Customer care=Chapter 3
prepared by Endalamaw K.
BDU
Chapter Three
Effects of customer service
3.1General requirement of customers: We know that different customers have different needs and
requirements:
 Some people are very budget conscious, and are very careful about spending money.
 Other people don’t mind spending money to enjoy themselves.
 Some people like holidays where they can get back to the basics, spend time outdoors, and just relax.
 Other people prefer spending their holidays in the big city, enjoying five star hotels, shopping dining and
attending the theatre.
 One person’s idea of a great holiday is to camp beside a lake and catch his own breakfast trout.
 Other people prefer to have breakfast in bed, with champagne, strawberries brought them on a silver
tray.
The most basic customer requirements are:
1. Friendliness: Friendliness is the most basic of all customers’ needs, usually associated with
being greeted graciously and with warmth. We all want to be acknowledged and welcomed by
someone who sincerely is glad to see us. A customer shouldn't feel they are an intrusion on the
service provider's work day!
2. Understanding and empathy: Customers need to feel that the service person understands and
appreciates their circumstances and feelings without criticism or judgment. Customers have
simple expectations that we who serve them can put ourselves in their shoes, understanding what
it is they came to us for in the first place.
3. Fairness: We all need to feel we are being treated fairly. Customers get very annoyed and
defensive when they feel they are subject to any class distinctions. No one wants to be treated as if
they fall into a certain category, left wondering if "the grass is greener on the other side" and if they
only received second best.
4. Control: Control represents the customers' need to feel they have an impact on the way things
turn out. Our ability to meet this need for them comes from our own willingness to say "yes" much
more than we say "no." Customers don't care about policies and rules; they want to deal with us in
all our reasonableness.
5. Options and alternatives: Customers need to feel that other avenues are available to getting
what they want accomplished. They realize that they may be charting virgin territory, and they
depend on us to be "in the know" and provide them with the "inside scoop." They get pretty upset
when they feel they have spun their wheels getting something done, and we knew all along a better
way, but never made the suggestion.
6. Information "Tell me, show me - everything!" Customers need to be educated and informed
about our products and services, and they don't want us leaving anything out! They don't want to
waste precious time doing homework on their own - they look to us to be their walking, talking,
information central.
Positive effects of good customer service
The importance of service
Providing your customers with quality service is important for the following reasons;
1. service is a distinguisher
This means that there are many businesses competing by providing similar services and
products. In leisure and tourism, the quality of the product can usually be seen in the
“Loyal customers, they don't just come back, they don't simply recommend you, they insist that their friends do business with you!” /Chip Bell
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Customer care=Chapter 3
prepared by Endalamaw K.
BDU
customer service that is offered. If you can’t distinguish your product from the competition
by price, you need to do so through a good reputation for service.
2. Service is a value adder
A product has value addition when it is made more useful to the customer. Example tea bags
are more expensive than loose leaf tea.
Benefits of Service Quality
Delivering excellent service is a winning strategy. Quality service sustains customers’'
confidence and is essential for a competitive advantage. Excellent service is a profitable strategy
because it results in more new customers, more business with existing customers, fewer lost
customers, more insulation from price competition, and fewer mistakes requiring the reperformance of services. Excellent service can also be energizing because it requires the building
of an organizational culture in which people are challenged to perform to their potential and are
recognized and rewarded when they do. The following are some of the benefits of service quality
for a company/hotel, travel agency, etc.
1. Customer retention-high quality builds loyal customers and creates positive word of
mouth. It is an important factor in the purchase decision. It determines customer
satisfaction, which affect repeat purchase and word of mouth.
“Loyal customers, they don't just come back, they don't simply recommend you, they insist
that their friends do business with you!”-Chip Bell
2. Avoidance of price competition-high quality can help to avoid price competition and help
to maximize potential revenue.
3. Retention of good employees-employees appreciate working in operations that are wellrun and produce high quality products. When an operation has good quality, it can retain
good employees. Recruiting is easier and training costs are reduced.
4. Reductions of costs:
A. Internal costs-are those associated with correcting problems discovered by the firm
before the product reaches the customer. E.g. cost of maintaining a broken air
conditioner.
B. External costs-are associated with errors that the customers experience. E.g. free wines
for a client complaining about slow service.
3.2 Negative effects of poor customer service: it is useful to discuss the causes for poor customer
service before discussing the consequences of poor customer service.
1. People are not trained. When an organization does not spend the time to fully train their
people the consequence is poor service.
Solution: Dedicate resources (time and money) for training and reinforcement. Employees
should be fully informed about company goals, the products and services. Emphasis and training
should be focused upon the importance of listening and responding to the customer’s
requests. People can only do the job if they are given the right tools and objectives. It costs
money to train people. It will cost more if you decide not to train them.
“Loyal customers, they don't just come back, they don't simply recommend you, they insist that their friends do business with you!” /Chip Bell
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Customer care=Chapter 3
prepared by Endalamaw K.
BDU
2. People don’t care. Selecting the correct personality is crucial for your business
success. Uninterested or self centered personality types have no place in a business that requires
customer contact.
Solution: Focus the selection and evaluation process to identify personalities that do not fit the
required profile. Get the wrong people out immediately, it also sends a clear message to
everyone.
3. Sabotage. Angry or frustrated employees can actively work to sabotage and try to destroy the
company.
Solution: Keep honest and open communications with employees. Informally and formally
review performance, goals, objectives and feelings to stop potential problems before they reach
the customers. Get these people out of the front lines immediately.
4. Employees don’t believe in the company, product or service. If the image, marketing and
promotion of the company is quite different from the reality, workers will not be able to sustain a
positive attitude in the face of problems they know exist.
Solution: Be honest. Work closely with customer service, marketing and quality control to
identify real problems and fix them. Don’t let marketing advertise over problems, solve them.
5. Personal problems reflected in work. When an employee’s personal life is in crisis or out
of control, they may exercise control, aggression and negativism toward customers in an attempt
to put some part of their life in order.
Solution: Clear communications with employees: If their personal life is affecting work
performance, talk about it. Time off, access to counseling or just listening may prevent more
serious problems.
6. Burnt out. Too much negative, too many complaints can lower a person’s level of
commitment and move their positive and helpful attitude to an apathetic one.
Solution: Constant communication helps to identify who is burning out and why. Get customer
service people together to talk of success and how to deal with the frustrations. Provide
recognition or incentives for excellence in dealing with problems.
7. Designing service without customer involvement: This is impossible to achieve especially
in the leisure and tourism industry due to nature of the industry.
Solution: involve and develop service with customers as they are the final users of your product.
8.
Don’t see the benefits – don’t understand their role in the company.
Solution: Employees project an image of the company. They are the company. They should be
reminded of their importance and value to the customer and to the company. Incentives, recognition,
training and constant reinforcement are important.
9. uninterested from hearing the same problems over and over. A fundamental role of the
customer service division is to provide constant feedback on how customers view the company,
“Loyal customers, they don't just come back, they don't simply recommend you, they insist that their friends do business with you!” /Chip Bell
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Customer care=Chapter 3
prepared by Endalamaw K.
BDU
the products and the service. If this feedback is not analyzed and acted upon by upper
management a feeling of apathy and frustration is created.
Solution: Set up a model and procedure for the accumulation, analysis and implementation of solutions
for the problems identified by customer service.
10. Incentives/salary not tied up to results.
Solution: If you insist that the company depends upon people, and that people are the key to
success, implement compensation packages, evaluations and incentives that support and
reinforce this.
Negative effects of poor customer care: If a company provides poor customer service, it will
have many disgruntled customers. Many companies have gone out of business because of poor
customer service. More ever, the following are the major effects:
1) Lost Market Share: when you provide poor customer service, you will lose market share.
Your competitors will begin to take over your customers. A disgruntled customer will
quickly spread the word about the poor service he received from your company.
2) Decreased Profits: bad can lead to decreased company profits. When profits tumble, stock
value can decrease as well. This will adversely affect shareholders.
3) Low Morale: your customer service department will become inefficient and ineffective.
They will spend the majority of their time on the phone arguing with customers. This can
lead to low morale and high turnover. No one wants to work for a company that is not topnotch.
4) Change in Management
Poor customer service can lead to a change in management. Sometimes a new leader
can exercise a certain amount of discipline, which will turn things around.
5) Increased Training Expenses
If a company provides poor customer service, it will incur expenses to train employees on new
techniques and procedures for customer service. The company will also have to train new
employees as a result of the turnover. Expenses will increase, and sales will decrease
6) Decrease in organization's reputation
7) Bad word of mouth
8) High turnover or attrition
3.2 Magical Customer care words
“In business you get what you want by giving what they want!”
1) YES V/S NO : We are not able to reduce your room rate but I am able to upgrade your room
2) Thank you
3) Glad you called / came.
4) Have a nice journey/vacation/meeting/….etc
5) How may I serve / assist you?
“Loyal customers, they
Cause the final user of your product is your customer
don't just come back,
6) What is most convenient for you?
they don't simply
7) What else can I do for you?
recommend you, they
8) I’m not sure, but I will find out.
insist that their friends
do business with you!”
9) thank you for your stay. Please call us again.
/Chip Bell/
10) I apologize for our mistake. Let me make it right
“Loyal customers, they don't just come back, they don't simply recommend you, they insist that their friends do business with you!” /Chip Bell
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