1. Customer Service in the Logistics System CHARISSE JEN P. RAMIREZ, LCB

2. Customer Service can be defined as: The activities, service actions are provided, acting as added value in logistics. The aim is to bring more value than the core service that customers need and bring the most satisfaction to customers. Companies attempt to differentiate their product, keep customers loyal, increase sales, and improve profits.

3. Planning of Logistics Customer Service

4. Elements of Customer Service Cost Quality Speed Fulfillment Marketing Elements of Customer Service Price Product Promotion Physical Distribution

5. Features of Customer Service

6. Customer service is often confused with the concept of customer satisfaction “Customer satisfaction represents the customer’s overall assessment of all elements of the marketing mix: product, price, promotion, and place”

7. Elements of Customer Service Pre-transaction elements : arise prior to the actual transaction taking place Transaction elements : elements directly related to the physical transaction and are those that are most commonly concerned with distribution and logistics Post-transaction elements : elements that occur after the delivery has taken place

8. Elements of Customer Service

9. Four Main Multifunctional Dimensions 1. time – usually order fulfilment cycle time; 2. dependability – such as guaranteed fixed delivery times of accurate, undamaged orders; 3. communications – such as the ease of order taking or effective queries response; 4. flexibility – the ability to recognize and respond to a customer’s changing needs.

10. The constituent parts of total order fulfilment cycle time

11. Fulfillment in Customer Service receipt of the order managing the payment picking and packing the goods shipping the package delivering the package providing customer service for the end-user handling the possible return of the goods

12. Two conceptual models of service quality Basic service model Extended service model

13. Basic service model A very simple, yet effective, view of service quality is that it is the match between what the customer expects and what the customer experiences. Any mismatch from this can be called the ‘service quality gap’.

14. Extended service model A rather more complicated approach can also be used as a conceptual model of service quality. This is particularly useful in helping to identify and measure the critical elements of service for key customers. The aim of this approach is to identify the various different service gaps that can or might appear throughout the customer service process.

15. A conceptual model of service quality: the basic elements

16. A conceptual model of service quality: the service gaps

17. Service Gaps Gap 1: customer expectation–management perception gap Gap 2: management perception–service standard gap Gap 3: service standard–service delivery gap Gap 4: service delivery–external communication gap Gap 5: actual service–perceived service gap

18. An overall approach for establishing a customer service strategy

19. Kano’s Classification of quality elements Expected Quality Attractive Quality One-dimensional Quality

20. Expected Quality Does not create much satisfaction, and mostly remains unnoticed; however, lack of it causes considerable dissatisfaction. It is important to recognize the minimum acceptable level of expected service, because a lower level increases dissatisfaction rapidly, and a higher service level rises costs without corresponding compensation to the customer value.

21. Expected Quality Example is the availability of exceptional order information, which is considered as necessary service in case of delivery delays or other exceptional occurrences.

22. Attractive Quality Offered by the supplier specially planned to exceed the customer expectations. The value attributes under this dimension of the Kano model, are neither explicitly demanded nor expected by the customer but are latent. These service elements can create satisfaction, but the absence of them does not cause dissatisfaction, because customers are not used to getting them.

23. Attractive Quality Attractive quality can effectively be used as means of differentiating service offering from competitors.

24. One-dimensional Quality In the case of one-dimensional quality, both satisfaction and dissatisfaction are possible Customer reaction depends more or less linearly on the level of the service offered. Order fill rate “The better the order fill rate the more satisfied the customer, and vice versa.”

25. Kano’s Classification

26. Common customer complaints.

27. Consumer Complaint Behaviour An important part which depends on satisfaction and retention of customer. Recognized consumers complain behavior as one of the reaction styles when dissatisfaction occurs. “Recovery cannot occur without a complaint”

28. Consumer Complaint Behaviour

29. seeking redress (i.e., a refund, exchange, repair, or apology, etc.), engaging in negative word-of-mouth (i.e., telling other people about one’s dissatisfaction), exiting (i.e., vowing never to repatronize the seller), contacting third parties (e.g., writing a letter to a newspaper, taking legal action, etc.).

30. Recovery A three dimensional view of justice has been applied to examine how customers respond to recovery efforts. Customers develop justice-based normative recovery expectations and compare it with recovery performance in the recovery evaluation  Distributive Justice  Procedural Justice  Interactional Justice

31. Distributive Justice The perceived fairness of the redress offered to consumers to resolve their complaints. Types of redress include refunds, exchanges, repairs, discounts on future purchases, store credits, etc., or some combination them. It is important to recognize that perceptions of distributive justice rest with individual complainants and reflect their impressions of tangible outcomes. Compensation in line with the perceived costs experienced by the customer

32. Procedural Justice Procedural justice refers to the perceived fairness of the policies, procedures, and criteria used by decision makers in arriving at the outcome of a dispute or negotiation. Fair procedures are consistent, unbiased and impartial, representative of all parties’ interests, and are based on accurate information and on ethical standards. In a study of service encounter incidents, flexibility, waiting time/responsiveness, and efficiency as dimensions of procedural justice.

33. Interactional Justice Interactional justice refers to the manner in which people are treated during the conflict resolution process; for example, with courtesy and respect or rudely. Truthfulness, the provision of an explanation, politeness, friendliness, sensitivity, interest, honesty Empathy and assurance, directness and concern, and effort. Acceptance of blame and the offering of an apology