Customers and customer service - Osborne Books

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Customers and customer service

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Sta rting point

Businesses rely o n custo mers fo r their survival. The pressures o f co mpetitio n dictate that custo mers must be at the centre o f everything that a business do es. Fo r example, the co re purpo se o f Tesco is ` to create value fo r custo mers to earn their lifetime lo yalty' . Value is relatively easy to achieve, but lifetime lo yalty can o nly be achieved when a custo mer is g iven g o o d service and wants to co me back ag ain.

Wha t you will lea rn from this cha pter

custo mers are impo rtant to an o rg anisatio n such as a business:

external custo mers can include a wide rang e o f ` types' identified by market research in categ o ries o f ag e, culture and lifestyle; internal custo mers include immediate co lleag ues, peo ple in o ther departments and o ther suppo rting o rg anisatio ns

custo mers all have different needs which must be lo o ked after by a

business ? these relate to facto rs such as ag e and disability

custo mers have co me to expect certain levels o f custo mer service that

they will receive befo re, during and after the sale o f a pro duct o r a service; the extent o f these expectatio ns will vary with the nature o f the pro duct o r service

custo mer service relates to issues such as staff attitude, the premises

and the pro ducts (o r services)

g o o d custo mer service relates very much to the use o f co mmunicatio n

skills ? an emplo yee o f a business must be able to tell the custo mer abo ut the pro duct o r service and be able to deal with co mplaints

Custo mers and custo mer service

Requirements of your Assessment

sta ge 1 - contra st two orga nisa tions The first stage of your assessment for Unit 5 requires you to investigate customer service in two contrasting organisations. You will need to appreciate in both cases who the external and internal customers are, and how the customer service meets the expectations of customers. The need to choose two `contrasting' organisations opens up a wide range of possibilities. You could choose: a small business and a large business offering a similar product or service a business selling a product and a business selling a service a private sector business and a public sector organisation You could theoretically choose your own school or college, although you would have to be guided by your teacher/lecturer.

sta ge 2 - a na lyse one of the orga nisa tions in more deta il The second stage of your assessment for Unit 5 requires you to be more analytical. You will need to choose one of the organisations which features in the first stage and carry out the following in relation to that organisation: evaluate the strengths and weaknesses of its customer service activities

and make suggestions for improvements research and analyse the ways in which the chosen organisation

maintains, monitors and then improves the quality of its customer service investigate the way in which current legislation affects the way in which

customer service operates In this chapter we will illustrate the elements of customer service with a Case Study of a large retail business (private sector). The next chapter uses a local authority Sports Centre (public sector) to illustrate quality standards.

sta ge 3 - present your findings The evidence for your investigation should take the form of a presentation with speaker notes. You could use Powerpoint to present your evidence. The notes that you have compiled when investigating customer service should support your submission and be accompanied by a detailed witness statement from your teacher/lecturer. You will be allowed to work in pairs if you wish, but there should be evidence of your individual contributions.

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Customers

wha t is a customer?

The traditional definition of a customer is:

someone who buys goods or services

A customer is someone who buys something, whether it is a magazine from WH Smith or a train journey from Virgin Trains. This person is a customer of a private sector business where a product or service is sold for profit. If a private sector enterprise loses its customers, it lose its sales, profit and in some circumstances its future.

a patient customer

Widening the definition further, the `customer' culture is also applied to the public sector where you are a `customer' if you borrow a library book or end up in hospital. Interestingly, business principles also apply here: if local doctors do not refer enough cases of, say, chest problems, to a certain hospital's chest division, either because of its location or reputation, that department may have to close and future patients ? `customers' ? will be referred to another hospital.

The definition of a customer may therefore be modified to:

someone who obtains goods or services

When you are investigating organisations for your assessment, note that the term `customer' may include any of the following examples:

a student at a school or college

a patient at a hospital

a member of a gym

a shopper at a supermarket

another type of customer

a passenger on a bus

someone booking a holiday

new a nd old customers

Some customers can be classed as new customers ? the prospects that the marketing department of a business want to persuade to make a purchase. These are the people who will provide future income and profit and become part of a customer base which the marketing department will want to retain and develop.

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Custo mers and custo mer service

An organisation such as a business must also look after its existing customers. It must make sure that these customers will come back and buy again, and buy more. This will lead to increased sales and profit. Look at the statistics:

why do businesses lose customers? 1% die 3% leave the area 4% naturally float between businesses ? they have no loyalty to any business 5% change because a friend tells them about other businesses which they say are better 9% find the products or services are cheaper somewhere else 10% just like complaining ? they actually enjoy it!

but the most important figure is: 68% go elsewhere because they are unhappy with the service that they were given

We will discuss the ways in which an organisation retains its customers later in this chapter, and also in the next chapter. The basic principles are to: keep in touch with them on a regular basis reward them for their loyalty

interna l a nd externa l customers The term `customer' is commonly used to mean someone who buys goods or services. That person is clearly an external customer. What is less commonly appreciated is that when you work in an organisation there are people, departments and suppliers who are in effect your `customers' whom you have to look after. These are internal customers. Consider the following examples: the finance department of a business provides sales figures for the

marketing department ? which is then an internal customer a school reprographics department photocopies handouts for a teacher ?

who becomes an internal customer within the school a chef in a restaurant is an external customer of the supplier who provides

him with food; the waitress who sends in orders from the restaurant to the kitchen is his internal customer; and the people eating in the restaurant are her external customers ? there is clearly a long chain of customers here, all of whom must be kept happy and provided with good service

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AS Applied Business fo r Edexcel

The concept of external customers, is more easily understood. In your assessment you will be investigating different types of organisation and different types of external customer. The ways in which they are looked after by the organisation will vary considerably. External customers can be classified in various ways: by age, eg children, adults, senior citizens by disability ? eg customers with mobility problems by nationality ? differing languages and culture We will look at the needs of these customers in the next section.

Activity 24.1 ? interna l a nd externa l customers

As part o f yo ur assessment yo u will need to identify two co ntrasting o rg anisatio ns and identify the custo mers ? bo th internal and external ? o f tho se two o rg anisatio ns. In preparatio n fo r this yo u sho uld:

1 Draw up a sho rtlist o f two co ntrasting o rg anisatio ns o n which yo u co uld base yo ur

investig atio ns. State whether they are in the private o r public secto r and in what o ther respects they are different fro m each o ther.

2 Draw up a list o f the different types o f internal custo mers o f the two o rg anisatio ns. 3 Draw up a list o f the different types o f external custo mers o f the two o rg anisatio ns.

Sug g estio n: draw up all this data in the fo rm o f a table.

Customer N eeds

Each different type of external customer will have specific needs which have to be looked after. As noted above, the requirements relate to issues such as age, disability and nationality.

customer a ge groups Most age groups need no special attention as most people are fortunate in being able-bodied and mobile. Extra attention is needed where the customer is either very young or very old. Employees need special skills and the right kind of personality when dealing with children. Children pose certain problems for businesses such as shops including: being a nuisance ? they can be noisy and, if allowed to run riot, may

damage goods on display

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