Customer service
CONTROLLED ASSESSMENT TWO: PEOPLE IN
BUSINESS
The importance of good customer service
 Without customers a business will fail
 Businesses seek to attract new customers and retain
existing ones (repeat business)
 Providing good customer service allows a business to
ensure that existing customers return and new
customers deal with the business
 This reduces business costs overall and in particular
advertising and marketing costs
The benefits of good customer service
To summarise good customer service allows a business
to:
 Gain new customers and retain existing ones
 Generate customer loyalty
 Improve the businesses reputation and public image
 Enable the business to increase or retain market
share
 Increases revenue and profits
 Provide information about products
Types of customers
Customers can be divided into external customers and
internal customers
 External customers are people outside of the
business who visit it to buy a product
 Internal customers are people within the same
organisation who need other members of staff to
provide a service for them
Customer expectations
 Customer expectations vary greatly depending upon
what the customers are buying, how much they’re
paying and how often such transactions take place
 Generally customers are concerned with; value for
money; a prompt response to enquiries; clear and
unbiased information; help with particular issues;
information about suitable products; care and
attention; after sales service
Value for money
 Consumers tend to expect the product to be worth
the amount they pay for it
 Higher-priced products should reflect superior
quality
 Obviously such a concept is subjective i.e. depends
upon opinion, and can vary from individual to
individual
A prompt response to enquiries
 Most customers expect staff to be able to answer
basic questions regarding the product
 If they ask a member of staff who does not know the
answer to a question then they expect to be directed
to one who does
 Not knowing the answer to a basic question or even a
more complex one can reflect badly on the company
Clear and unbiased information
 Business cannot knowingly mislead a customer
 However, customers may be misled by certain
companies either explicitly or through legally
acceptable but unethical stunts, such as very small
print
 Laws have been passed to avoid this, but
unscrupulous companies can get around these
Help with particular issues
 Businesses should be able to respond to people’s
individual needs
 This may be as simple as providing delivery outside
of working hours so that someone who works 9-to-5
can be at home when goods are delivered
 Or it can be more complex, such as providing access
to customers with particular requirements such as
disabilities
Information about suitable products
 A number of products are very technical such as
computers and video cameras
 It’s up to the customer service assistant to recognise
an individual’s needs and to meet those needs with
an appropriate product
 I.e. someone with very little technical knowledge
who just wants to use a PC for surfing the net, would
find very little use for a high-end machines with CAD
and CAM software
Care and attention
 Most people still want individual attention from
another person
 Particularly with complex high-value purchases,
such individual attention can mean a sale and a
happy customer likely to return in the future
After sales service
 Particularly important with high-value items
 Includes repair to the product, returning the item for
exchange, ordering spares, complaining, and more
technical queries
 On high-value items good after sales service can
mean the difference between a purchase or nonpurchase
Customer satisfaction
 How do businesses measure customer satisfaction?
 First of all what do we mean by customer satisfaction?
 Some people would argue that customers are only truly
satisfied if they returned to buy again.
 Others regard satisfied customers, as those whose basic
expectations are met by the business
 Businesses have four basic ways to measure customer
satisfaction: analyse sales data, examine number of
complaints, compare their performance with competitors
and formal/informal feedback from customers.
Analysing sales
 By looking at the number of customers who make
enquiries and comparing it with the number of
customers who carry out a transaction, businesses
can get some measure of customer satisfaction
 Loyalty cards enable the business to see how much
and when consumers spend their money. This allows
them to measure consumer satisfaction on a basic
level.
 Repeat business would tend to suggest customer
satisfaction.
Number of complaints
 Measuring the number of complaints will allow
business to determine customers dissatisfaction
 Complaints may vary in seriousness and as a result
may indicate different degrees of customer
satisfaction or dissatisfaction
 Some customers may have a history of making
excessive complaints
 Complaints may not be related to customer service
and should therefore be treated appropriately
Compare performance with competitors
 If competitors are suffering the same problems than
such complaints may not be a result of poor
customer service but rather something that is
endemic in the industry
 For example, in the recent downturn many firms are
suffering a decline in sales, this is due not to poor
customer service, but to a decline in the economy
 Such information can be gathered from rival’s
company reports or market research data
Formal/informal feedback from customers
 This can take the form of formal market research and
feedback from sales staff
 Formal methods include: observation,
questionnaires, consumer panels and interviews, email, websites.
 Informal methods include mainly feedback from
shop floor staff.
Consumer and business legislation
 Health and Safety laws are probably the most
important
 The Health and Safety at Work Act protects both
customers and workers
 If the business is responsible it will ensure that its
premises and facilities are safe for all users
 This includes both customers and employees
Contract of sale
 When a consumer buys a product or service they
enter into a contract
 Such contracts can be split into express and implied
terms
 Express terms are explicitly stated in the transaction
– for example an item is to be installed
 An implied term is something which isn't stated
because it's obvious, such as a reasonable price for
the products
The terms of the contract
 The contract is also divided in terms of conditions -
for example a product has to be unused if bought
new
 Also in terms of warrantee – for example, if a
product is supposed to have modifications and did
not, then you would have recourse to play a lower
price
Sale of Goods Act 1979 and 1995
 The Sale of Goods Act 1979 and 1995 says that all
groups must be as described
 It also says that all goods must be of satisfactory
quality
 Furthermore, all goods must be fit for the purpose
for which they are intended
Supply of Goods and Services Act 1982
Supply of Goods and Services Act of 1982 protects
against:
 poor workmanship
 delays
 excessive charges
Consumer Protection Act 1987
 Consumer Protection Act 1987 refers to price and
safety
 It states that customers cannot be misled about price
 This also applies to sales prices when massive
reductions have been highlighted which are not
necessarily correct
 Also when goods are placed on sale at a very low
price, but the business hasn’t got the goods to supply
The Trade Descriptions Act 1968
 Makes it illegal to describe goods in a false or
misleading way
 Misleading pictures or packaging are not allowed
 The quantity, size, method of manufacture, materials
used must be described
The Data Protection Act
 The Data Protection Act limits the ways in which
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companies can use information on individuals
All individuals have a right to see any information
held on them by a particular company
Businesses can only use this information in a way
which is agreed upon by customers
Some organisations will guarantee the information
will not be passed on to other businesses
However some organisations require customers to
allow this, and increasingly some organisations will
not do business with you unless you accept this
condition