“Addresses the issue of customer care and offers useful advice on maintaining loyalty within an ever more sophisticated and demanding customer base…informative and useful for anybody involved in customer relations.” Business Age Today’s consumers are sophisticated, well informed and have high expectations of the services they want to receive. They want greater choice, speed of service, convenience and will not be “sold to” or manipulated. Companies that do not face up to these changes will lose market share. This fully updated fifth edition of Customer Care Excellence recognizes these trends and demonstrates in a clear, practical way how to develop and sustain a customer-service focus. The book places great emphasis on the strategic aspects of customer care – gaining commitment, listening to customers, developing a customer-care ethos and motivating employees to deliver excellent service – ensuring success. It explains how to exceed customer expectations at the front line, covering personal service, speed of delivery and the importance of service recovery as well as creating a service culture internally. This edition also includes: • information about the effects of online technology on customer service; • additional material on employee and customer engagement; • research into virtual teams and intra-team working; • new international examples from Wal-Mart, Tesco, Lego, eBay and ASDA. Customer Care Excellence is essential reading for all those in business looking to improve their customer care, and consequently improve profits, employee morale, standing and reputation. Sarah Cook is Managing Director of the Stairway Consultancy, customer service specialists. She is also the author of Change Management Excellence, Practical Benchmarking and How to Improve Your Customer Service, all published by Kogan Page. Kogan Page 120 Pentonville Road London N1 9JN United Kingdom www.kogan-page.co.uk Kogan Page US 525 South 4th Street, #241 Philadelphia PA 19147 USA £19.95 US $39.95 Sales and marketing /Customer services CUSTOMER CARE EXCELLENCE CUSTOMER CARE EXCELLENCE SARAH COOK SARAH COOK 5th edition 5th edition HOW TO CREATE AN EFFECTIVE CUSTOMER FOCUS ISBN: 978-0-7494-5066-3 Custmr_Care_Excel_5ed_PB_FB_AW:Layout 1 5/10/07 10:00 Page 1 i London and Philadelphia CUSTOMER CARE EXCELLENCE SARAH COOK 5th edition HOW TO CREATE AN EFFECTIVE CUSTOMER FOCUS ii Publisher’s note Every possible effort has been made to ensure that the information contained in this book is accurate at the time of going to press, and the publishers and author cannot accept responsibility for any errors or omissions, however caused. No responsibility for loss or damage occasioned to any person acting, or refraining from action, as a result of the material in this publication can be accepted by the editor, the publisher or the author. First published by Kogan Page Limited in 1992 as Customer Care Second edition 1997 Third edition 2000 Fourth edition 2002 Reprinted 2003, 2005 Fifth edition 2008 Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licences issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned addresses: 120 Pentonville Road 525 South 4th Street, #241 London N1 9JN Philadelphia PA 19147 United Kingdom USA www.kogan-page.co.uk © Sarah Cook, 1992, 1997, 2000, 2002, 2008 The right of Sarah Cook to be identified as the author of this work has been asserted by her in accordance with the Copyright, Designs and Patents Act 1988. ISBN-13: 978 0 7494 5066 3 British Library Cataloguing-in-Publication Data A CIP record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Cook, Sarah, 1955- Customer care excellence : how to create an effective customer focus / Sarah Cook. – 5th ed. p. cm. Includes bibliographical references and index. ISBN 978-0-7494-5066-3 1, Customer relations. 2. Customer services. 3. Total quality management. I. Title. HF5415.5.C6635 2009 658.8912 dc22 2007038701 Typeset by Saxon Graphics Ltd, Derby Printed and bound in India by Replika Press Pvt Ltd iii Contents Preface vii Acknowledgements viii 1. An introduction to customer care 1 Service in a competitive environment 1 The changing nature of customer service 3 Changing customer behaviour and expectation 3 Customer retention 7 What is excellent service? 16 Personal versus material service 18 Embracing change 20 Contact centres 21 The internet 24 Customer Relationship Management (CRM) 27 The service/value chain 33 Summary 37 Action checklist 38 2. How managers need to drive and support a service strategy 39 Start from the top 39 Mission and vision 43 Values 47 Objectives 50 Strategy 51 Summary 87 Action checklist 87 3. Listening to customers 89 Barriers to listening 89 The monitoring of complaints and compliments 91 The value of listening to customers 93 Monitoring customer satisfaction 95 Where and when to measure 118 Measuring customer loyalty 119 Continuous improvement 119 Involving employees when you measure 120 Recognizing achievement 120 Involving head office departments in the measurement process 121 Canvassing the view of other stakeholders 122 Best practice benchmarking 125 Balanced scorecard 128 Summary 129 Action checklist 130 4. Implementing a service excellence strategy 132 Continuous improvement 132 Marketing a service strategy 135 Managers lead the way 139 High or low key? 140 Summary 143 Action checklist 144 5. Empowerment and ownership 145 Valued people value customers 145 Myths about empowerment 146 What should organizations do to encourage empowerment? 152 Service recovery and empowerment 156 Employee engagement 159 Summary 160 Action checklist 161 6. The internal customer 162 Everyone has a customer 162 Developing understanding of internal customer needs 163 Process improvement 165 Don’t forget suppliers, alliances and partners 170 Standards and charters 171 iv Contents Service-level agreements 177 Suggestion schemes 178 Employee engagement 179 Summary 181 Action checklist 182 7. Training and development for customer service 184 The growing importance of training and development in customer service 184 Identifying training and development objectives 185 Training and development for managers 189 Managers as trainers 191 Customer service training for front-line and support staff 192 The learning organization 197 Build customer service into all training and development activities 198 Review and refresh training and development 207 Summary 207 Action checklist 208 8. Communications 210 Disseminating the message 210 Developing a communications strategy 212 Sell don’t tell 217 Reinforcing the message 220 Tips on effective internal communication 224 A communications case study 225 Summary 229 Action checklist 229 9. Recognition and reward 231 Motivation 231 Performance management 235 Developing a reward and recognition scheme 238 Review and renew 248 Summary 248 Action checklist 249 10. Sustaining a customer focus 251 Problems in sustaining the focus 254 Developing a maintenance strategy 257 Contents v Reviewing progress 258 Reinforcement 268 Summary 268 Additional sources of information 270 References 272 Index 273 vi Contents vii Preface In today’s competitive, fast-paced and global economy, the growing demand from service-driven organizations for practical guidelines in developing a customer focus has given me the impetus to write this book. The contents are based on my own hands-on experience of helping many organizations, both big and small, become customer orientated. This book is intended to be practical. It is designed to be used as a reference and source of ideas for managers of businesses who wish to implement service quality as a means of competitive advantage, as well as for those managers in organizations who may already have developed a strategy and wish to implement this further. The book outlines how to plan, introduce and sustain a programme designed to increase customer satisfaction and retention. Technology can help create a customer orientation, yet in essence, service is a ‘people’ issue. How well individuals are inspired, enabled, motivated and recognized by their leaders and managers counts most towards creating a company-wide customer orientation. I believe strongly in the engagement of service providers in order for service excellence to become a way of organization life. Experience shows that the success of a service philosophy depends on continuous commitment to service improvements. I hope you will use this book to measure how customer focused your organization is. I recommend that you regularly review what you have achieved, discuss openly how you could do better and develop a plan of action so that improvements in service excellence can be made on a continuous basis. Sarah Cook The Stairway Consultancy e-mail: sarah@thestairway.co.uk viii Acknowledgements Many thanks to all the businesses whose quest for service excellence and customer satisfaction and retention have enabled me to utilize them as examples of best practice in this book. My special thanks also to Joyce for all her hard work in typing this manuscript. 1 An introduction to customer care We have become a service economy. Yet few organizations are truly delighting their customers. This chapter introduces the concept of service quality and defines what this means to the customer. At the end of this and subsequent chapters, a checklist is provided to allow you to take practical steps to develop and sustain a customer focus within your organization. Service in a competitive environment Over recent years organizations have placed increasing emphasis on customer service as a means of gaining competitive advantage. Who would have imagined 15 years ago, for example, that organiza- tions such as Amazon.com could capture market share from the high street by offering the customer a wide selection of value-for-money products backed by a quality service? Or that companies such as First Direct could fundamentally challenge the traditional way customers do business with their bank by offering a friendly, efficient service 24 hours a day, 365 days a year? In 1954 Peter Drucker wrote in The Practice of Management: ‘There is only one valid definition of business purpose: to create a customer.’ He said that an organization’s ability to remain in business is a function of its competitiveness and its ability to win customers from the competition. The customer is the foundation of the business and keeps it in existence. 1 [...]... eBay, can be said to be truly customer- centric: created for and driven by customers See Figure 1.1 Changing customer behaviour and expectation Today’s consumers are increasingly sophisticated, educated, confident and informed They have high expectations of the service they want to receive They want greater choice and will not be ‘sold to or manipulated 4 Customer care excellence Customer Focused Customer. .. phones and television sets, and the roles of TVs and PCs continue to converge, online companies will be able to reach more consumers 24 hours a day It is clear that to be customer focused when using the web, an organization needs to: An introduction to customer care 27 • • • • • research and give customers what they want, not what the organization wants to tell them; tailor their websites to individual customer. .. keep to promises and not to guarantee things which you cannot deliver To provide excellent service an organization needs to under-promise, overdeliver As Tom Peters says, ‘We can no longer afford to merely satisfy the customer To win today, you have to delight and astound your customers with products and services that exceed their expectations.’ Customer dissatisfaction As the power of the customer. .. CONSIDERATIONS (Choosing a doctor) An introduction to customer care 15 zation delivers against its brand promise, to what extent it treats its customers fairly, and how well it deals with complaints and issues Research shows that customer advocates are five times as likely to remain loyal to the brand, they spend more with the organization, are more profitable as customers and promote the brand to other people Fredrich... also the way it services its existing customers and the reputation it creates within and across marketplaces Many organizations, however, overlook the potential of existing customers to develop their business 8 Customer care excellence Caring for existing customers Statistics underline just how crucial retaining customers can be: • • • Reducing customer defections can boost profits by 25–85 per cent... business will realize on a customer over a given period of time It is an immensely powerful tool because it allows companies to work out how many transactions it will take to recoup the initial investment in attracting and servicing each new customer and generate a worthwhile return 12 Customer care excellence When companies invest in programmes to strengthen customer loyalty they can therefore do so knowing... acquiring new customers can be high Loyal customers tend to spend more and cost less to serve Satisfied customers are likely to recommend your products and services Advocates of a company are more likely to pay premium prices to a supplier they know and trust Retaining existing customers prevents competitors from gaining market share 10 Customer care excellence Existing customers Good products Good... importance an organization places on providing a good service to its customers increases as the product it sells becomes less tangible So, for example, when a customer chooses to purchase a dishwasher, after-sales service is only one of the deciding factors However, when a customer is choosing an accountant or a doctor, personal service is a very important factor in his or her choice (Figure 1.4) Customer. .. both for and with customers Companies are awakening to the need for total change – IBM has moved from hardware into services in response to consumer demand, while BT has moved from fixed voice telephone calls to data communication Autoglass, the replacement vehicle-glass company, is an example of an organization that has used customer service to drive its business performance When the company first... new customers being referred from existing ones Sandwich chain, Pret à Manger, which started in one store in Victoria, now owns over 500 outlets It puts it success down to a ‘relationship of trust’ with its customers, attention to detail and constant innovation The trend in the past 10 years has been for organizations to move from being product-focused to customer- focused Yet only a handful of organizations, . Sarah, 1955- Customer care excellence : how to create an effective customer focus / Sarah Cook. – 5th ed. p. cm. Includes bibliographical references and index. ISBN 978-0-7494-5066-3 1, Customer relations edition 5th edition HOW TO CREATE AN EFFECTIVE CUSTOMER FOCUS ISBN: 978-0-7494-5066-3 Custmr _Care_ Excel_5ed_PB_FB_AW:Layout 1 5/10/07 10:00 Page 1 i London and Philadelphia CUSTOMER CARE EXCELLENCE SARAH. way how to develop and sustain a customer- service focus. The book places great emphasis on the strategic aspects of customer care – gaining commitment, listening to customers, developing a customer- care