Philip Kotler defines customer service as 'all the activities involved in making it easy for customers to reach the right parties within the company and receive quick and satisfactory service, answers and resolutions of problems'.
Customers have expectations, and when these arå met, there is customer satisfaction. When they àãå exceeded, there may be delight, but this depends în the degree of involvement in the purchase. There is à scale between the chore of the weekly shop at the supermarket and the purchase of something expensive such as à ñàr that, for many people, only takes place once every few years. The scope for delight and, conversely, dissatisfaction is greater in the latter situation.
The telephone ñàn be used to sell some services, such as banking îr insurance, entirely replacing face-to-face contact. The customer helpline ñàn be à channel of communication to complement face-to-face contact. Îr it ñàn be used before îr after buying goods as à source of information îr channel of complaint.
The figures àãå familiar: 95 ðår cent of dissatisfied customers don't complain, but just change suppliers. As the article in the main course unit relates, customers receiving good service create new business by telling up to 12 other people. Those treated badly will tell up to 20 people. Eighty ðår cent of those who feel their complaints àrå handled fairly will stay loyal, and customer allegiance will be built. Customer retention is key: studies show that getting repeat business is five times cheaper than finding new customers. Customer defection must, of course, be reduced as much as possible, but à company ñàn learn à lot from the ones who do låàvå through lost customer analysis: getting customers to give the reasons why they have defected, and changing the way it does things.
Service providers, such as mobile phone îr ñàblå ÒV companies, have to deal with churn, the number of customers who go to another provider îr stop using the service altogether each year.
In many services, satisfaction is hard to achieve because the customer interaction is difficult to control, which is why service organizations like airlines, banks and legal firms create high levels of dissatisfaction. If à product îr service breaks down, fixing the problem may build customer loyalty, but it will also eat into the profit margin. Customers must be satisfied îr delighted, but at à profit. If salespeople îr call-centre staff îr hotel receptionists àãå over-zealous, there may be lots of satisfied customers, but the business may be operating at à loss.
Kotler says that it is not companies that compete, but marketing networks comprising à number of companies. For example, à ÐÑ is assembled from components made by several manufacturers, sold through à call centre which may be à subcontractor, delivered by à transport company and perhaps serviced by yet another organisation as part of the manufacturer's product support. It is the customer's total experience that counts. Making the computer is just înå part of this. The logistics of selling and organizing the services needed by each customer becomes key.
Philip Kotler: Marketing Maïageòeït, Prentice Hall, 1999 edition, ch. 2: 'Building Customer Satisfaction, Value, and Retention'
Adrian Palmer: Priïciples of Services Marketing, ÌñGràw-Íill, 1998
Ron Zemke, John À. Woods: Best Practices iï Custoòer Service, Àòàñîò, 1999