it !!!

‘If you can’t measure it, you can’t do

it!’

9D Jobber, Principles and Practice of Marketing, McGraw-Hill 2006

Efficiency and EffectivenessEfficiency and Effectiveness

Ineffective Effective

Inefficient Goes out of business quickly Survives

Efficient Dies slowly Does well Thrives

McKinsey 7S frameworkMcKinsey 7S framework

Strategy

Style

Systems Structure

Staff

Skills

Sou

rce

: M

cKin

sey

7S f

ram

ewor

k

Sharedpurpose

(Waterman,Peters and Phillips (Waterman,Peters and Phillips 1981)1981)

Creating Value for the customerCreating Value for the customer1.1. What do What do you you value when you shop for value when you shop for

clothes?clothes? A different productA different product Expert knowledge/advice Expert knowledge/advice Availability of product Availability of product Atmosphere – music, ‘the scene’/the Atmosphere – music, ‘the scene’/the

experience experience Brands Brands QualityQuality

Creating Value for the customerCreating Value for the customer1.1. What do What do you you value when we go to a fast food restaurant ? (i.e.) what are you looking value when we go to a fast food restaurant ? (i.e.) what are you looking

for?for? Choice Choice Speed of service without compromising qualitySpeed of service without compromising quality Cleanliness/smell Cleanliness/smell Drive thru – choice of delivery Drive thru – choice of delivery ‘‘The right price’The right price’ Clear menu Clear menu Not feeling rushed Not feeling rushed Open all hours Open all hours Packaging making it easy to eatPackaging making it easy to eat Good staff Good staff Not too busy /chaoticNot too busy /chaotic Atmosphere Atmosphere Hot food Hot food Healthy foods Healthy foods Kids activity Kids activity

16D Jobber, Principles and Practice of Marketing, McGraw-Hill 2006

Creating Customer ValueCreating Customer Value

Product benefitsProduct benefits Service benefitsService benefits Relational benefitsRelational benefits Image benefitsImage benefits

Monetary costsMonetary costs Time costsTime costs Energy costsEnergy costs Psychological costsPsychological costs

Customer value

Perceived benefits

Perceived sacrifice

Positive Negative

Group DiscussionGroup Discussion

What does “value” mean to you? Have What does “value” mean to you? Have our perceived values changed?our perceived values changed?

Is that the same for all ages, genders, Is that the same for all ages, genders, nationalities, business contexts?nationalities, business contexts?

Satisficers and maximisersSatisficers and maximisers

‘‘ According to Barry Schwartz (2005), the world is divided into two types of consumer: According to Barry Schwartz (2005), the world is divided into two types of consumer: maximizersmaximizers and and satisficerssatisficers. .

A A maximizer maximizer is a consumer who always tries to get the best possible deal they can, whereas is a consumer who always tries to get the best possible deal they can, whereas a a satisficer satisficer is a consumer who will be content when they find something which is 'good is a consumer who will be content when they find something which is 'good enough'.enough'.

Being a Being a satisficersatisficer may sometimes be rational. Information has a cost involved. On large may sometimes be rational. Information has a cost involved. On large purchases, like a car, we do detailed research, take test-drives and read relevant magazines. purchases, like a car, we do detailed research, take test-drives and read relevant magazines. On smaller purchases, we often just ask our friends who they use and if they are happy. In On smaller purchases, we often just ask our friends who they use and if they are happy. In the most extreme case, the cost of researching the best toothbrush is not worth the benefit.’the most extreme case, the cost of researching the best toothbrush is not worth the benefit.’

Tom Lees, Adam Smith Institute (2007)Tom Lees, Adam Smith Institute (2007)

Sources of competitive advantageSources of competitive advantage

Superior product benefitSuperior product benefit Perceived advantagePerceived advantage Low-cost operationsLow-cost operations Legal advantageLegal advantage Superior contactsSuperior contacts Superior knowledgeSuperior knowledge Scale advantagesScale advantages Offensive advantagesOffensive advantages

Source: Davidson (2004)Source: Davidson (2004)

Group ActivityGroup Activity

Think of a product that you bought Think of a product that you bought recently – were there any recently – were there any surprises/disappointments. Any surprises/disappointments. Any recommendations you would make to recommendations you would make to the company?the company?

18D Jobber, Principles and Practice of Marketing, McGraw-Hill 2006

An Effective Marketing Mix An Effective Marketing Mix – the tactics– the tactics

Effective marketing

mix

Matches customer needs

Creates a competitive advantage

Well balanced

Matches corporate resources

19D Jobber, Principles and Practice of Marketing, McGraw-Hill 2006

Marketing Mix and Customer Marketing Mix and Customer NeedsNeeds

Customer needs

Key customer requirements

Competitive advantage

Marketing mix

20D Jobber, Principles and Practice of Marketing, McGraw-Hill

Product Price Promotion Place PLUS People Process Physical

evidence

Marketing mix

Marketing Mix and Customer Marketing Mix and Customer NeedsNeeds

Competitive advantage

PsychologicalEconomic

Customer needs

PerformancePerformance AvailabilityAvailability ReliabilityReliability DurabilityDurability ProductivityProductivity

Self-imageSelf-image Quiet lifeQuiet life PleasurePleasure ConvenienceConvenience Risk reductionRisk reduction

D Boddy (2008)D Boddy (2008)– Management an introduction– Management an introduction

““Managers in any business can only Managers in any business can only carry out their role effectively if they carry out their role effectively if they receive accurate and timely receive accurate and timely information…Technological information…Technological developments make it possible for developments make it possible for managers to have more information managers to have more information about their business, and about external about their business, and about external developments than they have ever had.”developments than they have ever had.”

Data Mining – Customer Data Mining – Customer analysisanalysis

Customer acquisitionCustomer acquisition Customer retention and loyaltyCustomer retention and loyalty Customer abandonmentCustomer abandonment Market basket analysisMarket basket analysis

Solomon/marshall/stuart (2008) p 112Solomon/marshall/stuart (2008) p 112