Customer Relationship

Management
The Basics
Day 1
Thokchom Heeraj Anand

Outline for today

Introductions and welcome why are we here
today?
Customers, and customer service
Customer Identification exercise
What exactly do we mean by good customer
service?
Customer complaints best and worst examples
Managing customer expectations and complaints
Key attributes of an effective customer service

Applied knowledge
This course isnt just about giving you some of
the theory of delivering and improving an
effective customer service.
You can get that from reading books.
The course is about you developing practical
skills as well as knowledge and you will learn
most effectively after the course if you start to
make changes in the way you do things and
apply new ideas during your work

The fundamental belief of a customer

focused organisation

Customers are the

reason for work, not an
interruption of work.

What do we mean by the term

customer?
Anyone who interacts with us or the service
we provide, either directly or indirectly, or is a
affected by the quality of the product or
service, whether they are paying for it or not,
either indirectly or directly, whether they are
internal to the organisation or not.
They do not have to be in a contractual (i.e.
paying) relationship with us.

Customer, User, direct and indirect

is there a difference?
Customer person or organisation who receives or uses
something produced by us, regardless of whether they pay
for it or not.
User person or organisation who directly uses the
product/service, sometimes called end-user
Direct = direct recipient or user.
Indirect = indirect recipient or user. They may be 2 or 3 steps
away from us, but our quality affects them.
E.g. I didnt buy the computer I use in my office, I am not a
direct customer of the computer supplier, nor of the
purchasing department but I am a user or indirect customer.

Customer, User, direct and indirect

Your organisation has all of these.
MINI EXERCISE QUESTION - Should you treat
any of them any differently? Or should they
all be treated in the same way ?

Internal and external customers

Staff who work within your organisation are
internal customers of each other.
You are all customers yourselves

Individual Exercise
Now try and , then try and group or categorize
the internal customers
For example by: size, location, power,
influence, reputation, quality what is
important to you

Internal - external
Staff at other branches/depots/offices/sites in
Hull may be internal customers of both your
Hull site and, for example, of your stockyard
in Pontypridd (South Wales) and storerooms
in Leeds.
Do they receive the same service from each
place/site within your organisation?

External Customer Identification exercise

Who are your external customers?
Remember Direct = direct recipient/user.
Indirect = indirect recipient/user e.g. may be 3
stages away from us, but our quality affects
them.

QUESTIONS
How do your customer see your
organisation?
Is it a pleasure to do business with you?
Do they look forward to it?
Are your systems easy to use?
Are your people easy to deal with?
Are staff friendly and helpful?
Do they enjoy doing business with you?
Are they delighted to do business with you?

Question
How do you think your customers see you?
Would they classify your organisation as being
one of their best or worse customers?
There will be an exercise to help you think in
more detail about this later on this.

Mini exercise
When you hear the words

customer service what

does it make you think of?

Terms associated with customer

service

Customer focused
Delighting the customer
Satisfying the customer
Meeting the customers need
Exceeding the customers need.
Giving the customer what they want, not what
we think they want.

What do we mean by the term

customer service?
For the purpose of today we will take it mean that it
is the set of behaviours which an organisation
undertakes during its interaction with its customers
and how customers perceive the behaviours.
Service quality comprises the degree to which
attributes of the service desired by the users are
identified and incorporated in the product and
service and the degree to which desired levels of
these attributes are perceived by the users to be
achieved (Jacques Horovitz, 1987)

Customer service makes the

difference
Once differences between competitors are
fairly similar then good customer service
makes the difference for customers.
Once: price, delivery times, quality of product
are similar then customer service makes the
difference as to whether a customer comes to
you, stays with you, or goes elsewhere

In other words
Its not always what you do.
Its how your customers perceive what you do
that makes the difference

Young, or old?

Young, or old?

A Duck . . . Or a Rabbit?

Moment of truth:
Defined as Any episode in which a customer
comes into contact with any aspect of the
organisation and gets an impression of the
quality of service (Albrecht 1988).
Good customer service is all about improving
the moment of truth

But it isnt easy, right?

Difficulties/Problems with measuring and

assessing the quality of customer service
Extremely subjective
Quality is more frequently judged by price because there are less
likely to be other measurable factors. BUT once price
amongst your competitors is similar to your prices; then its
customer service that makes the difference
Each customer is different and has a different perception of what
they expect/need/demand/want
With products a customer can see it before they buy it, with a
service the quality can only be experienced

Its not what you do but how

others see it....
The quality of a service is determined by the
users perception (Murdick, Renders, Russel,
1990).
Its not what you do, nor the way that you do
it, but how your customers perceive what
you do and how you do it that determines
the quality of your customer service.

Discussion point
Its not what you do, nor the way that you do
it, but how your customers perceive what
you do and how you do it that determines
the quality of your customer service.
To what extent do you think that the above
statement is true or false?

Its easy to spot poor quality, sometimes

difficult to identify good quality.
When evaluating whether or not a product or
service meets his or her needs a customer will
typically wrap everything into one.
This means that everything to do with the
product /service is considered together as
part of the overall package. What this means
is that for your organisation to be able to
provide a quality product/service you have to
get everything right. The overall package.

Getting it right
- the overall package
Getting some of it right, or some of it perfect
(whatever perfect is) is no good if something
else isnt right. So your perfect
whatdoyamacallit may be let down and
regarded as poor by the customer by the surly
member of staff who takes 3 days to return a
customers phone call because they have
better things to, or may be let down by the
delivery being late.

Getting it right
the overall package
A great product and your organisations
reputation may be let down by the delivery
driver who walks dirt into the customers
carpet or who is scheduled to arrive at 2pm
but arrives at 4:30 without having let the
customer know.
Your subcontractors and suppliers affect your
reputation

Exercise the overall package

What do you think might typically form part of
your organisations overall package from a
customers perspective?
And to what extent do your suppliers and
subcontractors affect your overall package?
you think different customers have different
perspectives?

What types of things or

attributes are customers likely to
consider as being part of your
overall package?

Customers will typically consider all the

following as being part of the package:

Product or service reliability.

Consistency.
Speed and timeliness of delivery.
Accuracy of paperwork.
Courtesy of telephone answering.
The value of information you give e.g. accuracy and
useability of any instructions on how to use it.
The service provided by the delivery organisation.
The attitude of staff - can do or not my job guvnor

Getting it right
the overall package
Customers include everything as part of the
package - so you can never us the excuse that is
the other departments responsibility, or Its the
delivery drivers fault, or Its a computer problem
that caused it.
A customer expects everything to meet their
expectation so you have to ensure that everything
which forms part of the package is spot on even
if part of the service is outside your control or
authority. And that may be difficult to do.

The two dimensions of quality customer

service
1 procedural dimension
Systems, procedures and processes - the way
how things get done. The mechanisms by
which customers needs may be met.
Normally they are systematic, formal and
organised.
2 personal dimension
The human or interpersonal side.

Personal dimension
The human or interpersonal side includes the
attitudes, behavioural patterns and verbal
skills which are present in every interaction
with the customer.
Unless the organisation is customer focused
and staff are customer focused. Its easy to
lose sight of how important the personal
touch is. Things such as our: appearance,
attitude, communication style, telephone
manner, friendliness,etc

 An organisation can manage the procedural

dimension.
An organisation can help develop the
personal dimension and set standards.
As individuals you can improve, develop and
enhance your personal dimension.

Short break ?

Service characteristics
Before you can systematically start to improve
your service you need to understand its
characteristics.
The next exercise will help you do this.

What did you list for excellent

customer service?
?

Typical factors you might have listed for

excellent customer service

Knowledgeable and friendly staff

Professional manner of staff
Staff listened to me
They did what they said they would do
They seemed to care
They responded to me promptly
They seemed genuinely concerned
They smiled
They treated me as a real human being; not a distraction
They seemed proud of what they did and of the organisation
Courteous, friendly and efficient service

What did you list for poor

customer service?
?

Typical fact is you might have listed under

poor customer service

Nobody seemed to have a clue what they were doing

Nobody explained
I was kept waiting
They ignored me
They treated me as though it was my fault
They never got back to me; I had to chase them
They blamed it on the system, the managers, the
computers, their suppliers,
They fobbed me off
They were busy doing something else and I was an
interruption and a distraction from their main work

How long did your reactions to poor customer

service last?

Hours
Days
Weeks
Months
Years
A lifetime
And how many people have you told about
the poor service?

Typically
Feelings about really bad experiences last for
years?
We tell at least five other people (and how
many people do they then tell?).

The organisation rarely knows how badly we

feel

Some fundamentals

4 fundamental principles for delivering good

customer service
1 The organisation is fully committed to providing
excellent customer care and the customer is the key
focus throughout the organisation.
2 All staff are aware of and committed to, the vision of
excellent customer care.
3 All staff are trained to provide the highest quality
customer care.
4 Systems and procedures are designed to enhance
customer care.
(F & R Bee 2003 reprint)

Loopholes in Customer Service

We tend to rely on anecdotal evidence.
We tend to only really believe the positive
things but often dont want to hear the
negative things.

Loopholes in Customer Service

We tend to over rely on the opinions of a
small number of highly articulate and or
wealthy customers particularly those who are
of high status.
We tend to ignore the views of customers who
we dont like or who we believe are difficult
customers.

Loopholes in Customer Service

We tend to ignore the views of one-off or new
customers as they dont understand our
systems.

Why should THEY have to understand YOUR

systems? If its difficult for them the new
customer wont become a repeat customer.

Loopholes in Customer Service

We tend to rely on feedback from complaining
customers which might give us a distorted
picture of the situation.
Conversely we tend to rely on a lack of
customer complaints as being an indicator
that everything is OK and our customers are
all very satisfied. WE MAY BE WRONG!

Loopholes in Customer Service

We tend to over rely on outdated conceptions
about our organisations customer service - if
it worked well 3 years ago it must still work
well today.
We tend to over rely on complaint filtering
systems. Often only very major complaints get
dealt with. Minor ones tend to get filtered out
so we dont know about them so we cant do
anything about them.

Customer Perception
Quality of a service is about customer
expectation and perception. Exactly the same
product or service may be perceived as being
good or poor depending upon the customers
expectations.
Customer perception of the product or
service is often just as or even more
important than the service itself!
Its not just what you do but the way that you
do it.

Customer expectations
Customer expectations change over time
(usually becoming more demanding) and are
influenced by their previous experiences and
their experiences of dealing with other
organisations.
Almost every customer is unique; but we can
categorise them.

Ways of categorising customers

Prospective customers i.e. not yet a customer and
thats always more customers than you already have
New
Old long term
Repeat customers
Local and regional
National and international
By how much they spend
By how quickly they pay

Mini discussion point

How does your organisation categorise its
customers?

Some facts
Typically 68% of customers are lost through
poor customer handling. i.e. They dont come
back. But its cheaper to keep customers than
to gain new ones
Customers are not obliged to tell you if they
are unhappy.
Customers are not obliged to tell you if they
are happy.

Complaints
Do we like complaints?
Customers dont just complain for the sake of
it! Nobody wants to complain; they complain
for a reason.
How we manage the complaint is crucial to
our reputation and to whether they will want
to do business with us again

Quick question
How would you as an individual feel if you had
made what you felt was a valid complaint, and
the organisation/company dismissed it as
being of no concern and not worth sorting
out?
What would you be likely to do?
Discuss

12 tips for resolving customer complaints

1. Treat the person as an individual who has feelings,
values and a sense of self worth
2. Let the customer have their say
3. Say you sorry to hear what has happened
4. Listen actively
5. Get the facts by questioning effectively
6. Keep an open mind, dont make assumptions
7. Dont argue or be defensive
8. Try and find out what outcome the customer wants

12 tips for resolving customer complaints

9. Concentrate on what you can do and explain what

you cannot do and why

10.Dont impose your own solution you must reach a
solution which the customer finds acceptable
11. Summarise and check that the customer
understands and agrees
12. Agree a timescale which is acceptable to the
customer for resolving the complaint

How do you currently manage complaints?

Note manage rather than handle or solve or
deal with.
Manage implies a pro active approach.
Do we allow the customer to complain in any
way they want to?
What systems and procedures do we have in
place?
Do we learn from them?

Exercise complaint handling

List the what happens when a complaint is received
by your organisation.
Who/where does it come from?
Verbal complaints...
Written complaints...
Where does it go?
What happens.......?
Any specific examples you can think of?
Are there any gaps in or problems with the system?
Procedural or personal?

A proactive view of customer complaints

Complaints are welcome, without them we cant
improve.
We learn from complaints.
We must make it as easy as possible for
customers to complain to us.
We take customers very, very seriously.
Customers really are right.
Solving a problem at our expense is an important
investment in our customers.

A proactive view of customer complaints

Customers must always be respected and treated
accordingly.
We want no unhappy customers. We will do
whatever it takes to make all our customers
satisfied and happy with our service.
We respond quickly to all our customer
communications.
The way in which we solve every customer
service problem has crucial or long-term
ramifications, not only on customer loyalty but
ultimately on the success of our organisation.

Beware of Complaint filtering

Or our complaints system filters out the
unimportant complaint so that only the
major complaints get properly dealt with.
Less important complaints dont get dealt
with.
Yet to the customer the complaint IS
important!

Question
Do you have any complaint filtering in
operation within your organisation?
Are you sure?
If you dont think you do then - How do you
really know that you dont?

Complaints difference between a complaint

and a suggestion eliminating the but
The word But is either a complaint or a
suggestion.
If its a complaint - sort it out!
If its a suggestion - it gives you the opportunity
to develop new product or service
differentiation. With differentiation you can
charge more for your product or service!

Complaints difference between a complaint

and a suggestion eliminating the but
E.g. Your chips were really nice, but the batter
on the fish was a bit soggy.
This is a COMPLAINT sort it out.
E.g. Your chips are really nice, but it would
have been nice to have had a choice of batter
or breadcrumbs on the fish.
This is really a SUGGESTION the customer
noticed good quality. If you eliminate the
but youll differentiate your product/service
and enhance customer loyalty.

Complaints LLOVE acronym

Love the customer
Listen to their complaint
Offer an apology
Verify the complaint/query
Execute a solution
Reward

Good customer service ?

A Possible definition
One possible definition of quality or good
customer service is that it is supplying
customers with what they want, to the
standard and specification they want, with a
predictable and acceptable degree of liability
and uniformity, and at a price that suits their
need

(Perfect Customer Care all you need to get it right first time by Ted Johns 1999).

Factors which could add value to the

customer service

staff displaying appropriate body language

staff being friendly on the phone
callers not being placed on musical hold
staff who actually know what they are talking about
appropriate opening hours
one-stop shop
approachable staff
friendly staff
user-friendly
prompt service or reason for delay is explained.

Factors which could add value to the

customer service

Friendly and helpful staff

Staff with ability to listen
Appropriate tone, pitch and pace of voice
Approachable staff
Staff displaying appropriate body language
How staff greet the customer
Understanding the customers needs
Staff with good soft skills

Did you spot anything the points on the 2 previous

slides had in common?

They are all virtually zero cost.

So how do we add value to the

customer experience?
It isnt easy
Need to know our customers needs inside out
this in itself is not easy
Need to be aware of different customers needs
Need to be aware of changing customer need
Need to know what our customers expect of us
Need to know what it is that our competitors do
differently or better than us - and learn from it
Need to be consistent, yet improve over time
Small things count

Adding value to the

customer experience?
How can you add value?
What can the organisation do?
What can you as individuals do to make a
difference?
Ideas and suggestions from you.

Ideas overcoming barriers to making

changes to improve customer service
Good ideas can often be ruined or killed
before they are even properly considered.
In order to improve our customer service we
might need to consider some new ideas and
not kill them off.
The next few slides are typical idea killers

Idea killers

We tried it last year and it didnt work

It would take too long
Its not my job to
You may be right, but...
Our department is too big
Our section is too small
We dont do it that way

Idea killers

We have always done it this way

If it aint broken it dont need fixin
It sounds ok in theory, but.
It would cost too much
Something that cheap obviously wont work
That company down the road tried it and they
wasted a lot of time and money and scrapped
it in the end

Idea killers

Its impossible
Its too simple
Its too complex
Its obviously not going to work
We need more time to research the full
implications
We need more time

Idea killers

Why should I bother

My staff are too busy
We are all suffering from stress
Our budget has been cut
Our team has its own way of working
Maybe next year well re-consider it

Idea killers
We need more . before we can implement
it
It seems like a good idea; but..
I need more information before I can make a
decision
I need others to make a decision before I can
make a decision
I can appreciate that there is a problem, but
I cant; because.

Problems the problem with problems

Customers are not bothered about your problems,
the problems of your supplier, your manufacturer,
your staff, or your employees.
Why should a customer be bothered about your
problems? Customers are not always bothered about
your shortage of staff, the fact that your computer
network has gone down, power cuts, rail strikes,
leaves on the line, frozen points, portion control
policies, your customer service policy, your need for
a lunch break etc.

Why should the customer be

interested in your problems?
The customer is not interested in these things,
dont bother telling him or her about them,
you will only make him or her angry and
bored. They seem like feeble excuses.
No matter how good your tests, your quality
assurance system, your customer services,
your systems have usually been designed by
you, not by your customers.

The moral
The moral is that quality service is not what
your internal guidelines or tests or market
surveys or policies or procedures or
statements indicate is satisfactory.
Quality and customer service is what the
customer says it is, not what you say it is.

And

Customers are the

reason for work, not an
interruption of work.