Foundations of Customer Service

1. Foundations of Customer Service Using Quality Control to Build and Improve Customer Service ..with practical tips and findings from the latest research on quality customer service issues..

2. Program Overview By the end of this presentation, you will acquire knowledge of THE FOUNDATIONS OF CUSTOMER SERVICE 1. Creating a Company Customers Love doing Business With 2. 6 Steps to Improving Customer Service Using Principles of Total Quality Management 3. Issues Surrounding Self-Service

3. Creating a Company Customers Love Doing Business With Maintain Internal Harmony within the Organization to Provide Quality Service to Customers

4. Customer Service Philosophy • The core of customer satisfaction is COMPANY CULTURE • Company Culture cascades from top Management • Customers sense that your company is unique and different • Customers know that you have their best interest at heart • Company does not overlook ‘Team Spirit’ in business • A Golden Rule of Company Culture: Companies must take care of their own people first. When that is done, the customers they service are naturally happier. • The Customer comes Second

5. Build a Customer-Oriented Culture • Employees will treat customers the way they are treated by Management. Those who are not served well will not serve well. Employee belief system Business Culture Employee Relations Customers and Suppliers

6. Who Companies need to Hire • Hire people who are good with people, rather than just their technical abilities and/or product knowledge. • Hire those who possess attributes that cannot be easily taught. • Attitude: A fundamentally positive attitude toward work • Co-operation: Appreciative of work interdependency • Energy: Have a “fire” to accomplish • Service Ethic: Doing what is right without regard for profit (If you do the right thing, you will ultimately profit)

7. Employee Relations • Provide an environment where employees are happy to serve your Company and hence, serve your customers. • Encourage employees to look at work as a fun and personal experience and to enjoy coming to work every morning. • Instill ‘Company Family’ values to enhance employees’ sense of belonging and pride. Invite family members of employees to join corporate social activities. • Employees must feel unafraid to make decisions impacting their self-esteem

8. What’s in it for the Employee BOSS CUSTOMER SALES EMPLOYEE “The boss is getting business, the customer is getting what he/she wants, so what’s in it for me?” Managers should take an active responsibility to diversify job descriptions with sales employees’ career goals.

9. Caring in Business If you expect 100% from employees, then give them 100%. “Without caring, there can be no quality.Caring for customers leads to productivity, innovativeness, comfort and initiation from the customer.” When employees get 100%, customers get 100%.

10. Vision and Mission • Make employees aware of and involve them in setting the company’s ongoing vision and mission of business. • When employees can’t decide what course of action to take, train them to go back to the company’s mission statement to help them. • Post the company customer service philosophy over your offices so that employees are continually reminded of their job goals. • Every employee is part of a company’s vision for itself

11. Communicate for Internal Harmony • For Managers: Share company information without reservation.. • Let employees know where the company is headed and that they are a critical contribution to the company’s growth. • Encourage and regularly arrange for open dialogue between employees and Management to find out perceptions that may affect employee attitude and motivation. • To get desired behavior from employees, Management must know what employees are thinking about the company they work for.

12. Instilling Sales Philosophy • Do not react negatively to negative customer behavior. • Never say NO to a customer. Find a way to maintain contact. • Employees must believe that the customer is the center of the company’s universe. • Encourage employees at every organizational level to reveal information that could benefit the company’s growth. • Correct communication is the key to positive customers

13. Service in Action • Customer Service means taking someone else’s problem upon yourself and fixing it for them. Being liked is not the only goal. • How to handle BAD CUSTOMERS (S-A-V-E): • Sympathize: Agree with the customer’s complaint. • Act: Take action so that the customer believes that he/she is getting immediate attention. • Vindicate: Let them know how rare the problem is. “This is not a normal occurrence in our company.” • Eat Something: Give the customer an unexpected ‘goodie’ before they leave.

14. Bottom-Line Thinking • Making service possible requires being realistic. Do not expect ideal performance, and do not create the hope of unusual possibility. • Today, the monetary unit is not the Dollar. It is the MINUTE • Customers make a decision based not only on price, but also on how much time they have to invest to get benefit out of a product. Time is a VALUE UNIT.

15. Customer Focus • Saturate the company with the voice of the customer • Work as if there is a customer watches your actions all the time. • Identify specific ways to measure customer service success. • Conduct customer focus groups to get consumer reactions. • Constantly rethink customer service policies to fit Company goals. • Always express gratitude to the customers that bring business.

16. Re-Engineering Better customer service is a result of enforcing quality • Re-Engineering is complex, costly, and time-consuming. • - It is an option if the organization has a goal of long-term change and profitability. • This process is connected to Total Quality Management (TQM) where procedures and protocols are revised and updated to reduce time and cost

17. Applying Principles of Total Quality Management for Improving Customer Service Steps to Ensure Quality in Customer Service Processes and Policies

18. Origin of the Quality Concept • Edward Deming, 1950: Introduced QUALITY CONTROL in Japan • Quality Control focuses on: • Worker Involvement • Communication • Training • Quality Control helped Japan to transform itself from a country with a reputation for poor goods into an economic superpower.

19. Basis of Total Quality • The TOTAL QUALITY Movement is a reaction to these basic organizational questions: • What do we do to make customers come back? • How do we make my employees happy? • How can we continue to bring money in?

20. Defining Total Quality Management • “Systematically figuring out where the real problem is with employees, customers, or processes in order to prevent them from occurring time and again.” • Results of TQM include 25-40% bottom-line savings, increased customer service quality, and faster procedures. • TQM requires Management to step back and look at the big picture of the organization’s current state.

21. Why TQM Could Fail • Top Management does not stay focused on the process, only dedicating themselves to business. • No focus on what really matters. Focus is only on little things of the process which are not high on the priority list. • No customers are involved in developing critical organization-specific TQM principles. In TQM, involve everyone and account for everything that could be affected by the organization’s procedures.

22. Beat the Fear Factor • Managers must be able to get the truth out of their employees in a non-threatening environment. • Management must have the self-confidence to admit and realize glitches in their administration. • Once managers are open about what really goes on in processes, lower level employees will not have fear of retribution.

23. Keys to TQM Implementation Managers and employees who are open to new methods of redefining business will be the primary catalysts of change implementation. • Empower employees to make their own business decisions. Management should be relieved of extraneous pressures. • Identify and invest in those few who are vocal about issues in the company. They could potentially win over old-timers who have looked at work the same way for many years.

24. The 6 Steps to Customer Quality • Research Customer Service trends and philosophy. • Get data on problems faced by customers. • Define BURNING ISSUES from the data. • Identify root processes of burning issues. • Modify existing processes/create new ones. • Indulge in Continuous Improvement.

25. Step 1: Education • Get journal articles on TQM, research guiding principles, and case-studies. • Attend seminars on the subject and talk with prospective consultants. • Be committed to learning and getting TQM training. • Organize your time to accommodate this important step because only then can subsequent steps be followed

26. Step 2: Assessment • Ask employees and customers: • What do you think should be stopped here? • What should we start doing here? • What are the things we ought to keep doing? • Give them an open ended survey and ask them to track their observations for 3 weeks by completing sentences like ‘I wish we would stop…’, ‘I hope we continue to…’, and ‘I wish we could start…’.

27. Step 3. Determine Burning Issues The WHY Technique: When faced with a problem, don’t ask WHY just once. Burning Issue Why are we getting customer complaints about our product? Because we are shipping out the wrong product! Why are we shipping out the wrong product? Because it is difficult to read the 4th copy of the order form! Why can’t the warehouse manager read the 4th copy? Because we are using a 150-year old print wheel! Core of the Burning Issue

28. Step 4. Critical Process Management • Determine CRITICAL PROCESSES related to customer service in your organization. • How long do these processes take? • (Are there any unnecessary steps that can be eliminated?) • Decide what is to be measured like response time, aspects of service, and relevance to customers. • Know your business in terms of steps that • impact customers

29. Step 5. Reorganizing Customer Service Policies and Principles Get representatives that are affected by customer policies and a consensus on the steps required to perform them. Discuss whether steps are laid out in proper sequence, what takes too long, what needs to be simplified, and what needs to be measured to know how effective it is in terms of cost and time. Benchmark processes in other companies to innovate within. Get steps of critical processes down on paper

30. Step 6. Continuous Improvement • Vigilant watching on maintaining the principles of quality service. • Making sure that new customer policies become part of every employee’s everyday thinking, applying it to the work setting. • Celebrating the implementation of successful customer service with all employees. • Customer Satisfaction is directly proportional to an organization’s internal quality.

31. Customer Service Research Source: Journal of Business Research, Vol 56(4), Apr 2003. Special issue: Buyer-seller relationships. pp. 323-340. • A firm's market orientation positively influences salespersons’ work attitudes • Sales managers influence salesperson customer orientation with their organizational commitment • Salesperson orientation influences industrial customers' intentions to switch service providers

32. Customer Service Research Source: Journal of Applied Psychology, Vol 88(1), Feb 2003. pp. 179-187 • The perception of standards for service is strongly related to employees' perceptions of support from coworkers and supervisors • Perceived support from coworker was significantly related to service providers' customer orientation

33. High Conscientiousness + Low Emotional Exhaustion = High Call Volume High Conscientiousness + High Emotional Exhaustion = Low Call Volume Call volume is not related to service QUALITY Customer Service Research Source: Journal of Management, Vol 30(1), 2004. pp. 149-160

34. Website links to customer service and a site privacy policy significantly increase expectations of customer service The presence of product ratings on websites increase perceptions of product quality Product ratings, customer testimonials, and information privacy increase the likelihood of purchase on a website Customer Service Research Source: International Journal of Human-Computer Interaction, Vol 16(2), 2003. pp. 211-234

35. Issues Surrounding Self-Service Options for Customers The Concept of Self-Service without Human Interaction

36. Customer “Self” Service SELF-SERVICE attempts to offer a win-win situation with faster and easier access to service at a reduced cost due to the elimination of human contact. The biggest advantage of self-service is the reduction in time. The biggest disadvantage is the lack of human interface. Self-Service is a contradiction in terms as the idea is for the customer to help himself/herself

37. Self-Service Issues • The question of service as a concept that excludes human involvement. Is there service without people? • Self-Service only fits the technology-savvy and the go-getter type. Is Self-Service relevant to everyone? • The customer service landscape is continuously evolving and perceptions of it change over time.

38. Self-Service options must be accompanied by active and positive user benefits Organizations must not assume that customers know the benefits To be generally acceptable to customers, self-service options must genuinely be time-saving Implications for Organizations Organizations must engage in consumer research to know consumers’ perceptions of service over time

39. Why Self-Service 1. Time of Day A large proportion of transactions occur after working hours which are only possible through self-service channels 2. Type of Interaction Making purchases is the most utilized aspect of self-service rather than customer complaints and after-sales activities 3. Preference to use Self-Service The internet is the fastest growing self-service purchasing outlet. Customers usually say, “You can buy things over the net that you can’t get anywhere else.”

40. Activity for Organizations • Have cost-effective human backup for online and automated services • Offer a choice of self-service or dealing with a person at every stage • Adapt systems to customers’ personal preferences and nuances • Plan to deal with higher volumes of customer contact through self-service

41. Tools in Self-ServiceThe Telephone • For a lot of customers the telephone keypad is a more familiar and easy-to-use interface than a computer or digital remote • If well designed, the telephone is the easiest and most efficient route to getting service from organizations • Criticized for the lack of a written confirmation and for being a non-visual medium

42. Tools in Self-ServiceThe Internet • Experienced users hail the internet as a self-sufficient tool where everything can be achieved • Those who use the internet will continue using it more frequently, thus increasing customer contact • Regular users of the internet will not stop using other channels of communication to get services

43. Designing New Systems • Get call-centre settings right. The telephone is still a major communication channel • Customers should get what they want with the channel of their choice • Solicit customer views when designing new self-service systems as they know what works • Customers should not have to repeat their preferences when using different systems

44. Behaviors of Self-Service Users • AGE • Younger people tend to be more enthusiastic about self-service • Confidence and experience among older people make them better able to use self-service for after-sales and lodging complaints

45. LOYALTY Self-servers may be less loyal to a company’s products If they are highly sophisticated, experienced, and not concerned by personal touch, these customers are less likely to be attached to a particular supplier Behaviors of Self-Service Users

46. Target Audience for Self-Service 1. SPEED Group More male, younger, likely to choose the internet 2. HUMAN CONTACT Group More middle-aged, prefer to use the telephone or have face-to-face interaction 3. CONTROL Group More female, older, more positive than other groups about using kiosks, although primarily use the telephone

47. Analysis of Self-Service Cost • Cheaper interactive interfaces generate more verbal customer contact and therefore do not reduce costs in the long-run • Implementing cheap systems runs the risk of failing to manage customer inputs which will cause confusion and repetitiveness

48. Best Self-Service Practices Service Need Speedy Simple Satisfying Service Achieved • Speed is the most important benefit of Self-Service • Systems must have Simplicity for customers to get needed service • Satisfaction results when a customer feels empowered and valued

49. Most consumers still prefer human interaction at key stages of the purchase cycle Self-Service options are more accepted when the consumer experience is in mind rather than for cost-cutting reasons Consumers thought automated touch-tone telephone options represented poor service delivery Self-Service Research Source: Journal of Consumer Behavior, Vol 2(4), Jun 2003. pp. 382-392

50. Self-Service Research • Respondents with high levels of technology anxiety use fewer self-service technologies • Technology anxiety predicts usage of self-service technologies more than demographics • Technology anxiety influences satisfaction and intention to use self-service systems again Source: Journal of Business Research, Vol 56(11), Nov 2003. Special issue: Strategy in E-Marketing. pp. 899-906