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Lecture

RMG 200 Lecture Notes - Customer Service, Salse, Aisle


Department
Retail Management
Course Code
RMG 200
Professor
Brent Barr

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STRATEGIC ADVANTAGE THROUGH CUSTOMER SERVICE
Customer Service Strategies
Customization Approach
Standardization Approach
- Encourages service providers to tailor the service to
meet each customer’s personal needs
- Eg. Salse associates in specialty stores help
individual customers locate appropriate apparel and
accessories
- Eg. Harry Rosen does customer service with a stylus
- Standardization approach: an approach used by
retailer to provide customer service by using a set of
rules and procedure so that all customers
consistently receive the same service
- Eg. McDonalds
- 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
gap
The difference between the actual service provided to customers and the service promised
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
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