Summarize the critical differences between basic service, customer satisfaction, and customer success.? (150 words)
No Ai
Due: 10/8
Source: Attached pptx
Copyright ©2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Chapter 9
Customer Service Management
Copyright ©2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.9-2
Learning Objectives
9-1 Describe how operations management helps establish and
fulfill different levels of customer service.
9-2 Define the elements of basic service and explain how they are measured.
9-3 Explain ways in which technology is enhancing basic customer service.
9-4 Describe a model of customer satisfaction.
9-5 Explain the requirements for a commitment to customer success.
9-6 Describe the technological and relational aspects of customer relationship management.
9-7 Segment customers and tailor service strategies.
Copyright ©2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.9-3
Learning Objective 9-1
Customer Service at Amazon and the “Amazon Effect”
• 24/7 customer service
• Easy-to-place orders
• Continuous info about the
order
• Informed buying process
• Fast and reliable delivery
• A trusted source
• Easy returns
Copyright ©2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.9-4
Learning Objective 9-1
Customer Management
Intense focus on understanding and providing customers with products/service they desire.
Figure 9-1 Hierarchy of Customer Service
Copyright ©2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.9-5
Learning Objective 9-2
Six Basic “Rights” to Customers
• Basic Customer Service
– Right product
– Right amount
– Right place
– Right time
– Right condition
– Right information
Copyright ©2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.9-6
Customer Service—Product Availability
Product Availability: inventory available when and where
desired by customer
Orders Received
Total Units Ordered
Total Order Lines
Total Units Delivered
Total Complete Order Lines Delivered
Total Complete Orders Delivered
1,000 20,000 5,000 19,500 4,800 910
Unit Fill Rate: Total units delivered/Total units ordered = 19,500/20,000 = 97.5%
Line Fill Rate: Number of order lines delivered complete/Total order lines = 4,800/5,000 = 96%
Order Fill Rate: Total complete orders delivered/Total orders = 910/1000 = 91%
Table 9-1 Summary Order Data
Example 9-1
Learning Objective 9-2
Copyright ©2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.9-7
Learning Objective 9-2
Order-to-Delivery Lead Time
1. Order lead time: time required to place and schedule work for order
2. Product design lead time: time required to conceptualize, design, and test
3. Procurement lead time: source and obtain inputs
4. Production lead time: start to end of production
5. Delivery lead time: warehousing and transportation to customer
Copyright ©2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.9-8
Lead-Time Performance
Differing market orientations have different elements of Order-to-Delivery (OTD) lead time.
• Engineer to Order (ETO): design and make to customer specifications
• Make to Order (MTO): products that have similar designs but are customized during production
• Assemble to Order (ATO): products that are produced from standard components and modules
• Make to Stock (MTS): build and stock in anticipation of customer demand
Learning Objective 9-2
Copyright ©2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.9-9
Service Reliability: The Perfect Order
Service Reliability: performance of all order-related
activities error-free
The Perfect Order: delivered without failure in any
order attribute
• Complete
• On time
• Damage free
• Documentation correct
Example 9-2
If a firm has 97 percent reliability on four attributes, the
probability of a perfect order is .97 × .97 × .97 × .97 =
0.885, or 88.5%
Learning Objective 9-2
Copyright ©2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.9-10
Student Activity (1 of 2)
Using any Web browser or your library’s electronic databases, enter the term perfect order. Look for articles that discuss the perfect order measure. Find and summarize an article that discusses specific companies and their ability to provide perfect orders to their customers.
Learning Objective 9-2
Copyright ©2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.9-11
Technology Enablement of Basic Service (1 of 2)
Omni-Channel: distribution channel in which customers
can place orders and receive and return purchases in
different ways
Service Platform: a product designed to deliver a wide
range of customizable services
Crowdsourcing: the process of obtaining ideas or
services by soliciting contributions from a large group of
people
Learning Objective 9-2
Copyright ©2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.9-12
Technology Enablement of Basic Service (2 of 2)
Figure 9-2 Order and Delivery Points in an Omni-Channel Business
Learning Objective 9-3
Copyright ©2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.9-13
Limitations of Customer Service
Customer service involves specifying the firm’s commitment to availability, operational performance, and reliability.
• Order winners, qualifiers, and losers
• Meeting or beating competitor levels
• Link to competitive strategy
• Link performance to customer satisfaction
Learning Objective 9-3
Copyright ©2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.9-14
Customer Satisfaction: Core Expectations
• Customer Satisfaction
– Reliability
– Responsiveness
– Access
– Communication
– Credibility
– Security
– Courtesy
– Tangibles
– Knowing the customer
Learning Objective 9-3
Copyright ©2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.9-15
Customer Satisfaction (1 of 2)
Customer Satisfaction: meeting or exceeding customer expectations, including:
• Reliability: performance as promised
• Responsiveness: prompt reply and resolution
• Access: easy to use communication channels
• Communication: proactive order notifications
• Credibility: believable and honest
Learning Objective 9-3
Copyright ©2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.9-16
Customer Satisfaction (2 of 2)
Customer Satisfaction: meeting or exceeding customer expectations, including:
• Security: low-risk and confidential • Courtesy: polite, friendly, and respectful • Tangibles: physical appearance • Knowing the customer: responsive to unique
customer needs
Learning Objective 9-3
Copyright ©2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.9-17
Customer Satisfaction Model Gaps (1 of 2)
Figure 9-3 A Model of Customer Satisfaction
Learning Objective 9-4
Copyright ©2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.9-18
Customer Service Expectation Influences
1. Defined requirements: some expectations come from customer’s stated strategies and performance goals
2. Previous supplier performance: past supplier performance is often predictive of future performance
3. Word-of-mouth: Customers frequently tell each other about their experiences with specific suppliers
4. Supplier communications: Promises and commitments made by sales, customer service, marketing
Learning Objective 9-4
Copyright ©2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.9-19
Gaps occur at differences between:
• Knowledge: understanding of customer needs
• Standards: gap between internal performance standards and customer expectations
• Performance: gap between standard and actual performance
• Communication: gap between actual performance and communications about performance
• Perception: gap between customer’s view of performance and actual performance
• Satisfaction: customer’s perceptions and expectations of performance
Customer Satisfaction Model Gaps (2 of 2)
Learning Objective 9-4
Copyright ©2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.9-20
Student Activity (2 of 2)
• Think of a time you were dissatisfied with a supplier’s performance
• Which of your expectations were not met?
• How did you form these expectations?
• Which “gap” resulted in your dissatisfaction?
Learning Objective 9-4
Copyright ©2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.9-21
Customer Success
Customer success requires a supplier to:
• Have a long-term relationship focus
• Gain comprehensive knowledge of customer needs
• Consider the customer’s customers
• Adapt manufacturing and distribution
Learning Objective 9-5
Copyright ©2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.9-22
Customer Relationship Management
Customer Relationship Management (CRM): technology-enabled data gathering about customers to develop strategic relationships
Learning Objective 9-6
Copyright ©2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.9-23
Customer Service Strategy
Figure 9-4 Selection of Appropriate Customer Service Strategies
Learning Objective 9-7
Copyright ©2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.9-24
Customer Management Summary
1. Basic customer service program includes availability, lead- time performance, and service reliability.
2. Order-to-delivery lead time is important.
3. Digital technologies are enhancing service.
4. Customer satisfaction is achieved by meeting or exceeding customer expectations.
5. Customer success focuses on strategic objectives and individual customer requirements.
6. CRM involved data gathering and responding to the needs of specific customers.
7. There are multiple types of relationships and levels of commitment.
8. Customer expectations have been influenced by societal changes (“Amazon effect”).