Chapter 12 - Customer service

Question 1

Customers are Changing in the following ways:

Answer 1

They are becoming more diverse
- retailers in SA serve a multi cultural society with customers from diverse backgrounds. SA has 11 different languages and this causes frontline employees to fail because they can’t always communicate effectively.

Pressured for time
- many people are pressured for time and struggle to balance family and work life. This puts pressure on retailers to provide quick and efficient service. Woolworth’s helps with this by creating quick meals for 4 people in an effort to help.

They demand an individualized approach
- customers no longer tolerate being served as a demographic group or “one size fits all”. Customers expect a one on one approach as they know retailers have data available to customize their offerings.

They are younger
- purchasing power has shifted to younger consumers. Parenting shoes have changed and children are more independent and have more pocket money than generations before.

They are geographically spread
- Retailers are expanding their business geographically into Africa like Shoprite and Pick n Pay. The growth in multichannel retailing has opened the global market to many small - medium retailers doing e commerce. International retailers are moving into South African Market, eg Walmart

Question 2

Profiling Customers

Answer 2

Retailers gain insights through analyzing and profiling customers in terms of service needs.

Through profiling customers retailers can offer a more personalized service that will make customers feel more important. Restaurants can train their waiters to serve different types of customers differently.

Question 3

Customer Service Approaches

Answer 3

Customized Service

• this helps customers feel special and results in higher customer satisfaction.
• may be inconsistent as it depends on the mood and expertise of the employee.
• Also more expensive because they need to be trained or sophisticated technology may need to be implemented to offer this service strategy.
• Technology helps offer personalized service as it collects data on customer preferences and recommends items to customers based on their last purchases.

Standardized Service

• retailers follow this to improve consistency of quality service delivery and to avoid high cost of hiring specialists to perform customized services.
• retailers design a standardized process that is stated clearly for employees to follow.
• The flow of the standardized process is influenced by store design and layout. Shoppers can rely on signs to find their way around the store

Question 4

Customer Service

Answer 4

Services that the retailer does not charge the customer for that are provided to support the core products and services of the retailer.

Aim to build good relations with the customer.

Question 5

**Types of customer services

Answer 5

Assortment
- retailers display an assortment of products so their costumers can visit one site and purchase a variety of related products. Customers can also try products before buying them.

Financial Services
- Offering credit purchases with low on no interest to encourage customers to buy over an extended period of time.

Returns and repairs
- retailers who stand behind their products offer after-sales services with regards to returns and repairs. This builds a trust relationship with customers, especially who are buying unfamiliar products. Removes risk and provides peace of mind.

Convenience
- One of the core need that retailer must fulfill. Ease of access to retail store and disability access. Layout of the store and extended operating hours. All these elements add to a customers overall experience.
Retailers also offer convenient product trials to customers.

Delivery
- delivery of good especially if the type of products is difficult to transport. Retailer could be located far away from customer so they offer delivery as a convenience factor.

Complementary Services
- In store atms, restrooms, product- training workshops. All these added services make shopping more convenient and may give retailer competitive edge.

Question 6

Reasons Customer Service Expectation Gaps

Answer 6

Retailer not aware of customer service expectation or stores employees not informed.

Retailer not communicate clearly to customers what service level they can expect or has over promised their service level.

Retailer employees not able to perform services as systems not able to designer desired level or they are not willing to perform.

Retailer did not set appropriate service policies and standards to measure service performances.

Question 7

Dimensions of the Retail Service Quality Scale

Answer 7

Physical aspects
- store layout and design

Personal interaction
- service personnel and willingness to interact

Problem solving
- address complaints and assisting in returns

Reliability
- keeping service promises over a set period of time

Policy
- the retailers principles, strategies and policies under which the retailer operates.

Question 8

Cost of losing a customer

Answer 8

Far more expensive than just losing out on a transaction due to bad word of mouth and loss of customer lifetime value.

Question 9

Recovering from a service failure

Answer 9

Using technology
- convenient systems like self checkouts and other technologies that improve customer experience need to be ready for all customers to use easily as well as incentivize and help customers to use them.

If technology fails customers need to revert to transitional service provided by employee, rectify the problem and offer an apology.

Handling complaints

• listening to customer complaints
• providing a reasonable solution
• resolving the problem quickly

Question 10

6 Steps of the Customer service strategy

Answer 10

1. Identifying your retail organizations objectives
2. Identifying your customers and their service need
3. Identifying your competitors
4. Identifying how you will receive feedback from customers
5. Developing an employee-customer interactions strategy
6. Measuring effectiveness of the customer service strategy

Question 11

SERVQUAL PERFORMANCE AREAS(5)

Answer 11

Physical aspects
- store layout and design.

Personal interaction
- the service personnel and their ability to provide service and inspire confidence and trust in customers.

Problem solving
- Addressing complaints and assisting in return of merchandise

Reliability
- keeping service promises over a set period of time and performing services correctly the first time.

Policy
-the retailers principles, strategies and policies under which they operate such as quality of products and payment options.
Convenient