Lecture Retailing management (6e) Chapter 19 Levy Weitz

Lecture Retailing management (6e) Chapter 19: Customer service. The following will be discussed in this chapter: services offered by retailers, customer service strategies, standardization, cost of customer service, gaps model for improving retail customer service,...

Chapter 19 Customer Service McGraw-Hill/Irwin Retailing Management, 6/e Copyright © 2007 by The McGraw-Hill Companies, Inc All rights reserved 19-2 Store Management Layout, Design and Visual Merchandising Managing the Store Customer Service 19-3 Services Offered by Retailers 19-4 Customer Service Strategies Customized Greater benefits to customers Greater inconsistency Higher cost Standardized Royalty-Free/CORBIS Lower cost High consistency Meets but does not exceed expectations 19-5 Customization Customization Approach 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 Customized service is costly 19-6 Standardization Standardization Approach is based on establishing a set of rules and procedures and being sure that they are implemented consistently Retailers that use this approach: McDonald’s Wal-Mart IKEA Dollar General Save-A-Lot The McGraw-Hill Companies, Inc./John Flournoy, photographer 19-7 Cost of Customer Service High levels of customer service can be costly, but good customer service is worth an investment PROFITS COSTS It costs more to acquire customers than to generate repeat business 19-8 Customers Evaluate Service Quality Role of Expectations: based on knowledge and experience: Varies with types of retailers – discount vs department store Perceived Services – evaluations are based on perception Due to its intangibility, services are hard to evaluate accurately Stockbyte/Punchstock Images 19-9 Assessing Service Characteristics • Reliability: accuracy of billing, meeting promised delivery dates • Assurance (trust): guarantees and warranties, return policies • Tangibility: appearance of store and salespeople • Empathy: personalized service, receipts of notes and emails, recognition by name • Responsiveness: returning calls and emails, giving prompt service 19-10 Perceived Service Tangibility Reliability Cues used to assess service Assurance Empathy Responsiveness Gaps Model for Improving Retail Customer Service • 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 19-12 19-13 Closing the Knowledge GAP • Customer research • More interactions between managers and customers • Better communications between managers and service providers 19-14 Market Research Comprehensive Studies Gauging Satisfaction with Individual Transactions Customer Panels and Interviews Interacting with Customer Customer Complaints Feedback from Store Employees Steve Cole/Getty Images The service gap is reduced ONLY when retailers use this information to improve service 19-15 Customer Complaints Information about merchandise and its quality Information about services This feedback can be used for buyers, planners and customer service representatives Retailers need to encourage complaints because most customers will not complain Royalty-Free/CORBIS Complaints are a source of information for retailers 19-16 Closing the Standards GAP • High quality service commitment • Define the role of service providers • Measure service performance • Innovative solutions • Set service goals 19-17 What Does Good Customer Service Mean? • Retailers need to provide clear definition of this to employees • Description of service must be specific so expectations are clear • Service goals should be measurable customer surveys mystery shoppers Royalty-Free/CORBIS 19-18 Closing the Delivery GAP • Information and training • Instrument and emotional support • Internal communications • Reduce conflicts • Empower employees • Providing incentives 19-19 Support for Service Providers 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 The Target of Empowerment: Excellent Customer Service 19-20 Benefits to Employee: Stimulates initiative Promotes learning Teaches responsibility Manager’s Approach: Provide guidance to employees Steve Cole/Getty Images Train employees to the challenge 19-21 Empowerment is Not for Everyone • Some employees will not take the responsibility • It is expensive or some standardized retailers • Empowerment idea is not embraced by all cultures 19-22 Using Technology Retailers are using technology to assist sales associates in providing customer service Kiosks: -Kiosks can offer opportunity to order merchandise not in (c) image100/PunchStock store -Kiosks can free employees to deal with other customer requests -Customers can use kiosk to learn more about merchandise -Kiosks can provide customer solutions 19-23 More Technology • Hand Held Scanners – help to provide customer service by allowing customers to scan large merchandise instead of struggling with the product to checkout Nancy R Cohen/Getty Images • Intelligent Shopping Assistants – a device connected to a shopping cart with customer database to provide personalized information to shoppers 19-24 Closing the Communications GAP The difference between the service provided by the retailer and the service actually delivered Realistic commitments Corporate ideas – reality of store operations need to be communicated Managing customer expectations • Provide explanation • Describe how retailer is improving situation • Provide accurate info at point of sale 19-25 Service Recovery • Listen to the customer • Provide a fair solution Distributive fairness Procedural fairness • Resolve problem quickly Reduce number of contacts Give clear instructions Avoid jargon 19-26 What’s Fair? Distributive fairness – customers want to get what they paid for Procedural fairness – perceived fairness of the process used to resolve complaints • Did the employee collect information about the situation? • Was this information used to resolve the complaint? • Did the customer have some influence over the outcome? .. .19- 2 Store Management Layout, Design and Visual Merchandising Managing the Store Customer Service 19- 3 Services Offered by Retailers 19- 4 Customer Service Strategies... service promise 19- 12 19- 13 Closing the Knowledge GAP • Customer research • More interactions between managers and customers • Better communications between managers and service providers 19- 14 Market... Royalty-Free/CORBIS 19- 18 Closing the Delivery GAP • Information and training • Instrument and emotional support • Internal communications • Reduce conflicts • Empower employees • Providing incentives 19- 19 Support