Transcript Customer Service: Role in the Value - Brisc

Customer Service: Role in the Value Chain
July 26, 2013
Agenda Today
• A Quick Look at Value
• Value Oriented Retailing
• The Significant Impact of Customer Service
• A Framework to Design Customer Service Strategy
• Strategy to Tactics
A Quick Look at Value
What is Value?
Channel Perspective:
Customer Perspective:
 Value is a series of
activities and processes
(the value chain) that
provides a certain value to
the consumer
 Value is the perception the
shopper has of the value
chain
 It is the view of all the
benefits from a purchase
made versus the price paid
+ % …..
Wear the shoes of a customer for a moment?
How often does each of us talk about receiving excellent
customer service?
AND
How often do we recount horror stories of bad customer
service?
Retail Value Chain
Represents the total bundle of benefits offered to consumers
through a channel of distribution
• Store location and parking, retailer ambience, customer service,
brands/products carried, product quality, retailer’s in-stock
position, shipping, prices, image, and other elements….
Value Oriented Retailing
Value-Oriented Retailing Involves
Defining









it from a consumer perspective
a clear value/price point
a value position that is competitively defensible
what are expected and what are augmented value chain
elements
a distinct market segment to which it is targeted
a process to communicate the value-oriented approach
effectively to the target market
…….
customer satisfaction goals
ways to measure customer satisfaction levels periodically
Common MISTAKES in building a Value
Oriented Retailing Strategy…
• Planning value with just a price perspective
• Providing value-enhanced services that customers do
not want or will not pay extra for (understand your
customer!!!!!)
• Competing in the wrong value/price segment
(identify your customers!!!!!)
• Believing augmented elements alone create value
(know your customer!!!!!)
• Paying lip service to customer service (assuming that
the customer is stupid)
The Significant Impact of Customer Service
What happens when Customer Service falls
short..
In 2012, SMG, a customer insight agency, found in the UK
that :
• Retailers lose out on an estimated £45.38 billion a year by
not giving their customers the best possible experience in
store
• A survey of over 100,000 UK retail and leisure customers
discovered that improved interaction with the customer
could increase average spend per person from £23.36 to
£32.47- close to 40%!
In this world of High-tech:
we all crave High-touch!
And Retailers are Responding…
% Respondents who
stated:
Perishable/
Food
Durable/
Fashion/ Short
Hard goods Life Cycle
“We offer a high touch
customer service strategy
and think skilled
employees are critical
50%
63%
64%
“Employees play a critical
role but do not require
special skills or training”
50%
38%
27%
Source RSR Research, December 2012
The Stated Importance of Customer Service in their
Value Chain Clearly Impacts Performance….
% Respondents who stated: Retail
Winners
Average
Performers
Laggards
“In the last 3 years our
workforce has become
more important in enabling
customer service”
83%
85%
73%
“We offer a high-touch
customer service strategy
and skilled employees are
critical”
66%
47%
53%
Source RSR Research, December 2012
A Framework to Design Customer Service Strategy
Cost of Offering the Customer Service
High
Low
Patronage Builders
Patronage Solidifiers
High
Value of the
Customer
Service to the
Shopper
Low
Customer
Service
Approach
Disappointers
Basics
Cost of Offering the Customer Service
High
High
Value of the
Customer Service
to the Shopper
Low
Patronage Builders
High-cost activities that are the
primary factors behind customer
loyalty
Examples: Credit, Gifts
Examples: courtesy, referring to the
customer by name, Magic Words,
Suggestion Selling (BCCSM Skill Set)
Customer
Service
Approach
Disappointers
Low
Patronage Solidifiers
Low Cost “little things” that increase
loyalty
Expensive activities that do no real
good
Examples: Weekday deliveries for
dual-earner families
Basics
Low Cost activities - “naturally
expected”. Do not build patronage,
but absence can reduce patronage
Examples: Free parking, in-store
directories, store hygiene
Strategy to Tactics in Making this Fail-Safe Investment
Fundamental Decisions
 What customer services are expected and what
customer services are augmented for a particular
retailer?
 What level of customer service is proper to
complement a firm’s image?
 Should there be a choice of customer services?
 Should customer services be free?
 How can a retailer measure the benefits of providing
customer services against their costs?
 How can customer services be terminated?
Fundamental Decisions
 How can store managers be empowered to ensure consistent
delivery of the chosen customer service configuration?
 How can each customer facing store associate or employee be
empowered to ensure consistent delivery of the chosen customer
service configuration?
 How can the cost and benefits of the empowerment be measured:
 Training?
 Process monitoring?
 Decision making?
Fundamental Decisions
 How can technology be leveraged to support processes that
deliver chosen customer service elements:
 Consistently?
 In a scalable manner?
 With a quick turnaround?
Strategy
&
Planning
Logistics
&
Supply
Chain
Merchand
izing
Store
Operations
Marketing
Customer
Experience
How strong is your Customer Service Link?
Even Mothers often need to be reminded by their crying
child..
Is it time for a little attention?