McGraw-Hill/Irwin

Retailing Management, 6/e

Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
Chapter 19
Customer Service
19-2

Managing the Store
Store Management
Customer Service
Layout, Design and
Visual Merchandising
19-3

Services Offered by Retailers
19-4

Customer Service Strategies
Customized
- Greater benefits to customers
- Greater inconsistency
- Higher cost

Standardized
- Lower cost
- High consistency
- Meets but does not exceed expectations
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19-5

Customization
Customization Approach encourages service provider
to tailor the service to meet each customers 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:
McDonalds
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
Cues used to
assess service
Reliability
Assurance
Tangibility
Empathy
Responsiveness
19-11

Gaps Model for
Improving Service Quality
19-12

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
19-13

Closing the Knowledge GAP
Customer research
More interactions between managers and
customers
Better communications between managers
and service providers
19-14

Market Research
The service gap is reduced ONLY when retailers
use this information to improve service.
Comprehensive Studies
Gauging Satisfaction with
Individual Transactions
Customer Panels and Interviews
Interacting with Customer
Customer Complaints
Feedback from Store Employees
Steve Cole/Getty Images

19-15

Customer Complaints
Complaints are a source of information for retailers


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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19-16

Closing the Standards GAP
Innovative solutions
Set service goals
High quality service commitment

Define the role of service providers

Measure service performance
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
19-20

The Target of Empowerment:
Excellent Customer Service
Benefits to Employee:
Stimulates initiative
Promotes learning
Teaches responsibility
Managers Approach:
Provide guidance to employees
Train employees to the challenge
Steve Cole/Getty Images

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
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
(c) image100/PunchStock

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

Intelligent Shopping Assistants a device
connected to a shopping cart with customer
database to provide personalized information to
shoppers
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19-24

Closing the Communications GAP
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
The difference between the service provided by
the retailer and the service actually delivered
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
19-26

Whats Fair?
Distributive fairness customers want to get
what they paid for

Procedural fairness perceived fairness of
the process used to resolve complaints
Did the employee collect information about the situation?
Was this information used to resolve the complaint?
Did the customer have some influence over the outcome?