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ch 14 part 2.docx

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Ryerson University
Retail Management
RMG 200
Brent Barr

STRATEGIC ADVANTAGE THROUGH CUSTOMER SERVICE Customer Service Strategies Customization Approach Standardization Approach - Encourages service providers to tailor the service to - Standardization approach: an approach used by meet each customer’s personal needs retailer to provide customer service by using a set of - Eg. Salse associates in specialty stores help rules and procedure so that all customers individual customers locate appropriate apparel and consistently receive the same service accessories - Eg. McDonalds - Eg. Harry Rosen does customer service with a stylus - Store or website design and loyout also play an important role Cost of Customer Service - Providing high quality service, particularly customized service can be very costly - Eg. Savoy Hotel had high level of personal attention but it was very costly - However, in many cases, good customer service can actually reduce costs and increase profits Returns Rethink - Retailers need to consider the costs and benefits of service policies - The easy return policy is an important selling feature for the department stores - Customers will put up with a lack of other services, but the return policy is an established expectation and changing this liberal policy is difficult CUSTOMER EVALUATION OF SERVICE QUALITY - Customers evaluate retail service, they compare their perceptions of the service they receive with their expectations Role of Expectations - Customer expectations are based on a customer’s knowledge and experiences - Technology is dramatically changing the ways in which customers and firms interact – customers expect want good service even when people are not involved - Expectations very depending on the type of store – eg. Customers expect a supermarket to provide convenient parking but not have employees at every aisle for information - Since expectations aren’t the same for all types of retailer, a customer may be satisfied with low levels of actual service in one store and dissatisfied with high service levels in another store - Customer delight – when retailers provide unexpected services, building high level of customer satisfaction - Customer service expectations vary around the world – eg. Germany’s poor customer service is well known THE GAPS MODEL FOR IMPROVING RETAIL SERVICE QUALITY - The Gaps Model indicates what retailer need to do to provide high-quality customer service - Retailers need to reduce the service gam (difference between customers’ expectations and perceptions of customer service) to improve customers’ satisfaction with their service Four factors affect the service gap are: Knowledge gap The difference between customer expectations and retailer’s perception of customer expectations Standards gap The difference between the retailer’s perceptions of customer’s expectations and the customer service standards it sets Delivery gap The difference between the retailer’s service standards and the actual service provided to customers Communication The difference between the actual service provided to customers and the service promised gap in the retailer’s promotion program - These four gaps add up to the service gam - The retailer’s objective is to reduce the service gap by reducing each of the four gaps - The key to improving service quality is to: o Understand the level of service customers expect o Set standards for providing customer service o Implement programs for delivering service that meets the standards o Undertake communication programs to accurately inform customers about the service offered by the retailer KNOWING WHAT CUSTOMERS WANT: THE KNOWLEDGE GAP - Retailers can reduce the knowledge gap and develop a better understanding of customer expectations by undertaking customer research, increasing interactions between retail managers and customer, and improving communication between managers and employees who provide customer service - Eg. Supermarket hire extra people to make sure shelves are stocked at night, but then customers are most concerned about waiting at the checkout line Researching Customer Expectations and Perceptions - Market research can be used to better understand customers’ expectations and quality of service provided by a retailer Gauging - Survey customers immediately after a retail transaction has occurred satisfaction - Customer research on individual transactions provides up to date information about with individual customers’ expectations and perceptions transactions - The research indicates the retailer’s interest in providing good service Focus Groups - 8-12 customers to gain insights into expectations and perceptions - Participants are rewarded with food and merchandise or money for their time and effort - To reduce knowledge gap, some managers may select customers who’ve made large and small purchases; they call these customers and ask them what they liked and didn’t like about the store - Some retailers have consumer advisory boards composed of a cross section of their preferred customers Interacting - Owner-managers of small retail firms typically have daily contact with their customers and with customers thus have accurate firsthand information about them - In large retail firms, managers often learn about their customers through reports so they miss the rich information provided by direct contact with customers Customer - Complaints allow retailers to interact with their customers and acquire detailed complaints information about their service and emrchandise Feedback from - Salespeople and other employees in regular contact with custoemrs often havea good store understanding of customer service expectations and problems employees Using Customer Research - Collecting information about customer expectations and perceptions isn’t enough - Feedback on serviced performance needs to be provided to employees in a timely manner - Feedback must be prominently presented so service providers are aware of their performance SETTING SERVICE STANDARDS: THE STANDARDS GAP - Develop systems for delivering high quality service - Service standards should be based on customer’s perceptions rather than internal operations To close the st
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