Customer service refers specifically to the chain of sales satisfying activities, which usually begins with order entry and ends with the delivery of the product to customers, in some cases continuing as equipment service or maintenance or other technical support.
In times of tough competition when firms offer similar products in terms of design features, price, and quality, a firm that can offer customer service differentiation has a district completive advantage.
Customer service is the speed and dependability with which items ordered by customers can be made available by the firm.
The elements of customer service can be classified into three groups:
- Pre-transaction elements,
- Transaction elements and,
- Post-transaction elements.
These groups are linked to the notion of market transaction namely “before“, “during” and “after” the sale.
These elements of customer service ware briefly discussed in the following section:
Pre-Transaction Elements of Customer Service
Pre transaction elements of customer service tend to be related to a firm’s customer service policy.
They establish a climate for good customer service. This can have a significant impact on customers’ perceptions of the firm and their overall satisfaction.
These elements are not directly related to logistics.
Pre-transaction elements include the following:
1. Written Statements of Customer Service Policy
This document would define service standards related to top customers’ needs. It should include:
Measures for tracking service performance and the frequency of reporting actual performer.
Customer service standards should be measurable and actionable.
2. Customer Provided with Written Statements of Policy
A written statement of customer policy of the firm in the hands of the customer would help him or her to know what to expect from the firm.
It also helps to safeguard against unreasonable expectations and demands from the customer.
Also, it should provide the customer information regarding how to respond if expected service levels are not provided by the firm.
Related: Best Ways to Find Potential Customers for Your Business (Complete List).
3. Organization Structure
The organization structure should position the senior logistic executive at a high level (say senior management level) to have high visibility within the firm.
The structure should facilitate both internal and external communication of policies, performance, and corrective action as needed.
Customers should have easy access to individuals within the firm who can satisfy their needs and answer the queries and role their problems.
4. System Flexibility
The system should have flexibility and contingency plans built into it s that it can successfully respond to unforeseen events such as labor strikes, shortage of materials, and natural calamities.
5. Technical and Management Service
The firm should be able to provide technical services such as installation, testing, commissioning, and training to the customer.
Also, the firm should help the customers in merchandising, inventory management, and ordering (like management services).
These services may be provided either free of charge or fee-based.
Transaction Elements of Customer Service
These are the elements, which are normally considered to be associated with customer service.
They include the following:
1. Stock Out Level
Product and customer should monitor stock out so that potential problems could be tracked better.
When stock out occurs, the firm should offer the substitute to the customer, or ship the item from another location if possible or expedite the shipment as soon as the out of a stock item is available.
Key Importance of Inventory Management.
2. Order Information Availability
Customers must be provided access to the type of information they need related to their order.
This includes information on inventory status, expected or actual shipping date, and backorder status.
3. System Accuracy
Customers expect a wide variety of data to be made viable by the firm quickly and also the information they receive about order status and stock levels to be accurate.
The system should be able to pay a high level of attention to continuing problems and take corrective action.
4. Consistency of Order Cycle
The order cycle is the total time from customer initiation of the order through receipt of the product or service by the customer.
Elements of the order cycle include placing the order entry, and order processing, order processing, order picking and packaging for shipping, transit time, and the actual delivery process.
Customers tend to be more concerned about the consistency of delivery lead time rather than with absolute lead time.
In today’s time-based competition, reducing lead time has received greater attention.
5. Special Handling of Shipments
Some orders, which cannot be managed through the normal delivery system, require special handling.
These items may have special shipping requirements or may have to be expedited to meet the delivery schedule of the customer.
The costs of such shipments are considerably higher than standard shipments but the cost of a lost customer could be still higher.
Related: Key Importance of Information Technology in Supply Chain.
6. Transhipment
This involves shipping products between various distribution locations to avoid stock-outs.
7. Order Convenience
Order convenience refers to how easy it is for a customer to place an order.
Order related problems such as confusing formats, non-standard terms or long waiting time on gold on the telephone, etc. cause dissatisfaction to the customers.
Such problems should be monitored and identified by talking directly to customers.
8. Product Substitution
When the product ordered by the customer is not available, it is replaced by a different size of the same item or a different product, which will perform just as well as better.
Post-Transaction Elements of Customer Service
These elements of customer service support the product or service after the customer has received it.
Post-transaction elements include:
1. Installation, Warranty, Repair and Service parts
These elements are important in purchases of capital equipment where such costs could outweigh the cost of the capital equipment itself.
2. Product Tracking
It is an important customer service element.
The firm must be able to track the product in transit and recall it if it is defective or potentially dangerous.
3. Customer Complaints, Claims and Returns
An accurate online information system is needed to resolve customer complaints by processing the data the customer and monitoring trends and providing the customer with the most current information viable.
Customers return defective goods, which go through the logistics process in reverse and hence referred to as reverse logistics.
Customer complaints must be handled as efficiently and effectively as possible.
4. Product Replacement
When a customer’s product is being serviced, he or she may be provided with a backup product to be used temporarily until the product is repaired or serviced.
This minimizes the inconvenience to the customer and making him more loyal to the firm.
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