Managing Customer Service

Institute of Leadership & Management

• Publisher: Routledge
• Year: 2013
• eBook ISBN: 9781136385124
• Topic: Business
• Subtopic: Human Resource Management
• Index: Business

Super series are a set of workbooks to accompany the flexible learning programme specifically designed and developed by the Institute of Leadership & Management (ILM) to support their Level 3 Certificate in First Line Management. The learning content is also closely aligned to the Level 3 S/NVQ in Management. The series consists of 35 workbooks. Each book will map on to a course unit (35 books/units).

Session B
What is customer
care?

1 Introduction

Customer care is often misunderstood. People tend to assume that:

it is all about being courteous and friendly to customers;

only customer-contact staff need to bother about it.

This is quite wrong: customer contact is an important area (which we will look at in Session C), but seeing polite smiles is not the customer’s top priority.

Customer care is in effect part of marketing, and it plays a crucial part in ensuring the success of any organization. Unless it covers every aspect of the service provided to customers, ensuring that their needs and wants are met, it will not work.

2 Customers old and new

Customer care can be defined as:

‘serving the customer in a way that meets their needs and wants’

This is not the same as winning new customers, though many commercial firms devote a great deal of time and energy to doing this, through their sales and marketing activities.

McGibbons is a pharmaceutical company which makes and sells drugs used for treating severe asthma. Its primary customers are family doctors and hospital specialists, because these have the authority to prescribe drugs, and can opt for McGibbons’ drugs rather than those of a competitor

Out of McGibbons’ 520 staff, 100 are employed in some aspect of sales or marketing.

The Marketing Department itself consists of 20 people. They are responsible for working out strategy and controlling the annual advertising and promotion spend of £6,000,000.

The Sales Department includes 40 sales representatives who spend most of their time on the road visiting the primary customers.

The remaining 40 sales and marketing staff are involved in various sales support activities.

Activity 9

From what you know of representatives and selling, what would you say the main tasks of McGibbons’ representatives would be?

If they are like most sales representatives, they will have three main tasks on their agenda:

identifying potential new customers and trying to win them;

keeping existing customers happy;

trying to sell new products to existing customers.

Anyone in this line of work will tell you that the first of these is extremely difficult. It is also expensive.

It costs McGibbons £35,000 a year to keep a representative and his or her car on the road. They reckon that each representative spends about a quarter of his or her time trying to win new customers, and that the average number of new customers won per representative per year is 20. This is a cost of £35,000 ÷ 4 ÷ 20 = £437.50. (The true cost per net new customer is higher, because each representative also loses a few customers for various reasons.)

McGibbons also considers that £1.6 million of the advertising and promotion budget should be allocated to the winning of new customers. £1.6 million ÷ 20 ÷ 40 (the number of representatives) = £2,000. So the total cost per new customer won is a staggering £2,437.50!

In many industries like insurance, banking and retailing a new customer costs less...

Table of contents

• Front Cover
• Title Page
• Copyright
• Contents
• Series preface
• Unit specification
• Workbook introduction
• Session A: About customers
• Session B: What is customer care?
• Session C: Delivering customer care
• Performance checks
• Reflect and review