What Customer Service Level Is Acceptable?
February 1st, 2008 by Katrina Gallagher
Does the channel or business model make any difference to the level of acceptable customer service?
Jeremy writes that online stores should not bother with an extensive customer support service and offer a simple return service only. I.e. if you don’t like it, send it back.
In my opinion, it depends on a number of factors…
- How competitive is the market?
- Is your business model cut price self service or luxury?
- Is the item a low value commodity or a high value purchase?
- What channel are you using for the sale?
- Are you hoping for an ongoing customer relationship?
In the case of an online store - the majority of the work involved in achieving the sale and completing the order is automated. The customer can browse the store without a member of staff checking whether they need help or if they are shoplifting. Detailed product information and even reviews or customer feedback is available to help the customer with the decision. The purchase processing is automated, confirmation emails and estimated delivery dates or tracking can be automated. And depending on the nature and set-up, much of the logistics can be automated.
So when customer has a query - I would be inclined to agree with Jeremy - it may be simpler to continue the theme. With an automatically generated returns slip and refund procedure.
On the other hand - a retail store would need to staff a store with a number of people to complete a sale, so whereas a customer services team would need to be specifically employed if you wanted to offer support for an online sale, the existing retail staff needed for the original sale could help with queries - as long as they were trained correctly.
The customer expects different service levels based on the positioning of your brand - in his podcast, Steve Humphrey describes the decision making process and different levels of service required depending on the nature of the purchase. He uses the comparison of buying at Primark compared to Prada.
Customers also expect different service levels if buying a high value product - for example a car. Even in the case of online ordering, you would expect a certain amount of aftersales service.
Marks and Spencer offered a no quibble exchange policy regardless of how long ago the purchase was made, this was promoted as a selling point in the past.
This has now changed to a 90 day return policy for unwanted goods - presumably to reduce exploitation and cut costs.
Jason from good customer services blog suggests that the level of service you provide in retail stores depends also on your behaviour. I would agree that sales staff are likely to be happier to go the extra mile for polite customers.
Let me know your experiences -
- Have you been surprised by exceptionally good or bad service?
- Do you think companies should be able to get away with low customer service if they offer a lower priced product?
- Would a return only policy please you or is it not enough?
- What customer service do you offer?
- Have you seen examples of customers exploiting good customer service?
Listen to Steve’s Marketing podcast using this link - I would recommend episode 13 The decision making process, and 7 The Marketing Mix and the scope of Marketing.
February 1st, 2008 at 3:19 pm
I suppose a lot depends on the value of transaction you have with a shop. for example, I am receiving really poor customer service from Carphone Warehouse right now. But I am only a £50 transaction to them. They figure for that revenue, I am too expensive to service properly. I will of course cost them a lot in legal and administration time as I wont let the point go but you can see their thinking. You see a lot of shoddy service in the ISP sector. Spend a lot of money on advertising so you create the brand illusion but save on customer service as you expect a level of apathy and techno fear when it comes to migrating away to another service provider.
February 1st, 2008 at 5:32 pm
i have just had a week in America, and yet again I have been blown away with the levels of customer service there. It really seems to be a cultural difference. People seem to genuinely care that you are happy, and they seem used to, and fully accepting of our right to have individual requirements. The second day in our hotel, when ordering coffee to our room I asked for hot milk. No problem. The next morning I didn’t have to ask - they just asked me to confirm if I would still like hot milk. A great example I think of a person who cares that you have good service, and technology that supports great customer service. I’m not sure I would have the same experience here.
The key I think is that companies create an environment that their staff can accommodate the individual customers requests - this will surely guarantee great repeat custom.
February 2nd, 2008 at 6:44 pm
We must be on the same wavelength. I’m preparing a post on MarketingBeyond called “Multi-Channel Customer Service: Telephone, Email, Chat, Web Site, Live, Other.”
You raise critical customer service issues affecting every industry. Quite frankly, I don’t think any company–in our competitive global age–can afford to lose customers through poor customer service. The cost of acquiring new customers is very high.
Instead, sales, marketing and customer service managers should train EVERYONE who interacts with customers to delight them–not just solve a problem. Catherine’s comment about her hotel experience is a good example. She didn’t have to ask twice for hot milk. The hotel staff just did it. And they did it because they were trained and expected to go beyond the usual.
Simon’s comment about Internet Service Providers is also right on. I’ve worked in the industry and seen how bad customer service can become. Mention Comcast Cable to anyone in the U.S. and you’ll hear snarls. On the other hand, I use Speakeasy, an ADSL provider in Seattle. They cater to small businesses like mine and have created a trouble ticket system providing efficient, effective resolutions to any part of their business–from the initial order to activation to billing and technical issues. Speakeasy has integrated all customer interactions and does a follow-up email survey on EVERY interaction.
I’m glad Catherine was “blown away” with customer service in the U.S. However, in many industries and companies, customer service is kept on the back burner. Keeping quality customers through excellent service levels is not an option. It’s a critical necessity for survival.
February 13th, 2008 at 5:09 pm
Thanks for all your comments,
Simon - that’s one thing that’s very common - marketing and advertising build up your hopes that you’re getting an amazing service - but it’s not aligned with production, and customers are disappointed as a result. Sales, Marketing, Production and Customer services should ideally be working together, but that’s very rarely the case.
February 13th, 2008 at 5:10 pm
Catherine - it’s great you’ve seen such good service in America, it’s sometimes impossible to recreate the personal touch of a customer service advisor remembering you like hot milk in the morning, or bar staff that remember your usual drink.
Some large organisations, have tried this - where customer preferences can be saved to a database for future use.
Boots and Sainsbury’s use their loyalty cards to mine information about their customers and tailor their direct mail offers. This could be seen as good use of data to improve customer experiences, and I certainly appreciate tailored offers for the types of things I normally buy, but one friend recently said she stopped using her loyalty card recently because the offers based on her buying habits freaked her out. It was too much like big brother was watching over her shoulder.
February 13th, 2008 at 5:10 pm
Brian - thanks for your comment, I’ll look forward to reading that post. You’re spot on with your comment about the cost of acquiring new customers - it’s roughly 10 times more expensive to acquire new customers than retaining your current ones.
Some would argue that in purchase decisions based predominantly on price, it’s hard to find loyal customers, and not feasible to cover the cost of delighting them.
I would say it depends on your business model, but a certain level of customer service is a must for anyone.
February 20th, 2008 at 6:13 pm
I never gave the issue of a money back guarantee any thought until I came across the situation myself. I purchased an accessory pack for my camera which included case, extra discs and spare battery. Once unpacked I realised the battery was missing. The idea of a spare battery was a key reason for making the decision to buy. The returns process was quite bizzare, they told me not to return the goods to keep them and they would credit my account with the money I’d spent. Despite my offer to return they insisted I didn’t. Clearly it was not cost effective for customers to return goods under a certain value. My preferred outcome was to receive a replacement whether I kept the original or not, but this was not an option. I was told I would have to reorder the item again. I wasn’t prepared to do that until I was sure the money had been credited into my account. Needless to say I never got round to reordering it still have no spare battery! Great service but not what the customer wanted.
February 20th, 2008 at 7:06 pm
Your comment about American service for some regions in America is absolutely right Catherine. They do seem to have a knack for remembering the ’small stuff’ which has a ‘big impact’ on how we are left feeling our custom is valued. I mention regions for a reason. I have always had cause to praise Americas command of customer service until I visited New York late last year. I was shocked and appalled at the disrespectful attitutude that was shown to us. Almost every person we encountered in the in the retail or tourism sectors was rude and in some instances, obnoxious. I was so surprised, it was totally opposite to any experiences I’d previously had. I could accept and understand one, two or maybe even 3 bad experiences and put it down to ‘one bad apple’, ‘an off day’, ‘wrong side of the bed’ etc. but the instances weren’t isolated they came one after another. It left me thinking that on the whole it’s down to the values of the individual. I have encountered excellent service in the UK on countless occassions, but it’s the warmth of the person and the genuine willingness to want to help that makes the difference.
February 20th, 2008 at 7:17 pm
I endorse Brian’s idea that everyone who interacts with customers should be trained to delight them–not just solve a problem. It never ceases to amaze me that some companies steer away from doing little more than just solving the problem because they believe the cost will be to high. It doesn’t take much to delight a customer, sometimes a simple card ot letter does the trick and at minimal expense. If a customer is delighted they will no doubt return with additional business, all for the cost of a stamp, stationery and ten minutes of time. Low cost marketing if you ask me!
April 24th, 2009 at 11:59 am
My friend on Orkut shared this link with me and I’m not dissapointed at all that I came here.