Lecture Retailing management (6e) Chapter 19 Levy Weitz

Chapter 19
Customer Service

McGraw-Hill/Irwin
Retailing Management,
6/e

Copyright © 2007 by The McGraw-Hill Companies, Inc. All
rights reserved.


19-2

Store Management

Layout, Design and
Visual Merchandising

Managing the Store

Customer Service


19-3

Services Offered by Retailers


19-4

Customer Service Strategies

Customized
Greater benefits to customers
Greater inconsistency
Higher cost

Standardized
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Lower cost
High consistency
Meets but does not exceed expectations


19-5

Customization
Customization Approach encourages service provider
to tailor the service to meet each customer’s personal needs.

Store – sales associates offer individual customer service
Electronic Channel – instant messaging

Drawback: Service might be inconsistent
Customized service is costly


19-6

Standardization
Standardization Approach is based on

establishing a set of rules and procedures and
being sure that they are implemented
consistently.
Retailers that use this approach:
McDonald’s
Wal-Mart
IKEA
Dollar General
Save-A-Lot
The McGraw-Hill Companies,
Inc./John Flournoy, photographer


19-7

Cost of Customer Service
High levels of customer service can be costly, but good
customer service is worth an investment
PROFITS

COSTS

It costs more to acquire customers than to generate repeat business


19-8

Customers Evaluate Service Quality
Role of Expectations: based on knowledge and
experience:

--Varies with types of retailers – discount vs.
department store
Perceived Services – evaluations are based on
perception
Due to its intangibility, services are hard to evaluate
accurately

Stockbyte/Punchstock Images


19-9

Assessing Service Characteristics
• Reliability: accuracy of billing, meeting promised
delivery dates
• Assurance (trust): guarantees and warranties,
return policies
• Tangibility: appearance of store and salespeople
• Empathy: personalized service, receipts of notes
and emails, recognition by name
• Responsiveness: returning calls and emails,
giving prompt service


19-10

Perceived Service
Tangibility

Reliability

Cues used to
assess service
Assurance

Empathy
Responsiveness


Gaps Model for
Improving Service Quality

19-11


Gaps Model for Improving
Retail Customer Service
• Knowledge Gap -- knowing what the customer wants
• Standards Gap -- setting service goals
• Delivery Gap -- meeting and exceeding service goals
• Communications Gap -- communicating the service
promise

19-12


19-13

Closing the Knowledge GAP
• Customer research
• More interactions between managers and

customers
• Better communications between managers
and service providers


19-14

Market Research
Comprehensive Studies
Gauging Satisfaction with
Individual Transactions
Customer Panels and Interviews
Interacting with Customer
Customer Complaints
Feedback from Store Employees

Steve Cole/Getty Images

The service gap is reduced ONLY when retailers
use this information to improve service.


19-15

Customer Complaints

Information about merchandise and its quality
Information about services

This feedback can be used for buyers, planners and customer

service representatives. Retailers need to encourage
complaints because most customers will not complain.

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Complaints are a source of information for retailers


19-16

Closing the Standards GAP
• High quality service commitment
• Define the role of service providers
• Measure service performance
• Innovative solutions
• Set service goals


19-17

What Does Good Customer Service Mean?
• Retailers need to provide clear definition
of this to employees
• Description of service must be specific
so expectations are clear
• Service goals should be measurable
--customer surveys
--mystery shoppers

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19-18

Closing the Delivery GAP
•

Information and training

• Instrument and emotional support
• Internal communications
• Reduce conflicts
• Empower employees
• Providing incentives


19-19

Support for Service Providers
Instrumental Support – associates need to have the
appropriate systems and the right equipment to deliver
the services
Emotional Support – associates need emotional support
from their coworkers or a concern for the well-being of
others


The Target of Empowerment:
Excellent Customer Service

19-20

Benefits to Employee:
Stimulates initiative
Promotes learning
Teaches responsibility
Manager’s Approach:
Provide guidance to employees
Steve Cole/Getty Images

Train employees to the challenge


19-21

Empowerment is Not for Everyone
• Some employees will not take the responsibility
• It is expensive or some standardized retailers
• Empowerment idea is not embraced by all cultures


19-22

Using Technology
Retailers are using
technology to assist sales
associates in providing
customer service.
Kiosks:
-Kiosks can offer opportunity to order merchandise not in

(c) image100/PunchStock

store
-Kiosks can free employees to deal with other customer
requests
-Customers can use kiosk to learn more about
merchandise
-Kiosks can provide customer solutions


19-23

More Technology
• Hand Held Scanners – help to provide customer
service by allowing customers to scan large
merchandise instead of struggling with the
product to checkout

Nancy R. Cohen/Getty Images

• Intelligent Shopping Assistants – a device
connected to a shopping cart with customer
database to provide personalized information to
shoppers


19-24

Closing the Communications GAP

The difference between the service provided by
the retailer and the service actually delivered
Realistic commitments
Corporate ideas – reality of store operations need to be communicated
Managing customer expectations
• Provide explanation
• Describe how retailer is improving situation
• Provide accurate info at point of sale


19-25

Service Recovery
• Listen to the customer
• Provide a fair solution
Distributive fairness
Procedural fairness
• Resolve problem quickly
Reduce number of contacts
Give clear instructions
Avoid jargon