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Student Workbook
BSBCUS501C Manage quality
customer service
1st Edition 2011
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Published by: Innovation and Business Industry First published: December 2011
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Table of Contents
Getting Started ....................................................................................................................1
Features of the training program .................................................................................1
Structure of the training program ................................................................................1
Recommended reading ................................................................................................2
About Innovative Widgets .............................................................................................2
Section 1 Plan Customer Service....................................................................................4
What skills will you need? ............................................................................................4
What is customer service? ...........................................................................................5
What is quality customer service? ...............................................................................5
Internal and external customers ..................................................................................8
Customer behaviour .................................................................................................. 13
Investigate, identify and assess customer needs.................................................... 19
Customer questionnaire ............................................................................................ 21
Customer service plans ............................................................................................. 25
Relevant legislation, standards and codes of practice ........................................... 33
Section summary ....................................................................................................... 41
Further reading .......................................................................................................... 41
Section checklist ........................................................................................................ 41
Section 2 Deliver Customer Service ............................................................................ 42
What skills will you need? ......................................................................................... 42
Deliver customer service according to customer service plan ............................... 43
Customer service skills and attributes ..................................................................... 44
General communication skills................................................................................... 46
Handling customer complaints ................................................................................. 49
Monitor customer service.......................................................................................... 54
Manage team performance ...................................................................................... 59
Section summary ....................................................................................................... 62
Further reading .......................................................................................................... 62
Section checklist ........................................................................................................ 62
Section 3 Review and Improve Customer Service ...................................................... 63
What skills will you need? ......................................................................................... 63
Continuous improvement strategies ........................................................................ 64
Systematic quality monitoring ................................................................................... 66
Variation analysis ....................................................................................................... 70
Value chain analysis .................................................................................................. 73
Gather and analyse customer feedback .................................................................. 74
Develop, procure and use resources........................................................................ 78
Seven quality monitoring, reporting and analysis tools .......................................... 81
Produce and evaluate customer service solutions .................................................. 86
Record-keeping .......................................................................................................... 90
Section summary ....................................................................................................... 95
Further reading .......................................................................................................... 95
Section checklist ........................................................................................................ 95
Glossary ............................................................................................................................ 96
Appendices ....................................................................................................................... 97
Appendix 1: Answers to selected learning activities................................................ 97
Appendix 2: Complaints policy and procedure......................................................... 98
Student Workbook Getting Started
Getting Started
Features of the training program
The key features of this program are:
Student Workbook (SW) Self-paced learning activities to help you to understand
key concepts and terms. The Student Workbook is broken down into several
sections.
Facilitator-led sessions (FLS) Challenging and interesting learning activities that
can be completed in the classroom or by distance learning that will help you
consolidate and apply what you have learned in the Student Workbook.
Assessment Tasks Summative assessments where you can apply your new skills
and knowledge to solve authentic workplace tasks and problems.
Innovation & Business Skills Australia has licensed the use of over 200 video vignettes
from the Channel 9 television program, Your Business Success. The videos have been
carefully selected and embedded into relevant learning and assessment resources in
order to assist education providers and students in the learning process.
Each video is accompanied by a learning activity. Videos can be found on IBSAs YouTube
channel at <http://www.youtube.com/ibsachannel>.
Your facilitator may choose to combine or split sessions. For example, in some cases, this
training program may be delivered in two or three sessions, or in others, as many as eight
sessions.
Recommended reading
Cole, K., 2010, Management: theory and practice, 4th edn, Pearson Education
Australia, NSW.
Commonwealth of Australia, 2010, Australian Consumer Law, viewed December
2011, <http://www.consumerlaw.gov.au/>.
Commonwealth of Australia, Customer service in your state or territory,
Business.gov.au, viewed December 2011,
<http://www.business.gov.au/BusinessTopics/Fairtrading/Pages/Customerservice
inyourstateorterritory.aspx>.
Glossary, American Society of Quality, viewed December 2011,
<http://www.asq.org/glossary/q.html>.
Goodman-Delahunty, J., 2001, ASICs Stakeholder Forum: Promoting Consumer
Complaints in the Financial Sector, ASIC, viewed December 2011, available online
through the speeches section of publications
<http://www.asic.gov.au/asic/ASIC.NSF/byHeadline/Speeches portal>.
sales
accounts
human resources
In total, Innovative Widgets employs over 50 staff. Last year Innovative Widgets produced
a pre-tax profit $2,240,000 on a turnover of $16,000,000.
Innovative Widgets has a diverse customer base. Their largest customer is a major mining
equipment manufacturer. This customer accounts for approximately 40% of total widget
sales. The other 60% of sales are to medium and small businesses and to individuals and
sole traders.
Innovative Widgets has been operating successfully for over 50 years and became the
largest manufacturer of widgets in Australia. The company is owned by the sons and
daughters of the companys founder, who all sit on the board of directors. Until recently
the managing director was the grandson of the founder.
The grandson was appointed managing director fifteen years ago. Little changed at
Innovative Widgets during his leadership. The company had an enviable position as
market leader and, with little competition, their market dominance was safe. About five
years ago it was noticed that sales were beginning to slump. The owners soon
discovered that the grandson was ill-equipped to face this challenge and they called in
a firm of management consultants to help out.
Initially, the consultants undertook a pre-audit by talking to staff, looking at work
processes and departmental records. They then produced an initial report identifying
some areas for concern. They suggested that Innovative Widgets:
were not aware of their external customers needs
did not have adequate policies and procedures for managing its customer
service.
The managing director needed help. He admitted that he had been complacent about
his customers, saying that he had always adopted the If its not broken, why fix it?
approach to customer relations. He also asked what an internal customer was was it
the staff members who bought widgets under the employee discount scheme at a
discounted price?
The consultants had a lot of work to do!
ensure plans achieve the quality, time and cost specifications agreed with
customers.
Being on par in terms of price and quality only gets you into the game.
Service wins the game.
Alessandra, 2009
delivery times
Importantly, customers may not draw a clear distinction between the quality of a product
and the quality of service, particularly when making a complaint about the quality of a
product they have purchased.
1 Kano, N., 1984, Attractive quality and must-be quality, The Journal of the Japanese Society for Quality
Consider two times in which you complained about a product or service: one instance in
which you came away from the experience of interacting with a customer service
representative satisfied, and one instance in which you came away dissatisfied.
Satisfactory experience:
Dissatisfactory experience:
List the reasons you felt satisfied or dissatisfied in the table provided below.
Satisfied: Dissatisfied:
Positive customer service experience Negative customer service experience
2. In the positive customer service experience, how did the customer service
representative (CSR) satisfy your:
a. external needs for quick service, correct ordering, product replacement,
etc.?
b. emotional needs, for example, for reassurance, closure, or appreciation?
The goal of an organisation should be to ensure the quality of customer service meets or
exceeds the expectations of the customer to achieve a high level of customer satisfaction.
Customer satisfaction refers to how a product or service meets, fails to meet or exceeds
the customers expectations.
Dimension Description
The focus of this section is on discovering all customer needs in order to plan and deliver
quality customer service.
First, however, lets take some time to analyse the concept of customer, discuss the
kinds of relationships that may exist between service providers and internal/external
customers, and explore customer needs in more detail.
Internal customers
The internal customer/provider relationship is often overlooked. An internal provider
refers to anyone who does something for another person or department within the same
organisation. The person within the organisation who receives what the provider gives is
an internal customer. For example, a secretary who types a letter for a manager to sign is
providing the manager with a product (the letter). In this example, the secretary is the
provider and the manager is the customer. Internal customers help and support you to
provide a quality product or service to your external customers.
Every workplace consists of people interacting with each other in similar ways. In a large
bakery, the flour may be stored in a storeroom. The storeman delivers the flour to the
baker. The storeman is providing a service (delivering flour) to the baker (receiving flour).
The storeman is the provider and the baker is the customer.
The baker bakes the bread and delivers it to the packer. Here the baker is the provider
and the packer is the customer.
The packer wraps the bread and delivers it to the dispatcher. The packer is the provider
and the dispatcher is the customer. The dispatcher loads the bread into a van and the
van driver delivers to the retail shops. The dispatcher is the provider to the driver. The
driver is the dispatchers customer.
Describe how the customer relationship is managed to maintain quality. What policies,
procedures, standards or agreed practices are in place to identify customer needs and
deliver customer satisfaction?
External customers
External customers are the people and organisations who have a need to purchase your
product or service. They have a budget that determines what they will provide in exchange
for a solution that meets their needs and expectations. External customers are able to
choose where and how they will spend their budget. The big question is who will receive
that money, you or your competitor? That will depend on who has earned the confidence
and trust of the customer. You and your competitor are competing for a slice of their
budget the business providing them with the best product/service wins. Its important
to remember that most customers tend to vote with their money and complain with
their feet.
The Australian Consumer Survey covers the general experiences of consumers and
businesses in dealing with consumer issues. The results of the 2011 survey showed that
consumers are generally aware of the laws that protect their purchases, that they are
aware of the consumer regulators and that they have the confidence to take action when
they need a dispute resolved. In this environment of savvy customers, it is better to
provide customers with what they expect than have to resolve dissatisfaction at a later
point. It is estimated that it costs Australian businesses a total of $6.6 billion a year to
deal with problems where they have a legal obligation to provide a remedy for the
consumer. 2
2Australian Government, 2011, The Australian Consumer Survey Report, Australian Consumer Law, viewed
Value chains show how each process in an organisation increases the value of the
product or service. In our bakery example, there are three processes that add value:
the kitchen adds value by turning the cheaper raw materials into bread
high quality packaging can result in receiving a higher price for bread
delivering to the customer produces delivery charges that produce a profit.
Note: The storeman and dispatcher have an important role to play in the supply chain, but
do not add value to the product.
The concepts of supply chains and value chains are related in that, as a product or
service passes through the supply chain, value is added to the product or service. At the
end of the both chains the customer service representative (CSR) adds the value of
quality customer service to the chain.
Poor internal relationships can lead to disastrous results for your external customers. It is
important that you are able to take ownership for customer concerns. In spite of
everything, CSRs are ambassadors for the company and should not hand over the blame
for late deliveries, poor service, and inadequate support. Customers aren't interested in
identifying specifically who is to blame. If there is a problem, then customers want that
problem to be fixed. It is up to the customer service team to use and direct all of the
company's resources to resolving their problem. Policies and procedures, service
standards and agreements for internal relationships should be in place to ensure the
supply-value chain functions as it should.
In some organisations a dedicated customer service department is established to ensure
consistent interactions with internal and external customers. However, as discussed
earlier, internal customer/client relationships exist everywhere within an organisation.
Everyone in an organisation is responsible for fostering quality customer service.
Innovative Widgets have both internal and external customers. Their external
customers number over 1,000.
Internally, the reception yard receives the raw materials from the external suppliers.
The staff members in the yard are the suppliers customers.
The raw material is stored and kept in good condition until the production workshop
staff asks for a delivery.
At this point the storemen are suppliers and the workshop staff members are the
customers.
Consider Innovative Widgets organisational chart on the following page.
What policies, practices, standards, service guarantees, etc. are likely to govern
and control the relationship to maintain quality
What actions are or could be taken by service providers to improve service
quality?
Analyse the supply and value chain that ends with the external customer:
What policies, practices, standards, service guarantees, etc. might be put in
place to ensure the customer receives maximum value?
Customer behaviour
Customer behaviour can be thought of as both the decision-making process and the
physical activity undertaken to purchase and use a product or service.
Lets look at a common model of consumer decision-making:
Research into
Problem Evaluation of
product or
identification alternatives
service solutions
Post
Purchase/use
purchase/use
With respect to customer service, potential customers may base their decision-making on
the quality of customer service, whether the customer service experience meets the
original need which prompted the customers interaction with the business and how well
their need is met.
The general process described above varies from customer to customer depending on
needs and personal characteristics. To some extent, every customer is different. The
science of marketing of products and services, however, depends on the idea that,
although individual customers vary widely from one another with respect to some
personal attributes, with respect to their decision-making and purchasing behaviour,
consumers act in similar ways.
In the following pages, you will be introduced to some important concepts surrounding
customer behaviour and the relationship of customer behaviour to customer service. We
will look briefly at influences on customer behaviour, the notion of customer value, how
consumers behave when dissatisfied with a product or service, and finally at the
marketing process, how businesses attempt to influence behaviour.
sociology
psychology.
Loyalty describes the tendency for customers to purchase the same products or services.
Loyalty is an important force in shaping decision-making. Without loyalty, decisions would
be made solely on the basis of current availability. 3 In other words, customers would not
seek out the services of particular businesses or wait for service if alternatives were
present.
Sociology describes the tendency for customer decision-making to be influenced by the
decisions of others.
Psychology describes what and how aspects of products and services affect decision-
making. 4 For example, a product may appeal as a status symbol. Products may have
positive attributes or associations that consumers believe will to transfer to the
purchaser. Services, particularly those services delivered in connection to complaints
handling may appeal to a psychological need for empathy.
Undeniably, rational self-interest is also an influence on behaviour. In classical economic
theory individuals make purchasing decisions based on an unemotional, impartial view of
their own needs and they attempt to satisfy these needs at the lowest possible cost.
Marketers, however, presented with the task of differentiating products or services with
very similar features, emphasise the important role of social and psychological influences.
Underlying this emphasis is the appreciation of how much the decision-making process
while appearing conscious and rational is coloured by emotional reactions to products
or services.
3 Patel, S. and Schlijper, A., 2004, Models of Consumer Behaviour, Unilever Corporate Research, available
telephone online.
Consider your own organisation or an organisation you are familiar with and answer the
following questions.
1. What channel do your customers prefer? Why?
5 Liu, Y., 2007, Online interaction readiness: conceptualisation and measurement, Journal of Customer
Behaviour, vol. 6, no. 3, pp. 283-299. Available online, viewed December 2011,
<http://www.yupingliu.com/files/papers/liu_interaction_readiness.pdf>.
Customer value
For customers of products or services, perhaps the most important influence on
behaviour is perceived value. When consumers make decisions, they will balance cost
against perceived value.
The notion of perceived value includes the satisfaction of all needs, including:
satisfaction of external needs, such as the real need for product features, speed of
service, etc.
satisfaction of sociological needs to be seen as part of a social group
For example, two products with the same price and features may be perceived as having
different values if one product includes friendly, dependable service.
Importantly, perceived value is relative to individuals or market segments. For example,
segments with low income may not attribute as much value to service as someone with a
higher income. Great service may not benefit the consumer as much as other factors. It is
important, therefore, to know your customer and how your customer perceives value.
Consider your own organisation or an organisation you are familiar with. Answer the
following questions.
1. What influences your customers behaviour?
4. How could you increase customer service value for your different customer
segments?
Customers who complain and have their complaint resolved tell about 5 others.
Customers often behave with the herd mentality. If customers start to leave you,
others will follow them just to be part of the herd.
So for every customer who complains, there are likely to be many others who are
unhappy, but do not complain. Customers simply leave, at great expense to the business.
This final point underscores the importance many people attribute to the quality of service
they receive. The perceived value of customer service shapes purchasing behaviour and
custom.
6 Goodman-Delahunty, J., 2001, ASICs Stakeholder Forum: Promoting Consumer Complaints in the Financial
Sector, ASIC, p. 5.
Consider your own organisation or an organisation you are familiar with. Answer the
following questions.
1. How does your organisation handle customer complaints?
2. Considering the above information regarding customer behaviour, how could your
organisation add value to interactions with customers to:
a. defuse complaints?
b. retain customers?
Finally, once businesses know enough about their potential customers, they will design a
marketing mix for the product and service including price, product, promotion and
distribution elements.
With regard to customer service, a key element of the marketing mix is distribution.
Distribution refers to how a product or service is delivered to customers. For example,
customers may make a decision to purchase or not purchase a product or service on the
basis of friendly service. On the other hand, marketing research may uncover that
knowledgeable or fast service is a more important determinant of purchasing and usage
decisions. Businesses may also promote themselves as offering superior service as a way
of attracting customers.
Telephone surveys, when unsolicited, are often seen as intrusive but may be
effective when connected to calls made by customers.
Suggestion boxes can be placed in store and can generate good ideas but require
follow-up and maintenance to make customers feel valued after making
suggestions.
Point-of-contact questioning, such as at the cash register, can often provide an
informal method of identifying customer needs.
Focus groups, where samples of customers are questioned about their needs, are
useful for organisations with large numbers of customers.
Less direct methods of identifying customer needs may also be used. Some methods
employed are:
analysing customer interaction recordings and observations
correlating sales data, etc with other market data such as demographic data, social
or economic trends, etc
analysing market research by external providers.
Collecting customer feedback can be deceptively simple. The following example is from
the Innocent drinks website.
Innocent Fruit smoothies, viewed December 2010,
<http://www.innocentdrinks.co.uk/>.
In the summer of 1998 when we had developed our first smoothie recipes but were still
nervous about giving up our proper jobs, we bought 500 worth of fruit, turned it into
smoothies and sold them from a stall at a little music festival in London.
We put up a big sign saying: Do you think we should give up our jobs to make these
smoothies? and put out a bin saying YES and a bin saying NO and asked people to
put the empty bottle in the right bin.
At the end of the weekend the YES bin was full so we went in the next day and
resigned. 7
7 Sourced with permission from Innocent Drinks: Our story, Innocent Drinks, viewed December 2011,
<http://www.innocentdrinks.co.uk>.
Consider a business you are familiar with. Answer the following questions.
1. What methods are used to collect customer information?
2. How are these methods designed to collect the most useful information?
3. How is this information analysed to identify needs for the purpose of improving
customer service?
Customer questionnaire
Lets look at perhaps the most commonly used method of directly accessing customer
information questionnaires.
Questionnaire design
To design effective questionnaires, you need to determine what kind of data you require
to make management decisions about how to meet customer service needs. It is
important to consider if quantitative or qualitative data is required.
Quantitative data refers to data that can be converted into numerical form and organised
into tables and graphs. Qualitative data refers to comments such as suggestions for
improvement, where the customer is asked an open-ended question.
Quantitative data is easier to process and is useful when surveying large numbers of
people. Qualitative data can provide richer results, but can be difficult to analyse. Often a
mix is used; respondents might answer close-ended questions throughout the
questionnaire followed by a space provided for further comments (an open-ended request
for information).
Questions and scales should be designed to pass two tests: validity and reliability.
Question validity
A question is considered valid when the responder understands it in the same way as the
person writing the question. For example, cafe owners might ask customers when they
pay their bill: Did you enjoy the coffee? every time the owners get a yes response, they
assume that the customer was satisfied with the cafe. What if the customer found the
rest rooms dirty and has decided not to return? Is the owners question valid?
When writing questions for a survey they should be validated by conducting a smaller
survey and interviewing the responder to ensure that they understood the question as it
was intended to be understood.
Question reliability
A question is considered reliable if the response given would be the same as a second
response to the same question with the same conditions. For example, if I asked: On a
scale of 110 where 1 is ice cold and 10 is piping hot, please score your coffee
temperature. I may get different results for the same temperature of coffee. The question
is not reliable.
Reliability issues can be resolved by careful design of question and scale. In the example
above a more reliable question would be: Was your coffee too cold, about right or too
hot?
Scales
There are many different types of scales used in questionnaires and careful consideration
needs to be given to their selection. The main types of scales are as follows.
Nominal These scales ask the responder to select from a list of words, such as
yes/no, or sometimes/often/never.
Ordinal Ordinal scales ask the responder to rank items, such as Rank the
following in order of importance: price, availability, quality, one year
guarantee.
Interval Interval scales ask the responder to rate something on a given scale,
where the differences on the scale are of equal strength. An example may
be: Please circle which best describes what you consider when buying:
Price is the most important factor when I buy widgets.
strongly agree/neither agree or disagree/strongly disagree
Ratio Ratio questions ask for actual data, such as how many, how old, how
much, etc.
Bi-polar Bi-polar scales ask the responder to place a mark between two opposites,
such as: Happy_ _ _ _ _ Sad or
Will shop here again _ _ _ _ _ Will not shop here again
Likert Likert scales are designed to gather opinions or attitudes and ask
responders to select from scales such as strongly
agree/agree/neither/disagree/strongly disagree
RATER
RATER (previously discussed on page 8) can be used as a guide to help you identify what
questions to ask your customers. The questions will be different for different businesses,
but the following is provided as a guide.
Dimension Questions
Empathy Do our staff members show adequate and appropriate care and
attention?
Consider a business you are familiar with and design a questionnaire to identify
customer needs for that business.
2. How else could the news agency use an incentive scheme to encourage
customers to complete the questionnaire?
The following paragraphs explain what is normally included in each section of a customer
service plan.
Vision
In five years time, Company X will be considered a market leader in customer service.
Mission
Company X aims to deliver friendly, innovative and quality service to all internal and
external customers.
A customer service vision is a statement of how you see customer services being in the
future. The future can be any time, but is normally 510 years time. Vision statements
can take many forms, but most tend to be short and punchy, such as the Ford Motor
companys:
A mission statement can also be equally short. It defines what the company will do to
achieve its vision. The Ford Motor Companys states:
The customer is Job 1. We do the right thing for our customers, our
people, our environment and our society. By improving everything we do,
we provide superior returns to our shareholders.
A customer service plan should clearly identify how the business wants its customer
services to be in the future and how it intends to get there. A shared vision and mission
can be a powerful tool for guiding customer service delivery
Write customer service mission and vision statements for a company you are familiar
with.
Note: Tailor your statements to reflect the actual goals of the business and needs of
customers. If you have access to company documentation, look at company strategic
plans or vision and mission statements contained in the companys business plan for
guidance or inspiration.
Mission statement
Vision statement
training requirements
Most organisations will have a large number of policies and procedures that determine
how to deal with internal customers across a number of areas. For examples of policies
that cover internal customers, visit the Monash university website at
<http://www.adm.monash.edu.au/workplace-policy/>.
Effective policies and procedures should work to support the seamless integration of
business operations from different management areas. Policies and procedures should
also support and reinforce company culture, or how we do things at company X.
A good tactic to ensure policies and procedures from two management areas harmonise
such as customer relationship management and performance management is to
either reduce the number of individual policies, or base the individual policies on common
principles or values such as commitment to corporate ethics, or high performance. These
principles, in turn, should relate to or support company business or strategic goals. In this
way, individual policies and procedures will work to reinforce and support a company-
wide, integrated approach to doing business.
What is the maximum fare you will pay for a $25 $175
ticket from cities A and B?
How do you expect our cabin staff to dress? Not important Smart uniforms
Because customer needs and expectations are different, the Budget Airlines policies and
procedures will be significantly different to the National Carriers. Using the feedback from
RATER guides, the development of policy and procedures in this case, results in differences
on several points:
product standards: prices, delivery times, quality tolerances, etc.
after-sale contact: none needed (no refunds) versus telephone team to resolve
issues.
Consider the two airlines above. Using Monash Universitys policies and procedures as
a guide, create customer service policies for the airlines.
You may choose to use the blank policy template provided by Monash on their Writing
University Policy page available at <http://policy.monash.edu.au/processes/writing-
policy.html> as a guide for creating the policies and procedures.
2. Consider customer service procedures that would be governed by the policies you
have written. How might these procedures differ? On which points would they
differ? Why? On which points wouldnt they differ, or differ minimally? Why?
a. On step-by-step instructions for carrying out tasks and processes?
b. On training requirements?
Continuous improvement
Most plans would contain evidence of continuous improvement. There should be a
continuous cycle of updating the plan, acting on, reviewing and updating the plan. A
customer service plan may include a section on what general process the business will
follow to ensure the continuous improvement of customer service to meet customer
needs.
Download a customer service plan. An example from the Latrobe City Council is
available from <http://www.latrobe.vic.gov.au/About/Publications/> (the link is at the
bottom of the page).
1. From the information provided in this customer service plan, note down:
a. who the council has identified as their internal and external customers
b. the customer service channels that they have developed standards for
c. the ways they have identified will be a measure of their level of customer
service success.
2. Find another example of a customer service plan online, and note some
similarities and differences between the plan you have located and the Latrobe
City Council customer service plan.
Relevant legislation
Privacy Act 1988
The Privacy Act 1988 regulates how personal information is handled. It covers such
things as:
how personal information is collected
With respect to managing customer service, privacy legislation may be relevant to policies
dealing with the treatment of customer details and records keeping.
8NPPs Plain English summary, Office of the Australian Information Commissioner, viewed December
2011, <http://www.privacy.gov.au>.
Anti-spam legislation
Spam is electronic mail that is sent indiscriminately to many, many people. Spam is
similar to junk mail that you receive in your letter box; however, spam can be much more
sinister. Spam is often used as a disguise to infect computers with viruses that can
damage them, or worse, to extract personal data such as credit card details.
As a result, spam is illegal in Australia. This means that it is an offence to send unsolicited
electronic material to members of the public. The ACMA and the Australian High Tech
Crime Centre work in partnership to identify and track organisations or individuals who
breach Australias Spam Act 2003.
Unsolicited commercial emails must contain accurate information about the origin of the
mail and provide a means for recipient to opt out. The regulation applies to email, SMS,
MMS, and instant messaging.
Material that is not of a commercial nature (i.e. is not selling a product or service) is
exempt. This includes pure market research and emails from charities, political parties,
and religious organisations that are seeking donations. 10
Anti-discrimination legislation
Laws about discrimination are made at both the Commonwealth and the state/territory
level. These laws provide a basis on which individuals may lodge a complaint including
discrimination because of race, sex, disability and age.
Commonwealth laws and the state/territory laws generally cover the same grounds and
areas of discrimination. However, there are some gaps in the protection that is offered
between different states and territories and at a Commonwealth level. Workplace
discrimination is unlawful. All businesses need to be familiar with relevant legislation to
prevent incidences of discrimination in the workplace. Some relevant anti-discrimination
Acts are listed below.
Age Discrimination Act 2004
breastfeeding sexuality
11 Fact sheets for use in the workplace, Australian Human Rights Commission Information for Employers,
attempting to induce individuals to place their personal interests above those of the
companies or organisations they represent
attempting to restrict competition by:
Employees may only use legal, ethical and proper methods to maintain markets for a
companys products and services and to secure additional business.
Schedule 2 of the Competition and Consumer Act sets out a new national consumer law:
the Australian Consumer Law (ACL). The ACL establishes consumer rights and business
obligations when selling goods and services across Australia and replaces various
national, state and territory laws.
The Competition and Consumer Act is enforced by the Australian Competition and
Consumer Commission (ACCC), the Australian Federal Governments national agency
dealing generally with competition and consumer protection matters.
Consider Innovative Widgets, your own organisation, or an organisation you are familiar
with.
What specific legislation would you need to consider with respect to designing
and developing policies and procedures as part of a customer service plan?
What are the risks of not considering legislation in developing customer service
plans?
Mandatory standards
Organisations must comply with mandatory standards under the Competition and
Consumer Act 2010 13. Standards under the Act include various safety and information
standards for specific products and services.
Mandatory industry standards may be enforced under a number of other Acts and
Regulations. For example, under the Telecommunications Act 1997, The Australian
Communications and Media Authority (ACMA) enforce the Telemarketing and Research
Calls Industry Standard 2007. This standard provides guidance on the application of the
Do Not Call Register discussed previously and mandates times at which unsolicited
market research calls may be made.
AS ISO 10002-2006
Customer satisfaction - Guidelines for complaints handling in organizations (ISO
10002:2004, MOD)
Product and service standards define best practice models, which typically include the
following characteristics:
demonstrated customer focus:
supplier relationships and supply chain well developed and maintained in order to
deliver consistent value to customers
commitment of the organisation (from senior management down) to quality
customer service, all management and employees should be trained in and
demonstrate attitudes and behaviours that reflect commitment to customer service
quality.
Australian e-commerce best practice model
One specific model is The Australian Guidelines for Electronic Commerce. This model
seeks to encourage consumer confidence in electronic commerce by providing guidance
to businesses on how to deal with consumers when engaged in business to consumer
electronic commerce. 14
14The Australian Guidelines for Electronic Commerce, The Treasury, viewed December 2011,
<http://www.treasury.gov.au/contentitem.asp?NavId=014&ContentID=1083>.
Consider Innovative Widgets, your own organisation, or an organisation you are familiar
with.
What specific standards or codes of practice would you need to consider with
respect to designing and developing policies and procedures as part of a
customer service plan?
Section summary
You should now understand who customers are and how to identify their needs. You
should also know the key elements of a customer service plan.
Further reading
Commonwealth of Australia, 2010, Australian Consumer Law, viewed December
2011, <http://www.consumerlaw.gov.au/>.
Australian Competition and Consumer Commission, Dealing with customers,
ACCC, viewed December 2011,
<http://www.accc.gov.au/content/index.phtml/itemId/815329>.
Section checklist
Before you proceed to the next section, make sure that you are able to:
ensure plans achieve the quality, time and cost specifications agreed with
customers.
After the initial audit report the board of directors decided a new managing director was
needed to take the company forward. They promoted the grandson onto the board
and recruited a professional manager.
The new managing directors goal was to regain the market share that Innovative
Widgets had enjoyed prior to the recent slump in sales. The managing director started
by establishing a customer service department and agreeing to several new strategies
to implement:
an internal culture of excellent customer service through implementation of the
customer service plan
a vision and mission statement that all employees support
These documents should be created after careful consideration of customer needs and
should provide a program for staff to follow to meet the requirements and expectations of
your customers.
Section 2 focuses on following customer service plans to deliver quality customer service.
We will look briefly at integrating delivery with the rest of the business, general customer
service skills required to deliver effective customer service, monitoring customer service
and improving the customer service delivery of team members.
Learning activity: Integrating customer service with the rest of the business
2. Does the strategic direction of the business (as evidenced by strategic goals)
align with the mission, vision, policy and procedures in the customer service
plan?
3. How would you ensure customer service delivery is aligned with the needs of the
business as well as the needs of the customer?
ability to recap the facts and the customers feeling (active listening)
The skills and attributes above may come more or less naturally to some people. In other
cases, skills can be improved and personal issues identified and worked on. In any case,
access to professional development options such as training, coaching and access to
information can help improve customer service skills.
You may need to incorporate customer service training into your customer service
planning to ensure your team has the capability to deliver quality customer service.
Consider your customer service skills. Use the skills matrix below to identify the skills
you possess.
1 Interpersonal skills Y N Y N
How would you use the matrix to identify areas for customer service team members to
improve?
Before looking at how these skills and attributes can be applied to handling complaints,
lets look at general communication skills applicable to customer interaction.
Word choice
The way we use words is important. Words can have a strong effect on customers; their
moods, feelings and their attitude to themselves and others. If you challenge your
assumptions about types of people and treat everyone with respect, dignity and equality,
you are less likely to unintentionally cause offense; however, there are a few things that
you should keep in mind about the words you choose to use in your customer
interactions.
1. Addressing a customer by their name.
This is a good way to help them understand that you are treating them as an
individual and that you want to know what their specific need or problem is.
2. Referring to a job title or group of people using nicknames, or your own terms can
sound demeaning.
For example, referring to the IT technician as the IT kid can make that job sound
trivial; it is unprofessional and does not communicate respect.
3. Technical terms or jargon can confuse customers if the terms are not properly
explained.
Think back to your first day in a new job and remember how difficult it was when
everybody seemed to speak a language you didnt understand. Where possible in
the workplace, avoid the use of technical terms unless it is necessary. Where
necessary, make sure that your listeners understand the terminology, and explain
any terms they are unfamiliar with.
Body language
Your body also speaks to customers through your stance, movements and mannerisms.
In order to encourage open communication with another your customers, it is important
that you show your willingness to listen and engage.
Make eye contact with your customer, when appropriate, and position yourself so that it is
clear that you are paying attention. Always maintain a posture of openness and
involvement and show you are interested. People are very sensitive to unspoken
messages and will often put more value on the way something is said, than on the words
they use to say it.
Active listening
Demonstrate your respect for your customer by using active listening. Few of us really
actively listen to what another person is saying and it is an important skill to develop. It is
too easy to hear only part of what another person has said, and then begin to form a
response, counter-argument or rebuttal before they have even finished speaking.
objectivity
skilful questioning
You must be able to listen to obtain the information you require otherwise you are only
doing half the job. Confirming that you understand what your customer is saying by asking
questions to confirm, or by paraphrasing parts of what they are saying shows your
customer that you understand them.
A quiet environment with minimal distractions fosters effective listening. Active listening is
an important concept. On page 49 we will revisit active listening as applied to handling
complaints.
show interest?
Misunderstandings
Misunderstandings in customer service interactions will still occur from time to time. In
some instances, this may be a result of a misinterpretation of communication. Take some
time to complete the following learning activity with several other people to identify how
misunderstandings can occur.
The table below lists behaviour or actions that can occur during customer service
interactions. The right column lists possible interpretations of that behaviour.
Complete the table below.
Ask a friend or classmate to also complete this activity and compare your answers. You
may be surprised how different their answers may be. What sorts of differences did you
find?
How can you check understanding and recognise misunderstanding when it occurs?
The three steps to manage a customer complaint are: Listen Respond Resolve. The
first step is to listen to the customer using active listening techniques.
Active listening
Active listening comprises four processes. The four processes are: Asking Questions,
Paraphrasing, Using Verbal Prompts and Demonstrate Commitment. Active listening is a
skill that requires practise and will develop over time if you work at it.
Asking questions:
Try to engage with the person you are listening to by asking questions. Show
interest in what they are saying and try to build a positive relationship. Seek
clarification of the issue to find out what the core problem is. Be empathetic, not
assertive. Do not ask a question that implies judgement (such as: so you were
actually using the widget for something it wasnt designed for?)
Paraphrasing:
From time-to-time summarise or recap what the person has said to you. This serves
two purposes: to confirm to yourself that you understand what has been said, and
also to let the other person know that you have been listening.
Verbal prompts:
Use words such as yes, I see, and OK whilst the other person is talking to show
youre paying attention. Take care to use these words meaningfully. Do not say OK
or I see in order to make the customer feel better when you arent actually
understanding what they are saying.
Demonstrate commitment:
Demonstrating commitment serves two purposes to show the person you are
listening to that they have your full attention, and also to ensure you dont get
distracted during the conversation. Demonstrate commitment by making eye
contact, or, over the phone, by eliminating potential distractions such as
background noise. It is really important when listening to someone over the phone
that paperwork, the computer and background sounds dont distract you. Firstly you
will miss the nuances of what they are saying and also customers will hear paper
rustling or the keyboard being tapped.
Responding
Most people have complained to someone over the telephone or face-to-face about poor
service or products. Think about when you have complained and the responses you have
received. How satisfied were you?
Think about when you have complained to an organisation. What did you like about the
way they responded and what did you dislike?
Like Dislike
3. How then, would you modify the procedures of a team of CSRs to ensure
responses satisfied customer needs?
Most organisations have prescriptive procedures for their employees to follow when
responding to customer complaints. Most procedures will include principles similar to the
following:
assume the customer is telling you the truth
apologise if appropriate
ask the customer how they would like to see their complaint resolved
if unaccepted, explain you have to refer the complaint and explain when they will
hear back and from whom
make sure you refer promptly and someone gets back to the customer at the
promised time.
Resolving
Listening and responding by following organisational procedures is likely to resolve the
majority of customer complaints. However, there are some cases which are complex by
nature and may require more specialist skills, or solutions requiring a higher authority
than the customer services are able to offer. Some examples include:
the complaint involves injury or damage requiring the organisations insurers to be
involved
the complaint involves a threat of legal action requiring the organisations lawyers
to be involved
the complaint can be resolved, but at a cost above the authority of the Customer
Services Manager. This needs to be referred to the Customer Services Managers
manager
the complaint can be resolved by changing the product or service specifications.
This will require internal inter-departmental discussions.
Customer service departments often create scripts for customer service team members
to follow.
Review the complaints handling procedure from
Microsoft Excel is a useful and easily used application for recording, monitoring and
presenting progress towards KPIs.
Simple pie charts or histograms can be quickly produced to present performance
against targets.
When managing a team who are working towards common KPIs, make the KPIs visible
along with the actual performance. The team can instantly see how well they are doing
towards their goals.
For example, telephone call centres display KPIs and current performance such as:
KPI Average Maximum Call Duration: 3 minutes
Write two or three KPIs for a customer service role you are familiar with.
Describe how the KPIs relate to KRAs and over-arching business strategic goals.
Monitoring tools
Once you have developed KRAs, KPIs and targets to monitor the performance of
customer service team members, how do you use these measures to monitor
performance?
Customer service department use several tools. These include:
mystery shopper approaches
observations
customer feedback
Balanced scorecards
Balanced scorecards are used to ensure that an individuals goals and objectives are
directly linked to the goals and objectives of the organisation.
Balanced scorecards are used to record individual KPIs and are provided to employees at
the commencement of the performance period to explain what they must achieve, by
when and how it will be measured.
Scorecards are a useful tool for both managers and employees, as they can be referred to
throughout the performance period to ensure that efforts are focused in the areas that
have been identified as delivering the most benefit to the organisation.
Balanced scorecards typically focus on the following key result areas (KRAs):
customers
financials
people
processes.
Balanced Scorecard
Jennifer Henry Packing Team Supervisor
In the previous learning activity, you developed KPIs and targets for a customer service
role you are familiar with.
Using this information, develop a balanced scorecard for the role or individual.
Describe how you would use the balanced scorecard, in conjunction with other
monitoring tools, to monitor the performance of customer service team members.
In a small company, a manager may have all the above to contend with whilst still
undertaking the role of a manager. So what is the role of a manager? A manager needs to
produce department plans, prioritise and allocate work, assess individuals performance
and provide feedback. The manager also needs to manage non-human resources,
produce budgets and reports. Attending and chairing meetings is a routine activity.
Robert Sutton of the Stanford School of Business is an author and speaker on the
relationships between bosses and employees. Watch two or more of his talks on
YouTube and document some of the points that you could apply to managing a
customer service team. You might want to start with the following video clips:
Bob Sutton: Listening for the truth, 2010, YouTube, viewed December 2011,
<http://www.youtube.com/watch?v=4INfX3k073M>.
Bob Sutton: Hallmarks of Great Bosses, 2010, YouTube, viewed December
2011, <http://www.youtube.com/watch?v=oiknN8uomPc>.
How would you apply the information provided in the video clips to managing a
customer service team?
Lets briefly examine the four key skills and attributes of managing people: leadership,
supervision, mentoring and coaching.
Leadership
Leadership is strategic activity often thought of as the ability to set visions and inspire
others to achieve that vision. Many of the worlds greatest leaders shared their visions
and have inspired others to achieve them. Winston Churchill rallied allies from across the
globe to help during World War Two. Martin Luther Kings famous I have a dream speech
in Washington set the USA on a course away from black oppression and ultimately
towards the election of the first African-American President in Barack Obama.
In business, it is the role of the manager to set visions for the department to achieve. The
vision needs to be shared, with all staff buying into it and being prepared to work towards
it. A customer service vision may indicate a significant change to the current practices or
be a call to improve existing performance.
Supervision
Supervision involves overseeing of the performance of an individual or group regularly.
This involves allocating work, assessing individuals performances and providing
feedback. It also involves following up on feedback with staff to ensure improvements, or
to re-deploy or terminate staff. Intrinsic in this role is the need to use active listening in
order to fully understand the complex issues that can be present with personnel
problems.
Mentoring
Mentoring refers to the relationship between an experienced expert (the mentor) and the
mentors development of an employee. The manager may identify someone who appears
to have the skills to develop further within the organisation and assist with that persons
development through targeted strategies such as training, exposure or assignments. It is
the managers role to identify an appropriate mentor (not necessarily the manager) and
obtain agreement for the mentoring assignment.
Coaching
Coaching refers to the act of directing, guiding and training an individual or group.
Coaching often involves modelling what to do. In the sporting context a coach helps the
athlete to maximise their performance and this is what coaching in the workplace should
aim to achieve. Note that in the sporting context the athlete is the better performer, and
this can also be true in the workplace. The best manager may not be the best person to
respond to an irate customer!
A useful coaching model to follow is the GROW model. GROW stands for:
Goal Options
Reality Will.
Firstly, collaborate with the coachee to establish reasonable performance goals. Next,
establish the reality of current performance and the existence of a performance gap to
overcome. Obviously, if the coachee doesnt believe there is a performance gap to
overcome, the improvement process will stall. You may need to come prepared to
coaching sessions with evidence of underperformance.
Next you should discuss options for closing the gap. It is important to use active listening
to uncover root causes for underperformance and talk through the possible options to
generate effective solutions that will work for the coachee.
Finally, and perhaps, most importantly, you need to establish the willingness of the
coachee to improve. You should establish willingness by encouraging the coachee to
commit to taking practical, observable measures to achieve performance goals. In this
way, the coachee will be unable to hide a lack of commitment, through making vague
promises.
Note: The coaching conversation does not need to rigidly follow the order above. Any
genuinely two-way conversation will develop in unplanned ways. Nevertheless, each
element of the GROW model should be addressed at some point in any coaching session
that is likely to be effective.
Imagine you are the manager of a customer service team. You have a team member
who is having trouble meeting a number of customer service performance targets.
They are rude to customers, when customers complain. According to policy,
customer service team members must always remain polite.
They make mistakes during 40% of orders; the target is <5%.
You plan to hold a five-minute coaching session with the team member to establish
how to help the team member reach their performance targets and determine what
steps the team member should undertake.
Complete the following coaching plan for the session. Some possible questions have
been provided. Try to think of at least three questions to ask at each stage.
Options
Will
Section summary
You should now understand how to implement a customer service plan to deliver quality
customer service.
Further reading
Cole, K., 2010, Management: theory and practice, 4th edn, Pearson Education
Australia, NSW.
Section checklist
Before you proceed to the next section, make sure that you are able to:
develop and use strategies to monitor progress in achieving product and/or service
targets and standards
develop and use strategies to obtain customer feedback to improve the provision of
products and/or services
develop, procure and use resources effectively to provide quality products and/or
services to customers
Kaizen
The Japanese philosophy for improvement is Kaizen. Kaizen was developed in Japan
after the Second World War and the concept was used to great effect at Toyota. It
involves all staff within on organisation asking the following questions about what
they do:
How can we do this better?
15 Cole, K., 2010, Management: theory and practice, 4th edn, Pearson Education Australia, NSW.
PDCA cycle
A well known system structure for continuous improvement is the PDCA cycle. PDCA
stands for: Plan-Do-Check-Act.
Following the cycle, organisations first develop policies such as customer service
policies - and then plan to implement the policies. Organisations then implement the
policies along with monitoring strategies to check performance. On the basis of
performance data, the system is reviewed for effectiveness. Organisations take corrective
actions, or make further plans to improve the system. The cycle repeats indefinitely.
The PDCA cycle has several advantages. These advantages include:
lack of any close association with or ownership by any one organisation
simplicity
The PDCA cycle can be easily applied to customer service. Organisations develop and
implement customer service policies and procedures, check performance and gather
data, and then take actions to improve performance.
Research continuous improvement systems such as Kaizen or the PDCA cycle. For an
organisation you are familiar with, describe how you could systematically improve
customer service on an ongoing basis.
change timelines
increase budget.
Monitoring performance
quality
sales
productivity
customer satisfaction
employee engagement.
You also need to consider high risk areas that could cause substantial damage to the
organisation if something went wrong these should be included in your monitoring
program.
Determine key result areas for customer service.
Customer
How satisfied are customers with the service they receive?
satisfaction
As we saw in Section 2, it is important to determine the way you will go about monitoring
performance and what tools, such as balanced scorecards, you will use.
To ensure your monitoring strategy is effective, your team understands the monitoring
process and how it applies to them. Your team should also understand the system itself
and how it will be applied fairly. In addition, ensure your team understands how the
system ensures that their performance relates to organisational goals.
Lets consider some specific types of analysis you could perform as part of a systematic
approach to customer service performance management, variation management and
value chain management.
Variation analysis
The aim of performance management is to improve performance. Performance can be
improved on an individual or on a systemic basis (covering all team members rather than
one at a time). One important concept in systemically improving performance is variation.
Manufacturing quality or customer service performance may vary numerically over time.
For example, the number of unanswered calls on a customer complaints line may be 25
one day, 30 the next, 28 the day after, and so on. The number of widget returns is likely
to change week-by-week.
To more efficiently improve performance across all team members, managers should aim
to identify causes of variation and reduce performance variation.
Six Sigma
Six Sigma is a well-known performance improvement philosophy developed by Motorola in
the 1980s. Six Sigma is also a methodology for identifying and reducing assignable
variation.
The basic assumptions of Six Sigma rely on the statistics associated with a normal
distribution (the sort that produces a bell shaped curve when plotted on a graph).
If 10mm widgets were to be produced to a size tolerance of +/- 3%, then in an ideal
world all the widgets produced would be within a range of 9.7mm and 10.3mm. A bell
curve showing the frequency of 10mm widgets produced would appear as below.
Mean = 10mm
Number of
widgets 9.7mm 10.3 mm
Size
Almost all the widgets fall within the tolerance range. Sizes are less frequent as they
fall further from the mean. According to Six Sigma philosophy, 99.9997% of all widgets
produced should be free of defect, i.e. produced within the tolerance range. Defects
should be extremely rare.
If a significant number are outside the tolerance range (>0.0003%), then measures
should be taken to manufacture the widgets more accurately and reduce the number of
defective widgets.
Superficially, it may seem desirable for a customer service team to have a few members
who outperform others by a wide margin. Obviously, this is preferable to having no high
performers; however, a customer service manager is in a much better position to increase
overall performance if there is lower variation between high performers and low
performers. The ideal situation is for each team member to perform at a high level and
similarly to every other team member.
The reason why low variation is important is that it allows managers to take fewer actions
to improve the team performance as a whole. Low variation in performance makes it
easier for managers to identify and assign root causes for poor performance, i.e. some
condition that affects all team members performance in the same way such as a faulty
standard or procedure. Consequently, managers do not need to concentrate on individual
performance problems or customise performance solutions for each team member
separately. By acting on the team as a whole, one intervention, such as an improved
training program or an improvement to procedures can improve the performance of all
team members in one go.
Consider a business you are familiar with and answer the following questions.
1. What aspects of customer service performance show a high degree of variation?
3. What systemic measures (as opposed to one-off, individual activities) could you
take to:
a. reduce variation
b. improve performance?
Consider your current workplace, or the training organisation you are currently enrolled
with, and conduct a value chain analysis using the steps outlined above.
You may wish to read a more in depth description of each step in the article Value
chain analysis: Achieving excellence in the things that really matter available at
<http://www.mindtools.com/pages/article/newTMC_10.htm>.
Feedback analysis
Analysing quantitative data that is directly related to KPIs is straightforward. To present
results for analysis, you could use spreadsheet software (such as Microsoft Excel) and
use suitable charts. You can then relate data to customer service KPIs and compare
results with targets. In this way, you can determine areas of concern and take systemic
steps, such as amending procedures, or introducing training to improve performance.
In addition, quantitative data can help you to identify and analyse any gaps that exist
between service levels and customer expectations. For example, if the customer expects
a five minute wait for service and your average waiting time is ten minutes, a gap exists.
The relative importance of waiting times may also be gathered and analysed as a quantity
through the use of scales as discussed in Section 2 in connection with questionnaires.
Questions to ask when analysing quantitative data include:
what does the data represent
Feedback strategy
A good strategy for gathering data for analysis is to design your data gathering tools to
deliver quantitative data that:
is unambiguously related to KPIs
allows you to easily identify gaps between important expectations (those that will
drive purchasing behaviour) and service levels?
Review the customer service KPIs you developed in an earlier learning activity in
Section 2. In the space provided on the following page, design a customer feedback
tool such as a survey or questionnaire to gather service performance data that is
directly relatable to the KPIs.
Your customer survey had a space for customer suggestions. The results are given
below.
Its too dark at the back of the Can you offer organic milk?
cafe.
No magazines to read!!!
I didnt feel myself. I felt out of
My coffee was cold.
place.
I didnt feel welcome.
I think your sign should be larger.
Can you offer pastrami as sandwich
Id prefer seats with cushions.
filler?
Id appreciate free newspapers.
Id prefer classical music to the ABC
Only one toilet in the ladies its Radio News.
not enough.
I felt old.
Colour scheme is dated.
I think youd all look better in red
There was a noisy group of aprons instead of the blue ones.
students in the corner and I
Tablecloths would be appreciated.
couldnt hear my conversation with
my friend. Can you ban mobile phones????
Are there gaps between customer expectations and actual service level? What is the
priority assigned to each gap?
Would you take any further steps to help you determine priorities for customer service
improvement and improve the customer experience?
It is difficult to evaluate qualitative data such as the data above. There is no information
regarding how many people would agree with each suggestion. Also, there is no weighting
to each suggestion. For example, if the person who complained about the lack of toilets
said it would stop her visiting the cafe in future, would that change your
recommendations for improvement? If the person who asked for classical music would
spend more time (and money) each day, would you implement that suggestion? Whats
needed is some way of prioritising qualitative data to guide your analysis and decision-
making.
Bullseye diagrams
A bullseye diagram is one of many tools that can assist in this process. It is used with a
follow-up survey of your customers where you share the comments you received from the
first survey.
Your customers add weight to the comments by placing them into a bullseye diagram
where the outer circle represents no importance, the middle might make me visit more
often and the inner circle critical a must do item.
Lets take a brief look at developing and procuring resources for use in implementing
customer service planning.
Personnel
Your monitoring activities may reveal issues with individual or team performance. In such
cases, as discussed previously, you will need to develop the capacity of customer service
staff through such measures as training or coaching. Sometimes, however, the issue is
not quality but the ability of the team to handle the sheer volume of work. In this case,
you may need to consider recruitment of additional staff. You will need to conduct
recruitment in accordance with organisational policies with regard to, for instance,
planning and approval, advertising, selection, interviewing, assessment, and induction.
Use the internet as a source to gather information about a variety of systems. List the
common features below.
Consider a business you are familiar with. List some ways that a computerised
customer relationship management system could help improve the delivery of
customer service.
Note: Some of the computerised systems that you investigated require significant
investment both to purchase and operate and are intended for large organisations. The
benefits that they provide, however, can often be achieved manually through committed,
systematic application of the performance monitoring and feedback strategies discussed
so far.
Check sheets
A check sheet is a simple tool for gathering numerical evidence of problems. They are
usually used to make a tally prior to producing a Pareto Diagram, Histogram Chart or
Scatter Diagram. These types of diagrams are discussed later in this section.
Pressured 1111 1
Uninterested 111 1
The chart above captures data from customers after they have visited a store. The chart
shows that customers indicated four instances in which they felt pressure from Sales
Team 1. Possible interpretations of this data include:
Customer service representatives may not be following policy and procedures
KPIs and targets for sales may be incompatible with customer expectations
Check sheets may be used within a continuous improvement system to identify and
correct issues with individual performance, systems or customer service planning.
Histograms
Histograms are used to present the relative frequency of performance issues. Frequency
information may be used to determine which problems in a system, if fixed could
generate the greatest overall performance improvement.
Pareto charts
Vilfredo Pareto was an Italian economist in the late 19th and early 20th century. He
commented that 20% of the people had 80% of the wealth. This observed ratio has been
applied to quality issues, notably by Joseph Juran who stated that 20% of the quality
problems resulted in 80% of the financial loss. It is now usually referred to as the 80:20
Rule or the Pareto principle.
A Pareto chart is a bar chart or histogram, where the number of observations of a problem
is plotted on the y-axis while the faults are described on the x-axis. It is normal to sort the
results with the highest number closest to the y-axis. In addition, a line indicating
percentage is included.
As with histograms, the Pareto chart can quickly help identify areas of potential
improvement that would have the greatest overall effect.
Scatter diagrams
Scatter diagrams help to identify correlations between variables. For example, if the
number of complaints received on a particular day was higher than on other days, a
scatter diagram might help identify day-specific problems.
In this example, the number of calls unanswered by the customer complaints team clearly
shows problems on 5 January and 10 January.
Control charts
Control charts can be used to monitor quality over a period of time.
In this example, there appears to have been a peak of unanswered calls between 07:00
and 08:00.
suppliers
systems
skills.
Flow charts
Flow charts can present workflows in a graphical way. They are used to better understand
relationships between work processes. A simple complaints flow chart is presented
below:
Complaint received
Assigned unique
complaint number
Do I have the
No Refer to supervisor
authority to apply
the solution?
Yes
Implement solution
Consider a business you are familiar with and answer the following questions.
1. Which of the seven tools are used to present and analyse data for the purpose of
developing ideas for performance improvement?
2. Choose a tool and describe how it was used (or could be used) to help identify
and resolve a customer service performance issue.
fishbone diagrams
1. Brainstorming
Brainstorming, for the purpose of identifying performance solutions, usually takes place in
a meeting room. One person, a management team member, for instance performs in the
role of facilitator. The facilitators role is to state the performance problem and encourage
the participants to call out solutions. The solutions are written on a flip chart, whiteboard
or similar.
Brainstorming can be used to capture creative ideas to solve problems. It relies on a few
simple rules and conventions that are designed to maximise creativity:
participants are encouraged to call out unusual, novel or bizarre solutions
seeing bizarre solutions often triggers other ideas from the other participants
At the end of the session the results are normally typed-up and time is given for reflection.
A follow-up meeting then reviews the suggestions and tries to identify any successful
solutions.
2. Root-cause analysis
Root-cause analysis is a technique used to try and pinpoint the precise reason for a
performance problem. The following table shows the steps that are taken and gives a
simplified customer service application to help illustrate the use of the tool.
1. Define the problem People have started to leave the cafe without
finishing their coffees.
3. Identify cause and Gritty coffee can be caused by the grind being too
effect relationships fine and passing through the basket into the cups.
The grinder wearing out and becoming faulty can
cause this.
Setting the grinder to the wrong setting can also
result in a grind thats too fine.
Gritty coffee can also be caused by the holes in the
basket being too large.
4. Identify the cause or The size of the basket holes looks OK.
causes that if removed
The grinder is new and works OK when tested.
or fixed would prevent
the problem All staff asked if they know how to use the grinder.
3. Fishbone diagrams
Fishbone diagrams are another tool for helping identify the root causes of complex
performance problems. They are sometimes known as a cause and effect diagrams.
The possible causes of
problems are clustered
around the 5Ms, namely:
1. Man
2. Machine
3. Method
4. Materials, and
5. Measurement.
A fishbone diagram forces you to expand on all of these possible causes. Once the
possibilities are identified, you may then attempt to eliminate some causes or identify
root causes. You may then attempt to develop and trial solutions.
The following is a simplified example of a force field analysis for installing an extra toilet in
the ladies room in the cafe. The calculation was not in favour of the proposal:
Pros Cons
TOTAL = 5 TOTAL = 7
fishbone diagrams
Record-keeping
Effective record-keeping is essential to an organisations day-to-day operations and
continuous improvement. Record-keeping helps support communications within an
organisation and also provides data that can be analysed over time to identify trends in
regard to performance and evolving customer requirements.
To ensure effective customer service performance, records should be kept of:
the customer service plan (including out-dated versions)
customer complaints
databases
paper-based documentation.
The systemic use of the above items allows organisations to track the contact they have
with customers. This practice can prevent errors from occurring with orders, and
subsequently lead to fewer complaints. Customer feedback may also be used to improve
systems and processes.
anti-discrimination legislation
It is essential to be familiar with your legal and ethical obligations and industry codes of
practice so that you store and use information appropriately.
The Privacy Act, for example, outlines the national privacy principles that must be
followed when storing individuals private information. When participating in customer
interactions for example, following the privacy principles means that you must be open
about your organisations policies regarding the use of personal information. You must
allow individuals access to information you hold about them. You must also, in most
cases, refuse to disclose information to third parties without the consent of the individual
concerned. You will need to have policies and procedures in place to ensure information
is only given to authorised people. Many organisations, for example require identification
to be presented before discussing customer accounts.
Ethical considerations
While some information is clearly protected by legislation, such as personal or financial
information, some information may not be. Whatever the case, records in your possession
or the information about those records in your possession should be governed at all times
by principles of ethical record-keeping such as the following:
Avoidance of conflict of interest A conflict of interest is a situation in which
financial or other personal considerations have the potential to compromise or bias
achieving effective integration with existing systems, processes and strategic goals.
Company policy often reflects legislation, business ethics and industry codes of conduct.
For customer service employees, following company policy and procedures is often a
more practical and less time consuming way of achieving legal compliance than reading
the relevant Acts. Procedures should outline specific steps to take, such as asking for
proof of identity and specifying what constitutes proof, for example, before releasing
personal information. In addition, having policies and procedures allows you to promote
your organisations respect for the rights of employees and customers to have their
personal information treated appropriately. To maximise consumer goodwill and
understanding, you may wish to publicise your records policy in customer service plans or
customer service charters targeted at customers.
Effective policy and procedures allows your organisation to ensure that record-keeping
practices are standard and are not entirely dependent on the foresight, thoroughness,
helpfulness and personal ethics of individual employees. Standard procedures allow for
easy retrieval and use of customer or employee information and, and, for that reason,
facilitate better performance. Having standard procedures also ensures that performance
management is applied on the same basis to all employees and reduces the potential for
quality variance.
As discussed in Section 1, effective policies and procedures should work to support the
seamless integration of business operations. Policies and procedures should also support
and reinforce company culture. To this end, ensure record-keeping policies should
harmonise with one another and with other policies and procedures from different areas
of the business.
Consider a business you are familiar with. What legislation or ethical principles apply to
customer record-keeping?
Research the National Privacy Principles and the Do Not Call Register and, on the
following page, write a customer record-keeping policy.
Write procedures for:
safe storage of customer information
How could your policy and procedures support other aspects of customer service and
integrate with company strategic goals?
Section summary
You should now understand how to develop and use monitoring and feedback strategies,
analyse the data received from customer information and performance data, identify
problems and produce solutions to customer service issues.
Further reading
Cole, K., 2010, Management: theory and practice, 4th edn, Pearson Education
Australia, NSW.
Section checklist
Before you proceed to the next section, make sure that you are able to:
develop and use strategies to monitor progress in achieving product and/or service
targets and standards
develop and use strategies to obtain customer feedback to improve the provision of
products and/or services
develop, procure and use resources effectively to provide quality products and/or
services to customers
Glossary
Term Definition
Supply chain Supply chains are the process of procurement, production and
delivery within an organisation.
Appendices
Appendix 1: Answers to selected learning activities
Innovative Widgets
Complaints Policy and Procedure
Resources Specific procedures for the implementation of this policy are available
below and on the company intranet.
To manage complaints
1. Greet the customer courteously and give them your name.
2. Listen fully to what the customer is saying. Try to gather all the facts about the
complaint and jot them down. Ask questions and summarise what they are saying.
3. Never argue with the customer.
4. Apologise for any product fault or poor service. Be sympathetic. Ask if the customer
will allow us to send the faulty item to our quality department for testing.
5. When you have all the details about the complaint, ask the customer how they
would like it to be resolved.
6. No product replacements are within all staff members authority.
7. All staff members can use their professional judgement and refund an additional
10% of the value of the faulty product up to a maximum value of $25.
8. Complaints involving damage to other property are covered by our insurance. Help
the customer to complete the Claims Form and ask if the customer can obtain
quotes for repairs.
9. All complaints involving injury must be referred to the Customer Service Manager.
Agree a suitable time for the Customer Service Manager to call the customer.
10. Any complaint that is not covered in the above procedures must be directed to the
Customer Service Manager. Agree a time for the Customer Service Manager to call
the customer.