Customer Service & Loyalty Dr. Mark Rosenbaum University 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 Dont make promises unless you WILL keep them Listen to your customers Deal with complaints Be helpful - even if theres 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 –Xs physical facilities are visually appealing –Xs 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 Dont aim for 100% its impossible. In fact, its not feasible! – Marks hypothesis

Customer Loyalty Retention Repeat Business Referrals

Results Revenue Growth Profitability –How to measure profitability: – /ratios/financialratio.asphttp://www133.americanexpress.com/osbn/tool /ratios/financialratio.asp –Thomson Analytics –Yahoo financials Students should realize that a balance sheet without rations is like a house without a roof its not complete and I wouldnt want to live in it on a cloudy day.