Lucas_7e_PPT_Ch01 (1)

1. Chapter 1 The World of Customer Service

2. Learning Outcomes LO 1-1 Define customer service. LO 1-2 Describe factors that have impacted the growth of the service sector. LO 1-3 Identify societal factors that have influenced customer service. LO 1-4 Recognize the changes in consumer behavior that are impacting service. LO 1-5 List the six major components of a customer-focused environment. LO 1-6 Explain how some companies are addressing the changes impacting the service sector.

3. LO 1-1 Defining Customer Service 1 Goals vary depending on industry • Employee’s ability to deliver products and services to internal and external customers • Satisfying customers’ needs and resulting in positive word-of-mouth publicity and return business • Key terms • Service industry • Product • Customer-focused organization • Customer relationship management (CRM) • Service sector

4. LO 1-1 Defining Customer Service 1 Customer service: The ability of knowledgeable, capable, and enthusiastic employees to deliver products and services 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. Internal customers: People within the organization who either require support and service or provide information, products, and services to service providers who interact with external customers. Such customers include peers, coworkers, bosses, subordinates, and people from other areas of the organization. External customers: Those people outside the organization who purchase or lease products and services. This group includes vendors, suppliers, people on the telephone or Internet, and others not from the organization.

5. Why is Customer Service Important? • It costs five times more to attract a new customer than keeping an existing one • Organizations with Happy Customers are more successful in terms of: • Profit • Happy Customers come back • Happy Customers tell their friends

6. Facts • To Customers, Front-Line Are the Company. • Employee Satisfaction Matters! • Show Customers they’re valued; Don’t assume they know it. • Internal Customer service is as important as external Customer service… Why?

7. Perception of Service • When the received service equals the perceived service, guest will be satisfied. • When the received service is below the perceived service, guest will be dissatisfied. • When the received service is above the perceived service, guest will be delighted. • Organizations strives to become customer focused organizations.

8. LO 1-1 Defining Customer Service 1 Service industry: A term used to describe businesses and organizations that are engaged primarily in service delivery. Service sector is a more accurate term, since many organizations provide some form of service to their customers even though they are primarily engaged in research, development, and manufacture of products. Product:Something produced or an output by an individual or organization. In the service environment, products are created to satisfy customer needs or wants. Customer-focused organization: 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. Customer relationship management (CRM) Concept of identifying customer needs: understanding and influencing customer behavior through ongoing communication strategies in an effort to acquire, retain, and satisfy the customer. The ultimate goal is customer loyalty. Service sector Refers to organizations and individuals involved in delivering service as a primary product.

9. LO 1-1 Defining Customer Service 1 Customer relationship management (CRM) Concept of identifying customer needs: understanding and influencing customer behavior through ongoing communication strategies in an effort to acquire, retain, and satisfy the customer. The ultimate goal is customer loyalty. Service sector Refers to organizations and individuals involved in delivering service as a primary product.

10. Home Visits Before distribution systems were modernized, peddlers went from house to house, particularly in rural areas, to deliver merchandise or services. Doctors often went to the sick person's home for patient visits. How do these methods of delivery differ from those used today? Do you think the ones used today are better? Why or why not? © H. Armstrong Roberts/Retrofile/Getty Images

11. Figure 1.1 Customer-Focused Organizations 1 Some common characteristics for leading-edge customer-focused organizations • They have and support internal customers (for example, peers, co-workers, bosses, subordinates, people from other areas of their organization) and/or external customers (for example, vendors, suppliers, various telephone callers, walk-in customers, other organizations, others not from within the organization). • Their focus is on determining and meeting the needs of customers while treating everyone with respect and as if he or she is special. • Information, products, and services are easily accessible by customers. • Policies are in place to allow employees to make decisions in order to better serve customers.

12. Figure 1.1 Customer-Focused Organizations 2 Some common characteristics for leading-edge customer-focused organizations continued • Management and systems support and appropriately reward employee efforts to serve customers. • Reevaluation and quantitative measurement of the way business is conducted is ongoing and results in necessary changes and upgrades to deliver timely quality service to the customer. • Continual benchmarking or comparison with competitors and related organizations helps maintain an acute awareness and implementation of best service practices by the organization. • The latest technology is used to connect with and provide service to customers, vendors, or suppliers and to support business operations. • They build relationships through customer relationship management (CRM) programs.

13. LO 1-1 Defining Customer Service 2 The Concept of Customer Service • Cottage industries • A term adopted in the early days of customer service when people started small businesses out of their homes and bartered with neighbors

14. LO 1-1 Defining Customer Service 3 Post-World War II Service in the U.S. • Increase in the number of people in service occupations in the U.S. • As U.S. economy grew, Americans increased demand for meals, repairs, and other services

15. LO 1-1 Defining Customer Service 4 The Shift to Service • Economy shifted focus from manufacturing to providing service • Age of the service economy • International Council of Customer Service Organizations (ICCSO) • International Organization for Standardization

16. Figure 1.2 From Pre-World War IIOccupations to Service Occupations Typical Former Occupations Typical Service Occupations Salesperson Insurance agent Food service Administrative assistant Flight attendant Call center representative Repair person Travel professional Child care provider Security guard Farmer Ranch Worker Machinist Engineer Steelworker Homemaker Factory worker Miner Tradesperson (for example, watchmaker) Railroad worker

17. LO 1-2 Growth of the Service Sector 1 U.S. Bureau of Labor Statistics • One in five customer service representatives works part time. • Median hourly wage in 2015 - $15.25 • Projected to grow 10% by 2024 • Largest sector – health care and social assistance

18. LO 1-2 Growth of the Service Sector 2 Impact of the Economy • Quantity of jobs being created • Distribution of jobs among industries, occupations, geographic areas, and organizations of different sizes • Quality of jobs, measured by wages, job security, and opportunities for development

19. LO 1-2 Growth of the Service Sector 3 Impact of the Economy continued Quantity of Jobs Being Created • Impacted by interest rates, consumer demand, new technology Distribution of jobs • Need for employees to be able to have regular access to personal and professional networks and to engage in collaborative exchanges • Ease of transmission and exchange of information by means of technology. • Telework

20. Telecommuting Today, many employees work from their homes all or part of the time. Telecommuting, as this is called, is used frequently by companies in large cities, such as Los Angeles, to decrease travel time. Do you think you would need different skills or abilities to telecommute? Why or why not? © Martin Novak/123RF RF

21. LO 1-2 Growth of the Service Sector 4 Impact of the Economy continued Quality of Service Jobs • More competition for jobs • Need for networking

22. LO 1-3 Societal Factors Affecting Customer Service 1 Shifts in Consumer Needs, Wants, and Expectations • Companies must monitor societal changes • Demand curves • Demographic shifts • Aging population • Immigrants

23. LO 1-3 Societal Factors Affecting Customer Service 2 Global Economic Shifts • Economic indicators in turmoil • BREXIT • Impact of new legislation • Customer service has become a “must”

24. LO 1-3 Societal Factors Affecting Customer Service 3 Shifts in the Population and Labor Force • The present labor force • Older, more diverse, and has more women • Expected to grow at a slower rate than in previous decades • Immigration will play a major role in U.S. racial and ethnic composition. • Will therebe a need for more consumer goods and services to provide for diverse customers?

25. Figure 1.5 Labor Force Participation by Age and Sex 2015–2024 Jump to long image description in Appendix

26. LO 1-3 Societal Factors Affecting Customer Service 4 Increased Efficiency in Technology • Increased production and quality • Equipment working continuously • Enhanced ease of service delivery and faster processing • Easy access to information from anywhere • Driven by increased access to the Internet

27. Technology For many customer service jobs, skill in using technology will increase your value as a source of information for current and future customers. How can you keep up with the changes in technology? © Tim McGuire/Corbis/Getty Images

28. LO 1-3 Societal Factors Affecting Customer Service 5 Increased Efficiency in Technology continued • Globalization of the Economy • Globalization has opened new markets and allowed decentralized worldwide access for production, sales, and service • Business-to-business (B2B) initiatives • Offshoring • Outsourcing • Insourcing

29. LO 1-3 Societal Factors Affecting Customer Service 6 Deregulation of Many Industries • Deregulation of U.S. public services • Increased competition • Breakdowns in service quality • Closure or restructuring of companies • Opportunities for new companies to step up and to better serve customers

30. LO 1-3 Societal Factors Affecting Customer Service 7 Geopolitical Changes • Have reduced U.S. business access and competition within some areas of the world • North American Free Trade Agreement (NAFTA) • Greater need for better understanding of diversity-related issues and more multinational mergers and partnerships • European Union

31. LO 1-3 Societal Factors Affecting Customer Service 8 Changing Values • Different cultures have different values • Values affect what people consider important • Clashes can result from differing perspectives • Affecting companies’ approach to doing business

32. LO 1-3 Societal Factors Affecting Customer Service 9 More Women Entering the Workforce • Women’s traditional roles in society have shifted to service providers (cleaners, cooks, and child care providers) • Women’s income levels have risen, which provides more disposable income

33. LO 1-3 Societal Factors Affecting Customer Service 10 A More Racially and Ethnically Diverse Population is Entering the Workforce • New ideas, needs, and levels of knowledge, experience, and ability • Better understanding of the needs of the group that they represent

34. LO 1-3 Societal Factors Affecting Customer Service 11 More Older Workers Entering the Workforce • Median age of people in the United States is rising • Return to work due to economic necessity and/or social reasons • Companies admire their work ethic

35. Figure 1.6 2010–2020 WorkforcePercentage of Labor Force by Age In 2020, baby-boomers will be age 56 to 74 years, and this age group will be the largest age group in the workforce, comprising 25.2 percent. Other age groups comprise the remainder of the workforce in the following percentages: 45–54 years = 20.1 percent 35–44 years = 21.4 percent 25–24 years = 22.2 percent 16–24 years = 11.2 percent Source: Bureau of Labor Statistics Division of Industry Employment Projections, www.bls.gov/ooh/About/ProjectionsOverview.htm

36. LO 1-3 Societal Factors Affecting Customer Service 12 Growth of E-commerce • Consumers can surf the net for products and services without leaving their homes or offices • People can provide products and services worldwide without ever physically coming into contact with a customer

37. LO 1-4 Consumer Behavior Shifts 1 Different Mindset • People are being more careful with their spending • Younger people want fewer financial obligations • Computers allow consumers to do research before buying

38. LO 1-4 Consumer Behavior Shifts 2 Expectation of Quality Service • Consumers expect value for their dollar • Combined buying power has created “crowd clout” • Need for better trained and educated customer service professionals

39. LO 1-4 Consumer Behavior Shifts 3 Enhanced Consumer Preparation • Consumers today are well informed about the price, quality, and value of products and services. • Spurred on by the Internet • Customer satisfaction

40. LO 1-5 The Customer Service Environment 1 Components of a Customer Service Environment 1. The customer 2. Organizational culture 3. Human resources 4. Products/deliverables 5. Delivery systems 6. Service

41. LO 1-5 The Customer Service Environment 2 The Customer • The central component in a customer-focused environment • External customers • Current or potential customers or clients • Internal customers • Cafeteria workers, human resources staff, print shop employees, security personnel

42. Figure 1.7 - Components of a Customer-Focused Environment

43. LO 1-5 The Customer Service Environment 3 Organizational Culture • What the customer experiences • The values and beliefs that are important to the organization, its employees, and its managers

44. LO 1-5 The Customer Service Environment 4 Human Resources • Companies go to great lengths to recruit, select, train, and retain qualified people. • Although all employees provide customer service, certain employees are trained in the customer-service function. • Attracting and keeping qualified employees can be a challenge

45. Figure 1.9 Competencies of Customer Service Professionals There are many things that make one successful in the service profession and life. Many skills and competencies that someone possesses can carry over into other situations throughout life. The following are some general competencies or qualities that can make you successful when interacting with internal and external customers: Good judgment Ability to negotiate Solid organizational knowledge Problem-solving skills Professional Quality-oriented Reliable Resilient Self-aware Service-oriented Technically-oriented Good time manager Adaptable Detail-oriented Good business acumen Compassionate Collaborative Good communicator Lifelong learner Creative thinker Diversity-aware Results-oriented Takes initiative

46. LO 1-5 The Customer Service Environment 5 Deliverables • Tangible item manufactured or distributed by the company • Quality and quantity affect customer satisfaction

47. LO 1-5 The Customer Service Environment 6 Delivery Systems • Industry standards • Customer expectations • Capabilities • Costs • Current and projected requirements Service • The manner in which a company treats its customers

48. LO 1-6 Addressing the Changes Customer-based organizations • Must become learning organizations • Can no longer take a reactive approach to customer service • Employees must take personal responsibility for customer care • Employees should be empowered to do what is necessary to satisfy the customer • Service recovery

49. Appendix of Image Long Descriptions

50. Appendix 1 FIGURE 1.5 Labor Force Participation by Age and Sex, 2015–2024 Return to original slide