Customer Care Excellence

How to Create an Effective Customer Focus

Sarah Cook

• Publisher: Kogan Page
• Year: 2010
• ISBN:
  9780749462574
• Edition: 6
• Topic: Business
• Subtopic: Customer Relations
• Index: Business

Customer loyalty is essential to the long term financial success of your business, but with more choice then ever before, customers today have high expectations of the products and services they use. To continue to meet - and even to exceed - these high expectations, you need a top notch customer services system in place, and Customer Care Excellence will enable you to achieve just that.In clear, practical language, this book takes you through how you can develop and sustain a customer-service focus within your company. Emphasizing both strategic and practical aspects of customer care, Customer Care Excellence explains how gaining customer commitment and motivating employees to deliver an excellent service at all your company's touch points can ensure successful results and satisfied customers.This fully revised and updated edition includes new material examining the impact of social networking on customer behaviour and the emotional connection customers have with the brand, explaining how you can create a memorable customer experience. Author Sarah Cook takes you through the practical steps necessary to create a culture of customer focus and, crucially, shows how employee engagement leads to customer engagement.

1	An introduction to customer care

We have become a service economy. Yet few organizations are truly delighting their customers.

This chapter sets the scene for customer care against a backdrop of increasing customer expectations, globalization and use of technology. It looks at what is excellent service and how organizations can create a customer focus.

At the end of this and subsequent chapters, an action checklist is provided to allow you to take practical steps to develop and sustain a customer focus within your organization.

Service in a competitive environment

Over recent years organizations have placed increasing emphasis on customer service as a means of gaining competitive advantage.

Who would have imagined 15 years ago, for example, that organizations such as Amazon.com could capture market share from the high street by offering the customer a wide selection of value-for-money products backed by a quality service? Or that companies such as First Direct could fundamentally challenge the traditional way customers do business with their bank by offering a friendly, efficient service 24 hours a day, 365 days a year?

In 1954 Peter Drucker wrote in The Practice of Management: ‘There is only one valid definition of business purpose: to create a customer.’ He said that an organization’s ability to remain in business is a function of its competitiveness and its ability to win customers from the competition. The customer is the foundation of the business and keeps it in existence.

As competition has become more global and more intense, many organizations have realized that they cannot compete on price alone. It is in these marketplaces that many companies have developed a strategy of providing superior customer care to differentiate their products and services. Surveys suggest that service-driven companies can charge up to 9 per cent more for the products and services they provide. They grow twice as fast as the average company and have the potential to gain up to 6 per cent market share.

Through focusing on the customer, retailer Tesco managed to increase its profitability and market share, becoming the market leader in a highly competitive and cost-conscious marketplace.

Businesses such as hotel chain Ritz Carlton and retailer John Lewis have an enviable reputation for customer service. However, like very many other market sectors, few organizations succeed in leading the way.

Benefits of a customer-centred organization

In increasingly competitive marketplaces, best-practice organizations have demonstrated clear benefits of focusing on the customer. Excellent service enables a business to:

• differentiate itself from the competition;
• improve its image in the eyes of the customer;
• minimize price sensitivity;
• improve profitability;
• increase customer satisfaction and retention;
• achieve a maximum number of advocates for the company;
• enhance its reputation;
• ensure products and services are delivered ‘right first time’;
• improve staff morale;
• increase employee satisfaction and retention;
• increase productivity;
• reduce costs;
• encourage employee participation;
• create a reputation for being a caring, customer-oriented company;
• foster internal customer/supplier relationships;
• bring about continuous improvements to the operation of the company.

The changing nature of customer service

Recent years have seen enormous pressure on service organizations to improve the way they do business with their customers. A lack of good service even risks public humiliation as the Passport Office found to its cost some time ago when its Service Charter mark was withdrawn for inefficient delays in issuing passports during a busy summer period. Since then it has undergone a transformation to radically improve the experience it offers its customers. The challenge for a business today is to ‘inject’ innovation into its lifeblood so that it becomes part of its very being.

Successful service organizations constantly strive for higher levels of customer service. When online bookseller Amazon was established, its founder recognized that it could not offer comfy sofas or coffee to those who browse through its virtual bookstore, so it set about finding innovative ways to enhance the customer experience.

Only a few organizations have been able to do this successfully, but their success is noteworthy. First Direct revolutionized the retail banking sector with its introduction of a telephone banking service. Its focus on speed, convenience, quality and service resulted in 38 per cent of new customers being referred from existing ones. Sandwich chain, Pret à Manger, which started in one store in Victoria, now owns over 500 outlets. It puts its success down to a ‘relationship of trust’ with its customers, attention to detail and constant innovation.

The trend in the past 10 years has been for organizations to move from being product-focused to customer-focused. Yet only a handful of organizations, including online auctioneer eBay, can be said to be truly customer-centric: created for and driven by customers. See Figure 1.1.

Figure 1.1 The move from product-focused to customer-centric organizations

Changing customer behaviour and expectation

Today’s consumers are increasingly sophisticated, educated, confident and informed. They have high expectations of the service they want to receive. They want greater choice and will not be ‘sold to’ or manipulated.

Value for time

Already, the 24-hour society is here. A report by Future Foundation shows that, in 2007, over 2 million people in the United Kingdom work between 9 pm and 11 pm and around a million work between 2 am and 5 am. In a survey commissioned jointly by BT and First Direct, over 50 per cent of respondents wanted pharmacies and public transport accessible 24 hours a day. A third of those surveyed also wanted 24-hour access to a wide range of other retail outlets and sports, leisure and entertainment facilities.

Supermarkets are leading the way in 24-hour shopping. ASDA opened the first 24-hour stores in 1994. Tesco had 370 stores open round-the-clock in 2009, up from 81 stores in 1999, and in addition offered home shopping from over 100 stores. The home shopping service allows people to order goods over the internet; the web page displays each customer’s most frequently purchased items at the beginning of the list to aid selection and the order is relayed to a computerized trolley where on-board computers guide an order-picking assistant on the most efficient route round the store to collect the groceries.

Consumers are increasingly mobile and are looking for value for time. IPSOS carried out research for mobile phone operator Orange and found that a third of small companies and 40 per cent of medium companies have employees who are consistently mobile. They are reliant upon technology to keep in touch with their office and the customer. For example, Veeder-Root is a company that manufactures, installs and services 8,000 instruments that measure petrol levels in the underground tanks below many of the UK’s petrol stations. Field engineers are supplied with a laptop wireless computer so that they always have access to the latest customer information. They can call for the latest customer report in advance of each visit and diagnose problems on site without having to travel back to the head office. This process has resulted in increased levels of productivity and customer and employee satisfaction.

Consumer rights

The VP of marketing for Expertus is quoted as saying: ‘In a recessionary economy customer training is going up, while employee training is going down.’ Today’s customers know their rights and are more likely to make their opinions known if they feel that these have been violated. Research by the Henley Centre found that 35 per cent of adults in the UK agree that they love to complain every now and then. The survey also showed that 45 per cent of adults had complained in person about poor service and 42 per cent on the telephone.

An IPSOS poll shows that a clear majority of customers claim that social responsibility influences their choice of products and services. Consumer concern over human-rights violation and environmental abuse has endangered sales of brands as diverse as Nike, Coca-Cola and Shell. The debate over genetically modified food has brought together a wide range of consumer interest groups to stop the development of such foods.

What is emerging is a ‘pull’ scenario in which the customer is becoming empowered. This is facilitated by digital media, where internet ‘infomediaries’ (information intermediaries who search for the right trading partner, making comparisons and completing transactions) offer the consumer greater choice, and websites have the chance to r...