MODULE 6: CUSTOMER SERVICE IN RETAILING

• Customer Service => set of activities and programs undertaken by retailers to make the shopping experience more rewarding for their customers. These activities increase the value customers receive from the merchandise and service they purchase.
• Services Offered by Retailers:

  • Acceptance of credit cards, Alterations of merchandise, Assembly of merchandise, ATM terminals
  • Blogs and Bride registry
  • Check cashing, Child-care facilities, Coat checks, Credit, Customer reviews
  • Deep selection, Delivery to home or work, Demonstrations of merchandise, Display of merchandise, Dressing rooms
• Services Offered by Retailers (CONT):

  • Extended store hours
  • Easy returns to bricks-and-mortar location or online
  • Facilities for shoppers with special needs (physically handicapped) and Free shipping
  • Gift wrapping and notes
  • Layaway plans
  • Online chat, Online customization, and Online inventory search
• Services Offered by Retailers (CONT#2):

  • Parking, Personal assistance in selecting merchandise, and Personal shoppers
  • Repair services, Restrooms, and Return privileges
  • Shipping to store or home address, Shopping carts, and Signage to locate and identify merchandise, and Special orders
  • Valet parking
  • Warranties
• Strategic Advantage through the Customer Service

  • Good service keeps customers returning to a retailer and generates positive word-of-mouth communication, which attracts new customers.
  • The challenge of providing consistent high-quality service offers an opportunity for a retailers to develop a sustainable competitive advantage.
• Two Approaches of Customer Service:

  • Personalized Approach
  • Standardized Approach
• Personalized Approach:

  • Greater benefits to customers
  • Greater inconsistency
  • Higher cost
• Standardized Approach:

  • Lower cost
  • High consistency
  • Meets but does not exceed expectations
• Personalized Service => encourages service provider to tailor the service to meet each customer's personal needs.
• Store => sales associates offer individual customer service.
• Electronic Channel => instant messaging.
• Drawback => service might be inconsistent.
• Standardized Service => is based on establishing a set of rules and procedures and being sure that they are implemented consistently.
• Cost of Customer Service:

  • High levels of customer service can be costly, but good customer service is worth an investment.
  • It costs more to acquire customers than to generate repeat business.
• Customers Evaluations of Service Quality:

  • Reliability
  • Assurance
  • Tangibility
  • Empathy
  • Responsiveness
• Reliability => accuracy of billing, meeting promised delivery dates.
• Assurance (trust) => guarantees and warranties, return policies.
• Tangibility => appearance of store salespeople.
• Empathy => personalized service, receipts of notes and emails, recognition by name.
• Responsiveness => returning calls and emails, giving prompt service.
• Role of Expectations:

  • They are based on knowledge and experiences
  • Vary with types of retailers (discount vs. department stores).
• GAP Model for Improving Customer Service:

  • Knowledge Gap
  • Standards Gap
  • Delivery Gap
  • Communications Gap
• Knowledge Gap => knowing what the customer wants.
• Standards Gap => setting service goals.
• Delivery Gap => meeting and exceeding service goals.
• Communications Gap => communicating the service promise.
• Knowing what the customer wants:

  • Comprehensive Studies
  • Gauging Satisfaction with Individual Transactions
  • Customer Panels and Interviews
  • Interacting with Customers
  • Customer Complaints
  • Using Technology
  • Feedback from Store Employees
  • Using Customer Research
• Setting Service Standards:

  • High Quality service commitment
  • Define the role of service providers
  • Set service goals
  • Measure service performance
  • Give information and training
• Commitment to Service Quality:

  • Service excellence occurs only when top management provides leadership and demonstrates commitment.
  • Top management's commitment sets service quality standards, but store managers are the key to achieving those standards.
• Good Customer Service means:

  • Retailers need to provide clear definition of this to employees.
  • Description of service must be specific so expectations are clear
  • Service goals should be related to customer-based criteria
  • Service goals should be measurable
• Meeting and Exceeding Service Standards: Delivery Gap

  • Provide instrument and emotional support
  • Improve Internal Communications
  • Empower Store Employees
  • Provide Incentives
  • Develop Solution to Service Problems
  • Develop New Systems and use technology
• Support for Service Providers:

  • Instrumental Support
  • Emotional Support
• Instrumental Support => associates need to have the appropriate systems and the right equipment to deliver the services.
• Emotional Support => associates need emotional support from their coworkers or a concern for the well-being of others.
• Empowerment => means allowing employees at the firm's lowest levels to make important decisions regarding how service is provided to customers.
• The Target of Empowerment: Excellent Customer Service

  • Benefits to Employee
  • Manager's Approach
• Benefits to Employee:

  • Stimulates initiative
  • Promotes learning
  • Teaches responsibility
• Manager's Approach:

  • Provide guidance to employees
  • Train employees to the challenge
• Empowerment is Not for Everyone

  • Some employees will not take the responsibility
  • It is expensive for some standardized retailers
  • Empowerment idea is not embraced by cultures.
• In Latin America, the role of employees is not to make business decisions; their job is to carry out the decisions to managers.