Description: PROJECT ANALYSIS – Self-paced activities (No word count)
Visit the service provider of your choice, read the following pages and answer the questions. Apply the research to your Consulting Project Report. Note-form is acceptable but include relevant links to theory within your notes. You must include a Reference List in APA 6 style.
Overview
Each student is to develop a Service Operations Improvement Consulting Report, based on an experiential industry visit to a service provider of their choice. The following information and the associated exercises, called Self-paced Activities, will give you a practical insight into the relationship between customers and organisations, and provide tools with which you may conduct your analysis and develop your Report.
These activities comprise primary research based upon the practical experience of visiting a service supplier as a ‘mystery customer’, and secondary research, theory, and information on best practice. This is what is called ‘Umbrella Information’. Use this information in conjunction with your in-class study e.g. Servqual (Asubonteng & McCleary, 1996), to inform your final Report. Answering the questions will help you keep on track.
Key terms
Customer
A person or organisation buying or obtaining the goods or services of another.
Customer service
The range of help and support offered to customers before, during and after a sale has been made.
Cycle of Service
All the moments of truth that make up the customer’s experience in a service interaction.
Moment of Truth
An episode in which a customer comes into contact with an organisation, however remote, and thereby has an opportunity to form an impression of the organisation and its people.
Quality
In customer service, quality is when a product or service meets or exceeds the customer’s expectations.
Introduction
Customers are attracted and kept by organisations that provide quality products and services. To ensure that this occurs, Service Operations Mangers must know who their customers are, what their needs and expectations are, and how these can be met. The following information will examine how to determine customers’ needs, communicate these needs to team members and others, and develop ways of meeting those needs through customer service.
To survive, every organisation needs customers. A customer buys an organisation’s products and services because these products and services give the customer ‘benefits’. For example, the benefit of buying a cool drink on a hot day is that it will quench your thirst. Here the drink seller offers you, as the cool drink buyer, the benefit of reducing your thirst.
Organisations tell customers about the benefits of the products and services they sell using a process called marketing. Marketing helps to promote and distribute the organisation’s products and services. Marketing also makes the customer focus on satisfying their needs by using that organisation’s products or services.
So, what is customer service?
Customer service is about providing superior service to encourage customers to keep buying your product or service (Gerson, 1992).
Or is it?….
Henry Mintzberg (2013, p.12), the eminent business strategy guru, delights in saying that “Customer service is when they smile at you in the front office while trying to figure out how to squeeze more money out of you in the back office.”
Most of the books and journal articles on customer service define it as the range of help and support offered to customers before, during and after a sale has been made. This may apply to a customer who buys goods, or uses the services of an organisation, for example an appliance repair service.
Experts agree that the key steps to delivering quality customer service are:
1) Deliver the Promise
2) Deal well with problems and queries
3) Make it personal
4) Go the ‘extra mile’
Customers are likely to be attracted and kept by organisations that focus on all these steps.
(Johnston, 2004, cited in Johnston, Clark & Shulver, 2012, p. 436)
About customer service
Types of organisational customers
We usually think of organisational customers as the people who purchase or use the organisation’s products and services. However, if we look closely there is a range of customers in an organisation. These include:
• Internal customers who use products or services provided by the organisation and belong to the organisation.
• External customers who use products or services provided by the organisation but come from outside the organisation.
• Direct customers who deal directly with an organisation.
• Indirect customers who use an organisation’s product or service but have no direct involvement with the organisation.
For example, when you buy your lunchtime sandwich from a milk bar, you are a direct customer of the milk bar. But you are also an indirect customer of the bakery that has supplied the bread to the milk bar. If you do not like the bread you may complain to the milk bar and ask them to use different bread, but you are unlikely to talk to the baker. The outcome is that the baker may lose a customer (the milk bar) and never know why. (Tip: Think about the Supply Chain).Indirect customers are less obvious and, on occasions, unknown, but they are still customers.
Good v bad customer service
Elements of horrible customer service include:
• use of jargon or acronyms during a conversation
• being given bad advice on an organisation’s products and services
• providing insufficient information to the customer during communication with the service or product provider
• customers needing to keep asking the same thing
• difficulty in gaining access to speak to a responsible person who can help
• not returning phone calls or keeping promises
• incorrectly filling an order.
Elements of sensational customer service include:
• delivering what is promised
• being helpful and empathetic to the customer
• mistakes are fixed quickly — no questions asked
• being attentive to the customer, eg looking at the customer
• being knowledgeable about the product or service.
Industry Visit
Describe the service you received at the establishment you chose to visit for your case study. Consider your experiences with customer service at the establishment you chose to visit – Was it ‘horrible’ or ‘sensational’ customer service? Why was it good or bad? If you went with others, did you all experience the same service?
Levels of customer service
Not all customer service is the same. We know from our own experience that customer service comes in many forms and at different levels.
Organisations offer four general levels of service:
• Basic: This is the minimum acceptable standard of customer service a customer will accept. These are the things that the customer takes for granted will be provided by the organisation. A customer may elect not to do business with an organisation if this basic level of service is not met. For example:
‘Of course the café will have a chair for me to sit on.’
• Expected: This is the service that a customer expects from an organisation. Customers tend to do business grudgingly with organisations that only meet but do not exceed the ‘expected’ level of service. For example:
‘I expect that chair to be clean.’
• Desired: This is the service that a customer would like. When the desired customer service needs are met, a customer tends to be happy to do regular business with the organisation. Customers will tend to stay with the organisation until a competitor offers sensational customer service. For example:
‘I’d also like the chair to be comfortable.’
• Sensational: Sensational service ‘delights’ the customer. This is the type of service that makes a customer stand back and say ‘wow’. This type of service wins loyalty from customers and builds the business via word of mouth. For example:
‘Someone holds the chair for me as I sit down, brings the food to me, and treats me like royalty!’
Moments of truth
One of the basic concepts used in customer service is that of moments of truth. This concept was developed by Jan Carlzon, CEO of Scandinavian Air Services (SAS) in the 1980s to describe the aspects of customer contact that the organisation needed to control to ensure a positive impression for a customer. A moment of truth is defined as:A”n episode in which a customer comes into contact with an aspect of the organisation, however remote, and thereby has an opportunity to form an impression.” (Carlzon, 1989, p.3).
Carlzon also said:
Last year each of our 10 million customers came in contact with approximately five SAS employees, and this contact lasted an average of 15 seconds each time. Thus, SAS is ‘created’ 15 million times a year, 15 seconds at a time. These 50 million ‘moments of truth’ are the moments that ultimately determine whether SAS will succeed or fail as a company. They are the moments when we must prove to our customers that SAS is their best alternative.
A moment of truth can be a face-to-face contact, a telephone contact or an electronic contact (eg web page/ email). The important point about a moment of truth is that it is a critical factor in building the relationship between customers and organisations. Moments of truth allow the customer to make a judgement about the quality of customer service offered by an organisation and therefore develop a personal view of what they think about the organisation. A moment of truth with ‘basic’ customer service can therefore colour a customer’s view of the whole organisation.
(See:http://www.mckinsey.com/insights/organization/the_moment_of_truth_in_customer_service)
Why customers stop doing business with an organisation
If a customer fails to form a positive impression during a moment of truth, or the organisation fails to deliver the opportunity for a positive moment of truth, the customer may choose to stop doing business with the organisation because it has breached their Zone of Tolerance.
Why do customers cease to do business with an organisation? Some of the reasons are:
• 1% of them die
• 4% move to a new location and do business with somebody else
• 6% develop new relationships and move their custom
• 9% move to the competition that are offering better deals
• 10% for an unknown reason
• 70% stop being customers because they feel undervalued by the organisation during a moment of truth with that organisation (eg indifference by an employee of the organisation during a transaction).
• Only 4% of the customers who are dissatisfied complain; 96% simply melt away and do not tell you. Of those 96%, 91% will never do business with you again – they may have had one or many negative moments of truth which have breached their Zone of Tolerance.
Moments of Magic and Moments of Misery
Moments of Magic: Favorable moments of truth have been termed as ’moments of magic’ (Hyken, 2014). These are instances where the customer has been served in a manner that exceeds his expectations eg: An airline passenger being upgraded to from an economy to a business class ticket or the 100th (or 1000th) customer of a new department store being given a special discount on his purchase.
Such gestures can go a long way in creating a regular and loyal customer base. However, a moment of magic need not necessarily involve such grand gestures. Even the efficient and timely service consistently provided by the coffee shop assistant can create a moment of magic for the customers.
Moment of Misery: These are instances where the customer interaction has a negative outcome. A delayed flight, rude and inattentive shop assistants or poor quality of food served at a restaurant all qualify as moments of misery for the customers. Though lapses in service cannot be totally avoided, how such a lapse is handled can go a long way in converting a moment of misery in to a moment of magic and creating a lasting impact on the customer.
Note: Moments of Magic and Moments of Misery are trademarks owned by Shep Hyken. Used with permission. For more information go to http://www.hyken.com.
Zones of Tolerance
(Johnston, 2004)
(See: http://www.mktgsensei.com/AMAE/Services/Zone-of-tolerance.pdf )
Industry Visit
Why might customers stop doing business with this business? How are these reasons related to customer service? Should the business you visited worry about customers and customer service? Did you experience anything that threatens their ongoing success?
We can safely say that the bottom line is:
Customer service is only as good as the customers say it is. And customers only rate service as ‘good’ if their needs are being met (Pollack, 2008; Bullinger, & Fahnrich, 2003).
Meeting customer needs
Delivering great service relies on meeting customers’ needs. Let’s look at how we can use the information we have about customers and their needs to develop a service plan.
One of the most useful tools for service operation managers is the cycle of service.
The Cycle of Service
Remember the definition of ‘moment of truth’:
An episode in which a customer comes into contact with an aspect of the organisation, however remote, and thereby has an opportunity to form an impression.
Start by thinking about moments of truth, and think about the quality of service you are providing. Examine your customers’ experiences and focus on how the customer sees these experiences in terms of the organisation. If you can see things as the customer sees them, then you have arrived at a moment of truth. From there, you’ll be in a much better position to define, deliver and measure the quality of service you are offering.
Customers don’t consciously look for moments of truth — what they want is to have their needs met. You can meet these needs by going through a whole process from beginning to end — a cycle of service (Anderson, Pearo, & Widener, 2008).
Diagram showing a cycle of service (Johnston, 2004)
Cycle of service example
Let’s relate the cycle of service map to the simple example of going to the movies. The cycle begins at some identifiable point of customer experience, such as seeing an advertisement for the film or talking to a friend who recommends it. What does the customer experience? Arriving at the theatre, finding a parking place, standing in line to buy tickets, and waiting in line to enter the theatre are just some of them. As you trace the experiences of the customer such as visiting the rest room, standing in line for refreshments, and searching for a seat, you begin to realise that the experience of visiting a cinema includes much more than just sitting in a seat watching a movie.
We can say that each part of the customer’s experience is a moment of truth for the organisation. Each point on the cycle of service has an impact on the customer — not just the final service of seeing a movie. If the movie itself is enjoyable but the place is dirty, parking is a problem, the theatre is located in a dangerous neighbourhood, or noisy patrons interfere with the enjoyment of the other customers, the theatre will be perceived as having a service quality problem.
The customer came to the theatre to see a movie but also experienced some less desirable things. Some customers will complain about the dirt and the noisy patrons, but other customers will simply never return to that cinema.
For each experience the customer has in the cycle of service, the customer consciously or unconsciously rates the experience as satisfactory, unsatisfactory or superior. This assessment will determine whether the customer will use the service again or choose to go elsewhere.
Taking a holistic approach to interactions with customers, we can help to deliver customer service that will meet or exceed customers’ needs.
Industry Visit
Develop a Cycle of Service map of your industry visit based on the Moments of Truth as they relate to your visit.
To start ask: ‘When did our interaction begin with the establishment? What did we as the customer experience at this point?’ Then follow the customer’s experience to the end of that interaction, noting each action until the end of that experience.
Then consider each point on the cycle of service and ask: ‘What did we as customers need at that point?’ This will give you an indication of what you the customer regards as either ‘basic’ or ‘expected’ service.
Ask: ‘What did the establishment need to DO to meet your needs at each point?’
(See: http://www.customerservicegroup.com/pdf/csn0711docs.pdf)
Managing service problems
You can also use the cycle of service to help you identify problems matching service delivery to customers needs, and to develop options for improved service. Go through the steps above, focusing first on what customer needs may not be being met during the interaction, and then on what your team can do to meet those needs
Generally problems are related to:
• lack of flexibility in service delivery
• need for training of staff
• lack of communication among team members
• lack of communication from management
• no clear direction or collaborative goal setting
• ignoring customer feedback.
All of these problems are within your control, at least to some degree. Other factors that would not be within your control are:
• changes in the national or global economy which lead to unavailability of particular products or services
• unanticipated national or international events, which may bring about a high demand for a particular product or service, or conversely create a decrease in demand.
Types of Service Failures
o Core service failures
Capability related – people, product & machinery
o Responses to implicit/explicit requests
How we respond to customer requests
o Unprompted/Unsolicited employee actions
How the staff act
o Employee-reported incidents
Things staff experience
Group 1 Core Service Failures:
Why might contribute to poor response times?
Why might a service or product not be available?
Describe the look of premises & staff that you consider a core service failure?
How could equipment failure result in a service failure?
Group 2 Responses to Implicit/ Explicit Requests:
What special needs was the establishment able to cater for?
What customer preferences could result in a service failure?
Give an example of a customer error?
Describe the look of premises & staff that you consider a core service failure?
Group 3 Unprompted/ Unsolicited employee Actions
List some reasons for poor levels of attention?
What adverse conditions might result in service failures?
What cultural norms in your own culture could result in service failure?
Group 4 Employee reported incidents
How could a drunk customer result in a service failure?
Give an example of problematic customer in the establishment you chose to visit?
Industry Visit
Did you experience any service failures? What types of service failures did you experience and in what area? Identify the factors that indicate a gap between customer service delivery and customer needs. Consider each factor and identify strategies, which would help to close the gap. Apply this to your Analysis – make sure you give examples. (Tip: Don’t forget training issues!)
Customer service problem solving
Whether we actively seek customer feedback or not, there will be times when customers let us know about problems they have had in their dealings with us. Despite our best efforts to provide quality products and services, problems will occur. How we deal with these problems will affect whether we keep our customers in the long term. It will also influence how they speak about us, and our organisation, to other potential customers (Shaw, Dibeehi, & Walden, 2010).
It is well known that for every customer who complains about their dissatisfaction, there are 19 who do not, but those 19 may each tell ten of their friends. The multiplier-factor makes for alarming arithmetic.
Take, for example, an organisation with one million customers. If only 1% of that organisation’s customers have a reason to complain in any year, the total number of people who hear about problems is around 100,000, although only about 500 complaints will be communicated to the organisation directly.
Dealing sensitively and sincerely with complaints when they arise can preserve a customer relationship which otherwise might be lost. Many organisations find that customers who have their complaint well managed grow more loyal as a result of that overall experience. Loyal customers are real assets to an organisation, and they are very costly to replace. Systems that look after them make good commercial sense.
For all these reasons, complaint management systems are not just good manners, they’re important components of an effective, competitive, customer-focused business.
The optimum value of a complaints system is gained when it is integrated with service delivery, quality monitoring, management reporting and organisational learning. So don’t only deal with complaints when they are received.
Examples of service problems
There are many types of service problems that cause customer dissatisfaction. The following examples can refer to service problems for both internal and external customers:
• they have expectations that are not being met
• they feel no one will listen
• service providers are not well-trained
• they don’t get the information they need to make appropriate decisions
• they get inaccurate information
• service is delayed
• products are out of stock
• products are damaged or don’t work properly
• service providers are rude or discourteous
• they are told different things by different service providers
• the organisation has an inflexible returns policy
• they are promised something that it not delivered.
The list is almost endless!
These service problems can be caused by many factors in the workplace, for example, unrealistic targets, management issues, resource issues, environmental issues, low morale, lack of job knowledge/skill. Whatever the service problem is, you’ll probably need to deal with it on two levels. The first level is addressing the specific problem that the customer has brought to your attention — you must deal with the situation and the complaint that is presented to you at a particular time. The second level is solving service problems that appear to be recurring. This process may involve your team and others involved in service delivery in your organisation (White, & Yanamandram, 2007).
How to deal with complaints
1. Show your concern and remain calm.
Complaints are important to the people making them, so give them a chance to let off steam and to express their feelings. If they have a problem, you might have one too. It’s OK for them to be upset, but you need to remain calm, in control, tactful, and ready to respond.
2. Be objective.
Your job is not to judge — the issue is not really about who is right. The customer is simply seeking satisfaction. You must make it clear that you are interested in the problem and are concerned with fair treatment. Often the opportunity to complain is just as important to some people as any resolution of the issue.
3. Be prepared to listen.
Every story has at least two sides, and you are about to hear one of them. Listen to, and empathise with, the customer. This not only shows respect but might also enable you to find out what the real problem is — including any hidden agenda — and the depth of feeling associated with the complaint. Your considered response will show that you have taken the matter seriously. If you are particularly busy at the time, make an appointment to meet within a day or two. Never allow people to gain an impression that you are not interested.
4. Assemble the facts.
Although you should avoid any escalation of the perceived problem, you should resist making a decision until you’ve probed for the facts. Customers may attempt to minimise their part in a problem by selectively omitting certain details, so search beneath the surface to understand what is involved without trying to manoeuvre them into admitting the complaint is unfounded. Finally, state your interpretation of the key issues and allow the customer to clarify where necessary. Effective handling of the complaint at this early stage should avoid complications later.
5. Refer the customer to the right person.
Sometimes the best help you can give people is to put them in touch with the person who can help to solve their problem. You should make the necessary arrangements for the discussions to take place, and thoroughly brief the person to whom you refer the complaint.
6. Adopt and follow a grievance procedure.
You may already have documented procedures and accompanying work instructions for reporting and handling complaints and workplace problems. If not, develop procedures for handling complaints and educate employees and customers about those procedures. Though not every complaint will require strict adherence to formal, documented procedures, you can’t afford to ignore a grievance or a complaint
Address the complaint and advise of the decision.
It’s safe to assume that anyone coming to you with a complaint or grievance would like a direct answer. Either give it in clear, definite and understandable terms, or guarantee a response by a certain time. If further time is required to investigate, unanticipated delays should be communicated to the customer. Once you’ve made your decision, tell the person yourself. Any misunderstanding can be clarified at this point. Though customers may not always agree with your decision, they should understand that their complaints were given very serious consideration, and that you appreciate their feedback (Shaw, Dibeehi, & Walden, 2010; Zomerdijk, & Voss, 2010).
The problem-solving and decision-making process
When service difficulties recur, you may need to spend some time and effort resolving the problems behind the complaints that you are receiving. There are generally three phases to the process.
(Johnston, 2004)
(See: https://hbr.org/2010/07/stop-trying-to-delight-your-customers
This is the practical, experiential element to which you must add the theory http://sears.pissedconsumer.com/customer-service-not-interested-in-problem-or-solution- 20150121584894.html
Industry Visit
How did the establishment handle any complaints? After reading the above steps, are there any things you think you could have done better? What do you believe was done well?
Reference List
Anderson, S., Pearo, L., & Widener, S. (2008). Drivers of Service Satisfaction: Linking Customer Satisfaction to the Service Concept and Customer Characteristics. Journal of Service Research, 10(4) 365-381
Asubonteng P., & McCleary K.J. (1996). SERVQUAL revisited: a critical review of service quality.
Journal of Services, 10(6), 62-81.
Bullinger, H.J., & Fahnrich, K.P. (2003). Service Engineering – methodical development of new service products. International Journal of Production Economics, 85(3), 275-287.
Carlzon, J. 1989. Moments of truth — new strategies for today’s customer-driven economy, New York: Harper Collins.
Gerson, R. F. (1992). Beyond customer service. New York: Crisp Publishing Inc.)
Hyken, S. (2014). Customer Service Speaker. Retrieved from: http://www.hyken.com.
Johnston, R., Clark, G., & Shulver, M. (2012). Service Operations Management, Improving Service Delivery, London: Pearson
Johnston, R. (2004). Towards a better understanding of Service Excellence, Managing Service Quality, 14(2/3), 129-133.
Mintzberg, H. (2013). Simply Managing: What Managers Do – and Can Do Better. San Francisco: Berrett-Koehler Publishers Inc.
Pollack, B. L. (2008). The nature of service quality and satisfaction: empirical evidence for the existence of satisfiers and dissatisfiers. Managing Service Quality, 18(6), 537-558.
Shaw, C., Dibeehi, Q., & Walden, S. (2010). Customer Experience: Future Trends and Insights. London: Palgrave Macmillan.
White, L., & Yanamandram, V. (2007). A model of customer retention of dissatisfied business services customers. Managing Service Quality, 17(3), 298-316
Zomerdijk, L. G., & Voss, C. A. (2010). Service Design for Experience-Centric Services, Journal of Service Research, 13(1), 67-82