Leading Customer Service Excellence - Term Paper Example

Name: Tutor: Title: Leading Customer Service Excellence Course: Date: An executive summary This report is written in response to the recent investigation into the role of customer service in achieving competitive advantage. Following the recent appointment as the new Customer Insight Manager for the Institute of Customer Service (ICS) and its UKCSI-Customer Service Index Latest Results about Customer Satisfaction Pays, a report has been written in regard to the critical evaluation made about the current approach to customer service offered by the institute. In addition, some appropriate suggestions or solutions have been put forward to ensure sustainability of the provision of customer service excellence as well as the ongoing competitive advantage. Given the high-velocity environment and hyper-competition surrounding contemporary businesses, more approaches to marketing are required beyond the incremental changes for such businesses to remain competitive. Therefore, it is also crucial for ICS to leverage all their service interactions into opportunities so as to achieve real customer satisfaction and loyalty as well as to maximize their revenue and benefit more from each customer with every interaction they make. Table of Contents Main findings 5 A critical evaluation of the Institute of Customer Service’s current approach to customer service 5 Conclusions 10 Reference list 12 Bell, A., 2014, “Institute of Customer Service- Focus on customer service to rebuild trust with customers”, Retrieved April 29, 2014 from, 12 Institute of Customer Service, 2013, “UKCSI Latest Results - Customer Satisfaction Pays”, Retrieved April 28, 2014 from, 13 Introduction Customer service excellence is considered one of the crucial ingredients of a marketing mix for products and services. It is defined as the overall activity undertaken to identify and satisfy the customer needs. Therefore, high quality customer service is needed to ensure customer loyalty. Today, customer service is increasingly becoming important not only because companies are striving to offer customer care, but most customers are demanding quality customer service as a matter of transaction (Goodwright 2014). Literally, by delighting or annoying a customer companies can either win or lose many potential customers through word of mouth as well as via the Internet (Nash & Owton 2007). Customer satisfaction is defined as the reflection of performance to expectation. Therefore, for an organization to be well-placed so as to satisfy its needs, it is crucial for that particular organization to first satisfy the needs of its customers. Today’s consumers are no longer passive believers, and thus brands should not only be relied on as a reflection of an organization but also a determinant of the needs or desires of the market (McKaskill 2011). A number of managers perceive service as an after-sale service where it is considered as something connected to previous sale rather than a guide to the next one (American Management Association-AMA Report 2002). In this report, a critical evaluation will be made in regard to the current approaches implemented by the Institute of Customer Service to offer customer service excellence and why customer service matters for the Institute of Customer Service? Suggest a variety of customer service excellence frameworks which the Institute of Customer Service can apply to facilitate its goal of achieving sustainable customer service excellence. Conclude with a justified strategy that will facilitate the achievement of sustained customer service excellence. Main findings A critical evaluation of the Institute of Customer Service’s current approach to customer service The Institute of Customer Service (ICS) is an independent non-profit professional membership body which purposely enables organizations to strengthen their business performance by enhancing their customers’ experiences. The institute accomplishes this through research and insight, service training and qualifications as well as benchmarking and accreditation programmes. The main objective of ICS is to enable organizations harness customer service strategy so as to offer attractive customer’s experience. ICS publishes various research findings which combine strategic insight into important customer trends and issues with more practical recommendations for customer service leaders and professionals. The recent publications from the institute include; the future of customer service as a blueprint for 2020 and the return on investment within the customer service. In addition, ICS publishes the UK Customer Satisfaction Index (UKCSI) as its national measure of customer satisfaction that tracks 13 sectors across different metrics. Membership of the ICS means becoming a member of a like-minded group of professionals and organizations that recognizes the need to develop customer service. Fanning (2013) examines that effective marketing is achieved when equal attention is given to attaining the satisfaction of both the organization’s and customer’s needs. In this case, the goal of growth depends on how well an organization understands the past, current and future behaviours of its customers. Based on the Circle of Satisfaction idea, it has been noted that customer’s trust and loyalty are key elements of a positive transaction as well as base for achieving competitive advantage in a market (Fanning 2013). The fundamental question is why customer service matters for the Institute of Customer Service? For ICS, customer service is considered a central issue to both health and sustainability of the UK economy. Research shows that over 70% of the working population in the UK, deals directly with customers at the workplaces or job roles, making the service sector to account for about three quarters of GDP. Therefore, service is increasingly perceived a crucial differentiator in the manufacturing, production and construction industries, and thus within all the sectors organizations may succeed or fail depending on the existing quality of relationships with their customers and suppliers as well as within the organization. For ICS, customer service offers tangible benefits only where it is considered that the capability to deliver high customer satisfaction helps the organization to enjoy high levels of retaining its customers, recommendation and repeat business. Research shows that customer satisfaction greatly drives business success and has a big impact on companies’ capability to differentiate sustainably on customer service. In addition, customer satisfaction affects the downstream benefits of its Harvard’s 3Rs-Retention, Related sales and Referrals. Since the 3Rs are the key components of ensuring customer lifetime value, the 3Rs also play an integral role on the financial metrics of a company such as sales, market share and profit. For example, food retailers considered as top companies in the UK provide the highest customer satisfaction, have grown in sales and they lead in market share (Institute of Customer Service 2013). ICS offers various qualifications for all levels customer service professionals across different sectors. Through the UKCSI-Customer Satisfaction Index as a unique business indicator covering 13 sectors and more than 180 organizations, the institute tracks customer satisfaction within the UK. The Service Mark for the Institute of Customer Service comprise of accreditation scheme as well as the site assessment which are considered as a National Customer Service Standard. From the ICS’s latest research news, it can be noted that it is not leadership, culture and strategy of an organization as well as its employee engagement and the type of business model alone, but also quality customer service that greatly influence customer satisfaction. In the report released earlier this year about “Can Customer Service Create Trust?” Jo Causon, CEO of ICS claimed that restoring trust in an organization is one of the key issues that must be carefully addressed to enable organizations flourish whilst UK returns to growth. This implies that customer service has great impact on customer trust. Jo Causon emphasized that for customers, regardless of whether they are consumers or business oriented, quality of experience is crucial. Thus, investing in customer service as well as driving more performance improvement should be a significant area of focus for all business leaders across the world that recognize that quality service means good business (Bell 2014). From the customer loyalty point of view, Powell and Taylor (2000) examines that most businesses do not necessarily take into consideration that customer service is crucial or really selling. They emphasize that service is selling in the sense that it inspires customers to develop a positive attitude to return time and again to buy more. Aided by loyal customers who continuously buy because they prefer the service, yields an organization about 65 percent of its typical volume. However, the weakness in customer service is that most marketing managers tend to be reluctant in considering service as their marketing strategy. A variety of Customer Service excellence frameworks which the Institute of Customer Service can apply to facilitate its goal of achieving sustainable customer service excellence Due to the high-velocity environment and hyper-competition surrounding contemporary businesses, more approaches to marketing are required beyond the incremental changes for such businesses to remain competitive. Therefore, the Institute of Customer Service needs to adopt snappy marketing approaches that are considered to be universal solution to the challenges they face. For example, ICS should focus on offering memorable customer experiences also referred to as experiential marketing as one such important marketing approach. It has been observed that the scramble to win the presence among experience providers as well as lack of knowledge of what is really meant by undertaking experiential marketing and how it can be applied to achieve commercial advantage, has influenced companies to involve in quick designing and implementing of experiential marketing. As a result of their little idea of what they really intend to achieve through experiential marketing taken as their overall marketing strategy, such companies end up dissatisfying their customers rather than prioritizing to delight them (Lindgreen, Vanhamme & Beverland 2009, p.1). The success of every organization depends on its capability to keep its customers satisfied with the services it offers. However, most of the executives seem to view their customer service function as a minor aspect of their managerial roles. Goodman notes that today’s tactical service function is outsourced, off-sourced and global. Therefore, the Institute of Customer Service need to know that effective service function must be supported by state-of-the art technology by aligning it with the brand strategy as well as integrated with customer experience. It is also important for the institute to take into consideration that their service function should be regarded as a means of generating the value of every customer, and thus satisfying customers as well as delighting them. Companies that apply a great word of mouth often incur almost no marketing expenses simply because they allow their customers do their selling for them (Goodman 2009, p.4). It would be relevant for the Institute of Customer Service to adopt some frameworks for quality. For example, Customer First as the National Standard for Customer Service would help the institute to build sustainable customer relationships, maximize their market awareness as well as develop their people. This is because it will require the institute to sustainably build outstanding customer service cultures and delivery approaches by analyzing their customers interface with and its experience. Basically, this framework involves building successful long-term customer relationships (Customer First-UK Limited 2013). Furthermore, ICS should implement the International Standards developed by ISO to ensure that their services are of high quality and reliable so as to win the confidence of consumers in all types of services they offer. Customer Service Excellence standard need to practiced by the Institute of Customer Service to facilitate continuous improvement. It would also enable the institute to self assess its capability of ensuring customer focused service delivery with a new online self-assessment tool. Customer Relationship Management (CRM) is more concerned about loyalty schemes as commonly seen in a number of industries such as car hire, airlines, hotels and food retails. As a result of their continued use of the products or services, customers accumulate credits. Based on two major aspects; Loyalty scheme provide useful data that help in customer acquisition, retention and development. In addition, they can serve as an exit barrier which means that customers who seem to have accumulated credits within a scheme may tend to be reluctant to quit the relationship. The Institute of Customer Service needs to be aware that loyalty schemes are important in CRM implementations. Therefore, the accumulated credits would be a clear indication of the value of investment made by the customer in a particular scheme, and thus the relationship (Buttle 2008, p.14). Conclusions Organizations that are committed to best satisfying their customer’s needs are well-placed to satisfy their organization’s needs. High quality customer service is needed to ensure customer loyalty. Loyalty scheme provide useful data that help in customer acquisition, retention and development. The weakness in customer service is that most marketing managers tend to be reluctant in considering service as their marketing strategy. Customer satisfaction facilitates business success and has a big impact on companies’ capability to differentiate sustainably on customer service. Recommendations Service automation is considered one of the important approaches to building sustainable Customer Relationship Management (CRM) because it gives companies opportunities to manage their service operations. The Institute of Customer Service should use CRM software to handle as well as coordinate their inbound and outbound service associated communications across all their channels. The CRM software will enable the institute to develop efficient and effective ways of reducing service costs, enhancing service quality, increasing productivity as well as customer satisfaction. Companies use CRM software to support their missions to develop into more customer-centric, implying that customer-related data must be shared widely throughout the enterprise rather than through the marketing function alone (Buttle 2008, p.9-13). Based on his book titled “Strategic Customer Service”, Goodman (2009) proposes a new concept which can be adopted by ICS to achieve sustainable customer service excellence. Based on his thirty years research experience for organizations such as American Express, Toyota, Harley Davidson, Coca-Cola, J &J, FedEx, Marriot and Mayo Health System, Goodman shows how top companies implement it to renovate their businesses. The Institute of Customer Service should focus on generating their business imperative so as to build a more proactive and profit-focused customer service. It is also crucial for the institute to leverage all their service interactions into opportunities so as to ensure real customer satisfaction and loyalty as well as to maximize their revenue and benefit from each customer with every interaction they make. Over and above, the Institute of Customer Service should apply a low-cost and high-powered word-of-mouth marketing approach that parlays their current customer’s great experiences in building sustainable relationships. However, this will be achieved only if the institute aims to deliver consistent levels of services to their entire customers regardless of whether they are locally and globally situated. It is important for the management of ICS to realize that strategic customer service should reflect how to think their service strategy as well as begin winning more loyalty, customers and attaining substantial growth and profits (Goodman 2009). Reference list American Management Association-AMA Report, 2002, “Under the Influence: Building Relationships with Industry Tastemakers”, Retrieved April 29, 2014 from, Adrian Payne & Pennie Frow, 2005, ‘A Strategic Framework for Customer Relationship Management’, Journal of Marketing, Vol. 69, 167–176. Bell, A., 2014, “Institute of Customer Service- Focus on customer service to rebuild trust with customers”, Retrieved April 29, 2014 from, Buttle, F., 2008, “Customer Relationship Management”, Elsevier, Butterworth-Heinemann: Oxford. Customer First-UK Limited, 2013, “The National Standard for Customer Service: Improve your Service Delivery”, Retrieved April 29, 2014 from, Fanning, S.M., 2013, School of Marketing, Tourism & Leisure, Edith Cowan University, Australia. Goodman, J, 2009, Strategic Customer Service, Amacom. Goodwright, E., 2014, “Customer Service Basics: Top Tips for providing Good Customer Service”, Retrieved April 28, 2014 from, Institute of Customer Service, 2013, “UKCSI Latest Results - Customer Satisfaction Pays”, Retrieved April 28, 2014 from, Lindgreen, A, Vanhamme, J & Beverland, M, 2009, Memorable Customer Experiences, Gower Publishing Ltd. McKaskill, T., 2011, “Marketing Strategies: Customer satisfaction”, retrieved April 28, 2014 from, Nash, S. & Owton, A, 2007, Delighting your Customers, How to Books Ltd: Oxford. Powell, G.N., & Taylor, K.B., 2000, ‘Beyond O.J.: Examining race relations in the workplace’, Journal of Management Education. Read More