Chapter Thirteen: Customer Service

in Retailing

Being on par in terms of price and quality only gets you into the game. Service wins the game.

– Tony Alessandra, professional speaker on customer service

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Integrated Retail Management Flowchart

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Objectives

• Explain why the targeted customer is always right.

• Define customer service and explain the rater system.

• List and explain the key customer service activities for retailers and e-tailers.

• Explain customer response marketing and why it is important in retailing.

• Identify and describe various customer service levels.

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Customer Service

• Customer service can

– Make or break a retailer

– Impact image and equity

• In general customers are willing to pay more for excellent customer service

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The Targeted Customer is Always Right

• Retailers do not need to satisfy everyone’s wants and needs

• Retailer “selects” customers that are a good fit for the retailer

• Developing customer profiles helps to understand target

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Undesireable Customers

• A customer that:

– Buys goods for a “special event” and returns them after the event for a refund

– Steal

– Cannot legally purchase products/services

– Verbally or physically abuses the retailing staff

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Identifying and Segmenting Customers

• Develop customer profile(s)

• Customization

• Retailers must manage expectations

– Customers should understand why some get special perks

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Customer Perceptions

• Consumer perceptions are influenced by gaps:

– Not knowing what customers' expect

– Providing the wrong service-quality standards

– Expected vs. actual service

– Ensuring that delivery of service matches promises made by the retailer

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Consumer Perceptions

• Consumer perceptions fall into 5 main areas:

1. Reliability

2. Assurance

3. Tangibility

4. Empathy

5. Responsiveness

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Customer Services

• Goal of customer services

• Examples of basic service offerings for retailers and e-tailers – Convenient retail location or cyberlocation

– Convenient hours of operation

– Product availability

– Online retailing

– Faculty cleanliness

– Security and privacy

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Customer Services (cont’d)

• Examples of additional/luxury services for retailers and e-tailers

– Adequately staffed retail site

– Customer service toll free number

– Gift wrapping, personalizing, product packaging and shipping, personal shoppers, kiosks, bridal registry, valet parking, etc.

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Customer Services (cont’d)

• Customer service levels have declined at brick and mortar sites

• E-tailers – Key customer service activities

• Effective handling of complaints • Electronic confirmations of orders • Developing cyber-relationships with customers

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Service Policies

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Customer Focus

• Simple actions have significance

• Tools to gather information

– Surveys

– Bill-stuffer questionnaires

– Questionnaires accompanying warranty or registration cards

– Shopper’s panels

– Trade associations

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Customer Retention Strategies

• Must be top-down and bottom-up commitment to providing customer service

• Training programs

• Reward employees

• Get rid of employees who don’t perform

• Empower employees

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8 Cs of Creating Loyalty in E-tailing

• Customization

• Contact interactivity

• Cultivation

• Care

• Community

• Choice

• Convenience

• Character

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Customer Response Management

• Also called customer relationship management or customer-responsive management

• Uses databases to collect information from customers

• Must be integrated with all aspects of the IRM

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1:1 Marketing

• Focus on increasing business from current customers

• Most important factors

1. Customer communications

2. Executive buy-in

3. Maintaining a long-term focus

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Customer Service Levels

• Must match customer and retailer expectations

• Must consider

– Cost of providing service vs. benefits

– What the competition is doing

– Store characteristics

– Income level of target market

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