In a continent where consumerism’s growth trajectory is at 4% annually, which accounts for over 60% of the continent’s GDP; competition to win over loyal customers is more engrossed in every service and product delivery company strategy. With such a vigorous competitive market, companies face quite a tumultuous task in balancing provision of efficient customer services, while minimizing costs.
Speaking during the Alumni breakfast session on 22nd January, 2016, Professor Alejandro Lago, senior lecturer, IESE Business School, captured the interest of a full-house audience; playing character to the charisma displayed in his passion for the subject.
Prof. Lago has an expansive knowledge on business administration in Africa, with special interests in customer service. His research of the subject matter is also truly impressive.
According to a survey conducted in relation to customer and clients’ perception of services offered, 95% of the companies surveyed believed that they were absolutely customer oriented. 80% of the employees believed that their services were excellent. However, only 8% of the clients concurred with these remarks.
Professor Lago often posed questions to engage the audience, with the subject matter taking various perspectives, for instance; why should employees offer good services, and what does it mean to offer a good service? Does customer satisfaction predict profitability?
If a customer is loyal, their value is much more than what they pay for a service. If the number of recurrent customers shoots up to 70% for instance, then, the sustainability of the business could be ensured. Loyal customers are recurrent, they refer others to consume the same or similar products/services, purchase more and are less costly to serve and maintain.
Customer service provision has grown into a competitive function in operations management. However, it is indeed crucial to note that making customers happy may not primarily entail giving them all they want; but understanding all the processes they have to go through to get the product, making it effective and efficient, and properly managing their perceptions through the best way the company can afford.
It is very difficult to offer good services to a very diverse group of customers. Therefore a company should develop a strategy which looks into the various components of customer service, best summarized through a strategy equation, which encompasses four main categories: Target Market (who), Value Concept (What), Operating Strategy (How) and Delivery System (How).
Selling of products/ services, is equivalent to selling “experiences to customers”. Customer service satisfaction is as important as the perceived value and expectations. Companies which exceed the expectations of their customers, are more likely to retain them and even acquire new ones; whereas, companies who fall short of customer expectations struggle to retain them. Therefore, companies must always strive to meet the expectations of their customers.
The process of providing excellent services is gradual and exists at three levels. The first level; what is the real product that the company is offering, second, process reliability- what is the process that customers have to undergo before acquiring the product or the service, (the process has to be efficient, as the company is not only selling a product, but also the process) Good customer experiences cannot be guaranteed if the process reliability is poor. Third, emotional values (attachment); where experiences matter, one must be careful of the emotions of customers.
When faced with the service-cost dilemma, it is crucial to prioritize on strengthening specific attributes, introducing key mechanisms to fasten the processes and lastly, eliminate less effective attributes in the strategy chain. This does requires a thorough appreciation of the customer’s interaction with the services offered by the company.
However, in redesigning the customer service experience the most crucial aspect of them all is to have a highly motivated and happy team of employees. As the adage goes; Happy employees, equals happy customers and good services come from empowered employees.