CUSTOMER SERVICE - Novella



ANSWERS

KEY TERMS

The answers to the statements (Key Terms) are placed below the statements:

1. A term used by Peter Senge in his book The Fifth Discipline to describe organizations that value knowledge, education, and employee training.

Answer: learning organization

2. The process of righting a wrong or correcting something that has gone wrong involving a product or service to a consumer; it is based on the management giving employees authority to act without first asking for management intervention in order to resolve customer issues.

Answer: service recovery

3. The method(s) used by an organization to provide services and products to its customers. Answer: delivery systems

4. Those people outside the organization who purchase or lease products and services.

Answer: external customers

5. Includes an element of an organization that a customer encounters. Answer: organizational culture

6. Products or services provided by an organization. Answer: deliverables

7. Refers to the employees of an organization. Answer: human resources

8. People within the organization who either require support and service or provide information, products and services to service providers.

Answer: internal customers

9. The term applied to a programming error made in many software packages that would cause a computer to fail at midnight December 31, 1999.

Answer: Y2K bug

10. The environment made up of and influenced by various elements of an organization.

Answer: customer service environment

11. United States governmental agency established to assist small business owners. Answer: Small Business Administration (SBA)

12. An entire spectrum of companies that market products and services on the Internet and through other technology, and the process of accessing them by consumers.

Answer: e-commerce

13. A trade agreement entered into by the United States, Canada, and Mexico. Answer: North American Free Trade Agreement (NAFTA)

14. A period of military, economic, and political tension and competition between the United States and the former Soviet Union. Answer: Cold War

15. The term applied to an ongoing trend of information, knowledge, and resource sharing around the world. Answer: globalization

16. Refers to a business-to-business customer service. Answer: business-to-business (B2B)

17. Refers to the practice of contracting with third-party companies or vendors outside the organization (usually in another country) to deliver products and services to customers or produce products.

Answer: outsourcing

18. Occurs when governments remove legislature or regulatory guidelines that inhibit and control an industry.

Answer: deregulation

19. Term applied to the situation in which employees are terminated. Answer: downsizing

20. The term applied to the activity in which workers spend part of their day working from home. Answer: telecommuting

21. A term used to describe the trend in which businesses have shifted from a focus on production and manufacturing to a greater focus on service delivery. Answer: service economy

22. Refers to organizations and individuals involved in delivering service as a primary product.

Answer: service sector

23. Term applied to the early days of customer service when many people started small businesses in their homes or cottages.

Answer: cottage industries

24. The ability of knowledgeable, capable, and enthusiastic employees to deliver products and service to their internal and external customers in a manner that satisfies identified and unidentified needs and ultimately results in positive word-of-mouth publicity and return business.

Answer: customer service

25. A term used to describe businesses that are engaged primarily in service delivery. Answer: service industry

26. Something produced or an output by an individual or organization. Answer: product

27. A company that spends energy and effort on satisfying internal and external customers by first identifying customer wants, then establishing policies, procedures, and management and reward systems to support excellence in service delivery. Answer: customer-focused organization

28. Concept of identifying customer needs: understanding and influencing customer behavior through ongoing communication strategies in an effort to acquire, to retain and to satisfy the customer.

Answer: Customer Relationship Management (CRM)

ASSESSMENT CHECK

Learning Objective 1

Define customer service.

1. Why may the definition of customer service vary?

Answer: Depending on an organization’s focus, such as retailing, medical, manufacturers, or repair service, the goals of providing customer service may be different.

2. How can an organization become a customer-focused organization?

Answer: A company that spends energy and effort on satisfying internal and external customers by first identifying customer needs, then establishing policies, procedures and management and reward systems to support excellence in service delivery becomes a customer-focused organization.

3. Explain why the concept or practice of customer service is not new.

Answer: It has evolved from a meager beginning into a multimillion-dollar worldwide endeavor. When people worked on farms, small artisans and business owners provided customer service to their neighbors. For those living in rural areas, peddlers made their way from one location to another. Many small towns had their own service-oriented establishments. Further, many made and sold or bartered products from their homes in what became known as “cottage industries”.

Learning Objective 2

Describe factors that have impacted the growth of the service sector in the United States.

1. How has employment changes affected the service sector?

Answer: The shift from goods-producing to service-producing employment has affected employment demands in many occupations (see Figure 1.3 on page 9). Employment in the goods-producing industries has been stagnant since the early 1980s. Overall, this sector is expected to decline. Technology has replaced many production line workers and increasing numbers of service jobs have been created. Technology-related service jobs are expected to continue to grow.

The economy has also affected jobs in the quantity of jobs being created (need has increased for many new technical skills and at the same time skills performed by employees have been transferred to automation). The distribution of jobs has encountered two trends: the need for employees to have access to networks and to engage in collaborative exchanges and the ease of transmission and exchange of information. The quality of jobs has been affected; job security has also been affected. It is likely that competition for jobs will continue to become more intense. Networking (building relationships inside and outside the organization through meetings, interactions and activities such as joining and becoming involved in committees and boards) will be invaluable.

Shifts in the population and labor force and increased efficiency in technology have all had an impact. So has globalization, with many companies focusing on business-to-business initiatives, as well as individual consumers.

Deregulation has caused competition to flourish but also has caused breakdowns in service quality in many companies.

Agreements on trade with foreign countries have made it possible for US-based companies to send jobs across borders. With increased ease of transportation, companies cannot ignore international competition.

More people are finding themselves working at an office job or providing service on a variety of work shifts. This trend has led to new occupations (e.g., clothes cleaning services, house cleaning, care for children, personal shoppers, and the like).

More women have entered the workforce, which also has impacted the service occupations just mentioned.

Additionally, an increasing number of older workers are entering the workforce. There has been an increase in small business growth, and the concept of e-commerce has taken a firm grip on many companies’ growth patterns.

2. How have the forces that are shaping the world changing the economics of America and many other countries?

Answer: Demographic shifts in population, technological changes, globalization, deregulation, geopolitical changes, an increase in the number of white-collar workers, socioeconomic program development, and more women entering the workplace are some of the major shifts occurring in the U.S. and the world.

3. What opportunities has technology created in the services sector?

Answer: Technological advances in the computer and telecommunications industry have created hundreds of service opportunities for people who monitor and run the machines and automated services. Think back to the last time your computer or other telecommunication device crashed and your gratitude for the service provided by the person (or persons) who answered your questions and helped you get back online, whether it was through a telephone call, an Internet chat, or in person.

Learning Objective 3

Identify the socioeconomic and demographic changes that have influenced customer service.

1. How has the distribution of jobs impacted service occupations?

Answer: Employees need to have regular access to personal and professional networks and to engage in collaborative exchanges. The access to technology has changed the location of jobs from business to homes or satellite offices. Telecommuting is practiced by 20.7 million persons who work from home. Workers employed in professional and business services, in financial activities, and in education and health services are among the most likely to work at home.

2. How has the quality of service jobs changed?

Answer: As social and workplace demographics continue to shift and people move around in our mobile society, job security has been affected; competition for better jobs will become more intense. Employees who will obtain and maintain better customer service jobs that provide good working conditions, security and benefits will be better educated, trained and prepared. What has caused the increase in production and quality and what two side effects have resulted?

The development and increased sophistication of machines and computers have caused an increase in production and quality. Two side effects have been an increased need for service organizations to take care of the technology (service jobs were created to maintain and run the machines and automated services) and a decrease in manufacturing and blue-collar jobs.

An increase in white-collar jobs has emerged as a result of work shifts and new types of service occupations (e.g., cleaners, shopping services, child care services). They have emerged to take care of those new service needs.

Learning Objective 4

Recognize the changes in consumer behavior that are impacting service.

1. How has the desire for better leisure time impacted service occupations?

Answer: People have more disposable income and may have achieved middle and upper income status. They have, therefore, a heightened desire to relax and to enjoy children and grandchildren, and they want to use their free time in more personally satisfying ways. They now rely on service organizations for services such as personal shopping, lawn care, car wash, dog walker, laundry pickup and delivery, and executive book summaries.

2. What ramifications has consumer expectation of quality service caused?

Answer: Most customers expect a quality product or service. If not provided, they call or visit a competing company. This has also created a need for better-trained and better-educated customer service professionals. These professionals need up-to-date product information and must understand organizational policies and procedures, the competition, and the latest technique in customer service and satisfaction.

3. What affect has the educated consumer of today had on companies’ products and services?

Answer: Consumers are more informed about what they should receive for their money, making it difficult for less reputable businesses to prosper or survive. All business owners find themselves continually proving the worth of their products and services. They must provide customer satisfaction or lose customers to their competition.

Learning Objective 5

List the six major components of a customer-focused environment.

1. What are the six components of a customer-focused environment?

Answer: The customer, organizational culture, human resources, products/deliverables, delivery systems, and service are the components of a customer-focused environment.

2. Who is the key component in a customer-focused environment?

Answer: The customer is the key component.

3. What are the two categories of customers?

Answer: The two categories of customers are internal and external customers.

4. Who are external customers?

Answer: They may be current or potential customers or clients who actively seek out, research, and buy, rent or lease products or services offered by an organization.

Learning Objective 6

Explain how some companies are addressing the changes impacting the service sector.

1. What is a learning organization?

Answer: A learning organization is one that uses knowledge as a basis for competitive advantage. It values knowledge, education and employee training.

2. Who coined the phrase learning organization?

Answer: Peter Senge in his book, The Fifth Discipline, made the term popular.

3. Explain how companies use a proactive approach of anticipating customer needs as a common theme in today’s society.

Answer: To excel, organizations must train all employees to spot problems and deal with them before the customer becomes aware that such problems exist. Every employee must take personal responsibility for customer care.

4. Describe the concept of service recovery.

Answer: When employees are empowered to solve customer problems without having to ask for management intervention first, this is called service recovery.

CRITICAL THINKING QUESTIONS

Learning Objectives 2, 3, 4

1. How has the increase of white-collar workers and women in the workplace impacted the advent of new service occupations?

Answer: Many workers now have disposable income and, therefore, more opportunities to spend that increased income. Many are finding themselves in middle and upper income brackets with wants and needs to go along with that increased status. Because of this trend, new service businesses are developing to help people enjoy more leisure time, to travel, to avoid doing home and yard chores (such as cleaning services and lawn services), to have personal shoppers for grocery items, gifts and clothing, to have gourmet chefs who come and prepare a week’s menu and leave the items in the fridge, and so.

As women are becoming a large part of the workforce, they have seen their income levels rise. The impact of this trend is that many service occupations take up the chores that women used to do at home, as women have more disposable income to spend on items such as cleaning services, lawn services, child care services, and the like.

Learning Objective 6

2. How can increased global competition benefit the United States and its workers?

Answer: If the U.S. wants to continue to be competitive, it must focus on quality products and excellent customer service. The US services face growing global markets with high quality products at lowest prices possible. Many foreign companies have also built plants and have begun operations in the U.S. This activity also benefits the US economy and its workers, as employment is provided and supplies and equipment are usually purchased in the U. S.

Learning Objectives 1, 5

3. If the Jones Company was to start providing inferior furniture manufactured by its plant located in the U.S., what would be the effect on the fourth component of a service environment?

Answer: There are two areas of customer satisfaction or dissatisfaction: quality and quantity. If customers believe they are being sold an inferior product that does not match their expectations, they will be dissatisfied and will likely take their business elsewhere. Enough of this movement away from the company can seriously impact its revenue and can lead to the failure of the business.

Learning Objectives 4, 5

4. Francine believes that her coworkers are asking too much from her and she has been heard to exclaim, “You are not my customer. My customers are out front in the display area.” What can you expect from this type of attitude?

Answer: She is wrong. Anyone in the organization is her customer. They may not be traditional customers who come in and buy from the displays, but they are customers nevertheless. As Karl Albrecht and Ron Zemke say in their book, Service America, “If you’re not serving the customer, you’d better be serving someone who is.” This is true because if you aren’t providing stellar support and service to internal customers, external customers usually suffer.

PRACTICE TEST ANSWERS

|Multiple- Choice |Learning |Page |

| |Objectives | |

| 1. C |LO1 | 2 |

| 2. D |LO1 | 6 |

| 3. D |LO1 | 6 |

| 4. B |LO2 |10 |

| 5. C |LO2 |11-12 |

| 6. C |LO2 |11 |

| 7. C |LO2 |12 |

| 8. C |LO3 |12-13,18 |

| 9. B |LO3 |16 |

|10. C |LO3 |19 |

|11. D |LO3 |19 |

|12. D |LO4 |20 |

|13. C |LO5 |21-22 |

|14. C |LO5 |25-26 |

|15. A |LO6 |26 |

|True-False |Learning |Page |

| |Objectives | |

| 1. T |LO1 | 6 |

| 2. F |LO1 | 7 |

| 3. T |LO2 | 8 |

| 4. T |LO2 | 9 |

| 5. F |LO2 |11 |

| 6. F |LO2 |12 |

| 7. T |LO3 |14 |

| 8. F |LO3 |15 |

| 9. F |LO3 |15-16 |

|10. F |LO3 |15 |

|11. T |LO4 |20 |

|12. F |LO4 |21 |

|13. F |LO5 |23 |

|14. F |LO6 |26 |

|15. T |LO6 |26 |

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