Customer Service Management Chapter 2 PDF

PALOMPON INSTITUTE OF TECHNOLOGY COLLEGE OF ARTS AND SCIENCES BACHELOR OF ARTS IN COMMUNICATION Principles of Customer Service Chapter 2 CUSTOMER SERVICE MANAGEMENT Prepared by: RYAN N. WENCESLAO Today's Agenda a. Concept of Service b.Characteristics of...

PALOMPON INSTITUTE OF TECHNOLOGY COLLEGE OF ARTS AND SCIENCES BACHELOR OF ARTS IN COMMUNICATION Principles of Customer Service Chapter 2 CUSTOMER SERVICE MANAGEMENT Prepared by: RYAN N. WENCESLAO Today's Agenda a. Concept of Service b.Characteristics of Services c. Importance of Service Culture (Video) d. The Services Marketing Triangle e. Services Marketing Mix f. Customers Perception of Services g. The Service Employees  OUTCOMES Equip learners with the knowledge to effectively manage and enhance service experiences within a business context. LEARNING TASKS Designing your Service Experience  TOPIC 1 CONCEPT OF SERVICE INTRODUCTION The concept of "service" broadly refers to the act of providing assistance, support, or benefit to others. It can be applied in various contexts..  Context 1 CUSTOMER SERVICE This involves interactions between businesses and their customers. Good customer service aims to ensure satisfaction, resolve issues, and improve the overall customer experience. It can include answering queries, handling complaints, and providing support.  Context 2 PROFESSIONAL SERVICE Professions like consulting, legal advice, medical care, and financial planning fall into this category. Professionals offer their expertise to help individuals or organizations solve specific problems or achieve goals.  Context 3 PUBLIC SERVICE This refers to services provided by government or non-profit organizations to benefit the community, such as education, healthcare, emergency services, and infrastructure.  Context 4 PERSONAL SERVICE This involves services rendered to individuals, such as personal training, hairdressing, or home maintenance. These services typically focus on personal needs and preferences.  Context 5 SERVICE IN BUSINESS In a business context, service can also refer to how companies deliver value to their customers through their products, support, and overall experience. Service-oriented businesses often focus on creating positive interactions and delivering high-quality experiences.  Context 6 SERVICE ECONOMY In economic terms, a service economy is one where the majority of economic activity is focused on providing services rather than producing goods. This shift reflects broader changes in consumer preferences and the growth of sectors like technology, healthcare, and education.  CONCLUSION In all these contexts, the core idea of service is to provide value, support, or assistance that meets the needs or improves the well-being of others. The effectiveness of a service is often judged by the satisfaction it provides and the problem-solving it accomplishes.  TOPIC 2 CHARACTERISTICS OF SERVICES  INTRODUCTION The inherent differences that exist between goods and services result in unique management challenges for service organizations. Services possess five unique characteristics (to be discussed on the next slides). The said characteristics create distinctive challenges for service marketers in attracting new customers and keeping existing customers.  Services are intangible, meaning they cannot be seen, INTANGIBILITY touched, or owned in the same way as physical goods. IMPLICATIONS Evaluation: Customers often have difficulty evaluating a service before it is consumed because it lacks physical presence. This makes it challenging for them to judge quality before purchase. Marketing: Providers must rely on other cues to convey the value of their service, such as branding, testimonials, or guarantees. Demonstrating expertise, creating a strong reputation, and offering service guarantees can help mitigate the challenge of intangibility. Experience: The service experience itself often becomes a key differentiator. How a service is delivered can impact customer perception and satisfaction.  Services are variable and can differ from one provider to VARIABILITY another, from one customer to another, and even from one service encounter to another. IMPLICATIONS Consistency: Maintaining a consistent level of service quality can be challenging. Variability arises due to factors like the skill and mood of service personnel, the context of service delivery, and customer involvement. Standardization: Many organizations implement standard operating procedures and training to minimize variability and ensure a consistent service experience. Customization: While variability can be a challenge, it also offers opportunities for customization and personalization. Tailoring services to individual customer needs can enhance satisfaction and loyalty.  Services are often produced and consumed simultaneously, INSEPARABILITY meaning the provider and the consumer typically interact directly during the service delivery process. IMPLICATIONS Provider-Customer Interaction: The quality of the service is heavily influenced by the interaction between the service provider and the customer. Effective communication and interpersonal skills become crucial. Customer Involvement: Customers often play a role in the service process, which can impact the outcome. For instance, in a restaurant, the customer’s preferences and behavior can influence their dining experience. Service Environment: The physical environment where the service is delivered (e.g., a hospital, a retail store) also plays a significant role in the overall perception of the service.  Services cannot be stored, saved, or inventoried. Once a PERISHABILITY service opportunity is missed (such as an unused appointment slot), it is gone forever. IMPLICATIONS Demand Management: Service providers must carefully manage supply and demand to avoid issues like overbooking or under-utilization. Strategies might include reservations, pricing adjustments, or promotional offers. Capacity Planning: Efficiently managing resources and scheduling is crucial. For example, a hotel must manage room availability, while an airline must manage flight bookings and seating. Revenue Management: To optimize revenue, providers may use techniques such as dynamic pricing or offer incentives to fill excess capacity.  Unlike goods, services do not involve the transfer of OWNERSHIP ownership. Customers receive a benefit or experience rather than a tangible asset. IMPLICATIONS Customer Experience: The focus is on the experience or benefit derived from the service rather than on owning a physical product. For example, customers do not own the counseling session but benefit from the guidance and support. Value Proposition: Service providers must communicate the value of the experience or outcome rather than focusing on ownership. Emphasizing benefits, outcomes, and satisfaction is key to service marketing. Intellectual Property: While services themselves are not owned, the methods, processes, or content used to deliver them can be subject to intellectual property rights. For instance, proprietary training methods or software used in service delivery can be protected.  CONCLUSION Understanding these characteristics helps service providers design better strategies for delivering, managing, and marketing their services effectively.  TOPIC 3 THE SERVICES MARKETING TRIANGLE  INTRODUCTION The purpose of the Services Marketing Triangle is to highlight the essential relationships between the company, employees, and customers in delivering effective service. It emphasizes aligning internal marketing, external marketing, and interactive marketing to ensure a consistent and high-quality service experience.  MANAGEMENT Internal External Marketing Marketing Enabling Setting Promises Promises Employees Customers Interactive Marketing Keeping Promises The Services Marketing Triangle EXTERNAL MARKETING External marketing refers to the strategies and activities a company uses to promote its service offerings to potential customers. This includes advertising, public relations, and any communication aimed at creating awareness and generating interest. The Services Marketing Triangle EXTERNAL MARKETING ROLES AND IMPLICATIONS Service Promise: External marketing sets expectations for the service through advertisements, promotions, and other marketing communications. It creates a promise about what customers can expect. Brand Positioning: Effective external marketing helps in positioning the brand in the minds of customers, differentiating it from competitors, and establishing its reputation. Customer Expectations: The promises made through external marketing need to align with the actual service delivered. Discrepancies can lead to customer dissatisfaction. The Services Marketing Triangle EXTERNAL MARKETING CHALLENGES Consistency: Ensuring that the service delivered matches the promise made in marketing efforts can be challenging. Inconsistencies can damage the brand's credibility. Communication: Clear, honest, and realistic communication is essential to manage customer expectations effectively. The Services Marketing Triangle INTERACTIVE MARKETING Interactive marketing refers to the real-time interaction between employees (service providers) and customers during the service delivery process. This is where the service promise is enacted. The Services Marketing Triangle INTERACTIVE MARKETING ROLES AND IMPLICATIONS Service Delivery: This is the critical moment when the service is delivered. The behavior, skills, and attitude of employees directly impact the customer’s experience. Customer Experience: The quality of interactions can enhance or diminish the overall customer experience. Personalization, responsiveness, and empathy are key factors. Feedback and Adaptation: Employees must be adept at handling customer feedback and adapting their approach to meet individual customer needs. The Services Marketing Triangle INTERACTIVE MARKETING CHALLENGES Training: Employees need thorough training to handle various customer interactions effectively and deliver on the service promise. Consistency: Maintaining a consistent level of service across different employees and interactions can be challenging but is crucial for customer satisfaction. The Services Marketing Triangle INTERNAL MARKETING Internal marketing involves the activities and strategies a company uses to train, motivate, and support its employees. It focuses on aligning employees with the company's service goals and ensuring they are equipped to deliver excellent service. The Services Marketing Triangle INTERNAL MARKETING ROLES AND IMPLICATIONS Employee Engagement: Motivated and engaged employees are more likely to deliver high-quality service. Internal marketing includes initiatives to improve employee satisfaction and performance. Training and Development: Providing employees with the necessary training and resources to understand and deliver the service effectively is crucial. Alignment: Ensuring that employees understand and are committed to the company’s service values and standards helps in delivering a consistent customer experience. The Services Marketing Triangle INTERNAL MARKETING CHALLENGES Resource Allocation: Adequate resources must be allocated for training and development programs. Motivation: Keeping employees motivated and aligned with company goals requires ongoing effort and support. THE INTEGRATED SERVICE TRIANGLE Interaction Between Components Alignment: For effective service delivery, there must be alignment between external marketing promises, internal marketing (employee training and support), and interactive marketing (employee-customer interactions). Discrepancies between these areas can lead to customer dissatisfaction. THE INTEGRATED SERVICE TRIANGLE Interaction Between Components Feedback Loop: Interactive marketing provides feedback that can inform internal marketing strategies and external marketing communications. This loop helps in refining service delivery and adjusting marketing messages. THE INTEGRATED SERVICE TRIANGLE Interaction Between Components Technology Integration: Technology supports all three areas of the triangle. It aids in external marketing through digital channels, enhances interactive marketing through tools like chatbots and CRM systems, and supports internal marketing by providing training resources and performance tracking.  OVERALL IMPACT Understanding the Services Marketing Triangle is crucial for ensuring alignment between a company’s promises, its employees' performance, and customer expectations, which ultimately enhances service quality and customer satisfaction.  Questions? Clarifications?  TOPIC 4 Services Marketing Mix  INTRODUCTION Learning the Services Marketing Mix is crucial because it provides a structured approach to addressing the unique challenges of marketing services, such as intangibility and variability. It helps businesses effectively manage and differentiate their service offerings through the 7Ps— Product, Price, Place, Promotion, People, Process, and Physical Evidence—tailored to service contexts.  SERVICES PRODUCT PLACE Price MARKETING /SERVICES MIX Physical TARGET Evidence MARKET Promotion Process People  PRODUCT In the context of services, the "product" is the service itself. Unlike physical products, services are intangible and cannot be touched or owned. The service product includes the core benefit that the service provides, such as the outcome or result of the service (e.g., a dental check-up improves oral health). It also encompasses supplementary elements like service features, service quality, and any additional benefits that enhance the customer experience.  PRICE Price refers to the amount of money customers must pay to acquire the service. Pricing strategies for services can be complex due to factors like the intangible nature of services and variability in service delivery. Pricing models can include hourly rates, flat fees, tiered pricing based on service levels, subscription models, or performance-based pricing. The price should reflect the perceived value of the service and be aligned with the target market's willingness to pay.  PLACE Place, or distribution, in services marketing refers to how and where the service is delivered to the customer. Unlike physical goods, services are often produced and consumed simultaneously. Place considerations include the location of service delivery (e.g., a restaurant, a clinic), the convenience of access (e.g., online services), and the channels through which the service is provided (e.g., in-person, telephone, or digital platforms). Ensuring accessibility and convenience is crucial for effective service delivery.  PROMOTION Promotion involves the methods used to communicate the service offering to potential customers. Since services are intangible, promotion strategies often focus on building trust and credibility. Promotion tools include advertising, sales promotions, public relations, personal selling, and digital marketing. Effective promotion helps convey the service’s benefits, manage customer expectations, and differentiate the service from competitors.  PEOPLE People are a critical component in services marketing, as the service is often delivered by employees who interact directly with customers. The skills, appearance, and behavior of employees can significantly impact the customer experience. This component includes hiring practices, training programs, and customer service standards. Employees must be well-trained and motivated to ensure they provide a high-quality service and positively influence customer satisfaction.  PROCESS Process refers to the procedures, mechanisms, and flow of activities involved in delivering the service. It encompasses how the service is created, delivered, and consumed. Effective service processes are crucial for ensuring consistency, efficiency, and quality. This includes the steps customers go through when receiving the service, the use of technology in service delivery, and how well the service aligns with customer expectations.  PHYSICAL EVIDENCE Physical evidence involves the tangible aspects that help customers evaluate the service before and after consumption. Since services are intangible, physical evidence helps to provide clues about the service quality and enhance the customer experience. This can include the physical environment where the service is delivered (e.g., the cleanliness of a hotel), service brochures, online interfaces, or even the appearance of staff. It serves as a cue to the quality and reliability of the service being offered.  Integration of the Components For a successful services marketing strategy, it’s crucial to integrate all these components effectively. The service product should align with customer expectations and be supported by appropriate pricing, accessible delivery channels, and compelling promotions. The people delivering the service must be well-trained and the process should ensure consistency and quality. Physical evidence should reinforce the service’s credibility and quality. By carefully managing each element of the services marketing mix, businesses can enhance their service delivery, improve customer satisfaction, and build strong relationships with their clients.  TOPIC 5 Customers Perception of Services  INTRODUCTION Understanding customer perception of services is crucial for any business aiming to deliver exceptional service and build strong customer relationships. Customers evaluate services based on various factors that influence their overall perception, including service quality, customer satisfaction, and perceived value. SERVICE QUALITY Key Points: is a measure of how well the service meets or Consistency: Customers expect exceeds customer expectations. It’s a critical factor reliable and consistent service influencing customer satisfaction and loyalty. delivery each time they interact High service quality generally leads to positive customer perceptions and repeat business, while with a service provider. poor service quality can lead to dissatisfaction and loss of customers. Responsiveness: The ability of service providers to promptly address customer needs and concerns is crucial. Competence: The skills, knowledge, and expertise of service employees significantly impact customer perceptions.  DIMENSIONS OF QUALITY The dimensions of service quality are often measured through frameworks such as the SERVQUAL model, which includes five key dimensions: a. Reliability Consistent and accurate performance of the service as promised. b. Assurance The provider’s competence, courtesy, and ability to convey trust and confidence. c. Tangibles The physical representation of the service, including the environment and materials associated with the service. d. Empathy The level of personalized attention and care given to customers. e. Responsiveness The readiness to assist and respond to customer inquiries and issues. CUSTOMER SATISFACTION refers to the extent to which a service meets or exceeds customer expectations. It’s an emotional reaction that occurs after the service experience and significantly impacts customer loyalty and retention. Key Points: Expectations vs. Perceptions: Satisfaction is determined by comparing the actual service experience to pre-service expectations. If the service experience meets or surpasses expectations, customers are likely to be satisfied. Feedback Mechanisms: Regularly gathering customer feedback through surveys, reviews, and other channels helps understand satisfaction levels and areas for improvement. Service Recovery: How well a company handles service failures and complaints can significantly impact customer satisfaction. Effective service recovery can turn a dissatisfied customer into a loyal one.  PERCEIVED VALUE is the customer's overall assessment of the utility of a service based on what they receive versus what they give (e.g., price). It’s a subjective measure of the benefit versus the cost of the service. Key Points: Cost-Benefit Analysis: Customers weigh the benefits they receive from the service against the costs (monetary, time, effort) involved. Higher perceived value is achieved when customers feel they receive more benefit relative to the cost. Competitive Positioning: Perceived value is influenced by how a service compares to alternatives. Differentiating the service and highlighting unique benefits can enhance perceived value. Value Enhancement: Adding additional features, improving service quality, and offering exceptional customer service can increase perceived value.  CONCLUSION Ensure high service quality by focusing on reliability, assurance, tangibles, empathy, and responsiveness. Regularly measure and manage By addressing these aspects customer satisfaction through comprehensively, businesses can feedback and effective service recovery strategies. improve customer experiences, Enhance perceived value by balancing foster loyalty, and achieve long- service benefits with costs and term success. differentiating from competitors.  TOPIC 6 The Service Employees INTRODUCTION Service employees are essential to the success of any service-oriented business, as they directly influence customer experiences and satisfaction. Managing service employees effectively involves several key subtopics: recruiting the right employees, training and developing them, providing support, and retaining them. RECRUIT THE RIGHT a. Defining Job Requirements EMPLOYEES Job Descriptions: Clearly outline the skills, qualifications, and personal attributes needed for the role. This includes technical skills, customer service abilities, and relevant experience. Person Specifications: Identify the traits and characteristics that are important for success in the role, such as communication skills, empathy, and problem-solving abilities. RECRUIT THE RIGHT b. Sourcing Candidates EMPLOYEES Recruitment Channels: Utilize various recruitment channels such as job boards, social media, industry-specific sites, and recruitment agencies to reach potential candidates. Internal Recruitment: Consider promoting from within the organization, which can motivate existing employees and reduce recruitment costs. RECRUIT THE RIGHT c. Selection Process EMPLOYEES Interviews: Conduct structured interviews to assess candidates’ qualifications, experience, and suitability for the role. Use behavioral and situational questions to evaluate their problem-solving and customer service skills. Assessments: Implement skills assessments or simulations to gauge candidates’ ability to handle real-world scenarios relevant to the service role. Cultural Fit: Ensure candidates align with the company’s values and culture, as this can impact their performance and job satisfaction.  TRAIN AND DEVELOP EMPLOYEES ONBOARDING Orientation Programs: Provide new employees with a comprehensive orientation that covers company policies, procedures, and expectations. This helps them integrate smoothly into the organization. Role-Specific Training: Offer training focused on the specific duties and responsibilities of their role, including technical skills and service protocols.  TRAIN AND DEVELOP EMPLOYEES TRAINING Skill Development: Provide continuous learning opportunities to enhance employees’ skills and keep them updated on industry trends and best practices. Customer Service Training: Regularly update training programs to include new techniques and approaches for improving customer interactions and service delivery.  TRAIN AND DEVELOP EMPLOYEES PROFESSIONAL DEVELOPMENT Career Growth: Offer career development programs and pathways for advancement within the organization. This can include mentorship, coaching, and leadership training. Certifications and Education: Support employees in pursuing relevant certifications or further education that can enhance their skills and career prospects. Tools and Resources Work Environment: Ensure employees have access to the necessary tools, resources, and technology to perform their tasks efficiently. This includes software, equipment, and workspace. Information Access: Provide access to up-to-date information and guidelines to help employees make informed decisions and handle customer inquiries effectively. PROVIDE SUPPORT Feedback and Coaching Regular Feedback: Offer constructive feedback on employees’ performance regularly. This helps them understand their strengths and areas for improvement. Coaching and Mentoring: Provide one- on-one coaching or mentoring to support employees in their professional growth and address any challenges they may face. PROVIDE SUPPORT Emotional and Psychological Support Wellness Programs: Implement wellness programs that promote mental and physical health, reducing stress and burnout among employees. Employee Assistance Programs: Offer support services such as counseling and stress management resources to help employees manage personal and work-related challenges. PROVIDE SUPPORT RETAIN EMPLOYEES Recognition and Rewards Performance Recognition: Regularly acknowledge and reward employees for their achievements and exceptional performance. This can be through formal recognition programs, awards, or simple gestures of appreciation. Incentives: Provide incentives such as bonuses, commissions, or other financial rewards for outstanding service or meeting performance targets. RETAIN EMPLOYEES Career Development Opportunities Growth Paths: Create clear career progression paths and provide opportunities for promotions and advancement within the organization. Skill Enhancement: Encourage employees to pursue additional training and development opportunities that align with their career goals. RETAIN EMPLOYEES Work Environment and Culture Positive Work Culture: Foster a positive, inclusive, and supportive work environment that values employees and promotes teamwork and collaboration. Work-Life Balance: Promote work-life balance by offering flexible work arrangements, reasonable workloads, and time off policies that support employees’ personal needs. RETAIN EMPLOYEES Employee Engagement Involvement in Decision-Making: Involve employees in decision-making processes and seek their input on changes that affect their work. This can increase their sense of ownership and commitment. Communication: Maintain open and transparent communication channels between management and employees to build trust and address any concerns or issues promptly.  INTEGRATION OF STRATEGIES Effectively managing service employees involves a holistic approach that integrates recruitment, training, support, and retention strategies. By ensuring that employees are well-recruited, trained, supported, and motivated, organizations can enhance service quality, improve customer satisfaction, and achieve long- term success. Each aspect of employee management contributes to creating a productive and positive work environment that benefits both employees and customers.  Questions? Clarifications? THANKS FOR LISTENING! And now for your Learning Task!  Customer Services Management by 3G ELearning, K., Replika Press Pvt. Ltd., UAE BOOK SOURCE LEARNING TASK "DESIGNING YOUR SERVICE EXPERIENCE" Students in group will design and present an ideal service experience, considering service characteristics, the Services Marketing Triangle, the Services Marketing Mix, customer perception, and the role of service employees. INSTRUCTIONS Divide the class into small groups of 4-5 students. Scenario Selection: Each group selects a type of service industry (e.g., customer service, hospitality, healthcare, retail, financial services).  DESIGN YOUR SERVICE EXPERIENCE Concept of Service: Define the core service your group will offer. What is the primary value or benefit provided to the customer? Characteristics of Services: Identify and describe the characteristics of your service (e.g., intangibility, variability). How will you address these characteristics in your service design?  DESIGN YOUR SERVICE EXPERIENCE The Services Marketing Triangle: Outline the roles of the company, service employees, and customers in your service experience. How will each party interact and influence one another? Services Marketing Mix: Develop a comprehensive marketing mix for your service, including the 7 Ps (Product, Price, Place, Promotion, People, Process, Physical Evidence). Explain how each element contributes to the overall service experience.  DESIGN YOUR SERVICE EXPERIENCE Customers’ Perception of Services: Discuss how your service will manage and enhance customer perceptions. What strategies will you use to ensure customer satisfaction and positive perception? The Service Employees: Detail the role of service employees in your service model. What training or support will they need? How will they contribute to the overall customer experience?  PRESENTATION Prepare a 10-15 minute presentation to share your service experience design with the class. Use visual aids (e.g., slides, posters) to illustrate key points. Q&A SESSION After each presentation, allow time for a Q&A session where other students and the instructor can ask questions and provide feedback. EVALUATION CRITERIA Understanding and Application: Demonstrates clear understanding of service concepts and effectively applies them in the design. Creativity and Innovation: Shows creativity in developing a unique and compelling service experience. Clarity and Organization: Presents information in a clear, organized, and engaging manner. Engagement and Interaction: Actively engages with peers during the Q&A session and responds thoughtfully to feedback.