Table of Contents:-
- Customer Service Meaning
- What is customer service?
- Customer Service Definition
- Objectives of Customer Service
- Need for Customer Service
- Customer Service for Competitiveness
- Cues that affect customer perception of service quality
- Customer Service Gaps Reasons
Customer Service Meaning
Customer service is a measure of the effectiveness of a system’s ability to generate time and place utilities for a product. Effective marketers understand the significance of customer service within the larger context of customer relationship marketing. Therefore, marketers endeavour to enhance customer satisfaction by delivering superior customer value through top-notch customer service, which is an essential component. Customer service is more than simply moving the transportation of a shipment from point A to point B. It is about providing customers with options, information, and the expertise to help them make the right decisions; it is about helping the supplier to understand the trends and dynamics in the markets that can impact the business; it is about working with the customer to deliver the best possible value for his money.
Many companies differentiate their product offerings by providing support services with their product. Usually referred to as customer service, these services include any human or mechanical efforts/activities a company provides that add value to a product.
For example, customer service includes delivery and installation, financing arrangements, customer training, warranties and guarantees, repairs, layaway plans, convenient hours of operation, adequate parking, and information through toll-free numbers and websites. e.g., Zappos, an online shoe retailer, has earned a reputation for excellent customer service, in part due to its 24-hour service and free, fast returns.
What is customer service?
Customer service can be seen in one of several ways. Sometimes customer service is seen as an activity (something that the organisation provides). A customer service department that handles complaints, special orders, billing, etc., often evidences this aspect of customer service. Similarly, customer service can be viewed as a measure of performance.
Whether as a major or minor part of the total product offering, all marketers of goods sell customer service. Providing good customer service may be the only way a company can differentiate its products when all products in a market have essentially the same quality, design, and features. This is particularly true in the computer industry.
When buying a laptop or a computer, e.g., consumers shop more for fast delivery, technical support, warranties, and price than for product quality and design. Through research, a company can discover what kind of services its customers require.
For example, some customers are more interested in financing, whereas others are more concerned with training and installation. The level of customer service a company provides can affect customer satisfaction profoundly. The American customer satisfaction Index, compiled by the National Quality Research Centre at the University of Michigan, ranks customer satisfaction among a wide variety of businesses. Dissatisfied customers may curtail their overall spending, which could stifle economic growth.
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Customer Service Definition
According to Turban, “Customer service is a series of activities designed to enhance the level of customer satisfaction, i.e., the feeling that a product or service has met the customer expectation”.
In the words of Sam Walton – “The goal as a company is to have customer service that is not just the best but legendary.”
According to the International Customer Service Association (ICSA), “Customer service is those functions within a business that has customer satisfaction as their responsibility and provide that satisfaction through the fulfilment of sales order demand and/or information needs”.
Customer service starts with the first interaction with a buyer or prospect and continues through the sales process, review and evaluation process. When problems arise, quality customer service helps retain clients.
Objectives of Customer Service
The following are the objectives of customer service:
1) To Increase Sales
In customer service, whether production-oriented or market-oriented, the final product is to provide a service to meet the needs of customers.
2) To Improve Customer Satisfaction
Good customer service will increase the value of products, and improve customer satisfaction. Therefore, many companies provide customer service as an important feature.
3) To Reduce Distribution Costs
The important role of customer service is the choice of service and reduction of distribution costs. The low-cost strategy has always been competitive in the main and often involves the realisation of low-cost commodity production and circulation of the whole process.
4) To Create Value in the Supply Chain
Customer service is a unique way to merchandise for the media, the suppliers, manufacturers, wholesalers and retailers of organic components from production to consumption, a whole process flow system, and promotes the smooth flow of goods; on the other hand, logistics services through its unique system facilities (POS, EOS, VAN, etc.) continue to merchandise sales, inventory and other important information back to the distribution channels in all enterprises.
5) To Retain Customers
How to better meet customer needs, is key to business success. The strategy to retain customers is more critical. Because customers and the company have a very high-profit margin between the correlation of retaining old customers to retain business, while amortisation of the customer sales and advertising costs are low, particularly satisfied customers will provide business intermediaries.
Need for Customer Service
The need for providing customer service can be described in the form of the following aspects:
1) Changing Customer Expectations
With changing consumer expectations, competitors are seeing customer service as an important competitive weapon used to distinguish their product(s) from competitors’ offerings, thereby successfully differentiating their sales efforts. In almost every market, the customer is; now more demanding, knowledgeable and sophisticated than he/she was, say thirty years ago.
Customers have more choices and expectations than ever before. This means that marketers have to listen more closely to customers than ever before. They also have to anticipate needs, solve problems before they start, provide service that impresses customers, and offer responses to mistakes that more than makeup for the original error.
2) Increasing Competition Base
Competition is increasing and the products offered are becoming larger and more varied, so it is necessary to provide added value. Competitors increasingly are being matched in quality and price, so it is necessary to find a distinction.
Competitors have not only been meeting these rising customer expectations but shaping them with yet higher standards of performance and value. And so the cycle repeats itself, with customers asking for more and getting it. So there is no reason why customers should buy one organisation’s offerings unless it is in some way better at serving the customers’ needs than those offered by competing institutions.
3) Need for a Relationship Strategy
To ensure a customer service strategy that is formulated, implemented and controlled, and that will create attractive value for customers, it is necessary to establish this strategy as having a central role and not one that is only a sub-component of the elements of the marketing mix.
If a buyer is dissatisfied with the service or care, is likely to speak ill of one and tell of their bad experience to other consumers. If a buyer receives good service he is very likely to return to buy our products or visit us again. He is also likely to recommend us to other consumers.
Customer Service for Competitiveness
Customer service is a set of activities and programs designed and implemented by companies to make the buying experience more rewarding. These activities enhance the value of a service or product that the customer receives from the seller. Customer service is the most important dimension of product or service offerings to the customer. Value-added customer service is leveraged to gain a competitive advantage over their competitors and enhance their overall market position. Good customer service builds customer loyalty among existing customers and generates positive word of mouth communication, which attracts new customers. In other words. Customer service is the basis of all customer relationship management (CRM) programs being adopted by many major companies.
Customers base their evaluation of service on their perceptions. These perceptions are affected by the actual service provided by the company and the high degree of intangibility, which is sometimes very difficult to accurately evaluate. Firms that can map these gaps accurately and try to bridge them with value-added services can succeed in enhancing the customer satisfaction level and remain competitive.
Cues that affect customer perception of service quality
The following are a few cues that affect buyer perception of service quality.
1. Competence
The business demonstrates its expertise by providing comprehensive information through product brochures, manuals, websites, and sales discussions, highlighting both the product features and the range of services offered.
2. Reliability
Reliability refers to the consistent and dependable delivery of products or services, ensuring that they are provided as promised in terms of their designated location, scheduled time, and expected quality.
3. Responsiveness
Returning customer calls, faxes, e-mails, letters, and so forth on time and resolving customer problems or complaints with speed and accuracy during all three phases of transactions.
4. Transaction security
Ensuring the confidentiality of customer transactions and information.
5. Trustworthiness
Trustworthiness is established by implementing and continuously refining policies on product return, warranty and guarantee, and honouring commitments.
6. Access
This refers to the ease with which the customer can obtain information on products and services before placing an order, as well as the ability to track the status of the order placed and resolve the product complaints, claims and damages in the post-sales phase.
These cues on consumer perception of service quality stimulate satisfactory or unsatisfactory evaluations of the company’s services. Hence, the company needs to bridge service gaps (between perception and reality) to improve customer satisfaction with its services.
These cues on customers’ perception of service quality greatly affect customer satisfaction or dissatisfaction with the company’s services. Therefore, the company must address any gap that exists between customer perception and the actual service provided to improve customer satisfaction with its services.
Customer Service Gaps Reasons
These gaps may arise due to the following reasons:
1. Inadequate communication –
A primary reason for these gaps is the discrepancy between the actual service provided may be different from that conveyed through the promotion or advertising campaigns. When customers have certain expectations based on marketing appeals, but the actual service falls short, it creates a gap in their experience.
2. Standards adopted –
Another factor contributing to these gaps is when the service standards adopted by a company differ from the customers’ expectations. If customers have certain assumptions about the quality or level of service they will receive from the company, but the standards do not align with those expectations, it creates a gap in customer satisfaction.
3. Service delivery –
Sometimes, the services provided to customers may not meet certain service standards set by the company. This can occur due to various reasons such as poor execution, lack of training, or operational inefficiencies. When there is a gap between the intended service standards and the actual service delivered to the user, it can lead to customer dissatisfaction.
4. Customer knowledge –
Another reason for these gaps is when a company fails to understand the service standard expected by the customer. Customers may have different expectations or interpretations of what constitutes good service. If a company does not take into account these varying perceptions, it can result in a gap between the service provided and the customers’ expectations.
The company’s aim should be to bridge these gaps to create a wider base of satisfied customers and to stimulate them for repeat purchases.
To ensure customer satisfaction and encourage repeat purchases companies should aim to bridge these gaps. By aligning service standards with customer expectations, improving service delivery, addressing adequate information and gaining a deeper understanding of customer perceptions, companies can create a wider base of satisfied customers. This fosters brand loyalty and stimulates repeat purchases, ultimately contributing to the long-term success of the business.