9 communicating with customers · customer satisfaction is good communication between customer and...

9Communicating with customersCustomers: who are they? 9.4

Defining the terms: customers, clients, providers 9.4

Customers: B2B, B2C, P2P, internal stakeholders, virtual 9.5

The service society 9.8Rise of the service society: the communication

factor 9.8Customer service: why it’s so important, and why it’s

so hard to get right 9.9The service advantage 9.9Blurring definitions of goods and services 9.10Co-destiny relationships 9.10Data on value of customer service 9.10New models of job and organisational

design 9.11New emphasis on communication skills

training 9.13Consumer activism 9.13

Customer service: what goes wrong 9.13Deregulation 9.14Short–term financial planning and techno-

logical fixes 9.14‘Too much growth, too little maintenance’ 9.15Reactive, tactical status quo 9.15Have-a-nice-day-itis: smiles, not systems 9.15Poor job and organisational design 9.15Role conflict 9.17Emotional labour burnout 9.17

Communication skills: the tip of the service iceberg 9.18

Non-verbal communication and customers 9.18Non-verbal communication and

providers 9.19‘Reading’ customers 9.21

Creating rapport and empathy with customers 9.22Establishing rapport through other means 9.25Rapport: the perils of mimicry and

manipulation 9.25Chunking up, chunking down: new perspectives

with words 9.25Verbal communication 9.26

Listening to customers 9.26Active listening 9.28Questioning 9.29Positive and negative feedback: complaints

and compliments 9.31Hardware, software, humanware: customer

relationship management (CRM) 9.34Customers and problem solving 9.35

Some solutions 9.36One model: the hospitality industry 9.37

Communicating with customers: a checklist 9.37

STUDENTSTUDYGUIDE 9.39

SUMMARY 9.39KEY TERMS 9.39REVIEW QUESTIONS 9.39APPLIED ACTIVITIES 9.40WHAT WOULD YOU DO? 9.40References 9.41Suggested reading 9.43Acknowledgements 9.44

CONTENTS

Contents

Communicating with customers

9

L E A R N I N G O B J E C T I V E S

After reading this chapter you should be able to:■■ Explain the different types of customers and clients we meet and we are■■ Explain the factors that stimulate and inhibit good customer service■■ Discuss the relationship between customer service and communication skills■■ Explain the role of non-verbal communication in customer communication■■ Identify different techniques for establishing rapport with customers■■ Explain how listening and questioning affects customer communication■■ Discuss different approaches to dealing with customers

Communicating in the 21st Century 9.4

Customers:whoarethey?We all have experiences of being customers. We know that as individuals we are special, and as customers we want to be treated that way — not as ordinary people. Our experience in many situations, however, is of very ordinary customer service. Indeed, customer dissatisfaction seems to be more prevalent than customer satisfaction. The essence of customer satisfaction is good communication between customer and service provider.

Definingtheterms:customers,clients,providersWho is it that communicates with the customer? ‘Provider’ is almost so vague and bland as to be useless, but it seems to be the least useless worst term available. ‘Salesperson’ excludes not-for-profit transactions, and usually connotes the retail world rather than the realms of other transactions, such as those of doctor–patient and taxpayer–civil servant. ‘Service pro-vider’ is marginally less general than ‘provider’, but excludes transactions involving tangible goods, and thus excludes people working in primary and secondary industries, who neverthe-less need to communicate with their customers. ‘Vendor’ is fairly general, but perhaps has a too-specific real estate connotation. So — unfortunately — provider has become a useful umbrella term that covers just about anyone who sells or provides a good or a service.

‘Customers’ and ‘clients’ do not come from two different races of people. ‘Client’ tends to be a more upmarket way of saying ‘customer’, in much the same way as ‘salary’ is a more upmarket way of saying ‘pay’. Salary or pay, however, are both paid in the same type of money, and customers or clients need or want similar things. Semantics sometimes con-fuses more than it clarifies. Some organisations tend to take their customers for granted, and perhaps could benefit by reconceptualising or rethinking their customers as clients. Some organisations, by contrast, tend to take too rarified a view of reality, ignoring the competitive nature of the market they operate in: to avoid becoming client-less, they might well benefit by reconceptualising their clients as customers.

Examples of customers or clients and providers are shown in table 9.1.

Provider Customer/client

Salesperson Shopper

Doctor Patient

Seller Buyer

Customer service person in billing section of electricity company

Electricity consumer

Lawyer Person seeking legal advice

Hairdresser Person seeking haircut or hair care

Prison officer Prisoner

Help desk technical support person Computer user

Insurance salesperson Home/car/boat owner

Tour guide Tourist

Hotel staff member Hotel guest

Flight attendant Passenger

Analyst in taxation office Taxpayer

Mechanic Car owner

TABLE 9.1 Customers/clients and providers

Provider: someone who sells or delivers a good or service to a customer or client

Chapter 9 Communicating with customers 9.5

Providers often communicate with customers face to face, but there are also many other channels of communication, including:

■■ telephone■■ websites■■ newsletters■■ postcards■■ progress reports■■ brochures■■ customer relationship management (CRM) databases■■ market research surveys■■ electronic data interchange■■ advertising■■ media releases■■ environment (e.g. store layout, interior design)■■ customer panels/councils■■ customer visits/inspections■■ customer briefings■■ dining out■■ networking■■ prepaid complaints forms■■ trade fairs■■ exhibitions■■ shopping centre displays■■ video complaint booths■■ toll-free hotlines/telephone complaint, inquiry, advice lines■■ suggestion boxes■■ industry/community grapevines, rumour mills■■ focus groups■■ follow-up phone calls to ex-customers■■ physical/electronic graffiti facilities.

Customers:B2B,B2C,P2P,internalstakeholders,virtualWe tend to think of customers as people outside of the organisation providing the goods and/or services. In the past few years, however, new perspectives on customers have emerged:

■■ Our conventional view of the customer is that of an individual purchasing goods and services. This type of encounter, however, is only one of several, and so has — perhaps inevitably — been given its own jargon acronym: B2C, or business-to-customer. This is usually a one-to-one encounter, and is sometimes described as a dyad, or interaction between two people.

■■ B2C as a term was back-formed from the term B2B, which describes business-to- business interactions. This is what happens when businesses, firms and public sector organisations deal, not with individuals, but with other businesses, firms and/or public sector organisations (Merrilees & Fenech 2007; Papassapa & Miller 2007; Wind 2006). It is, if you like, the distinction between wholesale and retail, and has much in common with co-destiny relationships, where different organisations cooperate to produce goods and services in benign ways (as distinct from malign and illegal modes of cooperation, such as market manipulation, price-fixing, cartels and other anti-competitive practices).

B2C: interaction or transaction between an organisation as seller of goods and/or services and an individual customer or buyer of such goods and/or servicesDyad: interaction between two peopleB2B: interaction or transaction between an organisation as seller of goods and/or services and another organisation as buyer of such goods and/or services


■■ The means and modes of B2B — and, for that matter, B2C — can often be understood in terms of negotiation, haggling or bargaining. Indeed, it could be argued that the entire gamut of customer–provider interactions is just another form of negotiation.

■■ Customers are inside the organisation too. Internal customers are those who depend on or are affected by our work, whether ‘upstream’ or ‘downstream’ of us in the organisation. Working in an organisation, you may have no contact with members of the general public but must deal constantly with other individuals or groups in the organisation: these people, in this view, are your internal customers (Swartzlander 2004; Eraqi 2006).

■■ Customers can be virtual as well as physical. Online customer communication is becoming a major challenge for many organisations. One form of interaction that has developed in the past few years, particularly with the rise of the Internet, is that of P2P, or peer-to-peer interaction. This occurs when individuals buy and sell items without the mediation of organisations, or with only the indirect assistance of organi-sations. It can also describe situations in which individual computers interact with each other without the mediation of a central server or master computer. Examples of P2P include music sharing services such as Napster (or, at least, Napster in its former, illegal form: it is now a legal B2C organisation, selling music from B2C organisations like record labels), as well as auction sites such as e-Bay, and also situations where existing organisations — such as Amazon — provide a marketplace for third-party buyers and sellers to transact with each other, and in fact are beginning to provide marketplaces for B2B interactions (Sinclair 2007; Ferreira & Ferriera 2005; Santos 2003). In this arena, customer compliments are sometimes as important, if not more important, than customer complaints.Figure 9.1 summarises these various types of customer interactions.

B2C (business-to-customer)

B2B (business-to-business)

P2P (peer-to-peer)

Internal customer

Key

Other aspects of communicating with customers need to be noted. For example:■■ Customers or clients are stakeholders of an organisation (Stoney & Winstanley 2001; Simmons & Lovegrove 2006); that is, they actively participate in its growth or stagnation.

■■ Customer feedback may be vital to the survival of the organisation. This feedback may take the form of complaints, suggestions or any other type of market intelligence that

Internal customer: someone within an organisation who depends on the work of others in the organisation to complete his or her work

P2P: peer-to-peer interactions, or transactions between individuals without the mediation, or with only indirect mediation, of existing organisations; usually facilitated by technology, such as the Internet

FIGURE 9.1 A world of customers


contributes to the improvement of products and processes (Ulwick 2002; Prahalad & Ramaswamy 2004). Data gathered about customers may also be of use in understanding the motivations of customers.

CategorisingcustomersDifferent systems have been devised to categorise customers in the field of consumer or buyer behaviour (Evans, Jamal & Foxall 2006; Taylor & Lee 2007). Such approaches include:

■■ Psychographics: categorising consumers according to values and perceptions (see, for example, Kahle 2000)

■■ Behavioural styles: categorising consumers according to whether they tend to have styles which are utilitarian (task-oriented, non-emotional; i.e., shopping as a means to an end, or a strategy of sustenance) or hedonic (seeking multi-sensory, fantasy and emotive aspects of shopping; i.e., shopping as an end in itself, or a strategy of entertain-ment) (see, for example, Jones, Reynolds & Arnold 2006)

■■ Gender styles: categorising consumers according to gender shopping styles (males share many behavioural characteristics with females, but may be more aggressive — ‘shopping to win’ — in using brands to demonstrate superiority and in rushing the pace of shop-ping, and also in being confused about which shops to visit and consequently making some poor decisions) (see, for example, Bakewell & Mitchell 2006).

Non-customers,ethicsandaffluenza:‘IshopthereforeIam?’‘Customers’ may be an overused word, however. Some critics have argued that the com-mercial nature of the customer–provider relationship has contaminated other relationships by imposing the discourse of privatisation and profit where it has no place (Crenson & Ginzberg 2004). Students, patients, parishioners and citizens/voters do not necessarily appreciate being cast as customers by educational institutions, medical organisations, churches and governments.

The concept of internal customers may meet with similar resistance. While the idea is provocative and suggestive, it may mask or compromise other relationships — for example, the straightforward links between co-workers — and prove to be more of a problem than a solution in some situations.

Perhaps we need to invent a new role — that of non-customer — to help us clearly delineate roles, to stake out a claim for non-commercial roles, without at the same time sacrificing the gains which have been made by reconceptualising some transactions as customer–provider ones.

Alford (2001), for example, has tried to define transactional roles in the public sector by delineating four roles played:

■■ Citizens (voters creating a mandate for desired policies)■■ Paying customers (e.g., users of public transport)■■ Beneficiaries (e.g., recipients of welfare, students in public schools)■■ Obligates (prisoners, citizens subject to regulatory rules).While these roles are ostensibly outside the discourse of the market of customers, they

not only overlap to a certain extent but are partly being drawn into the market by forces such as privatisation of public sector facilities, so such roles are becoming more customer-like, even if some find that undesirable.

These role problems reflect the unease that some analysts feel when considering the relevance of the discourse of customers and the market. Other analysts have gone even further down this track, and have portrayed the world of the customer and the provider — in other words, the almost overwhelmingly large market that we all live our lives in — as being fraught with over-consumption, or ‘affluenza’ or ‘luxury fever’, in which customers over-consume because of internally-motivated compulsive shopping or because they succumb to powerful marketing and advertising, and the ways in which these factors may

Non-customer: role played by consumers of services in non-commercial situations

Affluenza: overconsumption of goods and services, often resulting in personal debt and compulsive behaviour


be interrelated (De Graaf, Wann & Naylor 2005; Hamilton & Denniss 2005; Frank 2001). While many of us joke about ‘retail therapy’, ‘shopaholics’, ‘when the going gets tough, the tough go shopping’, and ‘I shop, therefore I am’, some writers have expressed concern that such behaviour is, or verges on, obsessive behaviour that may have negative consequences in terms of debt and self-esteem (Benson 2000; Koran et al. 2006). Such considerations mean that service providers may be faced with ethical dilemmas in selling goods and serv-ices to some customers: if the role of the provider is to sell, and the basis of selling is com-munication, does over-consumption on the part of the customer mean that it is possible to over-sell, and therefore over-communicate on the part of the provider?

TheservicesocietyWhy has customer service become such a big issue? In recent years society has experienced significant changes that have led to new values and behaviour patterns. Let’s consider the historical context of these changes.

Goods are tangible artefacts; services are usually intangible processes. Over historical time, most capitalist economies seem to follow a sequence from an agricultural to a manu-facturing to a services orientation (figure 9.2).

Time

Key

Agricultural society Manufacturing society Services societyPrimary industry

Secondary industry

Tertiary industry

In traditional societies, before the innovation of large-scale manufacture of goods, the majority of the workforce was — as it remains in some parts of the world — engaged in primary or extractive industries: growing crops, raising domesticated animals, fishing and mining. In western countries, the Industrial Revolution of the eighteenth and nineteenth centuries saw the development of the first large-scale manufacturing industries. Manufac-turing or secondary industry is concerned with processing the raw materials derived from primary industries. Typical manufacturing industries are iron and steel, chemicals, auto-mobiles, textiles, clothing, footwear and food processing.

A substantial part of the labour force for the emergent manufacturing industries came from the old agricultural workforce: process mechanisation and automation and economies of scale in production meant fewer jobs in the primary or extractive industries. So while in agricultural societies the larger part of the workforce was employed in primary industry, in manufacturing societies a majority was employed in secondary industry (see Peneder, Kaniovski & Dachs 2003).

Riseoftheservicesociety:thecommunicationfactorAnother major change began to affect western societies from the middle of the twen-tieth century. While mechanisation, automation and economies of scale made increasing inroads into secondary industry employment, tertiary or service industries grew rapidly. Typical service industries are insurance, banking, education, media, medical and welfare, and government. In the post-industrial or services society, most workers are employed in tertiary industries.

FIGURE 9.2 Changing patterns of work: proportions of labour force in various industriesSource: Eunson (1987, p. 7).

Service industries: postindustrial or tertiary sector industries that produce intangible services rather than tangible goods


This model of economic development, initially confined to Euro-American societies, has become the global norm. Whether it is an ideal model — economically, politically, socially, ecologically, psychologically or spiritually — may be open to question. Nevertheless, in today’s dynamic services society a majority of the workforce delivers services rather than goods.

Because service workers spend most of their time dealing with people rather than things, this necessarily places a premium on communication skills. We will concentrate on these skills later in the chapter.

This does not mean that people working in primary and manufacturing industries do not need good communication skills. Far from it. Effective communication is essential in situations such as:

■■ a farmer discussing the quality of a crop with a processing plant manager■■ a mine manager negotiating sales of coal with an electric power company■■ a car retailer telephoning an auto manufacturer to pass on complaints about a new model■■ a technician working on a washing machine manufacturer’s hotline advising a customer on how to fix a basic fault

■■ a pharmaceutical company representative seeking to persuade doctors that a new drug is safe.Whether in a primary/extractive, a secondary/manufacturing or a tertiary/service industry,

these employees are ultimately providers who serve customers. Customer service, in other words, isn’t just the preserve of service industries: it has a role in all industries, and a vital part of customer service is communication.

Customerservice:whyit’ssoimportant,andwhyit’ssohardtogetrightLet’s consider the forces that encourage the provision of quality service and the forces that undermine or weaken it (figure 9.3).

Factors driving towards quality customer service

Factors restraining quality customer service

■■ The service advantage — decline of traditional competitive strengths (e.g. technology)

■■ Blurring of goods and services■■ Co-destiny relationships■■ New data on value of customer service■■ Emergence of proactive, strategic service

model — ‘moments of truth’■■ Job and organisational redesign: the inverted

pyramid and internal customers■■ New emphasis on skills training■■ Consumer activism

■■ Deregulation■■ Short-term financial planning■■ ‘Too much growth, too little maintenance’

approach■■ Reactive, tactical status quo■■ Have-a-nice-day-itis — ‘smiles, not systems’■■ Poor job and organisational design■■ Role conflict■■ Emotional labour burnout

TheserviceadvantageCustomer service and management specialists often point out that, for today’s and tomorrow’s organisations, customer service is no longer a luxury or an add-on feature — it is vital for their survival. Until recent times an organisation could count on workforce skills and technology to make their products stand out from the competition. (‘If our

FIGURE 9.3 Provision of quality customer service: driving and restraining factors


competition makes a 4 kW product, and we make a quicker, quieter 6 kW product, our competitor’s cus-tomers will desert them and come to us.’) New ideas, in other words, allowed organisations to differentiate their products from those of their competitors.

This is no longer the case, however: now any product innovation is usually copied by competitors within a short space of time, and uniqueness is likely to be only temporary. The phenomenon of convergence means that unique new products — cars, insurance policies, hair styles — are copied rapidly, and most products offered by competing organisations end up looking the same. How, then, can an organisation make its product dif-ferent from those of its competitors? The ‘great differ-

entiator’ rests not with the product but with the service an organisation can offer, with communication the critical part of that service:

In a regulated market with little differentiation in basic services, communication may be an important strategic tool to differentiate the firm . . . Bank tellers and loan officers know the cus-tomer, and the relationships thus formed, their pleasantness in the context of everyday life, and the efficiency that the bank can bring to transactions under such conditions constitute a reason for the customer to remain loyal. (Ball, Coelho & Machás 2006, p. 1284)

BlurringdefinitionsofgoodsandservicesIn an economy’s manufacturing phase, the emphasis is on mass-produced, cheap, simple goods. The encounter between customer and provider tends to be a once-only affair, at the moment of purchase, with perhaps some later contact relating to maintenance or repair. Some economic analysts have suggested that to maintain their dominance over the lower-wage, emergent industrial economies, advanced industrial economies need to move beyond mass manufacturing to precision-manufactured, custom-tailored and technology-intensive products in the same and related industrial areas, such as computer hardware and software, chemicals and drugs, lasers, ceramics, fibre-optic cables, custom-made synthetics, specialty steels and precision castings. Many of these products require custom designing and ongoing servicing, upgrading and consultancy; thus, the distinction between a good and a service begins to blur. In such situations, customer service becomes vitally important.

Co-destinyrelationshipsMany creators of goods and services have begun to establish much closer relationships with organisations that supply them with component parts and raw materials. These closer relationships have been nurtured by the growing popularity of the Japanese-inspired just-in-time (JIT) manufacturing philosophy. An organisation that uses the JIT system can greatly reduce its reliance on expensive inventories and quality inspections of incoming parts and materials, which arrive at the point of assembly only when needed. This system depends on effective communication and coordination with suppliers. Buyers and sellers, customers and providers, are partners in strategic alliances — that is, they enter into a ‘co-destiny’ (Thorne 2005).

DataonvalueofcustomerserviceRecent research in a number of countries has revealed much about the nature of consumer dissatisfaction. Some points to emerge from this research are outlined in figure 9.4.

In a highly competitive market, good customer service and communication can differentiate an organisation from their competitors.


■■ Only 4 per cent of customers ever complain; some suffer in silence, while most simply go elsewhere.

■■ People who stop buying from a particular business do so for the following reasons:– 68 per cent are upset with the treatment they have received– 14 per cent are dissatisfied with the product or service– 9 per cent begin doing business with the competition– 5 per cent seek alternatives or develop other business interests– 3 per cent move away– 1 per cent die.

■■ It is six times more expensive to acquire a new customer than it is to retain an old one.■■ Happy customers, or customers who have their complaints satisfactorily resolved, will tell three

to five other people. One study revealed that one unhappy customer told 11 other people, who in turn told five other people (a negative word chain of 1 + 11 + 55 = 67 people).

■■ 54 to 70 per cent of customers who complain will nevertheless continue to be customers if their complaint is resolved to their satisfaction.

■■ Organisations that provide superior customer service can charge more, create greater profits and achieve greater market share, because customers will generally pay a premium for superior customer service.

FIGURE 9.4 Some facts about customersSources: Adapted from Lovelock (1994); Gerson (1992).

Such data reveals good news and bad news: the bad news is that dissatisfaction has much greater ramifications than most organisations suspect is the case or indeed have the ability to detect. The good news is that an effective customer service program can not only undo the damage but give organisations a strategic advantage over competition.

How can customer complaints lead to a major rethink in organisations? In many organ-isations, customer service has in the past either been largely ignored or been given a mar-ginalised role. Lip service was paid to it, but decision-makers tended to give most attention to ‘the real issues’, such as long-range strategy, industrial relations, exchange rates and advertising. In recent years a new perspective has been emerging, however, which recog-nises that the only way most customers encounter an organisation is via many ‘moments of truth’ with front-line personnel — the people at the counter or on the telephone (Carlzon 1987). Customers judge the entire organisation in those moments of truth, and unless top decision-makers begin to pay attention to this, they are missing the point.

According to this perspective, customer service is no longer simply a reactive process, taking place at the lower or tactical levels (‘Take care of complaints and shut them up’), but rather a proactive or forward-thinking process, taking place at the upper or strategic levels (‘Listen to the customer and plan accordingly’). Some organisations now actively seek out complaints from customers and feed back this information into the planning process — the planning of prevention rather than merely of cure. Instead of being seen as a problem, a complaint is now seen as a gift — a vital piece of intelligence, critical to the process of strategic listening. Systems known as CRM (Customer Relationship Manage-ment) systems can also be of use in processing data — what we know about customers — to improve interaction and communication.

NewmodelsofjobandorganisationaldesignAll organisations can be thought of as pyramids or hierarchies — that is, there are a few people at the top and many people at the bottom. The traditional organisation (figure 9.5 (a)) was a tall pyramid, with numerous levels, which was sometimes described as ‘mechanistic’, ‘bureaucratic’ and ‘centralised’. There have, however, been attempts in recent times to create organisations which are sometimes described as ‘flat’, ‘organic’, ‘ad-hocratic’ and ‘decentralised’.

Moments of truth: critical encounters between customers and service providers that test the competence and reputation of the organisation delivering the service


These structural changes were a response to the problems associated with traditional hierarchies that were identified by organisational theorists. The main drawbacks were the following:

■■ The tall structure slowed down communication up and down the pyramid.■■ Several layers in the middle performed the primary function of shifting information up and down the pyramid, but such a function was becoming redundant as computers enabled data to flow directly from action centres at the bottom to decision-makers at the top.

■■ Decision-makers at the top were too far removed from the action, and often made decisions that were either too late or based on inaccurate information.

■■ The structure was totally inward-looking: it did not acknowledge the strategic impor-tance of encounters between customers and front-line staff, and did not incorporate the needs and wishes of customers in the heart of the planning process.

■■ The job-roles of workers were rigidly defined, with very little or no decision-making power or empowerment given to front-line staff. The power or decision-making struc-ture was clearly demarcated between managerial staff (brain workers) and operatives (labourers), who worked in specialised and divided work roles on assembly lines that depended on repetition, speed and little or no latitude for the expression of initiative or participation in the decision-making process. This industrial mode of production was sometimes referred to as Taylorism (after Frederick Taylor (1911), a highly influen-tial analyst of industrial processes of efficiency). Taylor’s approach was responsible for remarkable increases in workplace efficiency, but the term ‘Taylorism’ sometimes took on a negative or pejorative meaning, suggesting that workers were little better than machines, or cogs in a machine. It is now associated with restrictive and un-empowered job roles which are often stressful and lack task variety, and is sometimes associated with close and coercive modes of supervision and output monitoring.A flatter organisational pyramid (figure 9.5 (b)) meant ‘downsizing’, or the removal of

many middle management personnel, the widening of spans of control of many managers and supervisors, and the implementation of work teams.

Taylorism: a method of organising work flow and work roles that achieves efficiency through specialisation and division of labour or job roles, but that may also de-emphasise or eliminate initiative, empowerment and task variety and may entail close and coercive supervision

Senior management

Middle management

Supervisory team

Workers

Senior management

Middle managementProduction management

and specialists

Superintendents

Supervisors/forepersons

Leading hands

Workers

(a) (b)

Hierarchical pyramid(typified by many levels of management)

Hierarchical structure with greater spread of responsibilityand fewer levels of management

Service-centred organisation that focuses on customer need

Customers

Work groups

Services groupand committees

SeniorManagement

(c)

FIGURE 9.5 The changing shape of organisationsSource: McPhee and McNicol (1992), adapted.


The next step was to reconceptualise and invert the pyramid so that the primary focus was on the customer and the customer–front-line staff encounter, rather than on the high-status decision-makers (figure 9.5 (c)). The opinions of the customer are plugged into the heart of the decision-making process, while the role of front-line employees undergoes a transformation: having been traditionally the least valued organisational members, with low wages, little information about the rest of the organisation and their role within it, and little control over decision making and problem solving to better serve the customer, in the new organisational model front-line staff are better paid, fully informed about the organisation, and empowered to make decisions and solve problems in ways that previ-ously required supervisory or managerial intervention (Desatnick 1987; Melhem 2004). Customers are now seen as strategic partners. Of course, this is the theory, and there is often a gap between theory and practice. Nonetheless, those organisations that put it into practice usually become far more customer-responsive as a result.

NewemphasisoncommunicationskillstrainingThese role changes for providers, particularly front-line staff, mean there is a great need for training in technical and communication skills. Such training is necessarily expensive, but is nonetheless undertaken by successful organisations, which see such programs as cheap when compared with the alternative of communication failure.

Such training can help develop customer orientation in salespeople, so that — for example — salespeople concentrate more on the benefits of goods and services, rather than just the features. This means selling more and telling less, helping to inculcate a market-orientation mindset rather than a selling-orientation one, so that an effective salesperson can be characterised by1. a desire to help customers make good purchase decisions2. helping customers assess their needs3. offering products that will satisfy those needs4. describing products accurately5. avoiding deceptive or manipulative influence tactics6. avoiding the use of great pressure (Gillis et al. 1998).

This two-way communication within the customer–provider dyad is part of the marketing communication process, and can complement the one-way communication approach involving mass advertising, publicity and sales promotion. This one-way approach, while effective, can also be more costly, more difficult to manage, and more frequently criticised because of its visibility and intrusive nature (Gillis et al. 1998).

ConsumeractivismThere has been a considerable growth in consumer activism in recent years, which has also forced organisations to lift their game. This activism derives both from large, well-resourced consumer organisations, and from increasingly assertive individuals. In other words, many customers are saying, ‘We’re mad as hell and we aren’t going to take any more!’ Organisations with poor customer service, and with little intention of improving such service, ignore such trends at their peril.

Customerservice:whatgoeswrongThese, then, are the factors that have driven organisations to improve their customer ser-vice. So why is bad service still a problem? Many factors have restrained or undermined the provision of quality customer service.


DeregulationMore competition among providers does not always spell good news for customers. For example, deregulation in a number of American industries (banking, airlines and tele-communications) coincided with a dramatic rise in customer complaints in those indus-tries. Competitive pressures lead to cost cutting and reduced staffing levels, while existing staff are further demotivated by continual pressure to improve productivity. Australian customers may nevertheless have benefited from competition in some areas, such as telecommunications.

Short–termfinancialplanningandtechnologicalfixesCompetitive pressures have also led many managers to adopt a short-term financial plan-ning/technological fix approach, which often means that customer service — where payoffs tend to occur in the medium to long term — is the first area to experience cuts. Cutting and fixing can sometimes work, but it can also be counterproductive.

Typical approaches might be to use menu-driven phone systems or automated/inter-active voice response systems, and to use outsourcing of customer phone help services overseas (‘offshoring’). Such approaches have been very successful in many instances, with benefits for customers as well as employees in other countries (Gamble et al. 2006; Brodey et al. 2005; Taylor 2005), but individual preferences need to be taken into account: for example, while some customers in fact prefer dealing with automated systems, some prefer human contact (Leland & Bailey 2006).

In fact, some customers, and customer service staff, are actively hostile to such approaches: many respond with ‘menu rage’ (‘Press 3 for . . . ’) and even ‘near- homicidal

rage’ to automated/interactive voice response systems, while a recent UK survey found that 70 per cent of customers preferred dealing with phone assistance that was located in the customers’ home country (Mintel 2005; Crisler 2004; ‘Staff Writer’ 2004; King 2006; Wikihow 2006; see also Taylor & Bain 2005). A chat room participant in the US medical transcription industry expressed it thus:

As far as the whole thing of us losing our jobs because of shipping work overseas . . . who knows. I’m not naive enough to deny they are sending jobs out, but to what extent . . . I don’t know. All I know is that the USA needs to stop hiring outside of our country period. We are cutting our own throats. I don’t care if they work for less. Who is gonna buy your product if no one in your country has a job to pay for your product? How many times have you called a company and get an automated service only to wait to be connected to someone who

can barely speak English? That is a sore subject with me. ARGH! I’m getting off my soap box now. (Towanda 2006)

Cutting and fixing might involve, for example, a bank deciding to cut costs by out-sourcing phone help lines or using automated voice processing, only to find its rival building a marketing campaign around the notion that, if you call them, you will get a human being right away, and one who lives in the same country.

Poor customer service can have negative consequences for the reputation of an organisation, and eventually affect both its short-term and long-term performance.


‘Toomuchgrowth,toolittlemaintenance’Many organisations place a greater emphasis on securing new customers through exten-sive sales and marketing campaigns than on maintaining existing customers through good customer service. This approach also brings with it the danger of overcommitting the organisation to a customer base that is greater than its capacity to service it. Such an approach causes customer dissatisfaction while ignoring the basic economics of new versus old customers.

Reactive,tacticalstatusquoOld habits die hard, and many organisations see no need to change to the new model that views customer service as a proactive, strategic priority. In these organisations cus-tomer relations remains a reactive, tactical function of a separate, low-priority complaints department, which is usually the organisation’s ‘Siberia’.

Have-a-nice-day-itis:smiles,notsystemsWhen such organisations decide that ‘something must be done about customer service’, they usually adopt the have-a-nice-day-itis syndrome, also known as the ‘smiles, not systems’ approach, according to which it is assumed that improved communication skills will in themselves solve problems. However, as Sewell and Brown (1991, p. 23) point out, ‘What’s needed in restaurants, car dealerships, department stores, and everyplace else is systems — not just smiles — that guarantee good service’.

Communication skills in themselves are of little use, for example, to:■■ the nurse, with no beds available, confronted by an angry, injured patient■■ the department store salesperson with a crashed computerised cash register system being confronted by an impatient customer

■■ the waiter who must explain to diners that half the menu is unavailable■■ the car dealer with a full order book but no cars available because of industrial relations problems at the factory.Systems, facilities and technical backup have to be in place before the front-line pro-

vider can satisfy the customer’s needs.

PoorjobandorganisationaldesignOrganisations with poor customer service practices usually have poor job and organ-isational designs in place. As already noted, the new paradigm that prioritises customer service requires organisational redesign that involves inverting the organ-isational pyramid, empowering front-line staff, paying them better and keeping them fully informed. Managers may feel that such changes are unnecessary, too expen-sive, even threatening, but such attitudes may lock the organisation into the cycle of service failure (figure 9.6) This cycle involves both employees and customers, with feedback between the two; it is not the customer who fails, however, but the provider organisation.

The cycle of failure is characterised by:■■ attempts to cut costs by hiring low-wage, low-skills labour■■ attempts to control quality solely by using systems/technology, instead of allowing employees freedom to solve problems as they arise

■■ skimping on selection and training■■ demotivated and demoralised employees giving poor service■■ high staff turnover, depressing profits.

Have-a-nice-day-itis: approach to customers that focuses on superficial appearances, such as having staff smile to customers, while neglecting underlying systems


High customer turnover

Emphasis on rules rather than service

Failure to developcustomer loyalty Low profit

margins

Repeat emphasis on attracting new customers

Payment of low wages

Use of technologyto control quality

Minimisation of selection effort

Minimisation of training

Employeesbecome bored

Employee dissatisfaction,poor attitude

High employee turnover,poor service quality

Narrow design ofjobs to accommodate

low skill level

No continuity inrelationship with

customer

Customerdissatisfaction

Employees can’trespond to customer

problems

Employee cycle

Customer cycle

It doesn’t have to be this way, of course. The effective alternative is the cycle of success (figure 9.7).

This cycle reflects the proactive, strategic job and organisational designs we have considered. It is more expensive in the short run, but much cheaper in the medium to long run. Managers who insist on maintaining the cycle of failure rationalise their mistakes with stock excuses and self-fulfilling prophecies (quoted in Schlesinger & Heskett 1991):

■■ ‘You can’t find good (or any) people today.’■■ ‘People just don’t want to work today.’■■ ‘Getting good people would cost too much, and you can’t pass on those cost increases to customers.’

■■ ‘It’s not worth training our front-line people when they leave you so quickly.’■■ ‘High turnover is an inevitable part of our business. You’ve got to learn to live with it.’The failure cycle produces the McJobs some futurists have warned about — low-paid ser-

vice sector jobs with little or no career structure to motivate workers (Ritzer 2006; Sturdy, Grugulis & Wilmott 2003; Koermer & McCroskey 2006; Cameron, Bamber & Timo 2006; Gamble 2006). An analysis of work flow and practices in call centres, for example, discov-ered that employees working with CRM (customer relationship management) software were closely monitored and controlled by management; workflow being characterised as routine, repetitive and disempowered, and in fact as ‘sweatshops of the twenty-first century’ and examples of the ‘Taylorisation of white-collar work’ (Richardson & Howcroft 2006).

Motivation is the essence of quality communication and service. People are unwilling to put much passion and sincerity into customer service if there is nothing in it for them. Like any form of employment, service jobs can be either frustrating and demeaning or fulfilling and exciting — depending on whether or not they are designed well.

FIGURE 9.6 The cycle of failureSource: Schlesinger and Heskett (1991, p. 18).

McJobs: low-paid, lowstatus service sector jobs that offer employees little satisfaction or career development opportunity


Low customer turnover

Customerloyalty Higher profit

margins

Repeat emphasis on customer loyalty and

retention

Training, and empowermentof front-line personnel to

control quality

Above averagewages

Intensified selection effort

Extensivetraining

Employee satisfaction,positive service attitude

Lowered turnover,high service quality

Broadenedjob designs

Continuity inrelationship with

customer

High customersatisfaction

Employee cycle

Customer cycle

RoleconflictAnother factor that undermines the delivery of quality service is the role conflict experi-enced by many front-line providers. For many people, ‘service’ means ‘servility’ (Shamir 1980; Chung & Schneider 2002). They see the role of provider as little better than that of a servant or slave who is required to kowtow to the customer. Indeed, not a few customers seem to share this view. Thus some providers sometimes indulge in ‘service sabotage’, with workers in workplaces like aircraft and post offices actively resisting management (Harris & Ogbonna 2002: Jeantet 2003; Murphy 1998), while the relationships between customers and providers (such as supermarket checkers or nurses) may take on the form of a power struggle (Rafaeli 1989; Kettunen, Poskiparta & Gerlander 2002).

Providers with this conflict perspective may feel that, to preserve their dignity, they need to reveal no emotional response to the customer, sometimes even becoming passively or overtly hostile, or acting in other ways to undermine the operations of the employing organisation. The offensiveness of those who give bad service is therefore often merely defensiveness in another guise. This, of course, has much to do with the bad job and organisational design we have been considering.

EmotionallabourburnoutFinally, we need to consider the nature of the labour provided. Increasingly, providers contribute emotional labour rather than physical work (Hochschild 2003; Mann 1998; Meier, Mastracci & Wilson 2006). Front-line providers have to continually adopt a friendly demeanour, smiling, showing empathy, listening and solving problems. Unlike those who

FIGURE 9.7 The cycle of successSource: Schlesinger and Heskett (1991, p. 20).

Emotional labour: sometimes stressful nonphysical labour involved in working in front-line service roles


work ‘behind the scenes’, front-line providers are constantly in public view, where they are expected to conceal normal human responses such as tiredness, frustration, boredom and anger. Headaches, hangovers, being distracted by personal matters, or feeling the need to be left alone — such problems must be suppressed by front-line providers. This can be stressful and lead to feelings of burnout. Such basic human needs should be factored into job and organisational designs.

Communicationskills:thetipoftheserviceicebergSoon we will consider what communication and interpersonal skills work best in the cus-tomer–provider encounter. As we have seen, however, communication skills are only part of the total picture. If customer service can be conceptualised as an iceberg, the communication skills component is the most visible, but there are other essential components beneath the surface, such as technical skills, motivation, job and organisational design, and systems backup (figure 9.8). In organisations with a few (or many) problems in providing customer service, the point needs emphasising. ‘Smiles, not systems’ may be better than nothing at all, but such a partial approach can never be adequate and will probably be self-defeating.

Technical skills

Motivation

Job design

Organisation design

Systems backup

Communicationskills

ASSESSYOURSELF

Working with others, or simply by yourself, assess two workplaces you know of in terms of the cycles of success and failure model.

Non-verbalcommunicationandcustomersNon-verbal communication includes gestures, posture, facial expression, eye contact and a range of other bodily and environmental signals.

Non-verbal communication helps us understand what goes right and what goes wrong in the customer–provider encounter. Much non-verbal communication or body language can be ambiguous, and we need to be careful of thinking that we can ‘read people’s minds’

FIGURE 9.8 The customer service iceberg

Non-verbal communication: means of communication without words, including gestures, posture, facial expression, eye contact and a range of other bodily and environmental signals


from such behaviour; nevertheless, interpreted carefully, it can enrich our understanding of ourselves and others.

Non-verbalcommunicationandprovidersMany of us have had the frustrating experience of being ignored by service providers, or receiving only distracted assistance from them. Most providers would never dream of displaying such bad manners to their own friends and family. When we are in the role of service provider, we need to:

■■ discontinue any conversations we are having with colleagues■■ pay attention to the customer■■ put aside what we are doing■■ establish eye contact■■ orientate our body towards the customer■■ avoid fidgeting, scratching, looking at the clock or using other distracting mannerisms■■ focus on the transaction with the customer■■ give appropriate non-verbal feedback such as head nods, an attentive expression and friendly grunts (‘Mm-hmmm’).‘Smiles, not systems’ is a bad way to run a service organisation and can be emotionally

exhausting for the provider, but if the right systems are in place it becomes much easier to smile. A smile can help to break down a lot of barriers. It is a critical part of customer communication in organisations such as The Body Shop (figure 9.9).

TREAT CUSTOMERS AS YOU’D LIKE TO BE TREATED!

Anita’s 20 second crash course in customer care:

Never treat customers as enemies,

approach them as potential friends.

Think of customers as guests, make them laugh.

Acknowledge their presence within 30 seconds:

smile, make eye contact, say hello.

Talk to them within 3 minutes.

Offer product advice where appropriate.

Smile. Always thank customers and invite them back . . .

DAMMITS M I L E !

!SMILE

FIGURE 9.9 Smile, dammit, smile! Training sheet for staff at The Body ShopSource: Roddick (1992, p. 147).


Clothing,groomingandadornmentThere are no absolute rules for clothing, adornment and grooming. Service providers need to ensure simply that their appearance is appropriate for their work environment. Some organisations insist that employees wear a uniform, while in others uniforms are seen as ‘too military’. A salesperson in a record store, surf shop or hair salon will set dif-ferent standards from someone who works in a bank, an insurance broker or a real estate agency. In those organisations that require uniforms, such clothing can give providers a sense of identification, which may lead to a comparatively more positive emotional display. On the other hand, uniforms can convey powerful status and sex-role mes-sages: generally, it is females and lower-status males who are required to wear uniforms. Such uniforms may signal enforced conformity in less powerful people. Of course, more powerful people may also wear a ‘uniform’: powerful dynamics of conformity ensure that executives dress and adorn themselves in narrowly prescribed ways, just as members of a street gang conform to powerful norms, the violation of which will attract varying forms of disapproval. All this is well known to service providers who sell clothes and bodily adornment.

TouchingandpersonalspaceProviders should be wary of touching behaviour. Again, what is acceptable can vary considerably from situation to situation, and according to the cultural context. Apart from handshake greeting rituals, in most cases it is probably wise not to touch customers at all. Don’t crowd the customer, either: be aware of different people’s needs for personal space.

EnvironmentThe environment in which providers interact with customers has been called the servicescape (Reimer & Kuehn 2005; Rosenbaum 2005). The servicescape is made up of the totality of colours, textures, smells, sounds, temperature, lighting, rooms, floor area, build-ings, structures, furniture, decorations, signage, equipment and vehicles that customer and provider encounter.

Consider, for example, what impressions these smells will evoke in you:■■ fresh bread being cooked in a street or in a shopping mall■■ antiseptic in a dentist’s waiting room■■ the upholstery of a new car■■ perfumes and toiletries in shops or on scratch-and-sniff pads and magazine pages■■ flowers in a florist’s shop■■ rotten fruit in a fruit and vegetable shop.All of these smells may evoke powerful messages. Service providers can manipulate

the barrage of smells that greet customers so that the effect is attractive rather than repellent.

Visually, signage is an extremely important form of communication in the services-cape. Legible, accurate, stylish signs — ‘You are here’ signs, brand names, pedestrian and vehicular traffic signs — are vital ways of making the environment understandable and user-friendly.

In terms of personal space and territoriality, common sense dictates that crowding can be unpleasant, and thus act as a deterrent to customers even showing up in the service-scape. To counteract such effects, managers and planners often pay close attention to layout factors such as aisle widths in shops and malls and entrances and exits — crowd control, in other words.

It’s not always as simple as that, however. Many people go shopping because of the stimulus of the environment and the stimulus of other people — ‘It’s all happening at the

Servicescape: the totality of colours, textures, smells, sounds, temperature, lighting, rooms, floor area, buildings, structures, furniture, decorations, signage, equipment and vehicles that customer and provider encounter


mall’. When people act in the role of customers, in other words, they are not simply satis-fying functional needs (buying a dress, consulting a doctor, comparing prices on refriger-ators) but may be satisfying emotional needs — the need to be with people, to watch other people, to be paid attention to, to see exciting things, to find out what’s happening in the world. Indeed, the growing tendency to automate shopping processes, and the rise of ‘tele-shopping’ (shopping from home via computer/television hybrid appliances) may be bad news for all of us in general and lonely people in particular, who use servicescapes to sat-isfy their needs to be with others (Forman & Sriram 1991). Note also Ketrow (1991), where the author concludes that in many instances, customers prefer impersonal treatment from providers, and Canetti (2000 [1962]), who suggests that some individuals enjoy the loss of identity that comes from being in a crowd.

The encounter between the customer and the provider within the servicescape may mean that the behaviour of the provider is in fact a type of performance (John, Grove & Fisk 2006; De Nisco & Napolitano 2006).

Life within the servicescape is not all light and loveliness: radical critics of merchan-dising argue that retailers in fact manipulate the servicescape in order to manipulate cus-tomers, using techniques such as:

■■ positioning essentials, such as bread and milk, at the back of shops so that shoppers have to walk past many other items (often buying them on impulse) to get to the essen-tials (essentials are often priced as ‘loss leaders’; that is, below cost, to entice shoppers to enter stores and then buy other items which have higher profit margins)

■■ playing music paced at less than 90 beats a minute (standard walking pace) to slow shoppers down, so that they will buy more

■■ positioning expensive items at average adult eye level, and positioning sometimes less-than-healthy children’s items at lower levels

■■ providing in-house ‘bakeries’ which create pleasant smells, while the real bread-making — proving and kneading — is done elsewhere

■■ displaying zone-specific television — 75 per cent of shopping decisions are made in the three metres (ten feet) before the product, so in-store television screens promoting prod-ucts are doubly effective; they boost sales, and the stores can charge premium prices to suppliers for advertising space

■■ offering loyalty cards that offer discounts, but which may predispose shoppers to buy more than they would have anyway: a UK survey found that 48 per cent of loyalty card scheme shoppers actually increase the amount of money spent in a supermarket (Smith 2004).

‘Reading’customersEffective service providers need to pay attention to the non-verbal behaviour of customers. Every individual has a particular repertoire of gestures and mannerisms — drumming fingers, scratching chin, smoothing hair, tapping a pen, adjusting glasses, stroking a chair arm, tapping toes and so on. It is possible, to a certain extent, to ‘read’ customers’ internal state of mind — to recognise, for example:

■■ deliberation, evaluation (stroking the chin or hair, an expression of concentration)■■ stress, apprehension (licking of lips, darting or staring eyes, avoiding eye contact, fixed smile, lips pressed together, agitated gestures, rigid posture, constricted voice, body ori-ented away)

■■ interest (nodding, steady gaze, touching of object discussed, tilted head while listening)■■ disagreement, disapproval (head shaking, hands behind back, gritted teeth)■■ deceit, lying (stroking or scratching parts of the face, hand covering mouth, restricted use of gestures, decrease in smiling, adjusting clothing, erecting ‘signal blunters’ to hide behind — e.g. holding purse, briefcase, folder in lap).


CreatingrapportandempathywithcustomersEstablishing empathy and rapport with customers can be a desirable objective, not only at the interpersonal level, and for the immediate transaction, but also at the strategic level, where customers can be seen as co-partners in innovation (Lei & Greer 2003; Campbell & Davis 2006).

Neurolinguistic programming, or NLP, is one potentially useful approach to the issue of how empathy and rapport might be more effectively developed (Bandler & Lavalle 1996; McDermott & Jago 2003; Wood 2006). While not without its critics (e.g. Dowlen 1996), NLP can offer insights into human communication processes.

The five pillars or principles of NLP are, Yemm suggests:

1. Outcome thinking. Being clear about what you want to achieve, the aims or goals that you want. This can cover long, medium and short-term outcomes. Fundamentally, it is about doing things for a reason.

2. Sensory acuity. Paying attention to what is happening and the signals you are receiving. The better you can become at this, noticing changes in voice tone, small shifts in body language, the actual words people are using or even eye movements, the more you can understand the other person and tune into them.

3. Flexibility. ‘If you continue to do what you have always done, you will always get what you have always got.’ If something is not working — do anything else! We can become creatures of habit, yet good communicators and influencers are those who have developed more habits so are not stuck in particular ways of operating.

4. Rapport. The ability to develop a sense of mutual understanding, to tune into the other person and they feel as though you are on their wavelength. This does not have to equate to liking each other.

5. State management. Taking control of your own emotions, responses and attitudes. The start point for this is to accept responsibility for these and then to recognize what you can do to generate the ‘state’ you want for the context. (Yemm 2006, p. 14)

NLP practitioners argue that, while we all use the five senses to process information about the world and ourselves (our external and internal experience), each of us has specific sensory preferences — that is, we do not use all five senses equally. The three major types of preferences or representational systems are visual, auditory and kinaesthetic (relating to feeling, taste and smell). We can deduce which representational system is dominant in any given individual by analysing that individual’s vocabulary and eye movements.

People use words in specific ways. If the NLP model holds true, any individual will tend to favour words and phrases that reflect a particular representational system (figure 9.10).

Visual Auditory Kinaesthetic

an eyefulangleappearbeyond a shadow of a doubtbird’s eye viewblind spotcatch a glimpse of

announcearticulateaudibleblabbermouthcallclashclear as a bell

activeall washed upbearablebindbreakcoldcome to grips with

FIGURE 9.10 Verbal cues to representational systemsSources: Adapted from McDermott and Jago (2003); Zarro and Blum (1989).

Neurolinguistic programming (NLP): a system for understanding communication styles through non-verbal and verbal behaviour


Visual Auditory Kinaesthetic

clarityclearenlightenfocusforeseefuzzyget a perspective onglanceglimpsehazyhindsighthorse of a different colourhorizonideaillusioninspectlook back on it and laughlooks likemake a scenemental picturemind’s eyenaked eyephotographic memorypinpointplainly seepretty as a picturesee eye to eyeshed light onsight for sore eyessketchysurveytunnel visionunder your nosevisionwatchwell definedwitness

detaildivulgeearfulearshotexpress yourselfgive an account ofgive me your eargossiphumhushidle talkin a manner of speakinginterviewloudmanner of speakingmentionnoiseon the same wavelengthoutspokenpay attention topronouncepurrs like a kittenquietrap sessionrings a bellsingspeechlesssquealstate your purposetalktattle-talethunderoustoldtongue-tiedto tell the truthturn a deaf earunheard ofvoiced an opinionwell-informedword for word

concretecontrol yourselfemotionalfeelfeel it in my bonesget in touch withget the drift ofgraspgriphand-in-handhandlehang in there!hotheadhunchhurtintuitionlukewarmnot following youpain-in-the-neckpanickypressurepull some stringssensitiveshallowsharp as a tacksmooth operatorsoftlysolidso-sosqueezestiff upper liptensionthick-skinnedtied uptouchtopsy-turvywarmwring

Visual, auditory and kinaesthetic types of people have specific ways of using their eyes. Why eye movements? Because, say NLP practitioners, different parts of the brain handle different senses, and when we are thinking about or remembering (‘accessing’) different types of experiences or data (visual, auditory, kinaesthetic), the eyes move in specific pat-terns. Thus, when someone is thinking about something visual (or accessing visual data), such as a painting or a face, that person’s eyes will move up to the left, up to the right or remain defocused. When a person is thinking about something auditory (or accessing auditory data), such as music or speech, that person’s eyes will move to the left or to the right or down and to the left. When a person is thinking about something tactile, olfactory or gustatory (or accessing kinaesthetic data), that person’s eyes will move down and to the right (figure 9.11).

FIGURE 9.10 (continued)


FIGURE 9.11 Eye cues to internal states in NLP

Remembering somethingseen before (up and left)

Visualising something not seenbefore (up and right)

Remembering something seenbefore (defocused)

Internal dialogues, self-talk(down and left)

Imagining/creating a sound(right side)

Remembering somethingheard before (left side)

Accessing kinaesthetic data

Accessing feeling, taste,smell (down and right)

(R) (L)

(R) (L)

(R) (L)

(R) (L)

(R) (L)(R) (L)

(R) (L)

Accessing visual data Accessing auditory data

By listening to the words used by customers, and by watching their eye movements, it may be possible for a provider to determine whether the customer is operating in a visual, auditory or kinaesthetic mode. Rapport or better communication can be enhanced if the provider matches the language of the customer. Similarly, lack of rapport might occur if the provider uses language that does not match the representational system of the cus-tomer (table 9.2).

Customer saysProvider should give higher priority to saying

Provider should give lower priority to saying

‘I don’t see why I should choose this model over the cheaper one.’

‘Well, the design is more attractive.’

‘The colours are more attractive.’

‘You look good using it.’

‘It’s extremely quiet in operation.’

‘It has a really professional feel.’

‘My gut reaction is to take it, but perhaps I’d better not.’

‘Take your time, and get in touch with me in a few days.’

‘I understand how you feel.’‘It’s bound to have a great

impact on others.’

‘You look pretty as a picture in it.’

‘If you listen to the opinion of the experts, I think you’ll find they prefer this.’

‘The deal sounds OK, I suppose, but I’ll need more time.’

‘I give you my word, you won’t hear of a better deal.’

‘Give us a call in a few days’ time. We’re ready to listen.’

‘I think it’s just what you’re looking for.’

‘I’ve got a hunch that the whole thing will run smooth as silk.’

TABLE 9.2 Communication matches and mismatches


EstablishingrapportthroughothermeansPeople who are in high rapport with each other often have similar voice tone and tempo, breathing, movement or gestural rhythms, and postures. A provider can move towards rapport with a customer by subtly trying to match, synchronise or harmonise with these different aspects of a customer’s behaviour.

A person’s voice may be loud or soft, pitched deep or high. Speech tempo may be fast or slow, while pauses vary in frequency and length. Accent can also be a crucial aspect of the way in which a person speaks. The mix of all these factors is influenced by person-ality, geography, ethnicity and socioeconomic background. Of all these factors, people tend to be most aware of accent. It would obviously be inappropriate (and might well cause offence) to imitate another person’s accent. However, other aspects of voice can be usefully matched. Consider, for example, an encounter between a provider whose natural vocal style is deep, fairly loud, slow and with few pauses, and a customer whose natural vocal style is high, fairly soft, fast and punctuated by frequent pauses. Rapport is likely to be enhanced if the provider moves subtly closer to the vocal style of the customer.

Matching the breathing patterns of others may be another means of building rapport. Breathing can be fast or slow, deep or shallow. It can sometimes be difficult to detect a person’s breathing pattern through obscuring layers of clothing, but close observation can reveal much (Laborde 2003). Rapport can also be enhanced by observing and subtly reflecting another person’s posture, whether erect or slumped, relaxed or tense.

Rapport can thus be established by matching or synchronising words, voice, breathing, gestures and postures. Once a certain level of matching has been reached, it may be poss-ible to reverse roles — to switch from following the behaviour of others to setting a lead for their behaviour. Matching or synchrony (or the lack of it) may provide an index of the healthiness or otherwise of relationships between customer and provider, among work colleagues, between lovers or among family members.

Rapport:theperilsofmimicryandmanipulationIt should be emphasised that matching is a technique requiring subtlety and finesse. If clumsily done, it will be obvious to the subject, who will probably feel insulted and manipulated. Done smoothly and gracefully, and with appropriate lags built in (for example, if the subject changes posture, wait 20 or 30 seconds before following suit), it can be effective. The question remains as to whether this behaviour is ethically acceptable and non-manipulative. While some critics of NLP argue that it is not, NLP practitioners believe that the technique’s manipulative potential can be neutralised by real-life circumstances: if customers really don’t want to buy but are conned by pro-viders using NLP, then the customers will have their revenge — they will not be repeat customers, and almost certainly will be the beginning of a negative word-of-mouth chain (see figure 9.4).

Chunkingup,chunkingdown:newperspectiveswithwords‘Chunking’, an NLP term derived from computer science, simply means to break into bits. To chunk up means to move from the specific to the general, or from a part to the whole. To chunk down means to move from the general to the specific, or from the whole to a part. Chunking sideways relates to lateral thinking: perhaps what the customer really wants is something quite different. Service providers can use chunking to move beyond the customer’s initial frame of reference to create new perspectives on what he or she really wants (figure 9.12).


CUSTOMER: (after spending a long time fingering a price label) I’d like this model, please.PROVIDER: Certainly, madam. That’s our top model. It vacuums very deeply, and can in fact be used to shampoo carpets . . .Customer sends non-verbal signals of impatience, polite boredom (open mouth, fidgeting fingers, looking at watch).PROVIDER: Can I ask you what do you need from a vacuum cleaner? (chunking up)CUSTOMER: Well, what I really need is a machine that can mop up water.PROVIDER: Ah, well, while this machine is top class, and can do that, it might be more than you need, and you might end up unhappy with this price. This model here, for example, doesn’t shampoo, but it does collect water — and it costs a good deal less. (chunking down)CUSTOMER: Yes . . . and it doesn’t look too bad, does it?PROVIDER: It’s one of our best machines. Pardon me for asking further, but what water spill problems do you have to deal with?CUSTOMER: Oh, we have a refrigerator with a defrost that doesn’t work very well, and it creates a real mess every few weeks.PROVIDER: Do you think you might be better off taking the cheaper vacuum cleaner, or even not buying a vacuum cleaner from us at all, but instead putting your hard-earned money to better use by trading in your old fridge on one of these marked-down ones over here? (chunking sideways)CUSTOMER: I . . . I hadn’t thought of that . . .

VerbalcommunicationWe have considered a range of verbal communication strategies, but now let’s refine these to make the customer–provider encounter more effective.

For example, when addressing customers, speak clearly and speak at, not down to, the customer, and don’t use jargon or language that is too abstract (see online chapter ‘Writing skills 4: plain English’). Use questioning techniques to determine the customer’s needs and motivations, frame your thoughts succinctly, and see the interaction as a means of exchanging information and feedback.

Use language that is neither too formal nor too informal (figure 9.13 gives examples of informal language that focus groups of Australian shoppers have found particularly annoying).

YouseLove/sweetie/darlingYep/nahLikeYou know

Hi, guysGet my driftHave a good dayWe haven’t got noneWith yuh in a tick

As with clothing, grooming and adornment, acceptable and even desirable expression can vary enormously from situation to situation, so match your language to the circum-stances as well as to the customer.

ListeningtocustomersListening skills are powerful communication tools, but they are often either not used well or not used at all. We need to listen carefully to customers, not only because it is good man-ners, but also because of the strategic value of feedback and complaints. Sometimes we need to think of customers as researchers, field workers or spies: they bring back pieces of infor-mation, parts of a jigsaw, and it is up to us to know what to do with them. Their opinion,

FIGURE 9.12 Communication through chunking

FIGURE 9.13 Major language irritants for customer focus groups in Melbourne and Perth, 2003Source: Johnson (2003).


observation, problem or complaint may not be a cause but a symptom — the surface reality rather than the underlying reality. By listening and questioning, it is possible to assemble the jigsaw, to discern the causes, to bring the underlying reality to the surface. It is vital, therefore, that we do not jump in too soon, interrupting, suggesting quick fixes (table 9.3).

Customer inputApparent reality (symptom) Quick fix

Underlying reality (cause) Solution

‘This paint doesn’t give much coverage.’

Paint is inadequate

Sell twice as much cheaper paint

Surface has dark colour paint on it; is inadequately prepared.

Tell customer how to prepare surface.

‘I almost drove into that crate near the door. You should watch where you put things.

’Customer is just a whinger, looking for faults.

Ignore; get on with more important work.

Crate is in fact expensive shipment of industrial diamonds that staff thought had been stolen.

Drop everything. Grab crate. Thank and reward customer.

‘I had some trouble breathing last night.’

Patient is declining in health.

Change medication to a more powerful, riskier drug.

Respirator is faulty.

Attend to respirator. Leave medication unchanged.

‘Oh . . . yeah . . . we can afford those payments . . .’ [scratches face, wrings hands]

They can afford the refrigerator.

Get them to sign quickly.

They can’t afford the refrigerator.

Talk further about other payment options, other models.

Quick fixes may be well-intentioned but miss the point entirely. Listening providers are in fact gathering feedback, using the new information to change the way in which a ser-vice is provided. Quick fixes usually create dissatisfied customers, because their real needs have not been satisfied. Only real solutions can lead to satisfied customers, and good lis-tening habits can help to reveal those solutions.

Sometimes customers consciously or unconsciously send verbal signals. Many customer–provider encounters are negotiations, and signalling is a vital part of negotiation. Typical signals (and their meanings) are shown in table 9.4.

Signal Meaning

‘It’s very nice, but we just can’t afford it. ’Can you bring the price down?

‘As it stands, that offer is just ridiculous.’ Why don’t you change it slightly, and we’ll probably agree.

‘I’m not going to sign an agreement in that form.’ Show me a more interesting agreement.

‘There’s no way we can go for that, given the current state of the economy.’

We’ll buy if you lower the price/defer payments/link them to the consumer price index, etc.

Bad listeners take such messages literally, and that would be the end of the matter; sooner or later the customer would walk away unsatisfied, and perhaps no longer a cus-tomer. The good listener listens for the non-literal meaning, and is thus more attuned to what the customer really wants.

TABLE 9.3 Using effective listening to solve customer problems

Quick fix: inadequate problem solving, often caused by poor listening and interrupting

TABLE 9.4 Listening, signalling and negotiating at the customer–provider interface


ActivelisteningActive listening means moving beyond passively receiving input from customers and towards sympathetic response and reality checking. Active listening stands halfway between passively receiving input and using questioning techniques. Two active listening techniques are reflecting and clarifying.

Sometimes when a customer is upset or is not communicating clearly, it can help to simply reflect or echo his or her feelings and perceptions (table 9.5). This type of response lets the customer know that you have really been listening. It should be pointed out that this type of response does not necessarily indicate your agreement with the customer’s viewpoint — but then, customers are not always looking for agreement, just as they are not always looking for quick fixes. Sometimes they just want to know that someone is listening to them. Solutions can follow later.

Customer Provider

‘. . . and then the handle fell off!’ I can see that you’re upset about the quality of the mower. You feel that the engine housing should have been better secured.’

‘. . . and so it’s my mother that really makes me feel sick!’

‘You feel that the medication is not really what you need, because it’s problems in the family that are really upsetting you.’

Clarifying is another effective active listening technique. Using this technique, the provider paraphrases or sums up what he or she thinks the customer has said:

■■ ‘Let me just check and see if I’ve got this right . . .’■■ ‘What I hear you saying is . . .’■■ ‘What I think you have just said is . . .’‘Playing back’ what the customer has said serves four purposes:

■■ It can act as a reality check, confirming that the provider has understood what the cus-tomer said.

■■ It can be gratifying to the customer to hear his or her views expressed in someone else’s words.

■■ It can slow down the interaction, giving the customer a chance to cool down.■■ It can help to re-frame the issue, leading to more collaborative problem solving.So how good a listener are you? Table 9.6 helps sum up the good and bad listening

habits of providers when interacting with customers.

The bad listener . . . The good listener . . .

■■ daydreams, wanders, ‘internally listens’ while customer is speaking

■■ exploits gap between speaking rate and thinking rate by analysing, anticipating and memorising

■■ doesn’t look at the customer speaking ■■ keeps eye contact with customer

■■ is distracted by work, other people, clocks, televisions, noises

■■ concentrates on customer

■■ keeps body oriented away from customer ■■ is oriented towards customer

■■ gives no feedback (facial responsiveness, ‘friendly grunts’)

■■ gives feedback

Active listening: a communication skill that requires concentration, attention, sympathetic response and reality checking

TABLE 9.5 Active listening and customers

TABLE 9.6 Good and bad listening habits of service providers


The bad listener . . . The good listener . . .

■■ keeps objects (pen, equipment) in hand while speaker is talking

■■ puts things down; has hands free

■■ ignores non-verbal communication of customer ■■ tunes in to non-verbal communication of customer

■■ interrupts ■■ occasionally reflects and clarifies, but allows customer to complete what they have to say

■■ jumps to conclusions; focuses on symptoms and quick fixes

■■ is patient; sees complaints as opportunities for problem solving and learning; focuses on underlying causes

■■ is prisoner of gender, power stereotypes (interrupting, quick fixes)

■■ is not a prisoner of gender, power stereotypes

■■ takes criticisms personally ■■ doesn’t take criticisms personally

■■ takes all customers’ words literally ■■ doesn’t take all customers’ words literally

■■ blames the customer; becomes defensive about the organisation, and is judgmental and punishing when a customer complains

■■ suspends judgement as to who is to ‘blame’; customers are often wrong, but solutions rather than justice are what is important

■■ blames the organisation; colludes with customer

■■ doesn’t blame; seeks solutions in the future, not revenge for sins in the past

■■ is thrown by stressed-out behaviour of customer, and becomes stressed-out in turn; loses control of situation

■■ realises that customer must have had to ‘psych up’ to make a complaint, and has respect for their gumption; makes allowances for customer being slightly out of control

■■ shoots the messenger; anyone who criticises the way in which service is delivered, or who passes on customer complaints, is criticised, or made to look like a troublemaker, or an incompetent. This ensures that few criticisms or complaints are ever heard.

■■ encourages constructive criticism, passing on of complaints; wants to be the first to know, not the last; listens and learns

■■ misses signalling behaviour of customers ■■ picks up on signalling behaviour of customers

■■ judges others by looks, opinions; prejudices shut down listening

■■ suspends judgement on others; listens to what is being said, not who is saying it

Virtually all listening takes place on a one-to-one, face-to-face basis, as indeed does most communication in general. There are other types of listening, however, and we shall soon see that ‘strategic listening’ is a vital survival technique for virtually all organisations.

QuestioningQuestioning techniques complement listening techniques. Questions are tools that allow the provider to probe further to find out just what it is that the customer wants and needs (wants and needs, of course, not necessarily being the same thing). It also helps to slow things down, allows the customer to cool down, and you to dig up more information that can be used as a basis for problem solving; for example, in handling complaints.


We have analysed different types of questions, and we can now fine-tune some of these and others to better manage the customer–provider encounter (see table 9.7). Some types of questions lend themselves to manipulative situations, and ethical providers will not of course use questions in such ways.

Question type Examples Nature Analysis

Open What were your first thoughts when it broke down?How do you normally buy your stationery supplies?

Begin usually with How, What, When, Where, Who or Why

Provide maximum choice to customer. Gets customer talking in initial phases of encounter.

Closed Did you turn it off when it first broke down?Do you normally buy your stationery supplies from Universal?

Begin usually with Can, Did, Do, Have, Is, Will and Would

Requires simple yes/no response. Useful for establishing facts and gaining commitment, especially in latter phases of encounter.

Alternative Would you like to pay cash or charge it?Would you like it in black or in blue?

A form of closed question

Can focus customer’s mind on a limited menu of choices. Can also be used manipulatively when menu of choices is deliberately restricted (i.e., when other choices are actually available)

Probing What are you really looking for in a station wagon?

Can be open or closed — usually open

A direct, up-front way of getting information and opinions. Appreciated by some customers, not appreciated by others.

Leading So you’d have no problem meeting these levels of mortgage commitments?

Usually a form of closed question

A closed type of question, but context, wording and inflection often suggest that there is only one answer — ‘yes’. Can be used manipulatively.

Softening up Would you say that you tend to wear these more stylish lines?And do you think this more subtle blue is more flattering to you skin tones?

A form of closed/leading question

Softening up questions are usually asked in a sequence, all of which prompt the customer to say ‘yes’. At the end of such a sequence, a closed question is usually put about purchasing. The customer may, by this time, be conditioned to say ‘yes’. Usually used manipulatively.

Hypothetical Assuming you were in the market for a house next year, what area and price range might you be looking for?

Can be closed or open

Useful for opening up discussions, breaking deadlocks, responding to customer signals.

TABLE 9.7 Questioning used in customer–provider encounters


Question type Examples Nature Analysis

Rhetorical You wouldn’t buy from Universal, would you?Surely, after you consider the options, you’d have to look at this model, right?

Closed Closed, but implication is fairly heavy that there is no real choice.

Testing Is this OK so far?Are you getting a clearer picture now of what’s available?

Can be open or closed

Provider can use to check with customer to see if information is getting across. If trust has been established, customer often responds as if all such questions are open ones; i.e., will give an extended response.

Third-party We supply this model to Universal, and they’ve been very happy with it, price-wise and reliability-wise. Is this the type of thing you are interested in?

Statement plus question

Endorsement of service from another customer is linked with inquiry. Persuasion by association.

Sources: Adapted from Alessandra, Barrea and Wexler (2006); Collis (1992); Eunson (1994).

Positiveandnegativefeedback:complaintsandcomplimentsAs we have noted, most customers who are dissatisfied with the service provision of an organisation don’t complain. We have seen that it is much cheaper to keep existing cus-tomers satisfied than it is to acquire new customers. We have also seen that complaints do not necessarily arise as a result of one-off, isolated events; they may well be clues to an organisation’s deeper, underlying problems. In these cases, far from discouraging or discounting complaints, organisations should be going out of their way to encourage them. Such complaints are not so much annoying problems as opportunities for learning, which we will shortly consider when looking at strategic listening and customer relationship management.

Complaints tend to be of three kinds:1. Public: that is, where a customer complains face to face or over the telephone or on an

Internet site2. Private: that is, where a customer will not interact with the provider, but will talk about

an experience they perceive to be negative (they engage in negative word of mouth communication)

3. Public (third-party): that is, where a customer will complain to a body such as a con-sumer affairs bureau or department, a newspaper or other media outlet (Lerman 2006; Ndubisi & Ling 2005).A number of factors need to be borne in mind when dealing with customers. Firstly,

strategies of service recovery should be in place.Typical recovery strategies include:

1. Gratis (customer is provided with a free good/service)2. Discount (customer receives an immediate discount)3. Upgrade (e.g., upgrade economy rental car to luxury rental car to compensate for failure)

Service recovery: reversing or minimising damage caused by faulty service provision


4. Cash refund (customer is refunded the purchase price of product in cash)5. Empathetic response (apology, listening)6. Managerial intervention (Hoffman, Kelly & Chung 2003; Kau & Loh 2006).

Secondly, while it is useful to bear in mind the maxim ‘the customer is always right’, it is also useful to bear in mind that customers in the right, and in the wrong, are often motivated by concepts of justice, politeness and face or dignity. Effective organisations, for example, will take note of motivations of customers who perceive that an injustice has taken place, and the best place to respond to such motivations is to ask: what kind of justice are they seeking in the service recovery process? Attention to such subtleties (see table 9.8) can help speed the resolution of problems.

Justice type Explanation Example Effect on repatronage, negative word of mouth?

Distributive Focuses on perceived fairness of outcome

Refunds, exchanges, discounts

Significant

Procedural Consistent, unbiased and impartial customer policies

Transparent, customer-friendly procedures available; being given opportunity to tell their side of the story

Some

Interactional The way in which the customer is treated during encounter

Truthfulness, reasonable explanation, politeness, empathy

Strong

Sources: Adapted from Shapiro and Nieman-Gonder (2006); Kau and Loh (2006).

Service providers also need to be aware of the emotional side of customers who make complaints and, by extension, of those who do not complain, those who are the ‘silent voices’. Thus, in noting in 2005 that satisfaction from complaint handling today is lower than it was 30 years ago, Chebat, Davidow and Codjovi (2005, p. 340) observe that:

By focusing on functional and ‘objective’ responses to complaints, companies have ignored customer emotions, causing a drop in satisfaction with complaint handling. Customers do not simply come to the firm for logistical reasons (e.g., a broken dishwasher): they come to have their emotions redressed as well. This can be termed psychological compensation. Their anger, their anxiety and their resignation should be dealt with before the logistical problem is solved. Their self-image is at stake.

In terms of making complaints, it makes sense for providers to have as many channels of communication available as possible, but also to be aware that not all channels are equal — not so much because of the technical properties of the channels as because of the human factors involved in using such channels. Thus, a study of service recovery revealed that:

■■ Many customers were more comfortable complaining over the telephone rather than face to face as the pressure and embarrassment of complaining is diminished.

■■ Oral communication is better suited to convey sincerity and empathy than written communication.

■■ Email-based services inherently lacked many of the essential interactional human elements that are vital to traditional service recovery, often being characterised by poor interactions with customer service personnel, insincere, generic and impersonal recovery efforts, and a lack of apology and explanation for the failure (Shapiro & Nieman-Gonder 2006).While it is perhaps natural to focus on complaints rather than compliments from

customers, compliments are paid by customers, and compliment behaviour is becoming

TABLE 9.8 Types of justice involved in service recovery


particularly important for online customer transactions. It only takes a few clicks of the mouse to ‘vote’ or evaluate service provided by a web-based business, and the record of that evaluation stays up on the site for a long time. Such compliments can also be taken note of by potential customers who, by definition, will probably know less about an online business than a bricks-and-mortar establishment they can return to at any time (Goetzinger, Park & Widdows 2006).

StrategiclisteningComplaints, like compliments, chance observations and opinions, give organisations valuable feedback from their customers (figure 9.14). Ineffective organisations do not understand, appreciate or act on that feedback. Effective organisations will take all forms of feedback, including complaints, and plug them into the planning process, so that service delivery is modified and progressively improved.

FIGURE 9.14 The feedback model of service delivery

Service

CUST

OMER

S

Organisation

Complaints

Chance observation

Compliments

Opinions

Organisations detect this feedback through strategic listening. This means that front-line staff are trained in listening skills and feed back the information they acquire to senior managers. Organisations set up:

■■ toll-free telephone hotlines■■ website query forms■■ customer advisory panels■■ focus groups (groups of customers brought together to discuss products and services while being observed by market researchers)

■■ mystery shopping services (trained observers pose as customers to evaluate service provision)

■■ pre-paid mail-in comment cards systems.Listening skills, then, are not simply about being courteous to customers; they have a

strategic value. Organisations that don’t listen to customers are destined for failure, while those that do may well flourish.

Strategic listening: system of collecting and processing different inputs of information to feed back into the organisation


Hardware,software,humanware:customerrelationshipmanagement(CRM)Consideration of strategic listening leads naturally into considering customer relationship management, or CRM. CRM means different things to different people, but one definition is:

. . . a customer-focused business strategy that dynamically integrates sales, marketing and customer care service in order to create and add value for the company and its customers. (Chalmeta 2006, p. 1015)

So how does CRM differ from any of the other communication strategies we have been considering here? One significant way in which it does differ is in its use of software to build profiles of customers, in terms of their needs, preferences and behaviour. Thus, Krell notes that a casino using a CRM system makes this type of interaction possible.

After a glance at a computer screen, a casino host can greet a very important customer checking into a Harrah’s property [casino] by handing him his favourite drink and informing him that reservations for two have been made at his favourite restaurant and two tickets for tonight’s sold-out Elton John show are waiting for him in his [favourite] room — and, adding a warm ‘Happy Anniversary’. (Krell 2006, p. 22)

Weaver (2002) notes that Australian banks use CRM to integrate data from all inter-actions with customers (such as a complaint to a call centre, face-to-face interactions at a branch, answering questions via email, dealing with printed loan applications, the customer’s savings and loans history, any inquiries they may have made about products and services, their insurance needs, and any shares or managed funds they may have). This data or intelligence is used to build a ‘single view’ or profile of a customer that might then be used to inform the customer of additional services and to cross-sell — that is, to sell the customer other services and products. Critical to this part of the process is what type of channels, or media mix, will be used to communicate with the customer (Barrett 2004; Greenyer 2004).

CRM software and strategy, then, is like the knowledge management (KM) strategies discussed in the textbook, except that it is focussed on external customers rather than internal customers or staff (Astute Solutions 2006; Scheuing 2008).

CRM approaches have become very popular in both private and public sector organ-isations in the past decade (Chalmeta 2006; Scase 2007; Pan, Tan & Lim 2006; King 2007; Richardson & Howcroft 2006; Plakoyiannak & Saren 2006). It has enormous potential to improve customer satisfaction and to integrate organisations so that they might pursue more effective marketing strategies.

In spite of this, many CRM ventures fail or do not seem to deliver as well as might be expected. Some of the reasons for this include:1. Some CRM enthusiasts may simply buy an off-the-shelf software package and then

expect it to deliver, rather than devising a strategy and then determining what software (if any) is suitable (Chalmeta 2006; Sun, Li & Zhou 2006). In other words, the inanimate cart is put before the animate horse.

2. The data used to build customer profiles is based solely on products that customers have purchased, and by definition not on what customers decided not to buy — which might well be more important (Scase 2007).

3. CRM managers may be using poor quality data and information, so that the right con-clusions are not drawn by the organisation (Chalmeta 2006).

Customer relationship management (CRM): a customer-focused business strategy that dynamically integrates sales, marketing and customer care service in order to create and add value for the company and its customers


4. While a total CRM approach demands high levels of integration, synergy and ‘joining-up’ within organisations, the uncoordinated and territorial behaviour of different areas or departments or a culture of ‘silos’ may defeat this (King 2007).

5. CRM profiling can be seen as a type of ‘big brother’ or authoritarian invasion of privacy, where personal details are analysed without the permission of the customer, and details on databases may be sold on to other organisations without the customer’s knowledge or consent. Thus, the casino customer described above might be amazed at the service provided by such systems, or appalled that his needs and tastes are now public property (or perhaps both) (Scase 2007; Weaver 2002).

6. Cynics attack CRM as being just another management fad or gimmick:

Consultants say that (CRM) stands for Customer Relationship Management software, but everyone else says it means Consultants Raking in Millions, since consultants seem to be the only folk financially better off after a company implements a CRM solution . . . (CRM is) a fancy term that means you should treat customers as individuals and customize what you do to make them happy. Large companies do this with multi-million dollar computer systems. Small com-panies generally do it with a handshake and a smile. (Walston 2006, pp. 52, 54)

Communicating with customers — PLEASE!The PLEASE model can help us better communicate with customers:

P Pay attention to the customer. Put down or aside what you are doing, and give your undivided attention. Give eye contact.

L Listen. Take in all the information provided. Listen for what is not said as well as what is said.

E Enquire. Use questioning techniques in combination with listening techniques to get the full picture.

A Analyse. Try to see the fuller picture. Why is the customer not completely satisfied? What is the context?

S Solve. Fix the problem. If you need additional help or authority, get it.

E Enlighten and express. Don’t keep others in the dark — let others know what has happened, and what can be learned from the incident to prevent it from happening again.

The PLEASE model is the short version of how we can survive and thrive, developing a sense of partnership between customer and provider. The long version is coming soon — in the checklist on pp. 9.37–8.

CustomersandproblemsolvingMany service providers find dealing with customers stressful, and with some customers this is not surprising. Every now and then, the ‘customer from hell’ will turn up (figure 9.15).

Other ‘vexatious complainants’ have also been identified by some British local councils, including:

■■ Goalpost shifters — those who exhaust the standard complaints procedure, and then keep on raising new issues which the council is obliged to investigate

■■ Multimedia complainers — those who have ‘an excessive number of contacts’ with the council via telephone, letter, fax and email, as well as in person


■■ Conspiracy theorists — those who refuse to accept documentation such as council tax or benefits records

■■ ‘I have friends in high places’ — usually involves attention-seeking behaviour involving members of parliament, secretaries of state or ministers, and the prime minister (Freeman 2002).

Male customers from hell Female customers from hell

(1) require constant massaging of their oversized egos

(2) use foul language(3) make inappropriate sexual remarks(4) call servers by a pet name(5) sit far away from the table so servers have

to walk around them(6) act as if they own the place(7) are harder on male servers than on female

servers(8) want to deal only with the manager(9) shout at servers

(10) have been ‘in the business’, know the right way to do things, and will tell the server so — repeatedly.

(1) send items back to the kitchen (for no apparent reason)

(2) demand special orders at no extra charge

(3) change their mind often(4) demand substitutions at no extra charge(5) sit at the table long after the meal is

finished(6) wear too much perfume(7) don’t leave appropriate tips(8) act as if they are the only guest(9) put their belongings on other seats

(10) throw tantrums if anything goes wrong.

Customers sometimes have valid reasons for being angry, or at least dissatisfied. Confronted with such customers, effective providers problem-solve rather than argue. They need to be aware of the full picture, whether the customer is in front of them or on the telephone line. Many customers find interacting with providers a stressful experience, particularly if they envisage some type of conflict. They may have had to ‘psych themselves up’ before going into battle over a complaint. The ideal model of behaviour we should all aspire to in such circumstances is that of cool assertive-ness, nerves under control, focused and methodical. Many people, however — customers included — are not cool but slightly out of control in such circumstances. The sensitive provider watches and listens and, recognising the signs of strong emotion, makes allow-ances for such behaviour. Customers may exaggerate (‘I must have rung here twenty times this morning!’), and may lash out at the first representative of the organisation they encounter. The good listener doesn’t take everything literally or personally, staying professional at all times.

Sometimes the customer’s defensive behaviour is all too understandable: in fact, the customer is not always right; about a third of the time he or she is wrong (Anderson & Zemke 2002). When we are wrong, and know we are wrong, we don’t like to lose face. Once we get things off our chest, we tend to become more reasonable. At this point, if the provider has been patient and has listened well, the customer may provide his or her own answer to the problem.

SomesolutionsWhen customers are upset, remain calm — even if they are not — and proceed to assemble the facts. What is the problem? How can you help? Would an apology help? Do they want a refund or a substitution? Offer solutions and options. Pay attention to the fact that the customer may have had to ‘psych up’ to get to this position, and respond accordingly: for example, allow the customer to save face. If you can’t solve their problems there and then, try to enlist the aid of others, or negotiate some time to find a solution. Take their contact

FIGURE 9.15 Male and female customers from hell, as experienced in the US hospitality industrySource: Adapted from Withiam (1998).


details and offer to get back to them with solutions, or offer to take a product back and issue a receipt while a solution is found.

When the customer is clearly in the wrong, refer to the organisation’s policy. Some organisations, for example, will give refunds even when the customer is in the wrong because they consider the negative publicity that might flow from the incident will cost them more than the refund. Other organisations have stricter policies about what they see as giving way to bullying or blackmail.

While it is easy to counsel against ‘taking it personally’, dealing with aggressive or even irrational customers can be hard. You don’t have to take abuse. If an interaction with a customer threatens to get out of hand, seek assistance: refer the customer to someone more senior such as a supervisor or team leader.

Onemodel:thehospitalityindustryHeung and Lam’s (2003, p. 288) suggestions for handling customers in the Asian hospi-tality industry can be applied in virtually all situations.

1. Procedures should be developed and well received by employees. The objective of the policies and procedures is to enable the employees to understand the importance of customer satisfaction and customer service recovery, and the skills of handling customer dissatisfaction. The relevant policies and procedures should be included in the employee handbook and displayed in an eye-catching back-of-the-house area of the restaurant.

2. Training is important for developing customer complaint handling skills. Video shows and role-plays of complaint handling should be included in the training sessions, which help employees to consolidate the proper concepts and develop professional behaviour towards customer complaints. When complainants find that employees treat their complaints seriously and resolve them immediately, their dissatisfaction may turn into satisfaction, trust and confidence.

3. To encourage dissatisfied customers to give feedback, professional comment cards and/or feedback forms should be provided for customers. Incentives such as free drinks, food or drink coupons can be given to those who submit the forms. Importantly, managers should take a proactive role to communicate with customers so that they may hear the unassertive customers’ complaint.

4. The concept of ‘complaint is a gift’ should be emphasised among employees. Employees should bear a positive attitude towards ‘criticism’. Managers should strengthen the concept at every training and/or briefing occasion for their employees.

5. Recognition should be given to employees who are able to seek, correct and anticipate mistakes. Those employees who can turn complaining customers into good-will ambassadors should be publicly appreciated and rewarded immediately. A company pin or a subsidy for education fees for an outside develop[ment] program can be offered to the winners. This recognition practice can help develop a culture for professionally handling customer complaints.

6. Management should pay particular attention to the younger and better-educated customers since they are more likely to complain. These groups may be considered as more active groups, and restaurant management and employees should particularly respond to their complaints promptly and technically. The more quickly a complaint is dealt with, the greater the chance that it can be resolved in customer satisfaction.

Communicatingwithcustomers:achecklistLet’s now review and apply what we have considered in this chapter so we can work out how to communicate more effectively (and avoid communicating ineffectively) with customers. Here’s a checklist for providers.


Do this Don’t do this

1 Acknowledge the customer, even if you can’t attend right away. Say, ‘Hello, I’ll be with you in a minute’, or simply nod and raise eyebrows.

Ignore the customer.

2 If communicating via phone and you are unable to attend to the customer right away, ask if they will hold.

Keep them waiting, play tedious music, simply bark ‘Hold!’ then ignore them; use absurdly complicated and insulting automated voice processing menus.

3 If talking with colleagues, discontinue conversation and attend to customer.

Keep talking to colleagues, ignoring customer.

4 If involved in other tasks, set them aside. Keep working on other things for a while.

5 Establish eye contact. Avoid eye contact.

6 Personalise: use the customer’s name if possible, or ‘sir’ or ‘madam’. Use no names or titles in addressing customer.

7 Identify yourself. Never identify yourself.

8 Pay attention to the non-verbal behaviour of the customer. Ignore the non-verbal behaviour of the customer.

9 Use appropriate language — minimal or no jargon, not too formal or too informal.

Use inappropriate language — cluttered with jargon, overly formal or presumptuously informal.

10 Establish rapport, perhaps by using NLP technique. Discourage rapport, perhaps creating misunderstandings.

11 Use active listening and signal decoding — don’t interrupt or offer quick fixes. Listen for what is not said as well as what is said.

Don’t listen — interrupt, offer quick fixes.

12 Give non-verbal feedback — head nods, friendly grunts. Give no feedback at all, keeping face blank, head immobile, without speaking.

13 Know your stuff — be an expert. Know the products, services, procedures. Know the organisation. Know the competition. Derive satisfaction from being excellent.

Know nothing. Say something like ‘I only work here’. Get things wrong, damage things in front of customer.

14 Don’t take it personally — remain professional, involved but contained.

Take it personally — lose your cool, argue aggressively.

15 Offer a range of solutions, allowing the customer to choose a solution and get involved. Don’t get bogged down in blaming yourself, the organisation, the world in general or the customer. Apologise and explain where necessary, and then get on with the job of fixing the problem.

Offer no solutions or only one on a take-it-or-leave-it basis. Never apologise, never explain. Blame the organisation and blame the customer.

16 If you can’t solve it there and then, promise to get back, and then do so.

If you can’t solve it there and then, promise to get back, and then don’t do so.

17 Learn from experience — stay cool and analyse situations as they happen. Can your understanding of human behaviour help you to make sense of what’s happening?

Keep repeating the same mistakes. Learn nothing.

18 Know when to quit — you have rights too, and you do not have to take unrelenting insults or other types of negative feedback. Know when to walk away and delegate the problem to someone else.

Never know when to quit — keep fighting, nitpicking, accusing, using sarcasm and innuendo.

19 Expect backup — define what you need from the system in order to operate in terms of policies, procedures, resources and options. You can deliver the smiles if the system delivers for you.

Never expect backup, even when it’s there.

20 Feed learning about encounter back into system — each complaint is a gift. Follow up, review, debrief, correct faults, inventing the wheel (creating process) only once.

Learn nothing, feed nothing back. Keep making the same mistakes.


STUDENTSTUDYGUIDESUMMARY

In this chapter we explored the reasons why customer service has become so important, and the factors that make good customer service as rare as it is. We saw that customers can be external — B2C (business-to-customer), B2B (business-to-business), P2P (peer-to-peer) — or internal to an organisation, and that those who serve them can be called providers. The rise of the service economy was noted, which reinforces the need for good service and communication. Factors driving towards quality service included the service advantage (the strategic edge provided by service, helping to offset the decline of tra-ditional competitive strengths such as technology), the blurring of the boundaries between goods and services, co-destiny relationships, new data on value of customer service, the emergence of a proactive, strategic service model encompassing ‘moments of truth’, job and organisational redesign (the inverted pyramid and internal customers), a new emphasis on skills training, and consumer activism. Factors restraining quality customer service included deregulation, short-term financial planning and technological fixes, a ‘too much growth, too little maintenance’ approach of managements, a reactive and tactical status quo, Have-a-nice-day-itis (‘smiles, not systems’), poor job and organisational design, role conflict and emotional labour burnout. We saw that communication skills are a vital part of customer service, but only one part. We considered the role of non-verbal communi-cation in customer communication, and examined different means of establishing rapport, listening and questioning. We further explored the nature of customer complaints and compliments, and looked at CRM (customer relationship management) approaches. Finally, we considered problem situations of customer communication, and developed a checklist for establishing good (and avoiding bad) communication with customers.

KEY TERMS

active listening p. 9.28affluenza p. 9.7B2B p. 9.5B2C p. 9.5customer relationship management (CRM) p. 9.34dyad p. 9.5emotional labour p. 9.17have-a-nice-day-itis p. 9.15

internal customer p. 9.6McJobs p. 9.16moments of truth p. 9.11neurolinguistic

programming (NLP) p. 9.22

non-customer p. 9.7non-verbal

communication p. 9.18P2P p. 9.6

provider p. 9.4quick fix p. 9.27service industries p. 9.8service recovery p. 9.31servicescape p. 9.20strategic listening p. 9.33Taylorism p. 9.12

REV IEW QUEST IONS1.Does customer service take place only in service industries?2.What does ‘smiles, not systems’ mean?3.Identify three factors that work against good customer service.4.How can service providers best and most ethically deal with ‘shopaholics’?5.‘Females are better suited to service roles than males.’ Discuss.6.List three ways in which customer waiting times can be better managed.7.What is the purpose of chunking up?8.Evaluate the servicescapes of two organisations.9.How can service providers improve their verbal communication with customers?

10.Give two examples of quick fix listening.


11.What does P-L-E-A-S-E stand for?12.List five approaches to customer interaction that providers should avoid.

APPL I ED ACT IV I T I ES1.Using print and online sources, find four non-commercial organisations that refer to

their ‘customers’. Is the customer role appropriate to all these organisations?2.Interview four service providers who are required to wear a uniform. Determine their

feelings — positive and negative — about uniforms.3.Compare the way three organisations organise queuing behaviour.4.Write a role-play for customer interaction in which you use chunking up and chunking

down.5.Invent four more examples of quick fixes and four more examples of signals being missed.6.Using the checklist, along with discretion and tact, evaluate the customer

communication practices of two organisations.7.Consider the 20 good approaches and the 20 bad approaches to customer

communication in the checklist (pp. 9.37–8). Now think of at least two more good approaches and two more bad approaches.

8.Interview two people who work with customers, and see if they have had any encounters with ‘customers from hell’ or ‘vexatious complainants’. Get them to describe the people and the circumstances. How might such encounters have been happier?

9.Using the Internet, locate at least three sites selling CRM (customer relationship management) software packages and/or management strategies. Compare and evaluate them.

WHAT WOULD YOU DO?You work as the supervisor of six sales staff in the furniture section of a large department store. Martin, your boss, who is under a lot of pressure to cut back on staff costs, often walks through the area. You suspect he is trying to identify the poorer performers so he can lay them off. If you had to choose, you would get rid of Selena and Gill. They often simply ignore customers, and even when serving them they will often continue loud per-sonal conversations about their social lives. You have tried to get them to go on product information training seminars, but both have resisted, and it shows: you have heard them giving wrong information to customers, and Gill was once quite aggressive to a customer when unable to answer questions about sofa fabrics. You have watched the body language of customers when being served by these two, and notice that some customers seem quite annoyed. Gill and Selena suddenly become the models of effectiveness whenever Martin comes near, however, so he may not have noticed this. Certainly Selena, who is in fact Martin’s sister-in-law, is expert at distracting him.

Jeff is a different prospect: he has excellent product knowledge, is very attentive to cus-tomers, and will sometimes spend 15 to 20 minutes with a customer, showing them the intricacies of particular products. His sales record is good, and he gets a lot of repeat and word-of-mouth business.

Today, Martin approaches you and says: ‘I got a memo this morning ordering a new round of downsizing. I think I’ll get rid of this Jeff character for a start — he just seems to babble on to customers, and doesn’t get out quickly enough to grab other walk-through trade. I think the female staff have got more of the bubbly personality we need to move product off the floor. Head office also wants staff back behind the counters to keep the cash registers more secure, so I think I might move Gill and Selena and you back to a new central counter, and just let the customers come to you when they’re ready. That means I can get rid of Jeff and three others. That should improve our figures.’

What will you say to Martin?


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