Customer Service

Graphics courtesy of ZendeskOpens in new window Customer service has a critical impact on the profitability of the business, and also on the associated costs involved in providing a service (the total logistics cost). Sound customer service is often a reflection of sound logistics. You have probably been into a restaurant where you were politely greeted at the door (this is an example of a soft issue of customer service), but nonetheless waited over half an hour for a very basic order.

When many businesses think of customer service, they often think of the soft issues (how their staff talk to customers, how politely they attend to their needs, how they answer the telephone and other issues which are often easy for businesses to correct).

Unlike the soft issues, the hard issues of customer service are often harder to spot and correct. The hard issues are often logistical issues. Take for example, the meal arrives on the table half an hour late because:

But What Exactly Is Customer Service?

Customer service can be defined from three perspectives. Some see it primarily as an activity, others see it as a performance to be maintained, and others emphasize that it is primarily a corporate philosophy or belief. Let us examine each of these perspectives:

1.    Customer service as an activity.

Firstly, customer service is activity-related. It is the ability to co-ordinate and integrate activities so that the customer will be satisfied.

Customer service is doing the right things right first time. In most corporations customer service is defined as an activity that has to be managed, for example, by order processing, invoicing, or handling.

2.    Customer service as performance

Good businesses try not only to meet the customer’s expectations, but even to exceed the expectations. They perform at optimal customer service levels. In broad terms, customer service can be considered the measure of how well the logistics systemOpens in new window is performing in creating time and place utility for a product, including post-sale support. Performance measures, such as the ability to ship 95% of the orders received complete within 48 hours, are the focus of the customer service.

3.    Customer service as corporate philosophy

The meaning of customer service varies from one company to another. Furthermore, vendors and their customers often view the concept quite differently.

And What is a Customer?

The Three Elements of Customer Service

Customer service can be divided into three elements:

1. what happens before the transaction or sale (pre-transaction elements);
2. what happens during the transaction or sale (transaction elements); and
3. what happens after the transaction or sale (post-transaction elements).

We’ll devote the remainder of this entry looking at each of these three elements in greater detail.

1.   The Pre-Transaction Elements of Customer Service (what happens before the sale)

Many important activities must take place before a successful sale or service. Think of going into a restaurant for a nice juicy steak (or a Greek salad, as my vegetarian brother would prefer!)

The steak and the salad do not just arrive automatically on the plate once ordered. They have to be correctly sourced (purchasing), using money (the financial aspects of logistics) and stored in an appropriate fridge (cold storage).

The information system should reflect that one has 85 300-gram steaks soaking in a sweet-and-sour marinade, ready for customers’ consumption in the evening. You may even have a number of the basic ingredients for my brother’s Greek salad pre-chopped.

The pre-washed lettuce and the dressing would be added to these ingredients so as to present the salad to the customer efficiently while it is fresh. Next time you go into a restaurant during non-peak hours and the service is very slow, remind yourself that they either do not plan well in advance, or they do not have a lot of customers, and have to do everything once an order has been placed.

Key pre-transaction customer service skills will include:

2.   The Transaction Elements of Customer Service (what happens during the actual sale)

During a sale or the provision of a service, certain key activities occur that can influence the success of the transaction. Effective businesses make certain that they have adequate stock levels so as to satisfy the customers’ needs, that is, there is appropriate planning and forecasting for the actual sale.

Successful companies know which are their most popular items (these are called “A” items), which items are less popular (these are called “B” items) and which items are seldom bought (these are called “C” items in the ABC analysisOpens in new window).

When customers walk into a shop they expect the most commonly purchased brands to be in stock, for example. If one walks into a Pick ‘n Pay supermarket in South Africa one expects to find Coca-Cola. One expects to find Stop Bock beer in a liquor store in Mozambique, M & M chocolates in a sweet shop in the USA, and Titleist golf balls in a golf shop in Miami, Florida.

Key skills during the actual transaction include:

3.   The Post-Transaction Elements of Customer Service (what happens after the sale)

It is often said the best time to test a company’s customer service is not before or during the actual customer encounter, but afterwards. How efficient are the company’s staff at solving the problems that arise during the encounter, after the encounter has taken place?

I remember a few years ago buying a Kelvinator fridge when my wife and I were newly married. The light in the fridge went out within the first week and I suspected that something was not working correctly. I phone the Kelvinator company. I received a phone call and follow-up from the logistics manager, who sent someone out to check on the fridge within 24 hours.

What was the problem? The new fridge’s bulb had simply blown (something I had not expected within the first week).

Would I do business with the company again? Most definitely; they took care of this very small problem, and if they could do that, then they will probably be able to take care of the very big problems, too. Attention to detail, and matching the terms of the warranty are what separates the men from the boys in business.

Key post-transaction skills include:

We see then that sound customer service is made up of activities that take place before the encounter with a customer, while the customer is in the shop, and after the customer has left. Effective customer service implies getting all three phases of the customer service encounter right.