Retailing and Customer Service Strategy PDF

Preview

Summary

MK212 lecture 'Retailing and Customer Service Strategy'...

Description

Thursday, 24 June y Retailing and Customer Service Strategy

Customer Service; In Context - 67% of UK customers believe that customer service has deteriorated or

-

-

stayed the same in the past three years 22% believe it has improved a little 3% believe it has improved a lot 21% felt that service is becoming fundamental (2015) New research has shown that the number of brits satisfied with customer service has dropped to its lowest level since July 2015 The impact of panic buying and Brexit saw the most common problems within the food retail sector as availability of goods/services cited in 34.3% of problems Top performing organisations include John Lewis, M&S, Amazon and Aldi (research by the institute of customer service) M&S was the top ranked food retailer, with an increase in score on 1.7 points year on year leading it to taking fifth place, followed by Aldi, Iceland & Ocado In the face of ongoing uncertainty and shifting customer needs, this is an urgent wake-up call for all sectors, in particular retail, to make service a boardroom priority or risk undermining recovery later this year Customer service is a key enabler of business performance. In an increasingly complex customer experience environment, a bad encounter makes the difference between a one-off transaction and a long term, loyal customer 54% of customers have higher expectations for customer service today compared to one year ago This jumps to 66% for consumers aged 18 to 34 Gartner predicts that 89% of businesses are expected to compete mainly on customer experience Gartner have also predicted that by 2019 more than 50% of organisations will redirect their investments to customer experience innovations

Customer Value Propositions Should; - Increase the benefits and/or decrease the sacrifices that the customer perceives as relevant - Build on competencies and resources that the company is able to utilise more effectively than its competitors - Be recognisably unique from the competition - Result in a competitive advantage Customer Service Defined - It is ultimately about attracting, retaining and enhancing customer relationships 1

Thursday, 24 June y Customer Experience - Holistic in nature and involving the customers cognitive, affective, emotional, social and physical responses to the retailer Interaction - Balantine and Varey (2006) stress the importance of interaction as being critical to the relationship between retailers and customers - Both in a physical, virtual or a combination of engagement Points of Engagement

Drivers of Customer Experience Excellence Six Pillars; - Personalisation - Time and effort - Expectations - Resolution - Integrity - Empathy Strategic Questions - What level of service is proper to complement a retailers image? - Should there be a choice of customer service? - Should customer service be free? - How can a retailer measure the benefits of providing customer service against their costs? - How can customer services be terminated?

2

Impact of Increasing Customer Service Levels

GAPACT Framework

Categories of Customer Service - Compulsory

-

(qualifying services) Discretionary (determining services)

Designing Effective Customer Service Strategies - Customer service is a key competitive differentiator: a long term 3

Thursday, 24 June y

-

commitment Has to be driven from the top Customer knowledge has to be updated constantly Communicate effectively to all colleagues what they individually need to do Measure from a customers perspective

Information Requirements to Shape Customer Service Strategy - Frequency of browsing visits - Frequency of purchasing visits - Average transaction per visit - Items purchased - Range purchased - Products/services purchased/used - Satisfaction levels - Customer facilities used - Use of different retail channels - Comparison with other retailers visited Managing Customer Service Online “Online shoppers encounter oncoming sensory data from a range of stimuli on the e-retailers website such as text based information, visual imagery, video or audio delivery. The customer interprets this from a cognitive and affective perspective creating impression formation of the eretailer website” Online Dimensions of Customer Service - Reliability - Access - Ease of navigation - Efficiency - Responsiveness - Assurance - Security - Aesthetics - Personalisation Constraints to Effective Customer Service Design and Implementation - Levels of pay - Part-time staff

4

Thursday, 24 June y

-

Repetitive and boring In-store theft Technology Shift to ‘low-touch’

Shopping Behaviour - Consumers are 54% more likely to spend extra with companies with good customer service - 47% of consumers will pay a premium for products or services when they believe they are likely to receive a good service - 44% of UK consumers would pay a premium of 5% more for good service: this could lead to an increase in revenue of £350 million for a typical FTSE company

5...