Customer Service & Loyalty Dr. Mark Rosenbaum University of Hawaii

Customer Service & Customer Service & LoyaltyLoyalty

Customer Service & Customer Service & LoyaltyLoyalty

Dr. Mark RosenbaumDr. Mark RosenbaumUniversity of HawaiiUniversity of Hawaii

Satisfaction• Customer Delight.• To meet or to exceed expectations• Precursor to loyalty

Loyalty• Commitment • Despite situational forces that

encourage switching behaviors.

Steps to satisfaction• Answer your phone• Don’t make promises unless

you WILL keep them• Listen to your customers• Deal with complaints• Be helpful - even if there’s no

immediate profit in it

Steps• Train your staff (if you have

any) to be ALWAYS helpful, courteous, and knowledgeable.

• Take the extra step. • Throw in something extra.

Survey Customers• Are current customers satisfied?• What about customers who

defect?• Why do 90% of all customers

defect?• Satisfaction is temporal.

Loyalty• Why are customers loyal?

– Habit, after 5 years, 80% usually stay– Convenience– Beyond the product and into the

social– Loyalty is not necessarily forever

The forgotten fact

Service Quality

a. Reliability--ability to perform the promised service dependably and accurately.

b.Tangibles--appearance of physical facilities, equipment and personnel.

c.Responsiveness--willingness to help customers and to provide prompt service

d.Assurance--knowledge and courtesy of employees and their ability to inspire trust and confidence.

e.Empathy--caring individualized attention the form provides its customers

The questions• Tangibles:

– X has modern-looking equipment– X’s physical facilities are visually

appealing– X’s employees are neat-appearing– Materials associated with the service,

such as statements, are visually appealing.

Reliability

• When X promises to do something by a certain time, it does so.

• When you have a problem, X shows a sincere interest in solving it.

• X performs the service right the first time.

• X provides its services at the time it promises to do so.

• X insists on error free records.

Responsiveness• Employees of X tell you exactly

when services will be performed.• Employees of X give you prompt

service.• Employees of X are always willing

to help you.• Employees of X are never too busy

to respond to your requests.

Assurance

• The behavior of employees of X instills confidence in customers.

• You feel safe in your transactions with X.

• Employees of X are consistently courteous with you.

• Employees of X have the knowledge to answer your questions.

Empathy• X gives you personal attentions.• X has operating hours convenient to all

its customers.• X has employees who give you personal

attention.• X has your best interests at heart.• Employees of X understand your

specific needs.

But, what about employees

• Internal Service Quality:– Workplace design– Job design– Employee selection & development– Employee rewards & recognition– Tools for serving customers

Employee Satisfaction

• Surveys• Frequent interviews• Roundtable discussions

Leads to…• Employee Retention

– Avg. tenure of employees

• Employee Productivity– Sales per employee

Value

• Perceived Benefits/Costs• Wal-mart vs. small town America• Without value, no sales, no traffic

Customer Satisfaction• Current• Defects• Don’t aim for 100% it’s impossible.• In fact, it’s not feasible!

– http://www.theacsi.org/

• Mark’s hypothesis

Customer Loyalty• Retention• Repeat Business• Referrals

Results• Revenue Growth• Profitability

– How to measure profitability:– http://www133.americanexpress.com/osbn/

tool/ratios/financialratio.asp– Thomson Analytics– Yahoo financialsStudents should realize that a balance sheet

without rations is like a house without a roof—it’s not complete and I wouldn’t want to live in it on a cloudy day.