Customer Service Management

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Customer Service Management: 

Customer Service Management

Ray Croc of McDonald’s: 

Ray Croc of McDonald’s Q – quality S – service C – cleanliness V – value 14000 customer satisfaction departments - their restaurants

Paradigm Shift: 

Paradigm Shift Organizations being more customer driven Customer focus Customer value driven Customer driven core competencies

In other words: 

In other words The focus has changed from ‘finding customers for products’ to ‘finding products for customers’

Being customer driven is different from being market driven: 

Being customer driven is different from being market driven

Market growth, market attractiveness, target markets are market drivers: 

Market growth, market attractiveness, target markets are market drivers ‘appointing’ the customer to evaluate the firm’s value added process - is being customer driven

Research shows that: 

Research shows that 82% of customer dissatisfaction stems from product or service shortcomings Out of that, 80% ie. 65% of customer dissatisfaction are attributed to service shortcomings Every 2 out of 3 cases of customer dissatisfaction stems from customer service dissatisfaction

Organizations are lulled into a false sense of security, because few customers actually complain: 

Organizations are lulled into a false sense of security, because few customers actually complain

They just go away to competition: 

They just go away to competition On an average, they relate their dissatisfaction or bad experience to at least 10 – 15 people. At least 5% of these people would be influenced not to purchase the product in future

What happens when the customer is satisfied?: 

What happens when the customer is satisfied? He will probably talk about it to 5 others. Again, 5% of this audience may turn into new customers. Therefore the risks an organization takes on a dissatisfied consumer far outweighs the opportunities presented by satisfied customers

Why this concern now?: 

Why this concern now? 3 basic changes are taking place Rapid technological change Increasing global competition Demanding customers

Technological changes: 

Technological changes Flattened organizational hierarchies Changed production processes Improved quality and reduced defects Splintered markets into microsegments Mass advertising proving inadequate

Competition: 

Competition No longer confined to national boundaries Geographical distances neutralised by technology Leveraging local strengths

Customer: 

Customer More knowledgeable and aware (savvy) Demands good ‘consumer value’

A firm must know what a customer wants today or will want in the future to remain in the consideration set of desirable firms to buy from: 

A firm must know what a customer wants today or will want in the future to remain in the consideration set of desirable firms to buy from

What can be done?: 

What can be done? How can we do it better?

Identify components / attributes that convey ‘value’ – from the customer’s point of view: 

Identify components / attributes that convey ‘value’ – from the customer’s point of view

The firm’s internal processes: 

The firm’s internal processes Innovation must be given free and fair opportunity to be expressed and rewarded.

What are the gaps in perception?: 

What are the gaps in perception? Customer – requirements vs expectations Management – employees vs customers

Customer Service Management is a philosophy: 

Customer Service Management is a philosophy It is not a destination. It is a journey. The bar keeps getting higher, the moment it is scaled

Regardless of Industry, there is a strong positive correlation between : 

Regardless of Industry, there is a strong positive correlation between Customer satisfaction Customer retention Employee satisfaction Profitability

Organizations rated high in service: 

Organizations rated high in service Enjoyed an average of 7% price premium Were 12 times more profitable Grew twice as much as the rest of competition

More than 40 years ago, Peter Drucker defined the purpose of business as the creation and retention of satisfied customers: 

More than 40 years ago, Peter Drucker defined the purpose of business as the creation and retention of satisfied customers

As more and more products get undifferentiated,: 

As more and more products get undifferentiated, Customer service becomes the vital ‘differentiator’

Customer satisfaction leads to : 

Customer satisfaction leads to Greater product/brand loyalty Reduced vulnerability to price wars Commanding price premiums Expansion of cutomer base Surpluses being channelised to reinvestment in new product development.

Customer Service is not the Marketing Department or the Service Department responsibility: 

Customer Service is not the Marketing Department or the Service Department responsibility Customer Service is every employee’s responsibility. It is an incumbent, organizational responsibility

Slide 27: 

Any airline can take you from place to place, but it’s what happens to you between take-off and landing that makes the difference Naresh Goyal,Chairman Jet Airways