Planning Quality Customer Service

In an ever-competitive business environment, it is more vital than ever for organisations to deliver quality customer service. At a minimum, customers will expect that their product or service is delivered according to appropriate specifications. However, quality customer service is about going beyond the minimum expectations. Quality customer service does not just happen – it must be planned.

Planning quality customer service involves:

1. Identifying who the customers are
2. Clearly determining customer needs and expectations
3. Developing a plan on how these expectations will be met or exceeded
4. Implementing the plan

This section of the Study Guide is designed to provide an outline of each of these steps in order to ensure that you understand how to plan for quality customer service. The steps and skills discussed can be applied to any organisation.

The following fictional case study has been developed to help you understand the processes involved in planning and delivering quality customer service. We will refer to it throughout this module.

In order to deliver quality customer service it is important to understand who your customers really are. It is surprising how many organisations fail to adequately understand this! If an organisation does not take the time to get to know and understand who their customers are, it will be next to impossible to successfully determine their needs and deliver quality customer service.

When we talk about customers, most people instantly think of customers as the individuals who purchase the organisation’s products and services. While this is an adequate description of external customers, it is only half of the story. While the majority of customer service guides (and the majority of this Study Guide) focus on delivering quality service to external customers, it is important to understand that organisations also have internal customers – individuals within an organisation who rely on the work carried out by other employees in order to perform their own role. For example, if a sales associate requires a member of the finance team to produce an invoice in order to finalise a sale, then the sales associate is an internal customer of the finance team member. Most organisations have a number of different departments and so the relationships between these departments and their internal customers can have a tremendous impact upon the loyalty, attitude and productivity of employees. As Richard Branson says, “If you look after your internal customers you don’t have to worry about the external customers.”

To get loyal employees an organisation needs to ensure that they go beyond their employee’s expectations, just as they do for external customers. Employees expect organisational policies and procedures to be clear and streamlined and also to be provided with adequate training that will enable them perform their duties. However it is also possible for an organisation to exceed these expectations and deliver on things such as mentoring, coaching, and other personal development training. A working environment that fosters a happy, productive and respectful culture will most likely see this attitude being passed on to the external customer.

All business professionals must understand that customers are crucial to the success of any business. In planning to meet the needs of customers it is vital to first identify these needs (Arden and Edwards 2009).

Investigating customer needs often involves a combination of qualitative and quantitative research:

• Qualitative research is about getting people to talk about their opinions so that you can understand their motivations and feelings. Face-to-face interviews and group discussions are the best way to get this kind of in-depth feedback. Qualitative research can be valuable when an organisation is developing new products or coming up with new marketing initiatives that they would like to test. Examples of qualitative responses might include why someone feels they need a particular product or service, how do they feel after receiving a particular service or what motivated them to choose this product over another (Bell, Fisher and Kozinets 2013).
• Quantitative research is about asking people for their opinions in a structured way so that a business can produce hard facts and statistics to help them develop an understanding of their customers. Quantitative research methods include surveys and customer questionnaires. Examples of quantitative responses might include preferred opening hours, what their household income is, or what they are willing to spend on a particular product or service (Hagne, Hagne and Morgan 2004).

To help determine customer needs and expectations most organisations will seek to collect and analyse both qualitative and quantitative data on customer buying behavior (e.g., what, when, where, how and by who products and services are purchased) as well as obtain direct feedback from current customers.

To begin investigating customer needs (both internal and external) there are some questions that an organisation can focus on:

For external customers, the organisation may want to determine:

• Why and when does the target customer buy a product/service?  
• How does the customer buy this particular product and service? 
• When buying the product or service what does the customer expect? 
• How can the organisation meet and exceed the customer’s expectations?  
• What does the customer think about the organisation? 
• Is the customer experience a positive one?
• What does the customer think about the organisation’s competitors? 
• Does the organisation provide a better service than competitors?

For internal customers, the organisation may want to determine:

• What role does each department play within the organisation?
• How is each department performing and what are their satisfaction levels?
• What improvements can be made to ensure that the needs and expectations of internal customers are met?

As an organisation delves deeper into the needs and wants of its customers it is quite likely that customer segments will begin to appear. Customer segments will add further complexity to customer service as certain customers may want different products and services delivered differently.

Whilst different customer groups will have different expectations, there are some customer service standards that are commonly expected by all customers. Such expectations include:

Once an organisation has an understanding of their customers and their customers’ needs, it is paramount that the organisation develops a standard of service that meets or exceeds these needs. After all, there is no point in spending time and money understanding what customers want if you do not then use this information.

For most organisations, developing these standards will involve achieving the right balance of quality, time and cost for their products/services. The balance between these three factors will vary according to the particular requirements of the customer. This is why understanding your customers is so important in the first place.

When establishing customer service standards, organisations must decide what level of service they want to provide to their customers. In general, there are three key types of customer service: core, augmented and excellent service.

• Core Services. This involves providing a basic level of customer service. Core level service meets some customers’ expectations, however, many customers will not feel satisfied if they have experienced better customer service elsewhere. The better customer service will become the customer’s benchmark, therefore if an organisation only ever delivers the core level of service then it is likely that its customers will move to the competitor.
  An example of a core level of service:  You go to your local café and order your usual cup of coffee. You get the coffee you purchased. 
• Augmented Services. This level of service is going slightly above what customers might expect from the organisation, however the level of service at this level may not always be consistent. It is likely that this level of service will retain customers in the short- to medium-term however, it is unlikely to foster high levels of customer loyalty because it doesn’t deliver an exceptional experience.
  An example of an augmented level of service: You go to the local café and order a coffee. You get the coffee your ordered and the waitress also brings to your table a glass of water. 
• Excellent Service. At this level, an organisation has decided that they want to maximise their chances of being the market leader. Organisations that want to deliver this level of service are consistently looking for ways to improve their services with the most skilled and motivated employees. There is consistency in exceeding a customer’s expectations each and every time.
  An example of excellent service: You go to the local café and the barista greets you with your name (e.g. “Morning Jack”) and remembers what you like to order. You grab a seat and your coffee arrives with a complimentary small biscuit and glass of water and the waitress greets you with “enjoy your coffee, let me know if I can get you anything else Jack.” You drink your coffee whilst reading the complimentary newspaper. As you leave the waitress says goodbye and wishes you a great day. This happens every time no matter which staff members are on shift and no matter how busy the café is.

By providing excellent service, an organisation is more likely to gain loyal customers. In order to provide excellent customer service there are certain elements that a customer service manager will need to implement alongside the overall business goals. This include:

1. Following through on promises. It is very important that an organisation does what it says it is going to do. If it says it going to deliver a product in 48 hours then systems and processes must be set up to deliver on this promise.
2. Resolving problems effectively and efficiently. If a customer has a complaint these need to be taken seriously and resolved as quickly as possible. Customers like to be kept informed on what is being done to resolve their issue. Again organisations needs to have clear systems, procedures, and policies in order for this to happen.
3. Keeping things simple. To help your staff provide excellent customer service, processes and transactions should be as simple and stress free as possible for both the staff and customers. This will come down to having clear procedures, open communication, and adequate training for all customer service employees. 
4. Providing personalised attention. Customers like to be treated as individuals. This is sometimes as simple as using a person’s name when communicating with them. Such practices should be incorporated into customer service standards.

^{(Hagne and Morgan 2009)}

Customer Service Standards

Essentially, customer service standards should be developed in accordance with the business plan. Service standards help to: (1) establish the direction and goals of the organisation, and (2) establish benchmarks which can be used as a measure of success. Achieving service standards will come down to how effectively an organisation can utilise its people, systems and technology. However, clear standards must first be established and then communicated.

Service standards cannot be vague or ambiguous. There should be no room for doubt as to what exactly is expected from a customer service perspective. Service standards need to be clearly written, supported by management, reflect company goals and be communicated clearly and regularly to all staff members. When creating customer service standards organisations must fully understand the reason for the standard, who it will impact, and the procedure that will be used. Once plans are in place it is important that they are regularly reviewed. A review process will measure whether the plans are effective and/or if they are being followed accordingly. Some common examples of customer service standards and policies used by many businesses include:

• Customer Service Policy
• Customer Communication Policy
• Customer Complaint Policy
• Customer Enquiry Policy
• Customer Refund Request Policy
• Warranty/Guarantee

Customer Service Standards in Practice

Below is an extract from Bendigo Bank Telco Customer Communication Policy.

Reading this extract, it is clear that Bendigo Bank Telco wants to ensure clear and accurate communication with its customers and so has designed this customer service policy (which all staff must abide by).

Below are extracts from Virgin Australia’s Service Promise and Customer Service Plan. In these extracts we can see that Virgin Australia has set a customer service standard that clearly communicates to its customers where it stands in relation to quality, time and costs.

This is an example of a business placing itself as a service provider of high quality by aiming to exceed standards and expectations.

This standard considers the time it will take to communicate to customers if they cannot deliver on their service at the originally planned time. With this standard, the business needs to plan ahead and consider what will be the best way to contact their customers in the event of a delay or cancellation. The clear guidelines on when customers are to be notified sets clear policies and procedures for staff to follow.

The airline has identified that its target customer values cost as a critical factor when purchasing their airline ticket. They have set themselves as providing a low airfare with great service. From an organisational planning point of view it would be necessary to ensure that providing low airfares does not come at the cost of poor quality in both service and safety and that it also does not negatively impact the business’s bottom line.

As you can see the service standards set by Bendigo Bank Telco and Virgin Australia are not vague or ambiguous. There is no room for doubt as to what a customer should expect in any of these examples. Service standards need to be clearly written, supported by management, reflect company goals and be communicated continually.

A Note on Product Promotion and Public Relations

Product promotion and public relations are both aspects of marketing that are very much tied to the effective delivery of quality customer service and must therefore be incorporated into the planning process. Although both of these areas of marketing contain overlapping factors, there are key differences to each approach. Product promotions are techniques used specifically to stimulate demand for your products and/or services. This differs from public relations which is concerned with maintaining good relationship with your customers, the media, and the community at large. Some examples of the techniques used in product promotion and public relations are outlined below.

• Product promotion activities: These may include advertising campaigns, demonstrations of products in a marketplace, and door-to-door or telemarketing sales campaigns, or may also involve business to business sales campaigns. 
• Public relations activities: These may include Media relations activities such as press release articles or interviews, newsletters, or community relations activities such as sponsorship of a charitable organisation.

A Note on Legislative Considerations
It is imperative that all customer service policies and procedures comply with all relevant legislation. While relevant legislation may vary from industry to industry, all organisations must comply with:

• Relevant codes of practice for their industry. Codes of practice are essentially a set of rules that set out an industry’s commitment to deliver a certain standard of practice. Any organisational policies, including customer service standards, must comply with relevant codes. 
• Anti-discrimination legislation. There are a number of national, state and territory laws that make it illegal to discriminate against an individual on the basis of their ethnicity, religion, age, disability, sexual preference (and a range of other personal characteristics). Customer service standards must not directly or indirectly enforce any form of discrimination. 
• Work health and safety legislation. Organisations have a duty of care to provide a safe working environment for their workers and employees. All policies and procedures must comply with work health and safety legislation and practices. 
• Privacy laws. Specific legislation (such as The Privacy Act (Cth) 1988) restrict an organisation’s collection, use, management and disclosure of personal information. Customer service standards and organisational policies and procedures must comply with this legislation. For example, organisations should not give out their customer’s details. 
• Ethical principles. Organisations should also consider ethical principles when establishing their customer service standards. Just because a particular practice may be legal, it may not be ethical. Quality customer service involves delivering consistently ethical service. 
• Australian consumer law. Consumers in Australia are protected by Australian consumer law. This covers many areas of business dealings including consumer contracts, consumer rights, product safety, consumer redress and rules for things as lay-by agreements.

The rights of consumers are also protected by the Australian Competition and Consumer Commission (ACCC) as well as the Office of Fair Trading in each state.

The priorities of the ACCC are to:

• Maintain and promote competition and remedy market failure 
• Protect the interests and safety of consumers and support fair trading in markets
• Promote the economically efficient operation of, use of, and investment in monopoly infrastructure
• Increase our engagement with the broad range of groups affected by what we do.
  ^{(Australian Competitor and Consumer Commission 2014)}

The Office of Fair Trading deals with more specific one on one issues such as:

• Consumer rights
• Consumer complaints
• Investigation and compliance
• Scams
• Property sales and purchases
• Product safety
• Industry licensing

All organisations must ensure that they are complying with all relevant legislation when delivering services to customers.

Once an organisation has established their standards, it is important to implement these standards. Organisations must work to ensure that service standards are consistently maintained across the organisation. Additionally, organisations should always be searching for options for continuous improvement. The processes involved in implementing customer service plans are explored in more detail in the next two sections of this module.

This section of the module focused on planning quality customer service. You have learned about the importance of identifying customers and their needs and how service standards form an integral part of an organisation’s plan to meet these needs.