Lecture Retailing management (6/e): Chapter 19 - Levy Weitz

Chapter 19
Customer Service

McGraw­Hill/Irwin
Retailing Management, 6/e

Copyright © 2007 by The McGraw­Hill Companies, Inc. All rights reserved.


19-

Store Management

Layout, Design and
Visual Merchandising

Managing the Store

Customer Service

2


Services Offered by Retailers

193


19-

Customer Service Strategies

4

Customized
- Greater benefits to customers
- Greater inconsistency
- Higher cost

Standardized
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- Lower cost
- High consistency
- Meets but does not exceed expectations


Customization

195

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-

Standardization

6

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-

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

7


19-

Customers Evaluate Service Quality8
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-

Assessing Service Characteristics

9

• 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


Perceived Service
Tangibility

Reliability
Cues used to
assess service
Assurance

Empathy
Responsiveness

1910


Gaps Model for
Improving Service Quality

1911


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

1912


Closing the Knowledge GAP
• Customer research
• More interactions between managers and
customers
• Better communications between managers
and service providers

1913


1914

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.


Customer Complaints

1915

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


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

1916

1917

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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Closing the Delivery GAP
•

Information and training

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

1918

Support for Service Providers

1919

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

1920

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


Empowerment is Not for Everyone

1921

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


1922

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

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

1923


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

1924


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

1925