Investigating the Importance of Customer Service

Over the past thirty years Customer Service has been evolving, and will continue to do so the more we practice in organisations. The significance of customer service does not go unnoticed. There are many attributes involved to make it successful in practice. Customer Service has to be a team effort and not just the responsibility of the staff dealing with the public directly. Most customers have the option to go elsewhere is the quality of service is lacking, which in my opinion makes good customer service a source of competitive advantage.

In this assignment I have looked at different aspects of what customer service brings to a company. I have researched customer service in its past and have done a comprehensive summary on an organisation I have chosen to illustrate how customer service is used in present day and the significance in evolving customer service in the future. Exploring subjects such as the importance of customer service and the different categories of customers an organisation have contact with on a daily basis.

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I will demonstrate customer service policies in reference to my chosen organisation and the practice of customer service in practice using customer charts, mission statement and the staff roles that contribute to the quality of service in the company. The importance of customer service can never be underestimated as it is a vital part of any business. Customer service can be defined as the delivery in which the service you give is received, whether that is before, during or after a customer purchase.

The goal of this is to increase customer satisfaction by the trait and manner in which the product or service is given. (Wikipedia (2012) ‘Customer Service’)Goods were scarce in the late 19th and early 20th century, it was because of this that workshop owners were able to produce what they wanted and the public had no choice but to purchase what they offered. This time was known as the production era, and it was at this time the main focal point for business was mass production. This meant that corporations wanted to create goods in great amounts but at low cost with a fast rate of production. For example, if a company was selling arm chairs, the arm chair in question would be produced in one fabric, with one colour and one design with no options to change. During the mid-1920’s into the early 1950’s it was believed by manufacturers that they needed to persuade customers to buy their products. This was known as the sales era as the needs of the supplier were greater than that of the customer, or offering customer satisfaction. It was from the 60’s-70’s that businesses embarked on the thought that customers are different, and aggressive selling techniques were to be avoided. They began to rethink their attitudes towards the customer, finding out what they wanted rather to force them to buy a particular product. Every person/family is uncommon, with singular taste whether it is in decor, food, cars, holidays etc. which gave corporations insight that the customer was the key part of their business. In the 1980’s, customer service branched out getting customer feedback to make products of variety. This meant that companies were now meeting the needs and wants of customers and delivering on that product. Relational marketing was now used by businesses as it focuses on their dedication to customers and the service they provide to be of high standard, and to generate customer loyalty as result. Harrell (2002) defines relationship marketing as progressing and preserving relational exchange successfully by collaborating reciprocal connections between customers, organisations and other participants of mutual benefit. (Twomey 2012, p. 1/2) Customer service is extremely important in modern organisations. It does not matter what merchandise you sell or the service that you provide, the question you need to ask is how happy are my customers? Customer service is constantly being improved, what companies practiced one or two years ago is not what they would practice today. The coined saying “the customer is always right” is obsolete as far as today’s standards go. In my opinion the phrase should be “keep your customers happy, and your business will be happy”, as this would be more relatable in modern organisations.

Importance of customer value

Building and preserving customer value is essential in the new organizational structure taking place in the health-care industry. As businesses and consumers move forward, businesses are being measured more and more by the value they create for their customers. Customer value is the focus of the article "Customer Value & Business Success in the 21st Century." Customer value is defined as how a business values customers and how customers value a business's products or services.

The article focuses on health-care organizations, and how there is an expectant trend that individuals will absorb a greater share of their own health care costs. In order for health care organizations to respond to this growing trend toward consumerism, customer value applications must be implemented in daily business activities. The author describes four critical processes and areas that should be of focus in order to build success. The first is to successfully identify what your customers need and expect. The second process is to build service delivery models to meet each target segment. The third area is to understand your customers enough to anticipate customer expectations in order to meet these expectations. The final process is to commit the organization to customer-centered strategic marketing and communications.

In today's unstable market, the only businesses experiencing success are those that are able to meet and exceed expectations of customers. It is essential in today's fast-paced business to develop quality relationships with customers which results in customer loyalty. The traditional way of pushing the product or service down to the customer is being replaced by tailoring business decisions to meet customer expectations.

The delivery of health care is changing to consumer centered health care where each customer is an individual with unique needs and expectations. Consumer centered health care requires altering or creating new products and services to meet needs and expectations. It is also necessary for a health care organization to understand the lifetime value of a customer. The customer is not seen as a one time transaction, but as an ongoing customer receiving continuous service over time. The author states that it should be a goal to capture the share of the household's total healthcare over a long period of time.

The term customer satisfaction is being replaced by customer value. Achieving customer satisfaction is only the beginning, and building customer loyalty and value are necessary for sustainable growth in the business world today. Unlike traditional ways of conducting business, the new order is primarily focused on meeting individualistic needs of each customer. In order to achieve this goal, an organization must go through a series of steps. This involves understanding what customers value most, meeting and exceeding their expectations, developing services to meet these expectations, and refining services and products through feedback. Grouping by customer needs, market-based segmentation has been far more successful than the traditional method of grouping demographics.

Organizations today could highly benefit from market-based segmentation. One significant reason is that reducing customer defection rates could dramatically increase profits. Studies also show that a longer a customer stays with an organization, the more profitable they become. A recent study reporting reasons why customers leave an organization showed that 68% of those surveyed left due to an indifferent employee. It is essential and very necessary to have satisfied employees in order to be an organization that creates value for its customers. Satisfied employees are loyal employees, and loyal employees usually deliver excellent service. Excellent service results in customer satisfaction and loyalty which results in customer value, and higher profits for the organization.

Many organizations have only one service model and this result in mediocre service. After understanding customers' needs and expectations, service models can be developed for each market segment. Grouping by needs and expectations will allow an organization to establish relationship with customers by specifically tailoring services to each segment. Development of these service models will increase customer loyalty that will also increase profits and revenue.

Customer value puts the customer in the center of each process of expectation audits (understanding the customer), service models (niche customization), service innovation (understanding customer expectations), and strategic communication (communicating with customers).