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Customer Service Customer Service Strategy Strategy Customer Service: The Customer Service: The Benefits Benefits Session III Session III
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Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

Jan 11, 2016

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Page 1: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

Customer Service StrategyCustomer Service Strategy

Customer Service: The BenefitsCustomer Service: The Benefits

Session IIISession III

Page 2: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

Excellent customer

service attracts and retains customers

Page 3: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

Industry

3%

The ProofThe Proof

Honda

6%6%

Nissan

3%3%

The Results …

Nissan (USA) cut 450 white collar jobs

Nissan president left under pressure

Toyota

7%7%

Page 4: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

The ProofThe ProofMcDonalds

Brand with 4th largest advertising expenditure.

Brand with 4th largest advertising expenditure.

Sales however, haven’t kept up with inflation. The unit per sales inched up from $14 million to $15 million (1,7% per year)

Sales however, haven’t kept up with inflation. The unit per sales inched up from $14 million to $15 million (1,7% per year)

In the past five years, McDonalds has spent over $3 Billion on advertising.

In the past five years, McDonalds has spent over $3 Billion on advertising.

Page 5: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

Word of Mouth Word of Mouth Marketing Matters!Marketing Matters!

60-80% of customers seeking services 60-80% of customers seeking services from an MFI make the choice based on from an MFI make the choice based on other customers’ recommendation.other customers’ recommendation.

A more-than-satisfied customer will inform A more-than-satisfied customer will inform 3-4 people, but a dissatisfied customer will 3-4 people, but a dissatisfied customer will inform 8-9 people!*inform 8-9 people!*

Conclusion: investing in high-quality Conclusion: investing in high-quality customer service should be a significant customer service should be a significant part of your marketing budget.part of your marketing budget.

Page 6: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

Keeping Customers (1)Keeping Customers (1)There are many reasons why retaining There are many reasons why retaining customers is so profitable. These include the customers is so profitable. These include the following: following:  Retained businessRetained business Sales, marketing and set up costs are amortised over Sales, marketing and set up costs are amortised over

a longer customer lifetime.a longer customer lifetime. Increased expenditure over time.Increased expenditure over time. Repeat customers often cost less to service.Repeat customers often cost less to service. Satisfied customers provide referrals.Satisfied customers provide referrals. Satisfied customers may be willing to pay a price Satisfied customers may be willing to pay a price

premium.premium.

Page 7: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

Keeping Customers (2)Keeping Customers (2)It is more cost-effective to keep customers than It is more cost-effective to keep customers than

to win new ones.to win new ones.Keeping your ‘churn rate’ as low as possible is a Keeping your ‘churn rate’ as low as possible is a

strategic objective.strategic objective.You must meet their needs!You must meet their needs!

$$

CO

ST

PR

OF

IT

TIME

Cross-selling Referrals

Repeat clientsAcquisition

Page 8: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

The Benefits of Good Customer The Benefits of Good Customer Service (1)Service (1)

Quality of Customer Service consistently Quality of Customer Service consistently comes high on any ranking of what poor comes high on any ranking of what poor people are looking for in financial services …people are looking for in financial services …

… … and why they leave financial service and why they leave financial service providersproviders

Word of Mouth drives 60-80% of customer Word of Mouth drives 60-80% of customer acquisitionacquisition

Conversely, most dissatisfied customers:Conversely, most dissatisfied customers: They tell their friendsThey tell their friends They add embellishmentsThey add embellishments It turns into a real horror story – you may It turns into a real horror story – you may

even attract hostile press publicity.even attract hostile press publicity.

Page 9: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

Fosters internal customer/supplier relationshipsFosters internal customer/supplier relationships Bring about continuous improvements to the Bring about continuous improvements to the

operation of the bankoperation of the bank Create a reputation for being a caring, customer-Create a reputation for being a caring, customer-

oriented bank:oriented bank: It is much easier for a competitor to copy It is much easier for a competitor to copy

features of a product, imitate a service or utilize features of a product, imitate a service or utilize improved technology than it is to improve on the improved technology than it is to improve on the intangible elements; it is a much longer process intangible elements; it is a much longer process which needs to be sustained continuously.which needs to be sustained continuously.

The Benefits of Good The Benefits of Good Customer Service (2)Customer Service (2)

Page 10: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

Ensure your products and services are Ensure your products and services are delivered ‘right first time’delivered ‘right first time’

Improve staff morale and thus Improve staff morale and thus increase employee satisfaction and increase employee satisfaction and retentionretention

Increase your productivity Increase your productivity Improve your profitability and reduce Improve your profitability and reduce

your costsyour costs

The Benefits of Good The Benefits of Good Customer Service (3)Customer Service (3)

Page 11: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

Why Customer Why Customer Service MattersService Matters

Repeat Business:Repeat Business: If your customer service is merely ‘adequate” If your customer service is merely ‘adequate”

then it is probably INVISIBLE to customersthen it is probably INVISIBLE to customers Adequate service often registers as POOR by Adequate service often registers as POOR by

comparison with other organizationscomparison with other organizations Only EXCELLENT service that exceeds Only EXCELLENT service that exceeds

expectations gets noticed!expectations gets noticed! Repeat business is the life-blood of most Repeat business is the life-blood of most

businesses:businesses: Will your customers “write it off to Will your customers “write it off to

experience” and go elsewhere next time?experience” and go elsewhere next time?OROR Are you creating a business where customers Are you creating a business where customers

will WANT to come back?will WANT to come back?

Page 12: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

Customer Retention -2Customer Retention -2Consider:Consider:

Issuing new customers a Issuing new customers a shortshort questionnaire questionnaire when they have completed their transaction when they have completed their transaction asking them to rate the service they receivedasking them to rate the service they received

Develop a relationship through regular Develop a relationship through regular communication/events and/or additional communication/events and/or additional services available only to existing customersservices available only to existing customers

Because of reduced costs, MFIs may be able Because of reduced costs, MFIs may be able to offer reduced charges to longer-term to offer reduced charges to longer-term (typically higher value) customers. These (typically higher value) customers. These exclusive offers help build loyalty.exclusive offers help build loyalty.

Page 13: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

Advocate

Supporter

Client

Customer

Prospect

Emphasis on new customers

(Customer catching)

Emphasis on developing and enhancing relationships (Customer keeping)

The Relationship Marketing Ladder of Customer Loyalty

Page 14: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

Above All Else: Client Above All Else: Client ServiceService

Five key reasons why meeting and Five key reasons why meeting and exceeding customer expectations of exceeding customer expectations of service must be a “prime directive” service must be a “prime directive” for your businessfor your business::

1.1. Good service keeps customersGood service keeps customers2.2. Good service builds word-of-mouth Good service builds word-of-mouth

businessbusiness

Page 15: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

Above All Else: Client Above All Else: Client Service -2Service -2

3.3. Good service can help you Good service can help you overcome competitive overcome competitive disadvantagesdisadvantages

4.4. Good service is easier than many Good service is easier than many parts of your businessparts of your business

5.5. Good service helps you work more Good service helps you work more efficientlyefficiently

Page 16: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

Making a Service VisibleMaking a Service Visible People cannot see your service. People cannot see your service. So they judge your service by what they can So they judge your service by what they can

see. see. People will trust their eyes far before they People will trust their eyes far before they will ever trust your words.will ever trust your words.

Look at how your present your services: your Look at how your present your services: your business card, your lobby, your ATM machines, business card, your lobby, your ATM machines, your shoes. What do your “visibles” say about your shoes. What do your “visibles” say about the invisible thing you are trying to sell?the invisible thing you are trying to sell?

Watch what you showWatch what you show!!

Page 17: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

1.1. What do you remember about the customer What do you remember about the customer service experience that made it good/bad?service experience that made it good/bad?

2.2. How is that memory linked to potential How is that memory linked to potential customer service opportunities?customer service opportunities?

• How were you greeted?How were you greeted?eg: eg: warmly; with indifference; warmly; with indifference; aggressively; in an over-familiar tone; aggressively; in an over-familiar tone; cold politeness; etc.cold politeness; etc.

Exercise: Good & Bad Exercise: Good & Bad Customer Service (2)Customer Service (2)

Page 18: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

Exercise: Good & Bad Exercise: Good & Bad Customer Service (2)Customer Service (2)

How promptly were you attended to?How promptly were you attended to?

eg: eg: Immediately; kept waiting while Immediately; kept waiting while the assistant chatted; kept waiting the assistant chatted; kept waiting because of the queue; etc.because of the queue; etc.

How do you think you were regarded by How do you think you were regarded by the person serving you?the person serving you?

eg: eg: As a nuisance; just as someone to be As a nuisance; just as someone to be sold something (anything); as a valued sold something (anything); as a valued customer; etc.customer; etc.

Page 19: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

3.3. What effect (if any) did the way you were What effect (if any) did the way you were served have on how you personally felt at the served have on how you personally felt at the time?time?• eg: eg: You felt pleased; valued; annoyed; You felt pleased; valued; annoyed;

frustrated; powerless; etc.frustrated; powerless; etc.4.4. Has that experience affected your subsequent Has that experience affected your subsequent

dealings with that company/organisation?dealings with that company/organisation?• eg: eg: Have you told the company about your Have you told the company about your

(good or bad) experience?; have you (good or bad) experience?; have you stopped transacting there?; etc.stopped transacting there?; etc.

Exercise: Good & Bad Exercise: Good & Bad Customer Service (3)Customer Service (3)

Page 20: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

What’s Different About What’s Different About Good Service?Good Service?

Good customer service is not a smile Good customer service is not a smile campaign! It is about:campaign! It is about:

The quality of what you deliverThe quality of what you deliverANDAND The quality of how you deliver it in The quality of how you deliver it in

comparison to customer expectationscomparison to customer expectations

Good customer service is based upon the Good customer service is based upon the very basic truth that you cannot survive by very basic truth that you cannot survive by taking a short-term view of your customers taking a short-term view of your customers – if they don’t come back; if their friends, – if they don’t come back; if their friends, relations and acquaintances don’t come relations and acquaintances don’t come back, there is no futureback, there is no future

Page 21: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

Exercise 1.2 – What’s Exercise 1.2 – What’s important?important?

Rank the following attributes in terms of relative Rank the following attributes in terms of relative importance from the view point of your customers:importance from the view point of your customers:

1.1. Grace periodGrace period

2.2. Response to complaintsResponse to complaints

3.3. Loan officer politenessLoan officer politeness

4.4. Instalment sizeInstalment size

5.5. Processing timeProcessing time

6.6. Loan officer professionalismLoan officer professionalism

7.7. Loan sizeLoan size

8.8. Interest rateInterest rate

9.9. Simple proceduresSimple procedures

Page 22: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

Relative Importance of Selected Attributes

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

% o

f re

sp

on

den

ts

Source: MFC Spotlight Note 8

Page 23: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

Customer Service StrategyCustomer Service Strategy

Customer Service: The ChallengesCustomer Service: The Challenges

Page 24: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

Customer Care Challenges Customer Care Challenges (1)(1)

1. Reducing pressure on facilities 1. Reducing pressure on facilities and resourcesand resources

Microfinance is a volume businessMicrofinance is a volume business Competition and customer promise places Competition and customer promise places

huge logistical demands on staffinghuge logistical demands on staffing Growth necessitates:Growth necessitates:

Additional front line staff positions Additional front line staff positions Additional physical capacity Additional physical capacity

• Look for “quick wins” to reduce queues in Look for “quick wins” to reduce queues in banking halls and to increase productivity banking halls and to increase productivity of staffof staff

Page 25: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

Customer Care Customer Care Challenges (2)Challenges (2)

22. Changing the mindset of the . Changing the mindset of the customercustomer

Customers not managing their Customers not managing their financial behaviour - inordinate financial behaviour - inordinate logistical demands at peak periods - logistical demands at peak periods - expectation that the bank has to expectation that the bank has to deliver, come what may.deliver, come what may.

Page 26: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

Customer Care Customer Care Challenges (3)Challenges (3)

3. Changing the mindset of the 3. Changing the mindset of the front line stafffront line staff

Sales and service orientation - historically Sales and service orientation - historically been of secondary importance to been of secondary importance to processing efficiency. This mindset is processing efficiency. This mindset is difficult to change - reality is that long difficult to change - reality is that long queues need to be dealt with.queues need to be dealt with.

Limited perceived competitor activity – low Limited perceived competitor activity – low sensitivity towards customer retention sensitivity towards customer retention behaviour by front line staff.behaviour by front line staff.

Page 27: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

Customer Care Customer Care Challenges (4)Challenges (4)

4. 4. Reducing pressure on front line staffReducing pressure on front line staff Front line staff - alienated by sheer pressure Front line staff - alienated by sheer pressure

of work at peak periods and reduced of work at peak periods and reduced opportunity for reciprocal communication opportunity for reciprocal communication

Reduces buy-in and interest in problem-Reduces buy-in and interest in problem-solving, even some resentment. solving, even some resentment.

Perception of reduced control over the Perception of reduced control over the interaction with customers.interaction with customers.

The fundamental premise of quality customer The fundamental premise of quality customer care is work satisfaction - recent “climate care is work satisfaction - recent “climate survey” indicates only marginally positive survey” indicates only marginally positive attitudes. attitudes.

Page 28: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

Customer Care Customer Care Challenges (5)Challenges (5)

5. Awareness building 5. Awareness building Customer care trainingCustomer care training Generic customer care courses - Generic customer care courses -

sharpening awareness of customer care sharpening awareness of customer care issues - short lived “feel good” nature.issues - short lived “feel good” nature.

In-house customer care training courses In-house customer care training courses to help front line staff to apply their to help front line staff to apply their minds to addressing customer care minds to addressing customer care issuesissues

But effectiveness of these courses short-But effectiveness of these courses short-lived (2 months)lived (2 months)

Page 29: Customer Service Strategy Customer Service: The Benefits Customer Service: The Benefits Session III Session III.

Customer Care Customer Care Challenges (6)Challenges (6)

6. Streamlining processes6. Streamlining processes Existing system processes Existing system processes

fundamentally unchanged since fundamentally unchanged since 1984.1984.

Compliance, system and MIS Compliance, system and MIS requirements - considerable requirements - considerable additional pressure on staff to the additional pressure on staff to the detriment of financial transaction detriment of financial transaction efficiency.efficiency.