21 January 2015
Customer Service Matters
Organizations are complex collections of various groups working toward the same common goal. In order to create the effective use of limited resources and to focus on stated goal, organizations’ structures are established. The most common structure, Functional Structures, have 3-5 levels each with their own specific responsibility and expectation. The most commonly recognized levels include the following: Human Resources (Hiring employees, benefit packages), Accounting/Finance (accounts payable / receivable, payroll), Information Technology (Computers, Networks, Software), Operations or Production (Material Management, Inventory, Manufacturing, Equipment/Maintenance), and Marketing (Sales, Distribution, Product Development, and Customer Relations). Despite their individual section of goals, each area supports and impacts the others and require constant and effective communication between each in order to be able to effectively work towards that same goal. What is that goal? Is the primary goal to save money and increase revenue? Companies focus on the bottom line, where that money can be saved and how to increase the revenue. With competitive markets and ever changing business, it is not frequently enough that company leaders take a step back from the numbers and look to see not just where the money comes from, but how each area within the organization ‘serves the customer’ and finds flaws that could negatively be impacting their bottom line. Customer satisfaction and retention is necessary for any business. Creating quality standards and guidelines within Customer Service, the primary customer contact area, establishes a solid foundation with customers. By utilizing consistency in training, updating resources and continuing employee education, improving process standards, and using standard recovery methods, this foundation will form into the desired long-term customer relationships, improving both customer satisfaction and retention.
“Studies have found that service quality is the most important factor in establishing long-term customer relationship and thus customer retention.” (Venetis, 2004) With competitive markets in today’s world, the next available supplier can be found just a click away; causing companies to lose the product or price advantages that may have once been. “A company can only outperform rivals by establishing a difference that can be preserved. Customer service is that difference.” (Peterson, 1997) Customer Service is such a fundamental area for all organizations, and if left unattended, companies in already competitive markets can inevitably decline. Customer Relationships is a strategy that companies often use to create an emotional connection with customers through different approaches and techniques. The importance of such relationships can be found with McKinsey’s poll which references that 70% of buying experience is based on how a customer feels they have been treated. Every communication with a customer, opens the door for the potential of forming long-term relationships with a customer; service being the most important factor of this relationship. Inconsistency, inaccuracy, or ignorance can cost a customer while proper training, education, and information can build trust with a customer. Customer service is difficult to control and left to itself, the level of service that a customer can experience from one agent to another can vary greatly. According to RightNow Customer Experience Impact Report, 82% of consumers have stopped doing business with a company after experiencing poor customer service. Of those who experienced the poor service, the poor experience was due to the following: rude staff (73%), unknowledgeable staff (51%), and because issues weren’t resolved in a timely manner (55%). Information was compiled from CRMGuru poll taken by unsatisfied customers; multiple options were...
References: Ang, L., & Buttle, F. (2006). Customer retention management processes: A quantitative study. European Journal of Marketing, 40(1), 83-99. Retrieved from http://search.proquest.com.library.capella.edu/docview/237020914?accountid=27965
Bain & Co
DeRose, Chris and Tichy, Noel (2013). Here’s How to Actually Empower Customer Service Employees. HBR.org
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RightNow. 2010. Customer Experience Report. North America 2010
Retrieved 5 January 2015
Venetis, K. & Ghauri, P. (2004). Service Quality and Customer Retention: Building long-term relationships. European Journal of Marketing.
Retrieved 25 December 2014 from:
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