3.4.1 Methods of good customer service

What good customer service means

1. There are three methods of good service to know: product knowledge, customer engagement and post-sales service.
2. Service is part of what the customer is buying, and it matters most where the product itself is the same wherever they go, such as a phone contract or a bag of cement.
3. Good service has to be trained and repeatable rather than a matter of personality, because it still has to happen on a busy Saturday with temporary staff on the tills.

Product knowledge

1. Staff understand what they sell. They know the features of each model, what fits with what, and what the product will and will not do.
2. They recommend the right product. Asking what the customer needs and then matching it to a model turns a browser into a buyer, instead of somebody who leaves to think about it.
3. They answer questions on the spot. The customer does not have to go away and research it on their phone, which is usually where the sale is lost to a rival.
4. It depends on training. Supplier briefings and product training every time the range changes stop staff guessing about items they have never handled.
   1. A new range of ovens arriving in store is worth little if nobody on the shop floor can explain the difference between them.
5. The customer buys the right item first time. That means fewer returns to process, fewer complaints to handle and no wasted delivery.

Customer engagement

1. Greeting and availability: customers are acknowledged when they arrive and can find someone when they want help, without being followed round the shop.
2. Listening and asking questions: staff find out what the customer actually needs instead of pushing the dearest option, so the customer feels advised rather than sold to.
3. Helpfulness under pressure: short queues, a quick till, a clean shop and a clear layout are all part of the experience, and are what most shoppers judge a food outlet on.
4. Handling a complaint well: listening without arguing, apologising and settling it there and then can leave the customer more loyal than if nothing had gone wrong.
5. Staying in contact: order updates, loyalty schemes and replies to messages and reviews keep the relationship going between purchases.

Post-sales service

1. Delivery and installation: the item arrives on the day promised, is fitted and left working, and the old appliance is taken away.
2. User training: the buyer is shown how to use the product, from a two-minute demonstration of a hearing aid to a full course for a business buying new software.
3. Help lines and support: a phone line, email address or chat service gives the customer somewhere to go when something does not work, which turns a fault into a solved problem.
4. Warranties, repairs and returns: a clear guarantee, spare parts kept in stock and a returns process without an argument remove the risk the customer feels when handing over their money.
5. Servicing: an annual service keeps the product working for years, which is often what persuades a buyer to spend a large sum in the first place.

3.4.1b Importance of good customer service

The sales process

1. First contact: an advert, the website, the shop window or a phone call creates interest and sets the customer's first impression of the business.
2. Finding out what the customer needs: staff ask about budget, use and preferences, so they are solving the customer's problem rather than guessing at it.
3. Advising and demonstrating: the product is matched to those needs and shown working, and any doubts the customer still has are answered.
4. Closing the sale: price and terms are agreed, payment is taken, and delivery, credit or fitting is arranged clearly enough that nothing surprises the customer later.
5. After the sale: delivery, installation, training, support and putting problems right decide whether this customer ever buys from the business again.
6. Service runs through every stage and the customer can drop out at any of them, so a poor greeting loses a sale the product itself would have won.

Why good service matters to the business

1. It completes sales that would otherwise be lost. A customer who cannot get an answer, or who waits too long to be served, leaves having bought nothing.
2. It brings customers back. Repeat purchases are the cheapest sales a business can make, because it does not have to advertise to win the same person twice.
3. It cuts the cost of putting things right. Getting the sale right first time means fewer refunds, fewer returned goods and fewer staff hours spent on complaints.
4. It builds a reputation that works before the customer arrives. Recommendations and reviews bring in people who already expect to be looked after, so the selling starts from a position of trust.

Competing on service rather than on price

1. Where rivals sell a near-identical product, service is often the only thing left to compete on. Two banks offer much the same current account and two merchants stock the same timber, so how the customer is treated becomes the reason to pick one.
2. The alternative is cutting the price, which takes money off every single sale and which a rival can copy by the next morning.
3. Service is harder to copy, because it rests on training, staffing levels and the way the business is run rather than on one decision about a price label.
4. Service can even support a higher price, since customers will pay more for expert advice and for knowing a problem will be sorted out.
   1. This matters most on expensive or complicated purchases, such as a kitchen or a hearing aid, where the customer is frightened of choosing wrongly.

Analysing the techniques a business uses

1. Analysing a technique means following it through to an effect on sales, costs or reputation, instead of stopping once you have named it.
2. Product knowledge: trained staff give advice that fits, the customer buys the right item first time, fewer goods come back, and the customer trusts the shop with the next purchase.
3. Customer engagement: a customer who feels listened to stays longer and takes the suggested extra item, so the average amount spent per visit rises.
4. Post-sales service: a fault put right without an argument means the customer buys their next appliance from the same shop rather than a rival, so one repair protects years of sales.

3.4.2 Benefits and dangers of customer service

An increase in customer satisfaction

1. Satisfaction depends on the product and the experience together, so a good meal served rudely still sends the customer home unhappy.
2. A satisfied customer finishes the purchase, does not ask for a refund and does not take up staff time complaining, so that sale costs the business less to make.
3. Businesses track it through review scores, survey ratings and follow-up emails after an order, so they can see satisfaction slipping before sales do.

Customer loyalty and repeat purchase

1. Loyal customers stop shopping around, so a small price difference at a rival no longer takes them away.
2. Repeat orders are predictable, which lets the business plan its production, staffing and stock with more confidence.
3. Keeping an existing customer costs far less than advertising to find a replacement, so loyalty holds marketing spending down.
4. Loyalty schemes reward the habit and give the business a record of what each customer buys, which it can use to bring them back again.

Increased spend

1. Satisfied customers come back more often, so what one customer spends across a year is far more than a single visit suggests.
2. They buy more on each visit, adding the accessory, the dessert or the extended guarantee, because they trust the advice they are given.
3. They trade up to the dearer version, since a customer who believes the business will support the product will risk more money on it.
4. The business needs to discount less, because regulars are not choosing on price alone, so it can hold its prices instead of running a sale to fill the shop.

Recommendations and higher profitability

1. Recommendations cost nothing. A satisfied customer telling friends, or leaving a five-star review, brings in buyers the business never had to advertise to.
2. Revenue rises while marketing spending does not. The same customers return more often and new ones arrive on a recommendation, so sales grow without a bigger advertising budget.
3. Costs fall at the same time. There are fewer refunds, fewer replacements and fewer complaints to deal with, and staff spend their hours selling instead of apologising.
4. Profit can rise faster than revenue. Where a reputation for service lets the business charge a little more, the profit earned on each sale is larger as well as the number of sales.

Dangers of poor customer service

1. Dissatisfied customers: some leave without buying, others demand a refund, and each one absorbs staff time that could have been spent serving somebody else.
2. The cost of putting things right: refunds, replacement goods, free redelivery, goodwill vouchers and the hours spent handling the complaint all come off profit.
3. Poor reputation through word of mouth: people tell more friends about being treated badly than about being treated well, and online that spreading happens within hours rather than over weeks.
4. One-star reviews stay visible. A run of poor ratings on Google or Trustpilot is read by every future customer, long after the problem itself was fixed.
5. Customers switch to a rival. With a competitor one street or one click away, nobody has to give a second chance to a business that wasted their time.
6. A reduction in revenue: the business loses the repeat purchases of the customers it upset, plus the sales of everybody who read about them and never came.

3.4.3 ICT and customer service

How ICT has changed customer service

1. ICT lets a business inform, sell to and support customers without a counter, a phone queue or a member of staff being free at that moment.
2. The three developments to know are the website, e-commerce and social media, with apps, live chat, email and order tracking built on top of them.

Websites and order tracking

1. Answers at any hour: product pages, size guides, opening hours, stock checks and frequently asked questions deal with routine queries at eleven at night, when the shop is shut.
2. Customers can serve themselves. Booking an appointment, moving a delivery slot, printing a returns label or downloading a manual all happen without contacting anybody.
3. Order tracking removes the uncertainty. The customer can see where the item is and when it will arrive, so they do not have to ring up and ask where their parcel has got to.
4. One website serves thousands at once. The cost of answering each question is tiny compared with staffing a phone line, and no customer is left holding on.

E-commerce and apps

1. Customers can buy at any hour from anywhere, so the business is no longer limited to people who can reach its premises while it is open.
2. Saved addresses, card details and past orders make reordering quick, which is why an Ocado grocery order takes minutes rather than an hour in the aisles.
3. Apps add order updates, loyalty rewards and one-tap reordering, which keeps the business in contact between purchases.
4. Clear online returns, with a printed label and a nearby drop-off point, remove the risk the customer feels when buying something they cannot try first.

Social media, live chat and email

1. Replies are fast and often public. A question answered on Instagram or X within minutes is seen by everyone else following the business, so helpful service doubles as advertising.
2. Live chat gives help while the customer is still deciding. A chat window handles simple queries instantly and passes the unusual ones to a member of staff, which saves the sale before the customer closes the page.
3. Email leaves a written record. Confirmations, quotes and delivery dates in writing settle later arguments about what was promised, which matters most on warranty claims.
4. Comments and reviews are feedback the business can act on. When the same complaint appears repeatedly, the business can change the delivery window or the sizing guide instead of guessing at what is wrong.