Low performing customer service staff in lazmall channel of lazada vietnam

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business HO HOANG VIET LINH LOW PERFORMING CUSTOMER SERVICE STAFF IN LAZMALL CHANNEL OF LAZADA VIETNAM MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2020 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business HO HOANG VIET LINH LOW PERFORMING CUSTOMER SERVICE STAFF IN LAZMALL CHANNEL OF LAZADA VIETNAM MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: Assoc.Prof.Dr NGUYEN THI MAI TRANG Ho Chi Minh City – Year 2020 Contents ACKNOWLEDGEMENT EXECUTIVE SUMMARY LIST OF ABBREVIATIONS: LIST OF TABLES LIST OF FIGURES Company background Symptoms 11 Problem identification 15 3.1 Potential problems 16 3.1.1 The first possible problem: Low performing Customer Service staff 17 3.1.2 The second possible problem: Complicated process 23 3.1.3 The third possible problem: Competitive market with increase in customer demand 25 3.1.4 Bad experience with product quality and delivery service 28 3.2 Problem validation 32 3.2.1 Eliminating complicated process as main problem 32 3.2.2 Eliminating competitive market with increase in customer demand as main problem 32 3.2.3 Eliminating Bad experience with Product quality and Delivery service as main problem 33 3.2.4 Identify Low performing CS staff as the main problem 35 Justify the importance of Low performing CS staff 35 Potential causes 38 5.1 Potential cause 1: Stress at work 38 5.1.1 Potential sub-cause 1: Lack of headcount due to wrong forecast 38 5.1.2 Potential sub-cause 2: Too much distracting noise 40 5.2 Potential cause 2: Poor work engagement 41 5.2.1 Potential sub-cause 1: Lack of bonding in team 42 5.2.2 Potential sub-cause 2: Unpleasant task 44 5.2.3 Potential sub-cause 3: Limited praise and recognition 45 5.3 Potential cause 3: Robotic staff 46 5.3.1 Potential sub-cause 1: Lack of soft skill agent 46 5.3.2 Potential sub-cause 2: Limited learning and development opportunity 48 5.4 Cause validation 49 Alternative Solutions 51 6.1 Alternative solution 1: Design a set of team building activities 52 6.2 Alternative solution 2: Organize a buddy program 54 6.3 Alternative solution 3: Change in appraisal scheme to motivate agents 56 6.4 Solution justification 58 Change plan design 60 7.1 Objectives 60 7.2 Expected outcomes 60 7.3 Plan implementation 61 Conclusion 66 Supporting information 66 9.1 Methodology: 66 9.2 Interview guide 66 9.3 Transcript 69 REFERENCES 83 APPENDIX 89 ACKNOWLEDGEMENT First of all, I would like to deliver my gratitude to ISB for giving me such valuable opportunity to apply all knowledge I have learned during my master of business administration course I have been inspired a lot by enthusiastic and experienced professors and lecturers during my academic years Specifically, I would like to sincerely thank my thesis supervisor - Assoc.Prof.Dr Nguyen Thi Mai Trang for her careful and clear guidance I cannot have completed this thesis without her advice and support She is the one who is delivering me the very first knowledge about problem solving in organization with all her passion In addition, I would like to express my appreciation to all people who have co-operated very well with me for my in-depth interviews and are very willing to spend their precious time to share valuable information for me to add in my thesis Last but not least, I want to show my grateful attitude to my family members for the sympathy as they are always stand by me during my master thesis period EXECUTIVE SUMMARY Customer satisfaction is a term that many companies are trying to achieve in this modern economy, as customer is the base for any enterprise to survive However, in recent report of Lazada, Lazmall team has been achieved lower customer satisfaction than target, which goes against expectation of the management team in the company Lazmall team has been founded in 2018 with the purpose to bring out the extraordinary experience for customers who buy authorized products on this platform Therefore, in-depth interviews were conducted and data were collected to analysis the situation of Lazmall team With the strong support of literature, the research comes up with some potential problems: Low performing customer service staff, complicated process, competitive market with increase in customer demand and bad experience with product and delivery service After validation, the main problem as low performing customer service staff has been revealed Further analyzing, the research shows some potential causes for the main problems, which are: Stress at work, no work engagement and robotic staff After that, the main cause was identified as lack of work engagement, and some alternative solutions for the main cause were designed The best solution to solve the main cause has been chosen basing on its feasibility and the adaption with company‘s situation In a word, the thesis investigate the central problem in Lazmall team of Lazada, the main cause of that problem and the proposed solution, in order to improve the customer satisfaction score in Lazmall channel LIST OF ABBREVIATIONS: CS: Customer service CSAT: Customer satisfaction DSAT: Dissatisfaction KPI: Key Performance Indicator SLA: Service Level Agreement Backlog: Ticket of customer that is not resolved within SLA NPS: Net Promoter Score SKU: Stock keeping unit SOP: Standard operation process LIST OF TABLES Table CSAT monthly of Lazada in 2019 Table Ticket related to process of Lazmall in 2019 Table E-commerce usage habit in Vietnam Table Order beyond promised date divided by delivery method Table Problem with Lazmall products received in 2019 Table Call productivity of agents in campaign 11.11.2019 Table Employee satisfaction toward company‘s physical working environment Table Employee satisfaction of Lazada in 2019 Table Quality scorecard result divided by criteria Table 10 Educational background of customer service employees in Lazada Table 11 Years of experience in same industry prior to Lazada Table 12 Cost for alternative solution Table 13 Cost for alternative solution Table 14 Cost for alternative solution Table 15 Cost for selected solution Table 16 Action plan implementation LIST OF FIGURES Figure Company structure of Lazada – Dec 2019 Figure Lazmall customers by age – 2019 Figure Lazmall customers by gender – 2019 Figure Lazada customers‘ income by channel Figure Lazada Customer service structure Figure Lazmall CSAT and DSAT monthly Figure CSAT Lazmall break down by agent‘s tenure Figure Lazmall functional structure Figure Lazmall DSAT root cause Figure 10 Potential problem diagram Figure 11 Lazada CS monthly quality score 2019 Figure 12 Quality score by tenure of Lazmall agent Figure 13 Lazada monthly backlog per headcount 2019 Figure 14 Lazmall DSAT deep dive Figure 15 CS mistake contribution to DSAT in 2019 Figure 16 Process of handling transaction Figure 17 Traffic of users in Vietnamese Ecommerce Figure 18 Criteria cared by customer during shopping Figure 19 DSAT counts by contact reason Figure 20 Shipping and delivery issues contribution in Lazmall Figure 21 Net promotion score between Ecommerce site Figure 22 Potential causes Figure 23 Process of transaction handling in Lazada Figure 24 Updated cause effect map Company background Founded in 2012, Lazada Vietnam is a part of Lazada group – a Southeast Asia‘s leading Ecommerce platform presenting in six countries Lazada Group is majority owned by Alibaba Group Holding Limited Lazada Vietnam is one of the pioneers in E-commerce industry, with its vision is to change Vietnamese consumer behavior, from traditional market to an online platform On that platform, sellers can provide products from various categories like: Fashion and accessories, Health and Beauty, Groceries, Electronic products, Sport and toys, while shoppers can easily look for a product they want In a word, Lazada‘s mission is to deliver an ―Effortless shopping experience‖ to buyers, by offering them a huge marketplace whereby they can approach online to millions of products from thousands of sellers Focused on delivering an excellent customer experience, Lazada Vietnam offers multiple payment methods including cash-on-delivery, comprehensive customer care and hassle-free returns through its own firstand last-mile delivery arm supported by different logistics partners Organizational structure: James Dong is the Chief Executive Officer of Lazada Vietnam and Lazada Thailand James joined Lazada in June 2018 as the CEO of Lazada Thailand and was appointed CEO of Lazada Vietnam one year later, in addition to his existing role Prior to joining Lazada, he was the Head of Alibaba Group Globalization Corporate Development and Business Assistant to Group Chief Executive Officer, Daniel Zhang Under the CEO, there are six different departments, of which Customer Service belong to Customer care department Figure 1: Company structure of Lazada – Dec 2019 (Source: Internal Lazada report 2019) Linh: What alternative solutions can be applied to improve the current situation of Lazmall CS team? Ms Tu: Organizing teamwork activities or kind of competition to consolidate the relation in team Linh: Thank you so much Ms Tu for spending your valuable time with me to day for the interview Wish you a fruitful working day Ms Tu: You too, goodbye In-depth interview 4: Interviewer: Ho Hoang Viet Linh Interviewee: Ms Duong Thi Suong Title: Lazmall CS agent Age: 22 years old Working experience: More than years of experience in Lazada Customer service agent position Linh: Good morning First of all, I would like to thank you for spending time for the meeting with me today Could you please introduce about yourself (name, age, work experience) Ms Suong: Hello Ms Linh, my name is Duong Thi Suong and I‘m the Lazmall agent I have been working with Lazada for more than year Linh: What factors you think lead to the decrease in customer satisfaction of Lazmall CS team recently? Ms Suong: I think because customers have increase in demand When customers complain to us, they always compare that why Shopee and Tiki agents provide solution for them in this way but Lazada agents answer in other way They also compare the policy, the products and the price with other platforms They should be understood that different online platform has different policy and we just follow our policy Linh: What are your difficulties so far that lead to decrease in your performance and the whole Lazmall team's in recent month? 75 Ms Suong: I was forced to join Lazmall CS team I used to work in non-Lazmall team, and I was quite comfortable with that However, since I was picked to Lazmall, my performance tends to decrease We have to end up the call in hurry, and sometimes we avoid asking customers whether they still have and further issues, which is mandatory in the quality scorecard Hence, QA often minus our quality score when those call are audited Our team leader always urges us to idle all the time and we cannot let any customer waiting on queue for so long Linh: What you expect to be changed, in order to improve the current situation of Lazmall team? Ms Suong: I hope the process of Lazmall can be more supportive and faster for customers, otherwise, they will keep comparing and complaining In addition to that, I hope Lazmall team can co-operate with each other better, especially when there‘s someone new joining the team Linh: What solutions can you suggest to solve the above root cause, in order to increase customer satisfaction? Ms Suong: I suggest there should be some sharing session between the experienced agents to newbies like me Linh: What is your opinion about the impact of the above solution and what are the possible restrictions? Ms Suong: The benefit is newbies can improve the quality score and have chance to learn the way to deal with difficult customers from tenured agents The restriction is time, because we have to online with customers hours per day Linh: What alternative solutions can be applied to improve the current situation of Lazmall CS team? Ms Suong: I hope Lazmall team can co-operate with each other better, especially when there‘s someone new joining the team I remember months ago when I first join with Lazmall team, I find it difficult to get on with tenure agents We hardly talked to each other because they only communicate with some of their close colleagues Linh: Thank you so much Ms Suong for spending your valuable time with me to day for the interview Wish you a fruitful working day Ms Suong: Thank you, my pleasure for this sharing 76 In-depth interview 5: Interviewer: Ho Hoang Viet Linh Interviewee: Ms Do Mai Quyen Title: Lazmall CS agent Age: 21 years old Working experience: Less than months of experience in Lazmall Customer service agent position Linh: Good morning First of all, I would like to thank you for spending time for the meeting with me today Could you please introduce about yourself (name, age, work experience) Ms Quyen: Hello Ms Linh, my name is Do Mai Quyen and I‘m a newbie of Lazmall agent I have been working with Lazada for just less than months Linh: What factors you think lead to the decrease in customer satisfaction of Lazmall CS team recently? Ms Quyen: The product quality, I think In Lazmall, more than 50% of the contact reason for complaint is about ―Problem with items received‖ and ―where is my order‖ The Lazmall products fulfilled by Lazada often miss freebies and this issue once happens, it will always happen systematically We also have a lot of issues with the logistic partner, which we have to handle more complaints from customers We really understand with customer that when they choose the Express service means they are willing to pay more for delivery with the demand of getting the goods for urgent purpose, otherwise, customer should have chosen Standard or Economy method Most customer complain with us about the ―Same day delivery‖, because it‘s already beyond they date that logistic partner commits It‘s not our fault and the irrational thing is we cannot push 3PL Linh: What are your difficulties so far that lead to decrease in your performance and the whole Lazmall team's in recent month? Ms Quyen: What makes me distracted the most is the noise we are hearing every day? Usually in the pick time of the day, when volume is high, the upper – level people, like team leader and Service level monitor are screaming loudly to urge us to more quickly We feel really stressed because of that noise, while we are very focusing in our task In addition to that, almost the trainings we can join related to the SOP of Lazmall training We hardly have 77 chance to join any soft-skill training of company Maybe because of the updates in knowledge is too much, so we have to prioritize the time for SOP training, to make sure we always deliver correct solution Otherwise, our quality score will be down seriously Linh: What you expect to be changed, in order to improve the current situation of Lazmall team? Ms Quyen: I expect Lazada can improve the product quality and the logistic partner in future In the meantime, I hope the noise issue can be solved soon, especially during campaign time Linh: What solutions can you suggest to solve the above root cause, in order to increase customer satisfaction? Ms Quyen: The standard operation process of Lazada is long, so it takes time for us to recall knowledge we were trained It would be great if we can have immediate support from our peer, as you know, although my Team leader does support to answer my question, but there are many times she is busy with her tasks, or maybe she joined meeting with the manager I hope everyone in the team can discuss more and share experience as well Linh: What is your opinion about the impact of the above solution and what are the possible restrictions? Ms Quyen: I believe Lazmall‘s quality score and CSAT score will increase, because we can give quick solution to customer with our peers‘ support Linh: What alternative solutions can be applied to improve the current situation of Lazmall CS team? Ms Quyen: At first, I was working as a non-Lazmall agent, and it was the time when there was lack of headcount among Lazmall, I was interviewed and forced to transfer to this channel The management team told me that it is promising over there, but in fact, I see more difficulties doing Lazmall channel This is the reason I‘m not happy working in this task Therefore, I suggest that the process of recruiting Lazmall agents should be changed, basing on both interest and performance of employees Linh: Thank you so much Ms Quyen for spending your valuable time with me to day for the interview Wish you a fruitful working day Ms Quyen: You are very welcome 78 In-depth interview 6: Interviewer: Ho Hoang Viet Linh Interviewee: Ms Hoang Minh Anh Title: Lazmall customer Age: 25 years old Purchasing experience: More than years of experience buying products online Linh: Good morning First of all, I would like to thank you for spending time for the meeting with me today Could you please introduce about yourself (name, age, work experience) Ms Minh Anh: Good morning, my name is Hoang Minh Anh and I have more than years shopping online on various website, including Lazada Linh: Do you buy Lazmall products and what you expect when buying those products? Ms Minh Anh: Yes of course! Lazada advertises a lot of benefit for customers buying Lazmall products I expect an outstanding service quality However, when I have problem with the item received, the way that a Lazmall CS handle my issue is similar to the time I bought a normal product and contacted to non-Lazmall agents I did not see any special priority regarding the post-purchase support here‘ Linh: What you expect when contacting customer service staff of Lazmall? Ms Minh Anh: Faster resolution, less waiting time and nicer behavior Linh: What is your level of satisfaction when purchasing Lazmall product? And please give the reasons for your choice Ms Minh Anh: Well, maybe medium low! I chose Lazmall product because Lazada guarantee genuine quality and an express delivery Last time, I bought a Lazmall purse for my friend‘s birthday, but they did not deliver on time and it ruined my plan, such a terrible experience Linh: What is your feedback toward Lazmall customer service? Ms Minh Anh: Quite lack of responsibility in terms of solving customer‘s issue I feel like talking with a robot with no understanding and no empathy to customer The answer they provide is not in time, which makes me feel irritated 79 Linh: What is your suggestion to Lazmall customer service team to make customer happier? Ms Minh Anh: They staff should be more caring and spending more time to understand customers better, like agents in Tiki Apparently the Lazmall frontline staff is answering me like a robot, all of them answer similar to each other For example, when showing empathy to customer, every time I contact, they always say: ―We are so sorry for the inconvenience you are facing‖ I feel like they not really empathize with me Linh: Thank you so much Ms Minh Anh for spending your valuable time with me to day for the interview Wish you a fruitful working day Ms Minh Anh: Ok Thank you and have a good day too In-depth interview 7: Interviewer: Ho Hoang Viet Linh Interviewee: Ms Nguyen Thuc Hien Title: Lazmall customer Age: 27 years old Purchasing experience: More than years of experience buying products online Linh: Good morning First of all, I would like to thank you for spending time for the meeting with me today Could you please introduce about yourself (name, age, work experience) Ms Thuc Hien: Good morning, my name is Nguyen Thuc Hien and I have more than years shopping online on Lazada Linh: Do you buy Lazmall products and what you expect when buying those products? Ms Thuc Hien: Yes sometime I expect good quality However, when I purchased on Lazmall, the item still got problems like wrong delivered, broken or missing freebies This really got me lose hope about Lazmall products in general, because I know that I had to pay more, but the quality still not too outstanding and worthy Linh: What you expect when contacting customer service staff of Lazmall? Ms Thuc Hien: Well, I just hope they can understand my situation and resolve it at first place I not want to contact many time I not want to wait in long time for the resolution 80 Linh: What is your level of satisfaction when purchasing Lazmall product? And please give the reasons for your choice Ms Thuc Hien: I‘m not satisfied when the products have problem because the return process is long and complicated for customer Linh: What is your feedback toward Lazmall customer service? Ms Thuc Hien: Bad customer service They promise me again and again and ask me to wait for 48 hours more than two times I am loosing trust to Lazmall service The CS staff was talking to me so robotic and unfriendly, like they are in rush Linh: What is your suggestion to Lazmall customer service team to make customer happier? Ms Thuc Hien: They staff should improve their softs-kill and should be friendlier to customers In addition to that, we expect an appropriate solution to Lazmall customers, provided by the staff in a professional manner Linh: Thank you so much Ms Thuc Hien for spending your valuable time with me to day for the interview Wish you a fruitful working day Ms Thuc Hien: Goodbye and have a happy day In-depth interview 8: Interviewer: Ho Hoang Viet Linh Interviewee: Mr Nguyen Duc Hung Title: Lazmall and non-Lazmall customer Age: 28 years old Purchasing experience: More than years of experience buying products online Linh: Good morning First of all, I would like to thank you for spending time for the meeting with me today Could you please introduce about yourself (name, age, work experience) Mr Hung: Good morning, my name is Nguyen Duc Hung and I have more than years shopping online on Lazada Linh: Do you buy Lazmall products and what you expect when buying those products? Mr Hung: Yes, of course Because I expect better product quality with more guarantee policy from Lazada Sometime I also buy non-Lazmall products as well 81 Linh: What you expect when contacting customer service staff of Lazmall? Mr Hung: I not understand why sometime I call Lazada, the staff asks for my issues and stated that they understood my issue, but they asked me to wait for them to transfer to Lazmall customer service staff It really takes my time and sometime, I decided to hang up the phone because of that I not care who will solve my problem, I just want to have the solution in time Linh: What is your level of satisfaction when purchasing Lazmall product? And please give the reasons for your choice Mr Hung: Not as good as my expectation Sometimes problems with item received still happened, and the delivery time is not always as promised Linh: What is your feedback toward Lazmall customer service? Mr Hung: Not so impressive comparing to non-Lazmall line I mean their skills, behavior and knowledge, in my opinion are similar to non-Lazmall agents Linh: What is your suggestion to Lazmall customer service team to make customer happier? Mr Hung: They should show more enthusiasm when interacting with customers and be able to bring a wow service to customers Linh: Thank you so much Mr Hung for spending your valuable time with me to day for the interview Wish you a fruitful working day Mr Hung: It is my pleasure for this interesting talk 82 REFERENCES (1) Levesque TJ, McDougall GHG Customer dissatisfaction: The relationship between types of problems and customer response Revue Canadienne des Sciences de l'Administration 1996 09;13(3):264-276 (2) Wiles MA The effect of customer service on retailers' shareholder wealth: The role of availability and reputation cues J Retail 2007; 83(1):19-32 (3) Kumar Madupalli R, Poddar A Problematic customers and customer service employee retaliation The Journal of Services Marketing 2014;28(3):244-255 (4) Choraria S, Bhattacharjee SB Gaining customer satisfaction through frontline employee orientation: A Customer-Centric Approach Journal of Applied Management – Jidnyasa 2012;4:26-34 (5) Wu Y, Tsai C, Hsiung H, Chen K Linkage between frontline employee service competence scale and customer perceptions of service quality The Journal of Services Marketing 2015;29(3):224-234 (6) Bahadur W, Aziz S, Zulfiqar S Effect of employee empathy on customer satisfaction and loyalty during employee–customer interactions: The mediating role of customer affective commitment and perceived service quality Cogent Business & Management 2018 01;5(1) (7) Bove LL Empathy for service: benefits, unintended consequences, and future research agenda The Journal of Services Marketing 2019;33(1):31-43 (8) Beatson A, Lings I, Gudergan SP Service staff attitudes, organisational practices and performance drivers Journal of Management and Organization 2008 05;14(2):168-179 (9) Csikosova A & Maria J & Katarina C Increasing of customer satisfaction quality in relation to the assessment of processes efficiency – Case study Quality - Access to Success 2018; 19:55-59 (10) Djandji M Will Vietnamese e-Commerce competitions still have enough vacancy for new warriors? 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Bạn đánh hỗ trợ Nhân viên Chăm sóc Khách hàng? Good, I'm satisfied/ Tốt, tơi hài lịng Bad, I'm not satisfied Khơng, tơi chưa hài lòng 2: What would you like our agent to improve?/ Theo bạn, Nhân viên Chăm sóc Khách hàng Lazada cần cải thiện gì? Knowledge/ Kiến thức nghiệp vụ Response Time/ Thời gian phản hồi Friendliness/ Thái độ thân thiện Others/ Khác 3: What else would you like Lazada to improve?/ Theo bạn, Lazada cần cải thiện gì? Delivery Experience/ Dịch vụ Vận chuyển Product Quality/ Chất lượng Sản phẩm Others/ Khác 4: Feedback/Comments/ Ý kiến khác 89 ...UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business HO HOANG VIET LINH LOW PERFORMING CUSTOMER SERVICE STAFF IN LAZMALL CHANNEL OF LAZADA VIETNAM MASTER OF BUSINESS... complicated process of Lazmall and low performing Customer service staff 3.1.1 The first possible problem: Low performing Customer Service staff In the interview with Mr Khoa – Head of Customer care... choose the Low performing staff as main problem to be further analyzed Justify the importance of Low performing CS staff Customer service includes the staff working in a set of procedure in order