Servicing the retail Customer

Customer Service can be used as a powerful strategy for penetrating new markets controlling existing markets and generating substantial revenues and profits. A broad and increasing array of new service concepts and innovations is being developed and profitably implemented in markets across the world. One prominent example is Domino’s Pizza and its use of delivery as a service differentiation mechanism in the fast food industry.

Listening to customers must become everyone’s business. With most competitors moving faster, the race will go to those who listen (and respond) most intently. While this is true for all businesses, it has special relevance to retail. Retail today, is a part of the service sector. This is largely due to the fact that today retailers operate in a buyer’s market. Today’s consumer is a savvy shopper with an eye for price, service and convenience. He demands a lot and if the store fails to meet his expectations, he would rather shop elsewhere. The world has moved on the from the age of customer satisfaction to the age of customer delight, where organizations are remodeling their strategies around the customer and his needs, with aim of bringing him back and keeping hi for life.

The entire function of customer service needs to be understood from two perspectives. The first deals with the backend, which determines the activities undertaken to define the standards of service offered, the activities to define the measurement and quality control processes and activities that define personal responsibilities. This also includes post transaction activities.

The second is the one that directly deals with the interaction with the customers. Here the role played by the salespersons becomes important. Their communication skills and product knowledge and training are important.

The concept of customer service

To start with let us understand what is meant by the term customer service. Is it a returns policy? Is it a loyalty program? In India customer service is largely associated with loyalty programs however by itself customer service is a subject of a phenomenal amount of research world over. Customer service continues to remain an enigma to most retailers. Defining customer service is difficult as the concept itself is multi faced. The definition given by Lovelock focuses on various aspects:

Customer service is a task, other than proactive selling that involves interactions with customers in person or by telecommunications, mail or automated processes. It is designed performed and communicated with two goals in mind: operational productivity and customer satisfaction.

Thus, customer service may be termed as all the functions and activities performed by a retailer in order to satisfy the customer thereby building customers for life. In case of most customers, what is uppermost in the mind is their last experience with the retailer. They may have had a positive experience on the past ten occasions, but if the eleventh experience with the brand has been negative, it will subsume all the good ones that came before. Hence, customer service has in fact, become a necessity.

Very often, the terms customer service and customer satisfaction are used interchangeably however, the basic difference between them needs to be understood. Customer service focuses on measurement of how well a firm meets the established performance standards that re viewed as important to meeting customers’ needs Customers satisfaction on the other hand is how the customer measure externally the service performance of a firm. An important key to customer satisfaction is obtaining customer feedback. The aim of customer satisfaction is to identify the gap between customer perception of service and the actual service.

It is believed that every encounter that a customer has with a service provider in any form – personal on the phone, complaint handling bills etc – is a moment of truth. What customers know of the organization comes from various encounters that they had with the organization. How they feel about the organization is a result of the quality of these encounters. A moment of truth occurs any time a customer comes in contact with some aspect of the organization and uses the opportunity to judge the quality of service the organization provides. This when applied to the retailer, helps us understand why customers choose to patronize some retailers over others.