GABORONE UNIVERSITY COLLEGE OF LAW AND PROFESSIONAL STUDIES

ADVANCED DIPLOMA IN PURCHASING AND SUPLLY CHAIN

MANAGEMENT

YEAR 1: SEMESTER 2

MODULE –CSM 102: CUSTOMER SERVICE IN THE SUPPLY CHAIN

Table of Contents

Chapter Content Page

1 Introduction 2

2 Challenges of Customer Services 17

3 Problem Solving in Customer Service 31

4 Communication in Customer Service 46

5 Managing Difficult Customers and Coping with 82

Challenging Customers

6 Motivation Theory and Customer Service 109

7 Leadership in Customer Service 127

8 Customer Retention and Measurement Satisfaction 143

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References 159

Chapter 1
Introduction

1.1 What is a Customer?

Remember This
“A customer is the most important visitor on our premises. He is not dependent
on us; we are dependent on him. He is not an interruption in our work; he is the
purpose of it. He is not an outsider in our business; he is part of it. We are not
doing him a favour by serving him; he is doing us a favour by giving us an
opportunity to do so.” Mahatma Gandhi

1.2 Chapter Objectives

In this chapter, you will learn how to
 Define customer service.
 Recognize the difference between customer expectations and customer
perceptions.
 List examples of customer service.
 Identify the five needs of every customer.
 Explain the difference between external and internal customers.
 Distinguish customer attributes.
 Understand the high cost of losing a customer.
1.3 Customer Service is Important
One of the most effective and least expensive ways to market a business is
through excellent customer service. Customers are an obvious requirement for
doing business. The importance of customer service is at an all-time high.

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Businesses are realizing that providing a product or service alone is not enough
in today’s competitive economic environment.
Today, customers are much more sophisticated than they were even five years
ago. They are informed about how products should perform and know that if
they are dissatisfied with the service they receive, someone else probably sells it
and will provide greater service. They may also expect that if they express their
unhappiness with a situation, a positive result will occur.
Customer service is in style! People are talking about its importance and go into
the marketplace expecting to receive it. The provision of customer service is an
important component of the business cycle. In many cases, customer service is
the positive element that keeps current business coming back. The customer
service provider is frequently the one who “saves the day” and the account.
When a person goes out of his or her way to provide excellent customer service,
work is more fun and more fulfilling; as a result, positive relationships with
others develop.
1.4 What is Customer Service?
Shockingly, the average customer service provider does not know what
customer service is! Customer service is anything we do for the customer that
enhances the customer experience. Customers have varying ideas of what they
expect from customer interaction. The customer service provider must get to
know his or her customers and strive to provide them with excellent customer
service. No matter how accurately we see our definition of customer service, we
still have to live up to what our customer thinks that customer service is. The
customer’s satisfaction is the goal to attain.
1.5 Understanding Satisfaction
Customer satisfaction is the customer’s overall feeling of contentment with a
customer interaction. Customer satisfaction recognizes the difference between
customer expectations and customer perceptions. Satisfaction may develop
quickly or may be cultivated over a period of time. Customers have many
concerns; our job is to reduce as much of the customers’ stress as possible and
to create a pleasant customer experience, while also providing current
information and helping to solve customers’ problems. Satisfaction may be a
customer’s afterthought. The customer may think back on the experience and
realize how pleasant or unpleasant it was.
Examples of Customer Service

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1. Receipt lookup or “return by” date on store receipts
2. Calling the customer by name
3. Easy return policy
4. Updated map of the area or Global Positioning System (GPS) in rental cars
5. A doctor calling you back to see how you are feeling after a professional visit
6. On-time delivery
7. Courtesy and enthusiasm
8. Owner’s manuals and frequently asked questions online
9. Showing the customer that you care
10. Excellent follow-up
11. Empathy in handling customer complaints and questions
12. Well-explained instructions
13. Illustrations of encouragement
14. Suggesting a less expensive option
15. Package carryout
1.6 Why is Excellent Customer Service Rare?
Customer service is rare because it requires two things that the average person
and organization are unwilling to commit to: spending money and taking action.
In business, everyone talks about how important customer service is, but most
people do not really know how to provide outstanding customer service.
Customer service is much more than having a great attitude or being a people
person. To prepare to provide excellent customer service, one must develop the
skills to be successful.
In addition to developing skills, organizations must assess their current level of
customer service and determine if it appropriately meets their current
customers’ needs. Customers are changing all the time. In addition to the
people, the circumstances that customers and organizations are required to
operate in may change. If customer policies were established a number of years
ago or if the customer base has changed, current procedures for operation may
no longer be effective. Companies must develop strategies that meet today’s
customers’ needs.

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Employees must be empowered to make decisions to benefit their customers.
They must have managers who carefully hired the right people for the jobs and
employees who are adequately trained to anticipate the challenges that may
arise daily. While customer service is more than having a great attitude, it does
require having the right attitude. Some people become so involved in trying to
provide excellent customer service that they lose sight of the little things that
the customer would appreciate.
The use of technology and current information greatly facilitates the provision
of excellent customer service. We live in an age of technology in which a new
and improved model is on the market almost before a new system is installed.
Technology and information must work together to enhance customer service.
Many up-to-date computer systems, e-mail, fax machines, printers, and
messaging centers have remained unused because the information needed for
their use was not developed and distributed to the appropriate customer service
personnel. Customers use technology to enhance their own lives, and they
expect the businesses that they work with to use it also. Sometimes the
challenge is having too much information or information that is difficult to
understand. Management must determine its relative importance in the total
scheme of what the business is trying to accomplish. If we determine what our
customer’s concerns are but we do not know how to include the customer’s
home address, e-mail address, or other contact information in our database
effectively, we may conclude that we do not have the most important
information that the customer has given us.
The challenge of providing excellent customer service never ends. Individuals
must periodically examine their performance to ensure that they are continuing
to practice the positive skills that make providing customer service enjoyable
and efficient. It is easy to slip into old behaviors when we are busy or have
additional stress in our lives.
Management must periodically measure customer satisfaction. Just because an
organization thinks that its customers are pleased with what the organization is
doing for them does not mean that this is true. The customer must be asked
questions concerning what is being done well and what could be improved.
Those opportunities to express opinions must be offered in a way in which
customers will actually respond to. Customers have many concerns in their
lives; just because they have not complained to us does not mean that they do
not have complaints or suggestions.

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It may mean that we have not taken the trouble to ask. One of the best ways to
become a better customer service provider is to become a better customer. As
we exercise our rights as customers, we become more sensitive to and aware of
what it takes to become an excellent customer service provider. What bothers
each of us probably bothers our customers.
Exercise your rights as a customer. Write compliment and complaint letters or
e-mails to share your experiences and opinions. Fill out comment cards, and
truthfully answer when someone asks how your experience was. Do not expect
more of others than you do of yourself. You may learn more from your opinions
than the people you are sharing them with.
1.7 Five Needs of Every Customer
Every customer comes into the customer situation with differing wants. While
wants are frequently hard to identify and may occasionally be unrealistic, all
customers have the following five basic needs:
1. Service: Customers expect the service that they think is appropriate for the
level of purchase that they are making. A small, spontaneous purchase may
have a smaller service need than a larger purchase that has been carefully
planned and researched.
2. Price: The cost of everything we purchase is becoming more and more
important. People and businesses want to use their financial resources as
efficiently as possible. Many products previously considered unique are now
considered commodities. This means that while a consumer previously had to
travel to the local hamburger restaurant to purchase a hamburger, now one can
be acquired at many other locations. This makes the component of price even
more important to the customer.
3. Quality: Americans are less likely today to think of their purchases as
throwaway items. Customers want the products that they purchase to be durable
and functional until customers decide to replace them. This requirement of
quality mandates that manufacturers and distributors produce products that live
up to the customers’ expectations of durability. Customers are much less likely
to question price if they are doing business with a company that has a reputation
for producing a high-quality product.
4. Action: Customers need action when a problem or question arises. Many
companies offer toll-free customer assistance telephone lines, flexible return
policies, and customer carryout services in response to the need for action.
Customers are human beings and like to think that they are an important priority
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and that when a need or question arises someone will be ready and waiting to
help them.
5. Appreciation: Customers need to know that we appreciate their business.
Customer service providers can convey this appreciation in many appropriate
ways. Saying “thank you” to the customer through our words and actions is a
good starting point. Preferred customer mailing lists, informational newsletters,
special discounts, courtesy, and name recognition are good beginnings to
showing our customers our appreciation. Additionally, letting them know that
we are glad that they have chosen to do business with us conveys a positive
message. A fast-food restaurant has a sign in its drive-through lane that says,
“We know that you could eat somewhere else; thank you for allowing us to
serve you.”

1.8 External and Internal Customers

It is important to recognize the importance of both external and internal
customers because both contribute to the customer service of our organization.
External customers are the customers we do business with outside our
organization. External customers are the customers we most commonly think of
when we consider whom we serve. They are the people with whom we interact
and share our knowledge and positive attitude. External customers have the
power to enhance our reputation and to bring us new business, but they are not
the only customers that we serve.
Every day we interact with a special group of customers who frequently go
unrecognized. These customers are our internal customers.
Our internal customers are the people we work with throughout our
organization. They are important to our success in providing our external
customers with what they need. If internal customers do not see the importance
of completing work promptly and of treating others with respect, it becomes
very difficult for the organization to provide outstanding customer service to
external customers. Internal customers were previously referred to as co-
workers, but this title does not elicit the respect deserved by the people within
any organization who contribute to the overall success of the organization. Your
customers may get a pay check from the same company that you do.
The idea that all of us have customers does not appeal to those employees who
want to think that because they do not interact with external customers they do

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not have a responsibility in the customer process. Our internal customers should
be as important to us as our external customers.
By developing positive relationships with our internal customers, we are
showing them that we value their importance in the overall organization. We
can apply a slightly modified version of the Golden Rule to our internal
customers, “Do unto our internal customers as we would do unto ourselves.”
This rule suggests that as customer service providers we will strive to determine
what our internal customers’ needs and expectations are and place the same
level of importance on their needs as we would place on our own. We must stop
and ask them what we can do to make their jobs easier, and they have to ask us
the same thing. Working with our internal customers is not a form of
manipulation but, instead, a positive approach to being part of a team. All of the
team members are working together to win, but not all are making the same
type of contribution.
Management has an important role in creating an environment that recognizes
the importance of internal customers. By providing opportunities for internal
customers to experience the challenges of each other’s responsibilities, an
increased respect can develop. It also helps everyone involved to see the big
picture. It is a natural human tendency to assume that someone else has an
easier job and an easier life than we have.
Obviously, this is not necessarily the case. By beginning to understand our
coworkers’ challenges, we can work to minimize them. Systems may be
redesigned, paperwork may be reduced, and a team approach may emerge. By
satisfying our internal customers, we create an excellent foundation on which to
begin meeting our external customers’ needs. Fewer apologies have to be made,
work gets done more efficiently, and an overall positive atmosphere develops. If
you cannot quite decide who your internal customers are, think of it this way,
“Whose out-box do you work from and whose in-box do you feed into?” In
addition, consider who cleans the building, who does your typing, who
maintains your security, who makes the sales, and who works on the computers.
These are your internal customers. A team with the goal of providing excellent
customer service to all customers may make a common vision of customer
service a reality with real opportunities.
1.9 Customer Attributes
Each customer is, of course, unique. Identifying customer attributes may allow
an organization to better understand “who” its customers are.

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Customer attributes are characteristics that allow customers to be categorized
according to demographic, psychographic, or firmographic information.
Businesses frequently attempt to group their customers to enable the business to
serve customers more appropriately. Demographic information includes
characteristics like age, income, marital status, education, stage in the family
life cycle, home ownership, sex, ZIP code, occupation, household size, mobility
patterns, ethnic background, and religion. Demographic information is a
straightforward and basic method of identifying customers.
Psychographic information focuses on lifestyles, modes of living, needs,
motives, attitudes, reference groups, culture, social class, family influences,
hobbies, political affiliation, and so on. Psychographic information can provide
a more thorough picture of the customer. Not all individuals who earn the same
income choose to spend it in the same way. Just because people live next door
to you does not mean that they choose to maintain their home like yours or that
they share your hobbies.
Firmographic information includes characteristics about a company such as
how many employees they have; the kind of business they are in; whether they
are retail, wholesale, or a service provider; their hours of operation; and so on.
Since so many customer service providers serve the business-to-business
environment, it has become increasingly important to understand companies
themselves as entities rather than just the individuals served as the ultimate (or
end-of-the-line) consumers. Individuals take their personal experiences with
them as they make business decisions and vice versa.
1.10 The Cost of Losing a Customer
Because of the increased expectations of customers and the competitiveness of
the marketplace, customer service providers are recognizing the high cost of
losing customers. It takes little effort to lose a customer. When service providers
neglect their concerns, treat them disrespectfully, and fail to follow through
with results, customers will be tempted to make their exit.
When customers cease to do business with us and begin to do business with our
competition, several unfortunate situations occur.
 We lose the current dollars that our business relationship created. This
loss may seem insignificant to begin with, but over a period of time it can
prove to be quite damaging.
 We lose the jobs that our client or clients provide. If business goes
elsewhere, we do not need to employ the people who were working on
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the account or accounts. An advertising agency lost a major advertising
account because of a lack of courtesy and follow-through on the agency’s
part. This loss of business resulted in the closing of the office, with over
fifty people suddenly out of work.
 A third situation that may occur is the loss of reputation. Word travels
fast in our information-based society. Our clients will possibly share their
experiences with their clients and friends. This loss may result in the
immediate departure of other business or simply in a lack of trust among
our current clients and any potential customers.
 A final challenge is the loss of future business. This is an intangible
variable because it is difficult to assess the long-term effects of what
might have happened in the future. Nevertheless, whether it is one dollar
or a million, its importance is worth recognizing.
1.11 Quick Quiz
1. Customer service is anything we do for the customer that enhances the
customer’s experience. T or F
2. Customer service and satisfaction are easy to measure. T or F
3. Customer service requires nothing more than a positive attitude. T or F
4. Compliment letters can help to reinforce excellence in customer service. T or
F
5. Technology can be used to enhance the provision of customer service. T or F
6. Service, price, quality, action, and appreciation are referred to as the five
needs of every customer. T or F
7. The people we work with outside our organization are called internal
customers. T or F
8. Customer attributes are characteristics that allow customers to be categorized.
T or F
9. Information that focuses on lifestyles, modes of living, needs, motives,
attitudes, and so on are referred to as demographic information. T or F
10. The losses of dollars, jobs, reputation, and future business are consequences
of losing customers. T or F
CRITICAL THINKING

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1. What is the definition of customer service?
2. List five examples of customer service.
3. What are the five needs that every customer has?
4. Explain why it is necessary for customer service providers to maintain
a positive relationship with both internal and external customers.
5. How is technology enhancing the provision of excellent customer service?
6. Relate customers’ expectations about price to their expectations of service.
7. Is the loss of current dollars the only concern when a customer is lost?
8. List ways in which you can become a better customer.
9. Write your own philosophy and definition of customer service.
10. Define contentment.

GROUP WORK: SKILL BUILDING

My Customer
Excellent customer service providers are continually assessing their own
performance and the needs of their customers. The benefits of knowing our
customers include enhanced service opportunities and an awareness of service
weaknesses.

In your groups, answer the following questions:

 My customer is satisfied when . . .

 My customer would like for me and my organization to improve our
service
 by . . .
 I anticipate my customer’s needs by . . .
 The most basic customer service action that I can take for my customer
is . . .

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 The greatest demands on me and my time are . . .

Writing Complaint and Compliment Letters (Or E-Mails)

One of the best ways to become a better customer service provider is to become
a better customer. There are many ways of beginning the process necessary to
become a better customer. An effective method for exercising your rights as a
customer is to write compliment and complaint letters.
Many customer concerns are not effectively addressed when they occur, and the
customer continues to feel anger or frustration over the situation. By taking the
initiative to express customer concerns or satisfaction, a customer may feel
closure in a given situation and has shared critical information with the
organization.
When writing a complimentary letter, it is important to include as many facts as
possible. Unfortunately, most customers are much more interested in expressing
their dissatisfaction than their satisfaction. By writing a complimentary letter,
you are giving an employee, department, or company a pat on the back that
affirms for them that they are doing an effective job of meeting their customers’
needs. Verify the accuracy of the address or e-mail address that you are using
for your communication.
A compliment or complaint letter or e-mail accomplishes nothing if it doesn’t
go to the proper place or person.
What to include in a Compliment Letter
 Your name, address, home and work telephone numbers, and account
number, if appropriate
 Make the letter brief and to the point. Share specific facts about the
situation, including the name of the individual(s) that assisted you, the
date of the interaction, and what pleased you.
 Type your letter if possible; it will look more professional and will be
easier to read.
 Always keep a copy of any correspondence that you send. You may want
it for future reference or to use as a sample for another complimentary
letter in the future. If your compliment is sent in e-mail form, always send

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yourself a copy (BCC). This way you know that the communication went
through and it will be saved on your computer in an additional form.

Following is a guide to writing an effective compliment letter.

(Your address)
(Your city, Country)
(Date)

(Name of contact person)

(Title)
(Company name)
(Street address)
(City, state, Country)

Dear (contact person):

I would like to express to you how pleased I was with my recent interaction with your
company. On (date), I called your customer service department to request assistance with
my account. I was connected with (name). After patiently listening to my problem, she (he)
explained very clearly what had transpired and that I had, in fact, been billed properly.
Mr Disang professional approach and excellent communication skills allowed me to
become better informed as to how your company works and went a long way in confirming
my loyalty to your organization.

Thank you for providing me with such a positive customer experience.

Sincerely,
BoiDikgang
(Office and home phone numbers with area code)
(Your account number)

As with a complimentary letter, when writing a complaint letter, it is important

to include specific facts. Complaint letters should be to the point and none
motional. Complaint letters provide the writer with the opportunity to express
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concerns, document grievances, and to request specific or nonspecific
resolutions to the situation.
What to Include in a Complaint Letter
 Your name, address, home and work telephone numbers, and account
number, if appropriate.
 Make your letter brief and to the point. Detail specific facts about the
situation.
 Include the date and place of the purchase and information about the
product or service.
 State exactly how you would like to see the situation resolved and when
you expect to see the resolution in effect.
 Type your letter if possible, and include copies of all pertinent
documents.
 Do not send originals; retain them along with a copy of your
correspondence for future reference. Remember, if you are expressing
your complaint via e-mail, send yourself a copy.
The following sample complaint letter provides a guide to writing an effective
complaint letter.

(Your address)
(Your city, state, Country)
(Date)

(Name of contact person)

(Title)
(Company name)
(Street address)
(City, state, Country)

Dear (contact person):

On (date), I bought (or had repaired) a (name of product with serial or model number or

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service performed). I made this purchase at (location, date, and other important details of
the transaction).

Unfortunately, your product (or service) has not performed well (or the service was
inadequate) because (state the problem). Therefore, to resolve the problem, I would
appreciate you (state the specification you want). Enclosed are copies (copies—not
originals) of my records (receipts, guarantees, warranties, cancelled checks, contracts,
model and serial numbers, and any other documents).

I look forward to your reply and a resolution to my problem and will wait (set time limit)
before seeking third-party assistance. Please contact me at the above address or by phone at
the numbers shown below.
Sincerely,
(Your name)
(Office and home phone numbers with area code)
(Your account number)
Enclosures
Source: Southwestern Bell Telephone Book, 1992–1993.

Assignment
Compose two letters explaining two separate customer service experiences that
you have had or someone close to you has had. One letter should explain a
positive experience and should show appreciation for those who offered the
positive treatment. The second letter should express your dissatisfaction over a
poor customer service experience. Try to include as many details as you can,
including specific names, dates, and so on. You may wish to ask for some type
of follow-up if you feel that it would be appropriate in the situation. You are the
judge as to whether the situation is worthy of your correspondence.
Presentation
All professional business correspondence should be typed on a computer.
Follow the guidelines for writing a compliment/complaint letter. Always
remember to include your full name and address so that the business will know
whom to send a response to. Be specific when describing what you would like

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to see happen in response to your letter. Always keep a copy of anything that
you mail or e-mail.
You will have it to refer to in the future and can use it as an example when
writing your next compliment/complaint letter. Most important, mail your
letters! Record on your calendar when the letters were sent and watch the mail
for a reply. Happy writing!
Helpful hint: Many word-processing programs have letter wizards to assist you
in writing professional letters. If you have limited experience with writing
business letters, you may want to give one a try.

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CHAPTER 2
The Challenges of Customer Service
REMEMBER THIS
A reputation once broken may possibly be repaired, but the world will always
keep its eyes on the spot where the crack was. JOSEPH HALL

2.1 Chapter Summary

• Elements of Success
• Barriers to Excellent Customer Service
• Power of Perceptions
• Understanding of Expectations
• Levels of Expectations
• Scope of Influence
• Reputation Management
• Techniques for Exceeding Customers’ Expectations
• Keys to Credibility
• Importance of Values
• Ethics in Customer Service
• Current Status of Customer Service
• New Trends in Customer Service
• Skill Building: Understanding Expectations
• Opportunities for Critical Thinking

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2.2 Elements of Success
Customer service is such a valuable concept that it seems it would be simple to
provide it. Unfortunately, this is not necessarily the case. After assessing their
own strengths and weaknesses, customer service providers must begin to
understand the customers that they are serving. After doing this, they may begin
to be prepared to provide those customers with excellent customer service. By
becoming familiar with the various barriers to customer service, recognizing the
power of perceptions, understanding expectations, and maintaining their own
credibility and sense of values, customer service providers are equipping
themselves to fully serve their customers.
2.3 Barriers to Excellent Customer Service
Numerous obstacles stand in the way of the delivery of excellent customer
service. Some of the common barriers include management philosophy; making
it difficult for customers with a problem to contact a company or the person
who can really help; unreliable equipment; restrictive company policies;
difficult-to-understand warranties or owner’s manuals; out-of date procedures;
or a lack of understanding of the value of service. These barriers are, in most
cases, beyond the control of the customer service provider and, unfortunately, a
common part of doing the job.
Some barriers to excellent customer service are within the control of the
customer service provider. These challenges can be overcome through diligent
effort, allowing the customer service provider to do the best possible job. Some
of the most common barriers to excellent customer service are:
1. Laziness
2. Poor communication skills
3. Poor time management
4. Attitude
5. Moodiness
6. Lack of adequate training
7. Inability to handle stress
8. Insufficient authority
9. Serving customers on autopilot

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10. Inadequate staffing
Customer service providers must perform periodic self-evaluations to assess
their effectiveness and to identify areas that need improvement. When that
assessment is made, the individuals must take the initiative to make changes and
must monitor themselves so that they don’t slip into their old habits.

2.3 Power Perceptions

When we interact with others, we must be aware of their perceptions of
situations, experiences, and people. A perception is the way that we see
somethingbased on our experience. Everyone’s perception of a situation will be,
at least slightly, different. The question persists, “Is the glass half full or is it
half empty?”
Perceptions are frequently developed over a period of time and reflect the ways
that we have been treated, our values, priorities, prejudices, and sensitivity to
others. Two people can share the same experience and then describe it
differently. Unfortunately, perceptions are not necessarily based on rational
ideas and may be influenced by momentary frustration and anger. Because
perceptions are so full of mystery, it is important for the customer service
provider to anticipate customer resistance based on the customers’ prior
interactions and always to work at providing the customers with excellent
service so that their most current perception is a positive one.
Customers may not remember every detail of an experience, but they will retain
an overall feeling about it. That “feeling,” in combination with other
experiences, will create their perception of your company and you. Whenever
possible, try to deal with your customers as individual human beings. Respect
their time, circumstances, and priorities. Always convey to customers that you
appreciate the time it takes them to do business with your company. Ask the
customers if there is anything else that you can do for them. Periodically, ask
the customers how you are doing. The feedback that they give you will provide
insights as to how they perceive your organization.
Remember that you may not be able to erase customers’ negative perceptions
that are based on their prior interactions. What you can do is to show them,
through your actions, that their perceptions are not accurate.
2.4 Understanding Expectations

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Every customer walks into a known or unknown situation with a set of
expectations. Expectations are our personal vision of the result that will come
fromour experience. Expectations may be positive or negative. How many times
have you practiced your response to an anticipated objection only to find out
that you didn’t have to use it? Expectations are usually based, at least partially,
on our perceptions. If your last experience with a company was negative, you
may approach a new situation with the expectation that you will again be
dissatisfied. Because of this, you may approach the interaction “armed and
ready” for battle. Sometimes companies or individuals wrongly assume that
they cannot live up to their customers’ expectations. This assumption frequently
stems from a misconception of what the customers expect.
At an educational institution, school representatives and students were
informally surveyed to determine the students’ expectations of the institution.
The results showed a broad disparity between what the students expected and
what the school representatives thought the students expected. The
representatives of the school ranked the students’ top five expectations of the
school as follows:
1. Grades with no effort
2. Extra assistance with enrolment
3. Short classes
4. No reading assignments
5. More parking
The students ranked their own expectations this way:
1. Positive environment that encouraged learning
2. Transferable classes
3. Instructors who cared and knew the students’ names
4. Safety in the parking lot and building
5. More parking
It is easy to identify the differences between the two lists. It would be incorrect
to assume that all students shared the surveyed students’ expectations. It would
also be incorrect to assume that there weren’t some students who did have the
expectations that the school representatives perceived that they had.

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What is important to learn from this comparison is that what we think our
customers expect is frequently much easier and less costly to provide than we
may think. What the students expected cost relatively little or nothing to
provide, but since the school didn’t understand the students’ expectations, they
were not being consistently fulfilled.

2.5 LEVELS OF EXPECTATIONS

Customer service providers must recognize that customers have differentlevels
of expectations. Expectations can be divided into two distinct
categories:primary expectations and secondary [Link]
expectations are the customers’ most basic requirements of an interaction.
When dining at a restaurant, our primary expectations are to satisfy ourhunger,
to let someone else do the cooking, and to pay a reasonable price.
Secondary expectations are expectations based on our previous experiences
thatare enhancements to our primary expectations. When dining at a restaurant,
oursecondary expectations are to have good service, to be treated with
courtesy,and to receive good, tasty food.
A customer’s expectations change constantly, and each customer willhave his or
her own unique set of expectations. While this is a challengingreality, it
provides a unique opportunity for us to strive consistently to bewhat the
customers want us to be.
2.6 SCOPE OF INFLUENCE
It is important for businesses to recognize the influence that their customershave
on other customers and potential customers. This is called scope of influence.
Scope of influence is our ability to influence others based on our perceptionsor
experiences. Each person’s “scope” is different. On average, our
opinionsinfluence between 7 and 15 people. Some people have a larger scope
becausethey interact with a larger number of people or because they
haveoutgoing, open personalities.
Scope of influence plays no favourites and is usually not objective. Thus,it is
extremely important to do all we can to make our customers happy andto keep
their business. Studies have shown that it costs about five times asmuch to
attract new customers as it costs to keep our current customers. Researchhas
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also shown that customers are more likely to share a negative experiencewith
their superiors. These superiors are frequently the peoplewith more decision-
making power, income, and influence. Unfortunately,customers are likely to
share a positive experience with the people closestto them and with no one else.
Marketing professionals have long recognized the power of word-
ofmouthadvertising. This is basically what scope of influence is. We mustask,
remind, and entice our customers to share their positive experienceswith others.
By doing so, we are showing our current customers how muchwe appreciate
them, and we are also creating an opportunity for new customersto come to us
expecting a positive experience. Ahappy customer canattract new customers at
virtually no cost.

2.7 REPUTATION MANAGEMENT

One way that some companies are trying to differentiate themselves fromthe
competition is through reputation management. Reputation managementis the
process of identifying how a company is perceived and establishing an
actionplan to correct, maintain, or enhance the company’s reputation. As more
andmore products and services become commodities, customers may be
moreattracted to a company because of its reputation than any other single
factor.
Reputation management moves away from how a company would liketo be
perceived and identifies and responds to how it really is perceived. Agood
reputation is cultivated over time through a company, department,
orindividual’s performance, good or bad, in a variety of situations.
A company seeking to begin to manage its reputation must survey itscustomers
and the community at large to assess what its reputation reallyis. A company’s
reputation is different from its image. A company couldhave a positive image,
but not a positive reputation. A company may berecognized as a positive and
likeable member of the community, but customersmay still consistently decide
to do business elsewhere.
According to the marketing research firm Yankelovich& Partners, acompany
with a good reputation:
• Is very responsive to customers.
• Is a company you can trust.

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• Delivers on its promises to customers.
• Provides excellent value to customers.
• Has excellent communications.
• Is ethical and honest.
• Conducts business in a human/caring way.
• Has excellent top management.
• Is able to adapt to changes in its industry.
• Is a good citizen.
• Is a progressive company.
• Is cooperative.
• Has a record of strong financial performance.
• Treats employees with respect.
• Is a technological leader in its industry.
• Is committed to the environment.
• Complies with state/federal regulations.
• Is successful in diversifying operations (Industry Week, Feb. 3, 1997,pp. 13–
16).
By effectively managing its reputation, a company can maintain an informedand
realistic understanding of how customers and the communityperceive it, which
can help it to anticipate and plan for challenges in thefuture.

2.8 TECHNIQUES FOR EXCEEDING CUSTOMERS’ EXPECTATIONS

To begin attempting to exceed customers’ expectations, try the following:

1. Become familiar with your customers. Get to know who they areand why
they do business with you. Find out their likes and dislikes.
2. Ask your customers what their expectations are. Find out what theysee as
the benefit of doing business with you. What would they likefor you to do that
you aren’t already doing?
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3. Tell your customers what they can expect. Convey to your customersyour
commitment to them.
4. Live up to their expectations. Follow through by accomplishingwhat you
have said that you would do.
5. Maintain consistency. Don’t promise what you cannot deliver,but always
deliver a consistent service. Customers like to know thatthey will have the same
positive experience every time they interactwith you.
One important key to exceeding customers’ expectations is to rememberthat
expectations are always changing. What was previously in excessof our
customers’ expectations may suddenly be no different from what allof our
competition is doing. If we fail to stay current with our competition,we may fail
to live up to our customers’ current expectations.
The American auto industry was for many years the world standard
forexcellence in automobiles. With many loyal customers, its position in
themarketplace seemed secure. It had set the standard of excellence. At thesame
time, foreign automakers were watching and observing what customersappeared
to like and to dislike. The Americans paid little attentionto this potential
competition; after all, they had set the standard. Suddenly,seemingly out of
nowhere, a new group of competitors had entered themarketplace. These new
competitors knew what customers liked and dislikedabout American cars. The
American auto industry was shocked; howcould its customers turn their backs
and purchase automobiles from non-American manufacturers?
Unfortunately, what the American automakers failed to remember isthat once a
standard is set, it represents an opportunity for the competitionto attempt to
surpass it. No industry has ever continued to maintain a loyalcustomer base
without continuously recognizing what the competition isdoing and continuing
to meet the customers’ ever-changing needs andwants. Fortunately, the
American auto industry has recognized what thecompetition is doing and has
regained many of the customers that ithad lost.
2.9 KEYS TO CREDIBILITY
In all aspects of our lives we are confronted with the challenge of being
believableto those around us. How believable we are, in combination withhow
reliable we are, translates into how credible we are to others. Credibilityis made
up of the combination of our current knowledge, reputation, and
[Link] encourages trust. If we are to work successfully
withour customers, they must trust us. Our personal credibility can be the
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onecharacteristic that determines our success as people and as customer
serviceproviders.
Try these tips for cultivating credibility:
1. Practice consistency. Approach similar situations in the same manner,always
striving for fairness. Demonstrate your emotional [Link] positive,
professional, and warm at all times.
2. Keep your word. Follow through with the commitments that youmake. Any
call you receive expresses the implication that you willrespond with answers.
People will not have faith in you if you breakyour promises.
3. Develop your expertise. Become very knowledgeable about yourproducts,
your company, and the overall industry. Strive for continuousimprovement.
4. Become a teammate with your co-workers. Working successfullywith
others shows that you have common goals and can benefit fromeach
individual’s specific skills.
5. Show your dedication to customers. Tell customers what you willdo for
them, take every request seriously, and follow up.
6. Treat all of your customers and co-workers with the same highlevel of
respect. By showing that you respect others, you create anenvironment that
allows others to respect you. Be sensitive to youreffect on customers.
7. Apologize if you are wrong. Your honesty will impress others andthey will
respect you for who you are, not who you pretend to be.
8. Remember that credibility is much harder to regain than it is tokeep.

2.10 IMPORTANCE OF VALUES

For excellent customer service to exist, the successful joining of
corporatevalues and employee values has to occur. Values are a combination of
our beliefs,perceptions, and ideas about the appropriate response to a situation.
Bothindividuals and companies have their own specific sets of values.
Companiesmust effectively communicate to their employees what the
company’svalues are. Stated corporate values are most commonly conveyed to
employeesthrough written information in employee manuals or policy
statements.

25
Real corporate values can also be conveyed through the actions ofthe
management in an organization. Employees must recognize their ownvalues and
beliefs and attempt to identify organizations that have similarpriorities.
Individual values are very personal. No other person has had the sameset of
circumstances that have allowed you to develop the values that youpossess. In
the customer service industry, some organizations have a verydistinct set of dos
and don’ts. Other organizations may be vaguer inexpressing corporate priorities
to employees. In either instance the customerservice providers must recognize
that they are both representativesof their company and also individuals. Their
behaviors and philosophies illustratethe persons they are.

2.11 ETHICS IN CUSTOMER SERVICE

Most individuals are periodically faced with ethically challenging
[Link] exactly are ethics and why do they matter in our professional
and personal lives? Ethics are a set of principles that govern the conduct of an
individualor group. Sometimes ethical decisions are easy to recognize and
areperceived as popular choices of behavior by the people around us. At
othertimes the spectrum of potential choices falls into gray areas in which
the“right” or “wrong” course of action is difficult or nearly impossible to
identify.
The challenge of ethical decision making becomes even harder when itis not
just an individual’s personal judgment that is involved, but also carryingout the
instructions of a supervisor, request of a customer, policy ofthe organization, or
some other situation in which a threat, real or perceived,is involved.
There are really no shortcuts when it comes to telling the truth and
determiningan appropriate course of action. Individuals in business must beseen
by those around them as honest or they will not succeed for long. Thebottom
line in decision making is that individuals must face the consequencesof their
decisions—good or bad. When faced with an ethically challengingsituation, ask
yourself the following questions:
• Is it legal?
• Is it fair?
• How do I feel about it?
• Would the court of public opinion find my behavior incorrect?

26
• Am I fearful of what those I trust would say about my actions?

The above questions can be quite revealing when attempting to choose anethical
course of action. This is not to suggest that ethically challenging situationsare
easily resolved, but analyzing a situation may make the appropriatedecision
easier to identify. One final consideration regarding ethicalbehavior is that it is
not always popular to “do the right thing,” but maintainingindividual integrity
and an organization’s reputation will allow allinvolved to know that they
examined all possibilities and chose the most appropriate course of action.

2.12 CURRENT STATUS OF CUSTOMER SERVICE

Although everyone talks about how important customer service is, theyoften do
very little to improve it. This can be attributed to several causes.
1. It is frequently difficult to measure the financial benefits of customerservice.
It may be challenging to convince some financial managersof the long-term
payoffs.
2. Customers have high expectations of what they hope to gain fromthe people
with whom they do business, but frequently customerservice providers don’t
know what those expectations are.
3. Customers have grown accustomed to expecting improved levels ofcustomer
service and considerable latitude when it comes to receivingcustomer service,
but the resulting cost is becoming prohibitive formany businesses. Frequently,
the customers who take advantage ofcustomer-friendly policies are abusing the
opportunity and representminimal percentages of the overall business.
Businesses now have toretrain customers about appropriate and realistic
expectations.
4. Technology provides the opportunity for faster responses to
customerquestions, but it also creates the requirement that customerservice
providers have additional training to become proficient inusing new systems.
5. Customer service is an opportunity that no professional can affordto ignore. It
is frequently the distinguishing difference between twoor more companies that
offer the same product or service.
2.13 NEW TRENDS IN CUSTOMER SERVICE

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Several new trends are emerging in the customer service industry. Thesetrends
reflect the ways in which customers approach a business interactionand the
ways that businesses are preparing to respond to them. Thetrends include
accessibility for the customer, immediacy of response, feedbackfrom customer
to customer service provider, outsourcing of all orpart of customer service
functions, and non-traditional examples of customerservice.
Customers today have more access to information about their accountstatus,
billing, delivery, and product availability than ever before. This accessibilityhas,
in many cases, reduced the questions that customer serviceproviders must
respond to, leaving them to respond to more unique requests.
An example of this accessibility is found in customer informationhot lines
which can be reached from a touch-tone telephone using personalidentification
numbers; a second example is computer software that trackswhere a shipment
is, whether the shipment has been received, and bywhom. Customers appreciate
the control that this accessibility allows them,and it reduces the number of
routine questions that customer serviceproviders must answer. It is also a
wonderful illustration of technologyat work.
Immediacy of response is another trend in customer service. Again,with
technology, customers can have questions or problems resolved
almostimmediately. Customer service providers are also more fully
empoweredto make decisions in response to customer inquiries that
previouslywould have been taken to a higher level supervisor.
Feedback is important to all businesses and can provide opportunitiesfor growth
in the customer service department. Customer suggestions arenow frequently
requested and encouraged. Independent research departmentsor companies to
survey customer responses may contact customers.
Customer service providers are also beginning to keep logs of
customersuggestions and requests so that improvements can be made
[Link] appreciate the chance to share their ideas and to see
changesbeing [Link] businesses seek new strategies to improve performance,
save money,and effectively address increasingly technical requests, outsourcing
may bean effective alternative. Competition has forced many industries to
beginoutsourcing such functions as payroll, data processing, billing,
maintenance,marketing, accounts receivable, and many more. The
specializedcustomer service needs of many businesses are also being
outsourced. Outsourcingcan provide cost savings in rent, benefits, equipment,

28
and shorttermemployee expense, and it can also allow organizations of all sizes
tobetter serve their customers. Most organizations receive customer
questions,complaints, and comments via 800 numbers and e-mail. While this
allowscloser interaction with customers, it has also decreased the
expectedresponse time. The necessary equipment to receive and respond to
thesecontacts is costly; when added to the cost of hiring and training effective
customerservice representatives, some organizations may find that theycannot
afford to provide this service. By hiring a carefully chosen outsidecompany to
handle specialized technical questions, customer concerns, andproduct inquiries,
customer response time can be decreased and the cost ofproviding the service
shared among participating companies. The most positivepotential benefit is
increasing customer retention—keeping currentcustomers actively involved in
doing business because their needs are metand they are never tempted to look
elsewhere for better service.
Customer service is an important part of the overall marketing strategy;this has
encouraged the development of some non-traditional approaches.
One example of a non-traditional approach to customer service is
offeringinformational newsletters to customers. Informational newsletters sent
periodicallyor handed out are non-threatening to customers because theyshare
information, new product or service offerings, new systems, or servicehours;
they also remind customers that the company is available andready to serve
them again. Newsletters have the luxury of being seen bycustomers as
informational pieces that aren’t trying to sell something. Theyare really selling
the company, but the approach is subtler; therefore, it isless threatening.
SKILL BUILDING:
UNDERSTANDING EXPECTATIONS

All customers have their own unique sets of expectations. Expectations may be positive or
negative. Organizations must periodically attempt to determine what their customers
expect from their customer experience.

Individually, or in small groups of three or four, list the top four expectations that
customers would have of the following organizations.
• Prestige hotel
• Electric company
• Nationally recognized fast-food chain
• Auto service department or garage
• Car rental company
• Local community college
• Credit card company
• Your own organization or department

29
After determining the top four expectations of each of the above organizations, rank the
expectations from easiest to provide to most difficult. Attempt to draw conclusions from
your rankings.

A common observation when customer expectations are evaluated is that many of the
expectations that customers have are easy and inexpensive to provide. Attempting to
understand customers’ expectations gives organizations the opportunity to consistently
strive to be what customers want them to be.

OPPORTUNITIES FOR CRITICAL THINKING

1. Why is it important to convey credibility to your customer?

2. Explain the five techniques for exceeding customers’ expectations.
3. Why do many people talk about customer service and yet do little to improve its quality?
4. Why should we consider our customer’s perceptions?
5. What are some common barriers to customer service?
6. How relevant is the reality that some customers may perceive your service inaccurately?
7. How do primary expectations differ from secondary expectations?
8. Describe an example of a situation where scope of influence hurt or helped your
business.
9. What are some techniques for conveying credibility to others?
10. What role do values play in an individual’s approach to providing customer service?

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Chapter 3
Problem Solving in Customer Services

REMEMBER THIS
We are continually faced by great opportunities brilliantly disguised as
insoluble problems.

3.1 ROLE OF PROBLEM SOLVING IN CUSTOMER SERVICE

Most individuals encounter the need to solve problems frequently. In many
instances problems are challenges that we would prefer to avoid, but, in most
cases, this is not a possibility. One of the most important activities in which
most customer service providers participate is helping to solve customers’
problems. Problem solving is an active resolution to a challengingsituation.
Many individuals dread problem solving. It can add considerable stress to an
otherwise peaceful work environment. One of the main reasons problem solving
is perceived as being unpleasant is because the average business professional
has not worked to develop the skills necessary to accomplish it effectively and
efficiently. The only training that some people have is their observations of their
own families dealing with problems as they were growing up. This example is
frequently not transferable to a business environment.
Most individuals in an organization are aware of the repercussions that can
result from an incorrect resolution to problems. Because of this they may be
reluctant to take the responsibility that accompanies problem solving.
To actively confront the challenge of problem solving, organizations must
prepare employees with training. They must create a safe environment, which
31
encourages employees to develop solutions that are positive for both the
customer and the company. Problem solving and decision making are
individualized processes. Every individual may have his or her own method of
determining an appropriate course of action. What is important is the end result,
not the process of determining the solution. As long as the solution is timely, the
process is less important.
One significant challenge to problem solving when interacting with customers is
the speed with which decisions must be made. When a customercalls with a
question or problem, the customer service provider mayonly have a few seconds
or minutes to provide an answer. Unfortunately, this does not allow for much
time to examine possible solutions. Customer service providers must become
highly proficient in listening to a customer’s explanation of a situation or
problem, in asking pertinent questions to clarify the information, and in
providing the customer with an appropriate solution. The solution must be one
that they are willing to share regardless of the possible repercussions.
Customer service providers can effectively equip themselves to make decisions
and to solve problems by learning problem-solving strategies, developing
negotiation skills, learning how to deal effectively with conflict, and
recognizing the importance of follow-up.

3.2 CREATIVITY AND PROBLEM SOLVING

When individuals incorporate creativity into the process of problem solving,
positive challenges result. Creative problem solving suggests that through an
open approach to finding solutions, an appropriate and innovative result may be
discovered. Creative problem solving requires that employees work in a culture
that allows new ideas to flow freely and to be considered realistically. When the
same problems consistently arise and are resolved in the same established
manner, the opportunity for new and more creative resolutions may exist.
Customers appreciate creativity. Creativity requires effort and commitment to
creating a new idea or solution. The individuals in an organization who are the
closest to the pulse of the customers are those individuals who interact with
them on an ongoing basis. In many organizations these individuals are the
customer service providers. By offering suggestions to customers and to
management about innovative ways of solving challenges, customer service
providers can share their creativity with others.

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3.3 PROBLEMS AS OPPORTUNITIES
Criticism provides an opportunity to obtain information. When customers
express problems or frustrations, it is easy to become defensive. A productive
method of response to criticism is to consider the criticism as productive input
to the creation of a problem-solving environment. A customer complaint is
really a request for action.
Customers frequently have ideas about how a problem might be avoided in the
future. Offering them the opportunity to share their ideasgives customers the
opportunity to participate in the process of improvinga situation or system that
has disappointed them. This allows a team effort that creates unity between
provider and customer.

3.4 CONFRONTING CONFLICT

Conflict is a reality of most approaches to problem solving. Problem solving
and decision making involve the consideration of possible alternatives and the
selection of the alternative that is viewed by the decision maker as the most
appropriate. This does not mean that all of the parties involved will agree that
the chosen course of action is the best. This may create conflict in some
situations. Conflict is a hostile encounter that occurs as a result ofopposing
needs, wishes, or ideas. Conflict can occur in even the most cohesive employee
team or with our most faithful customers. When faced with conflict and
disagreement it is important to proceed with caution! Many words have been
spoken in anger, creating difficult-to-correct damage. The goal in any problem-
solving environment, even when anger is present, is not to win an argument, but
to resolve a conflict.
When encountering conflict, remember the following suggestions:
1. Listen to the other viewpoints that are being presented.
2. Do not bring up old problems from the past or assign blame.
3. Use tact as you respond to others.
4. Do not repress your own anger; instead, use it productively. Take advantage
of the opportunity to share other related concerns in a positive manner.
5. Focus on finding the best solution to the conflict.

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3.5 PROBLEM-SOLVING PROCESS
Numerous approaches may be taken when attempting to solve problems. After
determining that a problem exists, it is helpful to respond to the following
guidelines.
1. Identify the problem. Attempt to recognize and understand what the real
problem is. Sometimes the true problem will be difficult to identify because of
other variables that are more recognizable, but that do not represent the problem
that requires solving.
2. Understand the problem’s unique characteristics and the
possibleoutcomes. The problems that must be solved by customer
serviceproviders are frequently confounded by unique characteristics.
These unique characteristics may have no bearing on the eventual solution, but
they must be considered while a solution is being developed.
3. Define the requirements of a possible solution considering the company
policies currently in place. Frequent requests may haveresulted in policies
being developed to promote consistency in solutions.
The requirements of the solution must be determined and the policies
considered. Policies that are flexible should be considered as opportunities.
4. Identify possible solutions. Frequently, the success of a problem’s solution
has to do with the generation of more than one possible solution and the
selection of the best solution. As possible solutions are considered, they should
reflect an array of alternatives and the individuals who will be affected.
5. Select the best solution. Selecting the best solution may be the most
challenging aspect of the problem-solving process. The positive and negative
results must be considered from both the company’s and the customer’s
perspective.
6. Implement the solution, informing the customer of the details and how
the customer will be affected. Putting the solution into place isan integral part
of the problem-solving process. From the customer’s viewpoint, nothing has
been done until the solution is implemented.
The most creative solution has little value if it is not put into action.
Communication is important at this time. Everyone who will be affected by the
solution must be informed of its implementation and of any responsibility that
they may have in contributing to its success.

34
7. Observe and evaluate the solution’s impact. After a solution has been
implemented, it should be observed and evaluated to determine whether it was
successful. Observation can occur on an ongoing basis, but a formal evaluation
should be scheduled to take place at a designated time.
The problem-solving process should follow the guidelines included in the
model. If steps are skipped or overlooked, serious errors may occur in the
solutions. For example, a courier company’s delivery people did not have time
to read their mail. Important information was not getting to the appropriate
people because of the problem. Members of the managementteam called a
meeting to attempt to resolve the situation. After hearing abrief explanation of
the problem, members of the group began sharing their solutions. Some of the
ideas were to begin forwarding all the employees’ mail to their homes so that
they would have more time to read it, to purchase laptop computers for all of the
couriers so that they could receive electronic mail, and to reprimand the
employees for their oversight. The most popular solution was to forward the
mail to the employees’ homes. At this time the management team began
discussing how to print address labels and what type of envelopes to use.
One of the managers believed that the solution of mailing materials twice was
premature. She suggested that although mailing material twice would guarantee
that the employees received their mail, it would not guarantee that they would
actually read it. She suggested finding out why the employees were not reading
their mail. This provoked a more focused approach to problem solving. The
group began to follow the problem-solving process as they attempted to
understand and to solve the mail problem.
Upon further analysis it was determined that employees received as many as
100 documents daily. Every memorandum circulated in the company was sent
to every employee, even when it did not directly affect him or her. A courier’s
main function is delivering materials; it was difficult for couriers to read mail
and to drive, especially when much of the mail was useless to them. The
managers began to see that the problem was not just with the employees; the
management team shared the responsibility. A solution to the problem was
developed to meet the needs of all involved. If the manager had not voiced her
concerns about the original solution to what was perceived as the problem, the
company would have been spending a lot of money on postage to send mail to
employees who did not need to read it.

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3.6 PROBLEM-SOLVING STRATEGIES
When approaching the challenge of determining a solution for a problem,
individual strategies or a combination of strategies may be used. To effectively
determine solutions it may be helpful to follow methods that have been proven
to create positive results. The two common strategies of problem solving are
brainstorming and diagramming.

Brainstorming
Brainstorming is a problem-solving strategy that can be used by groups of two
or more. The premise behind brainstorming is that the more ideas that are
shared in an open and accepting environment, the more creativity willresult. As
ideas are shared, other ideas may develop. Agroup approach likebrainstorming
to problem solving can create a unique and creative opportunity to generate
solutions.
To begin a brainstorming exercise, a group gathers willing to share ideas. A
specific problem is identified. One individual is designated as the recorder; he
or she is responsible for recording the ideas shared.
The next step is for someone to share the first idea. Other ideas should follow.
The more ideas shared, the better, as ideas frequently stimulate other ideas. It is
mandatory for the leaders facilitating the exercise to create an accepting
environment in which the participants can operate. If individuals are afraid that
their ideas will be rejected or that they will be ridiculed for their suggestions,
they will be less likely to participate.
When several ideas have been generated, a master list is prepared. It can be
displayed immediately on a flipchart or chalkboard. The master list can also be
compiled and distributed to group members for later discussion.
The members can review the ideas and make additions. A second meeting
should be held to recommend the most appropriate solutions. Allowing group
members to review all the ideas that were shared makes it easier to determine
which ideas are possible solutions to the problem. Implementation of the chosen
solutions can begin, and hopefully the problem is on its way to being resolved.
Diagramming

36
Diagramming is a strategy for problem solving that provides a visual
representation of the problem and the facts related to it. Visual representations
are easy to work with because they allow visual examination as well as
discussion.
There are four main methods of diagramming problems in search of appropriate
solutions: pro/con sheets, flowcharts, organizational charts, and mind mapping.

1. Pro/con sheets:Asimple approach to diagramming a problem is the use of

pro/con sheets (Figure 3.2). Pro/con sheets are best when used to choose a
specific course of action as the resolution to a problem.
To create a pro/con sheet, write the problem and the possible solution on a sheet
of paper. Then draw a line down the center and write the word pro on one side
and con on the other side. Write all the positive reasons that the solution would
work on the pro side of the line. List all the reasons why the solution would not
be appropriateon the con side. When all the reasons for and against a possible
solution are listed, it can be determined whether the solution is appropriate or
not. Pro/con sheets are simple, but this is one reason that they can work well in
choosing a solution.
2. Flowcharts: When using flowcharts in the problem-solving process, it is
helpful to diagram what the process or flow of a problem is. Sometimes just
listing how a situation is processed and who must be involved is enough to
identify why a problem is occurring.
To create a flowchart, include in a box on the top of a sheet of paper the point
where a process begins. An example might be: Who has to authorize an
extension on a payment for a customer? If the beginning of the process starts
with the customer making the request, this goes in the first box. The person
whom the customer calls goes in the second box. The third box is for the person
whom the employee must ask to gain approval for the payment extension.
If the customer’s records must be retrieved from another department, this goes
in the next box. The process continues from there. Diagramming the current
system for responding to the customer’s request makes it easier to understand
why the process takes longer than might be considered appropriate. Flowcharts
are helpful in identifying unnecessary steps in a process. They can also assist in
identifying who would be affected by a change in the method of processing
information.

37
3. Organizational charts: Acommonly used method of illustrating the
hierarchy of a company is with organizational charts. An organizational chart is
a diagram of who reports to whom within an organization or department. While
organizational charts will not assist in solving specific problems, they can
provide a visual illustration of areas of employee overload and can reveal
possible snags in a system’s success. If someone is required to give
authorization to a new project, but is involved in managing another area of the
business, he or she may not have the knowledge to make the most effective
decisions. In addition, if the person is not involved in the same part of the
process, he or she may not be aware of the day-to-day challenges encountered
by employees.
4. Mind mapping: An extremely creative approach to diagramming a problem
is mind mapping. The concept of mind mapping was developed in the 1970s
and is still popular today. Mind mapping involves the practical aspects of
traditional problem solving while incorporating the opportunity to freely
approach new ways of thinking.
To begin a mind-map, place the problem or decision in an oval in the center of a
large piece of paper. The center placement symbolizes that the problem or
decision is the core of your map. After creating thecenter, place lines going out
of the centerin different directions. On the lines write important words or
phrases that pertain to finding a solution to the challenge. Add additional
branches coming off the important words or phrases. These branches should list
ideas or thoughts that relate to the solution of the problem. Try to come up with
ideas as quickly as possible; the more outlandish and creative the ideas are, the
better. Quality is not important at this point in the process. If visual images can
illustrate ideas, it is appropriate to use them. Record as many ideas as possible.
Review the ideas and make additions if any are suggested.
Try putting aside your mind-map for an hour or even a day, and then review
what you have written. Make any additions that you can. Then begin drawing
conclusions from your “map.” What solutions have been diagrammed that could
possibly be implemented?
Share your ideas with others and seek their feedback. When mind mapping, it is
important to approach the exercise with an open mind and a willingness to think
creatively. Mind mapping is not meant to be neat and orderly or even
consistently realistic. It is meant to stimulate ideas and to help individuals
consider what might be possible. Many people write speeches and plan
meetings by creating mind-maps.

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3.7 DEVELOPING NEGOTIATION SKILLS
There may be no easy solutions to problems in a professional environment.
Customer complaints, requests, and problems must be resolved in an efficient
manner. A constructive method of problem solving is to ask the customer what
will resolve the situation. While this places responsibility on the customer to
share what he or she sees as a satisfactory resolution, it also places a significant
responsibility on the individual whose job it is to decide what an appropriate
resolution would be. At this time the art of successful negotiation is necessary.
Negotiation is the evaluation of the possible solutions to a challenge and the
selection of the solution that is mutually beneficial. Negotiation requires
discussionbetween the two parties involved. It suggests that a resolution canbe
reached that everyone involved considers fair and reasonable. Negotiationmust
allow for give and take on both sides of an issue. To improve negotiationskills
as a customer service provider, remember the followingsuggestions:
1. Know your customer. Anyone involved in solving a problem must know the
parties involved. Past relationships can shed valuable light on how a customer
may approach a current situation. New customershave unique qualities that we
have yet to discover. The morefamiliar we can become with our customers, the
more likely we will be to recognize what their real problems or concerns are.
Some customers may make outrageous requests initially, and then lessen their
demands. If this tendency has been noticed previously, it is helpful to recall it at
the beginning of the negotiation process.
Customers are unique individuals with their own sets of needs, motivations, and
fears. The greater our awareness of their needs, motivations, and fears, the more
effectively we can begin to solve their problems. Customers want to know that
they are important to us and to our business. They also want to know that we
remember them from one interaction to another. Any details that we can draw
on about specific customers can help us to solve their problems appropriately.
2. Ask questions and listen to the spoken and unspoken messages.
By asking questions of our customers and actively listening to their responses,
we can develop an informed understanding of the situation at hand. The more
information that can be collected, the more accurately we can help to solve the
customers’ problems. Customers are not always eager to share all the details of
a situation. Effective questioning requires that the customer service provider
continue to ask questions until he or she believes that all of the pertinent
39
information has been collected. Once questions have been answered, it is
helpful for customer service providers to clarify their understanding by
reviewing what they have interpreted from what the customer has shared.
Customers may have unspoken messages that they are unwilling to share with
others without some type of encouragement. Customers who are unable to pay
their bills because of sudden changes in their lives may not feel comfortable
sharing their problems with someone else. In this situation, the customer service
provider must “listen” to what the customer is not saying. This can be done by
listening to the hesitation that a customer may have in responding to a question,
attempting to detect anxiety in the voice, or by asking nonthreatening questions
that convey to the customer that meeting the current needs is of utmost
importance. Although customers who are having cash flow problems may be
reluctant to share the details of their situations, they will be pleased to learn
about a company’s special payment opportunities or other possible alternatives.
Sometimes asking a customer questions creates tension in a conversation.
Customers may not want to share more information than they think is necessary.
By asking well-presented questions, the customer service provider can create an
environment in which the customer may be more willing to share the details that
can lead toproblem resolution. Questions must be asked with a tone of empathy.
Customers need to know that they are important and that theirbest interest is the
company’s concern.
3. Know the policies of your organization and in which areas flexibility is
allowed. When attempting to negotiate with customers, itis especially important
to be very familiar with your company’s policies.
It is hard to coordinate a resolution to a situation if you are uninformed about
what will be allowed. Not knowing company policies may make customer
service providers appear unprepared or as though they have little or no
authority. No customer wants to hear that the reason that his or her requests
cannot be granted is because it is against “company policy,” but in many cases
this is the only response that is accurate. Knowing what is not allowed is not
enough.
Customer service providers can go into a negotiation situation ready to
negotiate if they also know what the policies allow. Unfortunately, all too often
human beings focus on what cannot be done, rather than what can be done.
Most policies have been developed to establish a consistent method of
responding to a common situation. In this respect, policies are a positive

40
measure that a company has taken so that it is not accused of showing
favouritism among its customers. Customers may not always think of the
existence of policies in this way. Customer service providers should know
where and when flexibility is allowed with regard to policies. If customer
service providers are trained and empowered, they will comprehend the amount
of flexibility that they can exercise on behalf of their customers.
4. Demonstrate the willingness to be flexible. The ability to react to situations
as they occur is important in demonstrating flexibility. It is not enough to want
to grant the customer’s request; customer service providers must be able to
convey that desire to their customers.
By asking customers how they would suggest that a situation be resolved, an
opening for their input has been suggested. If their suggestions can be entirely
or even partially implemented, the customers may feel as though they have
created a positive solution that the company was flexible enough to agree to.
Flexibility can also be expressed through the words used in interacting with
customers. Encouraging words that express appreciation for the customers’
ideas are always a plus. Whenever possible, allow customers to participate in
the problem-solving and negotiation process. Their ideas may be inspired
because of their involvement in the overall situation. Their approach to the
problem resolution may even be more conservative than the one that the
company might have offered.

5. Learn to handle your anger and your customer’s anger appropriately.

In a situation in which negotiation is taking place, anger is always a possibility.
Something has taken the situation to the point of requiring negotiation. When
anger is revealed, it is best to defuse it as subtly as possible. Anger may express
frustration, anxiety, or unmet expectations. It may also be a result of
circumstances totally unrelated to the situation being discussed.
To defuse a customer’s anger, try to anticipate the cause and to confront it
carefully. Anger that is defused quickly is less likely to build in intensity. The
customer service provider can acknowledge that a change in the situation could
occur and could offer some type of compensation. Acustomer who is annoyed
because he or she has been waiting in line at a drive-up window at a fast food
restaurant may angrily ask the manager what the holdup is. The manager may
respond by saying that several employees called in sick and that they are
understaffed. This response alone might make the customer even angrier, but

41
when the manager offers free food or drinks to compensate for the customer’s
inconvenience, the anger may begin to diminish.
By offering the apology and the free items the manager is acknowledging that
his company is in error, but he is minimizing the effect of the error. Whenever
possible, shift responsibility for the customer’s anger back to the customer. This
must be done with care, but it can have positive results. A customer may call his
or her lawn care company, ready to cancel the contract because of recurring
weeds. When the company owner hears that the customer is concerned about
the weed problem, he or she can respond immediately by saying that if the
customer will call in the future, the company will provide an additional
application at no cost. Although the owner does not say it, he is reminding the
customer that it would be impossible for the lawn care company to recheck all
of the customers’ lawns to determine the effectiveness of each application. By
encouraging the customer to share in the responsibility, anger may be defused
and the business relationship may continue. This approach would not be
effective if frequently repeated; however, if used periodically, it could be
effective.
When customer service providers find that they are becoming angry, they
should consider the role that they are playing as representatives of their
company. Every individual must take responsibility for his or her own anger. A
company’s reputation will not be enhanced if the employees allow their anger to
be shown to customers. When you feel yourself becoming angry, move quickly
to resolve the challenging situation.

6. Consider what the customer may lose in the negotiation process.

The nature of negotiation involves give and take. Customers may feel that they
are doing all of the giving and that the company is doing all of the taking. Try to
understand what the customer will see as a compromise. Acustomer who is
delinquent in bill payment may be seeking to be relieved of some of the
financial responsibility. Although this may be an unrealistic solution from the
company’s viewpoint, the customer may not see it that way. A modified
payment schedule may be the solution to the situation, but the customer still
must pay. When negotiating with customers, stress that the goal is a positive
resolution for all.
7. Determine mutually beneficial solutions to challenging problems and
situations. When completing a negotiation with a customer,seek solutions that

42
will benefit both the company and the [Link] one gains if the customer
leaves the interaction angry, vowingnever to do business with the company
again. By creating a win-winsituation that both sides can live with, potential
future business relationshipscan be a possibility. Even if it has been determined
that acompany no longer wishes to do business with a customer, it mustbe
remembered that possible business contacts with others who areacquainted with
the difficult customer are probably desired.
Explain to the customer exactly how the agreed-upon solution will work. Seek
feedback from the customer so that additional information can be provided, if
necessary. Stress that the solution allowed both sides to compromise, but the
result will have a positive benefit for all.
3.8 PROFESSIONAL APPROACHES TO APOLOGIZING AND
CONVEYING BAD NEWS
As customer service providers attempt to assist their customers in problem
solving, they may become aware of errors or oversights that were made by their
own company, co-workers, or by themselves. Effective problem solving
acknowledges the fact that the customers may have legitimate concerns and that
the customer was treated inappropriately. At this time, an apology is due to the
customer. Apologies are not signs of weakness, but instead they are productive
methods of continuing the opportunity to communicate.
Apologizing to customers is a reality of professional life. While customer
service providers should not apologize without justification, they should be
prepared to do so when appropriate.
When apologizing to customers, consider the following suggestions:
 Acknowledge customer’s feelings. By indicating to customers thatwe
recognize their feelings and emotions, we send the message thatwe care.
 Express to the customer that you share the responsibility for
theproblem. Even if you and your company were only loosely
associatedwith the problem, you are a part of its diagnosis and resolution.
 Convey sincerity. When apologizing to customers, it is important
toconvey care and concern. If we say that we regret that an error
wasmade, the manner in which we say it should demonstrate our regret.
 Ask for the opportunity to correct the problem. Just apologizingfor a
problem has little impact if we do not offer to correct the erroror to make
changes in the future. Saying “May we correct the errorfor you?”
expresses the desire to continue doing business with thecustomer.

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 Request the opportunity to continue doing business in the [Link]
asking the customer if we can still consider him or her an activecustomer,
we suggest to the customer that we are willing to correctthe error and
would like to go forward in a positive business [Link] request
also gives the customer the opportunity toshare other concerns that might
keep him or her from doing businesswith us.

3.9 BARRIERS TO PROBLEM SOLVING AND DECISION MAKING

A number of barriers may exist that affect the actuality of problem solving and
decision making. Decision makers may not be aware that barriers are detracting
from the decision-making process. Some of the most common barriers to
problem solving and decision making are:
 Resistance to change: People are often reluctant to change from the
time-honored way of doing things. Resistance to change can
preventpeople from taking chances and from considering new
possibilities.
 Habits: Habits limit our vision of what can be accomplished andmany
stand in the way of solving a problem. Habits may go undetectedby an
individual and may be a tremendous deterrent to correctinga problem.
For example, receptionist who is having difficultyin completing his or
her work may be unaware that the habit of takingpersonal calls is taking
the bulk of work time.
 Individual insecurity: Individual insecurity may deter individualsfrom
taking risks or from pursuing behavior that may require themto take a
stand. Individual insecurity may come from past experiencesor from an
overall lack of self-confidence.
 Past history: Knowing what has happened before and what workedand
did not work can inhibit an individual’s desire to try new methodsof
problem solving or decision making. Past history is frequentlyan excuse
for not making changes. The individual, who may not wishto approach a
situation in a new way, may remind others that a similaridea failed in the
past.
 Fear of success or failure: At some time, everyone experiences
sometype of fear. The fear of success or failure may be viewed as
unreasonable,but it can greatly deter the confrontation of problems.
Theunknown can be a frightening thing. When a new way of
doingsomething is attempted, the possibility exists that it may work

44
wellor not at all. In either instance, changes may result. While some
peoplethrive on recognition, others shy away from it. These fears may
causepeople to avoid the possibility of success or failure altogether.
 Jumping to conclusions: When problems must be solved and
decisionsmade, it is easy to jump to conclusions. When someone jumpsto
conclusions, assumptions are made about what might or might notwork
or the possible results; assumptions may frequently take onnegative
perspectives.
• Perceptions: As we have stated, perceptions are the ways that we see things
based on our experiences. We may be unable to see something from another
perspective because we are so blinded by our own perception.
By developing an awareness of some of the barriers to problem solving and
decision making, customer service providers can attempt to overcome the
obstacles before they occur.
3.10 IMPORTANCE OF FOLLOW-UP IN PROBLEM SOLVING
Once a problem or problems have been solved or decisions have been made, it
is vitally important to follow up. Follow-up is checking back todetermine
whether or not a situation is operating according to the initial plan. Effective
follow-up requires that the original problem solver or decision maker check
back with the customer to determine whether or not the original plan of action
actually took place. The most effective approach to problem solving has little
value if the solution was never fully implemented or if it has run into some type
of difficulty. Customers remember the end of their interaction, not the
beginning or the middle.
A customer may have been treated in a friendly manner, had questions
answered quickly, and been highly satisfied with a solution that was created to
correct their problem; however, if for some reason the solution never took place,
the customer will not remember the friendly treatment. The customer will
remember that he or she still has a problem that needs to be resolved. Anytime a
solutionto a problem requires the involvement of someone other than the person
making the commitment, follow-up should occur.
Keeping customers informed about the status of their order or problem even
when there is no news to report can be an excellent public relations tool.
Aperiodic call just to let the customer know that you have not forgotten them or
their concern can be a refreshing change from the treatment that the customer
may be accustomed to receiving. Their response may be, “I cannot believe that

45
you called me back! Your company really does provide excellent customer
service.” Follow-up is a safeguard to ensure that customers continue to be
satisfied with a company and its ability to meet the needs of its customers.
Through effective preparation, the reality of problem solving and decision
making in customer service can become an active opportunity to convey to
customers how valuable they are to the success of a business and that satisfying
their needs is a part of the accomplishment of a company’s goals.

Chapter 4
Communication in Customer Service

4.1 Building Customer Intelligence

What is Customer Intelligence? It is somewhat axiomatic to observe that we live
– and companies operate – in an information-rich environment. It is neither
possible nor profitable to try to monitor and digest all the sources of information
that exist for a modern enterprise. The emergence of big data - a collection of
data sets so large and complex that it becomes awkward to work with using on-
hand database management tools – creates difficulties including capture,
storage, search, sharing, analysis, and visualization.
However, the greatest challenges are associated not with data and analysis but
with clearly defining what we need to know and how we’ll apply that
knowledge to create differentiated business value. We also recognized that
customer intelligence is often viewed as a subset of market intelligence. Market
intelligence may focus on one (or all) of three source environments and
processes may vary between them. These three are:
 Supplier environment: existing upstream of the corporation, the supplier
environment consists of the entities that supply resources, goods,
information, and parts to the company.
 Market environment: the market environment is part of the business
context that surrounds the company, meaning market intelligence can

46
come from regulators, competitors, and other influencers, such as the
media.
 Customer environment: the customer environment consists of the entities
that are demanding goods or services from the company, such as
customers, prospects, and channel partners.

Based on these distinctions, we developed the following definition:

Customer intelligence is the systematic process of gathering, analyzing and
applying information (both qualitative and quantitative) about the customer
environment (including current, past and prospective customers) that
simultaneously reflects and refines the company’s understanding of its
relationship to the customer environment.
Customer Intelligence reflects the company’s understanding of its relationship
to the customer environment by focusing on the most urgent process and
strategy decisions. It refines that understanding by creating new or amended
insights that not only improve planning, decision-making, operations and
performance, but also improve the clarity with which the customer is
understood and the value derived from that understanding.

4.2 Practical Hints

 Effective customer intelligence activities are directly linked to business
performance, particularly revenue growth and profitability. Effective
customer intelligence drives business profitability and revenue growth by
developing or accelerating the maturity of key competencies within the
company. Companies that have used effective customer intelligence to
drive customer centricity have enjoyed discernible returns and market
advantages.
 High value customer intelligence is characterized by a balance and
integration among three necessary processes: – Demand is leadership and
strategic alignment around customer intelligence priorities. What do we
need to know in order to make decisions? How will this information be
used? What questions or problems will it help us solve? Who needs the
information? – Supply is essentially how customer intelligence is done.
How do we gather data? What are the reporting and analytical processes?
– Application is the business change and value realization that result from
the customer intelligence analysis. What do you do differently as a result

47
of this information? What type of value can we achieve from using this
information?
 Although customer intelligence is necessary to acting in a customer-
centric manner, it is not sufficient unless it is used to apply answers to the
right questions in the right manner. Otherwise, a company can invest a lot
of time and money on customer intelligence and still not become
significantly more customer centric.
 Traditionally, customer intelligence activities are driven by those who
own the information, the technology and the analytical process (i.e., the
supply-side), but the value of the activity may be constrained because the
focus is on supply as opposed to clarifying demand and ensuring
application of customer insights.
 Effective application of customer intelligence essentially accomplishes
four things. It aligns the organization around customer insights and instils
the need to act; it ensures disciplined execution of the action plan; it
refines customer intelligence demand in light of new insights; and it
captures and communicates the value of the customer intelligence.
 The most valuable customer intelligence focuses on how and why
customers are likely to make decisions in the future, and requires the
integration of quantitative and qualitative information. The most
complete and actionable picture of the customer comes from a
combination of transaction-driven data and human-derived insights,
which can only come from being in rich dialogue with customers.
Decision-makers who rely on quantitative data points alone may have a
superficial view of the customers. But decision-makers who have a rich
dialogue with their customers are better equipped to understand
transactional data and make strategic decisions.

4.3 Key Practical Recommendations

 Assess the maturity of individual customer intelligence processes, and
develop a strategy for improving the performance and value of customer
intelligence. Strategic and operational decisions are based on market and
customer information, which improves the impact of the application and
limits the risk of making misguided decisions. In general, the most
effective customer intelligence approaches focus on the importance of
demand (pull) more than supply (push).
 Educate senior leaders. Senior business executives can cross functional
and political boundaries, promote the sharing and reuse of customer

48
information, and act as advocates for customer intelligence. Therefore, it
is not surprising that the first step in improving the demand process often
involves some specific, concrete and actionable education of senior
leaders.
 Ensure that intelligence activities are driven by well-defined business
needs. Providing well-defined objectives of an intelligence activity before
you start includes identifying the key questions that must be answered in
order to make a specific set of business decisions, and understanding how
these answers will be applied to create value for the business.
 Create a breakdown. Move beyond the “If it ain’tbroken, don’t fix it”
mentality by adopting an “If it ain’t broken, break it” approach. In other
words, find a way to create a breakdown that will shake the company out
of what may be a comfortable state of unawareness of market and
customer changes.
 Leverage intelligence wins to stimulate demand. It is said that nothing
succeeds like success. Some of the companies that we investigated had
started doing customer intelligence in a very specific way, focusing on a
particular pressing question or urgent need. Performing well and creating
value on that small issue creates a platform on which to discuss the
possibility of expansion of systematic customer intelligence to other
areas.
 Make sure the tools and sources fit the job. Customer Intelligence groups
sometimes get attached to their information systems and other tools and
approaches, all of which may, over time, decline in applicability and not
be ideally suited to addressing the highest priority intelligence needs of
the business. In many situations, the intelligence results are limited
because the wrong approach is applied.
 Integrate qualitative and quantitative intelligence. Most of the companies
we studied had a natural bias towards either qualitative intelligence or
quantitative intelligence. Some companies seem to know their customers
exceptionally well while conducting little or no formal research.
Maximizing the value of customer intelligence requires a balance and
integration of qualitative and quantitative understanding.
 Focus on creating a repeatable, easy-to-use process to conduct customer
research. Customer intelligence activities do not have to be overly
complicated. Simply put, effective customer intelligence is a matter of
getting the right information to the right people at the right time. To do
this, companies need to focus on creating repeatable processes to conduct
customer research.
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 Manage customer intelligence activities as a portfolio. The customer
intelligence processes may include several (or many) specific customer
related activities. Each activity can potentially reflect different intents,
content, and outcomes. The challenge is in managing these different
activities in a portfolio to leverage common processes and resources
across the company.

4.4 Methods of Communication

What is effective communication and why is it necessary?
Communication is when a message transferred from one person to another and
is understood by the latter. We communicate everyday (by talking, by chatting,
by texting, etc.) but we need to learn how to communicate effectively. Effective
communication means that:
"The information or message being sent is received, understoodand acted
upon in the way intended."In business, ineffective communication or
communication failure could result in seriousproblems.

4.4.1 Why do people within business need to communicate with each other?

In business, if we do not communicate, we would be working as individuals

with no co-ordination with anybody else in the business. The management,
whose tasks are guiding, instructing and commanding subordinates could not be
done because they cannot communicate with them. Here are some common
messages found in the workplace:
 No Smoking (sign)
 You are fired because you are always late (letter)
 Do not touch (sign)
 There will be a fire drill 11:00 today (noticeboard)
There are many more things that are communicated. Consequences would be
severe if these matters are not communicated effectively.

4.4.2 The Process of Effective Communication

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Effective communication involves four features:
 The transmitter/sender who sends the message. He has to choose the
next two features carefully for effective communication.
 The medium of communication. It is the method of communication, e.g.
noticeboard, letter, etc...
 The receiver who receives the message.
 Feedback means that the receiver has received the message
andresponds to it. This confirms that the message has
been understoodand acted upon if necessary.

4.4.3 One-way and Two-way Communication

There are two types of communication. One-way communication is when there

is no feedback required for the message, or the receiver is not allowed to reply.
This might be the sign that says "No smoking", or your boss saying: "give me a
biscuit". The other is two-way communication, when feedback is required.
Therefore, both people are now involved in the communication process. This
could lead to better and clearer information.
Pros of two-way communication:
 The sender can now know whether
the receiver has understood andacted upon the message or not. If
they have not, the message might have to be sent again or made
clearer. Effective communication takes place only if the message is
understood by the receiver.
 Both people are involved in the communication process. This makes
the receiver feel more important which might motivate them to make
better contributions to the topic discussed.
4.4.4 Internal and external communication
Internal communication is messages sent between people inside a business.
For example:
 The boss talking to his subordinates.
 A report sent to the CEO.

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External communication refers to messages sent to people or organisations
outside the business. For example:
 Orders for goods from suppliers.
 Talking to customers.
 Advertising to the public.
Both types of communication is almost the same, the only difference is who is
being communicated with.

4.4.5 Why External Communication has to Work Well

External communication can greatly affect the efficiency and image of a
business. Imagine if the wrong information is sent to a supplier and a customer.
The supplier would send wrong materials while the customer might buy
products from another company. Here are some cases which ineffective external
communication might turn out to be very dangerous:
 The Finance Manager writes to the tax office inquiring about the amount
of tax that must be paid this year.
 The Sales Manager receives an order of 330 goods to be delivered on
Wednesday.
 The business must contact thousands of customers because a product
turned out to be dangerous. An advertisement must be put into the
newspaper so that customers can return the product for a refund.

4.4.6 Different ways of communicating: the communication media

Information can be transmitted in several ways:
 Verbal: Involves the sender speaking to the receiver.
 Written: The message is written to the receiver.
 Visual: Using charts, videos, images or diagrams to communicate a
message.
There is no best method of communication, so the appropriate medium of
communication must be selected depending on the situation. First the sender
also has to analyse the advantages and disadvantages of each type of
communication.

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4.5 Verbal Communication
Verbal/Oral communication might be:
 One-to-one talks.
 Telephone conversations.
 Video conferencing.
 Meetings.
Pros:
 Information is transferred quickly. This is an efficient way to
communicate in meeting to lots of people.
 There is opportunity for immediate feedback which results in two-
way communication.
 The message might be enforced by seeing the speaker. Here thebody
language and facial expression could make the message easily
understood.
Cons:
 In big meetings, we do not know if everybody is listening or
hasunderstood the message.
 It can take longer for verbal feedback to occur than written feedback.
 Verbal communication is inappropriate for
storing accurate andpermanent information if a message. (e.g. warning
to a worker)

4.6 Written Communication Including Electronic Communication

Here are some written forms of communication:

 Letters: Used for both external and internal communication. Follows a
set structure.
 Memos: Used only for internal communication.
 Reports: Detailed documents about any problem. They are done by
specialists who send them to managers to analyse before meetings. These

53
reports are often so detailed that they cannot be understood by all
employees.
 Notices: Pinned to noticeboards that offer information to everyone.
However, there is no certainty on whether they are read or not.
 Faxes: Written messages sent to other offices via telephone lines.
 E-mails: Messages sent between people with the same computing
facilities. The message is printed if a hard copy is needed.
o Intranet: A network inside a business which lets all employees
with a computer message each other.
o Internet: The global network for messaging anyone. (e.g.
customers, suppliers)
Pros:
 There is hard evidence of the message which can be referred to and help
solve disputes in the future over the content of the message.
 It is needed when detailed information is transferred: it could be
easilymisunderstood. Some countries the law states that businesses need
to put safety notices up because people could forget them.
 The written message can be copied and sent to many people.
 Electronic communication is a quick and cheap way to get to many
people.
Cons:
 Direct feedback is not always possible, unless electronic communication
is used. However, this could result in too many emails sent (information
overload). Direct feedback via other means of written communication is
hard.
 It is not as easy to check whether the message has
been understoodor acted upon.
 The language used might be difficult to understand. The message might
be too long and disinterest the reader.
 There is no opportunity for body language to be used to enforce the
message.

4.7 Visual Communication

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Here are some forms of visual communication:
 Films, videos, and PowerPoint displays: often to help train new staff
or inform sales people about new products.
 Posters: can be used to explain a simple but important message. (e.g.
propaganda poster)
 Charts and diagrams: Can be used in letters or reports
to simplifyand classify complicated data. Computer technology could
help in the design of these charts or diagrams. A printed copy might
be needed forhard data to add to reports and documents.
Pros:
 Present information in an appealing and attractive way
thatencourages people to look at it.
 They can be used to make a written message clearer by adding a
picture or a chart to illustrate the point being made.

Cons:
 No feedback is possible. People need to checked via verbal or written
communication to check that they have understood the message.
 Charts and graphs might be difficult for some people to understand.
The message might be misunderstood if the receiver does not know
how to interpret a technical diagram.

4.8 Formal and Informal Communication

Formal communication is the channel of communication that is recognisedby

the business, such as notices on boards, emails and memos. Formal means of
communication is important. It shows that the information given is true.
Informal communication might be communication between friends and co-
workers. There is no set structure and the information transferred is
notrecognised by the business. This channel of communication could be used
by the manager to try out new ideas, before publicly announcing it to the rest
of a company. However, informal communication can result
in gossip can rumour, and managers have no way to remove these informal
links from people.
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4.9 Communication Nets
There are many groups of people in any organisation, and each of them
communicate in different ways. People have connections with each other, and
these links form communication nets. There are three standard types of
communication nets:
Chain network:

 Can be used to transfer important messages from higher management

levels to lower levels.
 This often leads to one way communication.
 The message could become altered as it passes through different
management levels.

Wheel network:

 The central management can pass messages to all departments quickly.

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 The departments cannot communicate directly between themselves.

Connected network:

 This is used to create or discuss new ideas.

 It specialises in two-way communication.
 Can be time-consuming.
 There is no clear leader or sender of messages.

4.10 Which Network Works Best?

There is again, no best network. A company is likely to use different network

atdifferent times or for different groups.
 The chain network is for communicating important business policies.
 The wheel network is used for sending different messages to
differentdepartments.
 The connected network is used to generate new ideas or solutionsto
problems where group discussion is the most effective.

The direction of communications

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Here is an organisation chart from the book explaining the direction of
communications within the business. The arrows are labelled A, B and C which
shows the direction of communication:
 Arrow A (downwards communication):
o Used by managers to send important messages tosubordinates.
o Does not allow feedback.
o The message might be altered after passing different levels.
 Arrow B (upwards communication):
o Used by subordinate send feedback to managers.
o Feedback from subordinates ensures that there is effective
communication.
o Feedback results in higher morale and new ideascontributed to the
business.
 Arrow C (horizontal/lateral communication):
o People at the same level of management communicate with each
other.
o Information and ideas can be exchanged
both formally andinformally.
o Can cause conflict between departments. (e.g. Production
department asks the Finance department for a budget to hire new
staff but is rejected)

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4.11 Barriers to Effective Communication

As we already know, the four parts of effective communication includes

thesender, medium, receiver and feedback. However, communication may fail
if there are problems with one of these four features. If one part fails, it becomes
abarrier to effective communication which might cause a breakdown in
communication resulting in serious consequences to the business. Here are
some common barriers to effective communication and how to overcome them.

Problems with sender:

 Problem: Language is too difficult to understand. Technical jargonmay
not be understood.
Solution: The sender should ensure that the receiver can understandthe
message.
 Problem: There are problems with verbal means of communication. (e.g
speaking too quickly)
Solution: The sender should make the message as clear as possible and
ask for feedback.
 Problem: The sender sends the wrong message to the wrong receiver.
Solution: The sender must ensure that the right person is receiving
the right message.
 Problem: The message is too long with too much detail which prevents
the main points from being understood.
Solution: The message should be brief so that the main points are
understood.
Problems with the medium:
 Problem: The message may be lost.
Solution: Check for feedback. Send the message again!
 Problem: The wrong channel has been used.
Solution: Ensure the appropriate channel is selected.

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 Problem: Message could be distorted after moving down a long chain of
command.
Solution: The shortest channel should be used to avoid this problem.
 Problem: No feedback is received.
Solution: Ask for it! Use different methods of communication (e.g.
meeting)
 Problem: Breakdown of the medium.
Solution: Use other forms of communication.
Problems with the receiver:
 Problem: They might not be listening or paying attention.
Solution: The importance of the message should be emphasised.
Request feedback.
 Problem: The receiver might not like or trust the sender, and may
beunwilling to act upon the message.
Solution: Trust is needed for effective communication. Use another
sender to communicate the message.
Problems with the feedback:
 Problem: There is no feedback.
Solution: Ask for feedback. Use a different method of communication
which allows feedback.
 Problem: The feedback is received too slowly and may be distorted.
Solution: Direct lines of communication should be available between
the subordinate and the manager.

4.12 Communication Tips

We all know what happened to the Titanic. Clearer communications could have
prevented the tragedy and the loss of more than 1,500 lives. Communications
plays just as important a role in your careers. When asked to name the top three
skills they believed their subordinates need, 70 percent of the readers
of CIO magazine listed communications as one of them.
Here are some tips on how you can communicate more effectively with people
at work, be they customers, co-workers, subordinates, or superiors.

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1: Beware of interrupting
Titanic wireless operator Jack Phillips interrupted a wireless message from a
nearby ship, telling them to shut up. In doing so, he prevented that ship from
sending Titanic an iceberg warning.
Be careful about interrupting others, particularly your customers. They'll be
especially upset if, while they're explaining a problem, you interrupt them and
start offering a solution. If you feel you have to interrupt, at least cut to the
chase and tell the other person what you think his or her main idea was. That
way, the other person at least can confirm or correct you, and in either case save
time.
2: Listen actively
Did you ever get the feeling, when talking to someone that you were really
talking to a wall? The person may have heard you but gave no indication of it at
all. Avoid doing the same thing. When communicating with others, it's just as
important that people be aware that you're listening as it is that you're actually
listening. For that reason, be involved with and react to what the other person is
saying, either via a nod, or an "I see," or a paraphrase of the other person's
statements. You'll strengthen your own understanding and make a better
impression.
3: Avoid negative questions
Suppose you say to a customer, "You don't have Word installed?" and he
answers "Yes." What does he mean? Yes, you're right, Word is not installed? Or
yes, he DOES have Word installed?
Asking a negative question creates confusion. It's clearer if you phrase the
question positively (e.g., "Do you have Word installed?") or ask an open-ended
question ("What applications do you have installed?"). If you must use the
negative, try a question such as "Am I correct that you don't have Word
installed?"
4: Be sensitive to differences in technical knowledge
Chances are, your customers have less technical knowledge than you do. Be
careful, therefore, when explaining things to them. If you use acronyms, be sure
you identify what the acronym means. The same acronym can mean different
things, even in an IT context (for example, ASP can refer to "application service
provider" or "active server page"). Be careful that you don't make two opposite
mistakes: either talking over their head or talking down to them. Keep your eyes
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on customers when you talk to them and be alert to cues indicating that they
don't understand. Ask them whether they understand what you're saying, if
necessary.
5: Use analogies to explain technical concepts
A good way to explain a technical idea is to use an analogy. Though they have
limitations, analogies are helpful in explaining an unfamiliar idea in terms of a
familiar one. One of the best analogies I ever heard compared a firewall to a
bank teller. When you enter a bank, you don't just go into the vault and get your
money. Instead, you go to a window, where the teller verifies your identity and
determines that you have enough money. The teller goes to the vault, brings it
back to the window, gives it to you, and then you leave.
6: Use positive instead of negative statements
Your customers are more interested in your capabilities than in your limitations.
In other words, they're interested in what you can do, rather than what
you can't do. The way you say things to them influences how they perceive you
and your department. You, as an IT department or individual, can be seen as a
roadblock or you can be seen as a partner. So, for example, instead of saying, "I
can't help you unless you log off," consider saying, "Please log off so that I can
help you." Your statements often will be easier to understand as well.
Here's another reason to avoid negative statements. Have you ever experienced
gaps of silence in your telephone calls, where the conversation breaks up?
Usually it happens when using a cell or a VoIP telephone. If the gap occurs as
you're saying "not," your recipient could get the opposite message from what
you intended.
7: Be careful of misinterpreted words and phrases
Sometimes we say something with innocent intent, but the other person
misinterprets it. We mean to say one thing, but our pronunciation or inflection
causes us to convey something else. For example, in Chinese, the sound "ma"
said in a high level tone means "mother in law." However, said in a falling and
rising tone, it means "horse."
Be especially careful of the word "you." Overusing this word can make the
person you're talking to feel defensive or threatened. Instead of saying, "You
need to speak louder," try saying, "I'm having trouble hearing." Another issue
involves the dual meaning of "you." Unlike other languages, English uses the
same word to refer to an actual person (for example, the person you're talking

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to) as well as to a hypothetical person. Suppose you said to someone, "You
never know what's going to happen next," and meant to equate "you" with
"people in general." The other person might think you're referring to him or her
specifically and take offense. A better alternative might be, "It's really
unpredictable here."
If someone is upset, one of the worst things to say is "calm down." It might
work one half of one percent of the time, but generally all it does is make things
worse.
In general, think before you speak. I'm not saying you always have to be polite
or diplomatic. Sometimes you do need to (figuratively, of course) beat people
up. However, do consider the alternatives before speaking. As the proverb goes,
"He who guards his mouth and his tongue keeps himself from calamity."
8: Remember that technical problems involve emotional reactions
When customers have a technical problem (for example, they're having trouble
printing), keep in mind that they'll almost always have an emotional reaction as
well. Those emotions can range from simple annoyance to outright panic,
depending on the importance of the document and the time element involved.
I'm not saying you have to be Dr. Phil, but it's important to acknowledge and
recognize these emotional reactions. If all you do is solve the technical problem
and walk away, chances are the customer will still be upset.
In these cases, simply saying something like, "Pain in the neck, isn't it?" or "I
hate when that happens to me" can help the customer feel better about the
situation and possibly feel more positive about you.
9: Anticipate customer objections and questions
In his book The Art of War, the ancient Chinese author and strategist Sun Tzu
said, "If you know the enemy and you know yourself, you need not fear the
result of a hundred battles." Apply this principle when communicating with
customers. In particular, try to anticipate the objections your customers will
have to your message and address those objections.
For example, suppose you're sending out a directive regarding the downloading
and application of Windows updates. Suppose further that you have customers
who know enough to be dangerous. Such a customer might think, "Well, I'm
current in my virus definitions, so this update is unnecessary for me." Your
communications with such a customer will be more effective if you anticipate

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and address that issue. Consider, therefore, a sentence such as, "This Windows
update is necessary even if your virus definitions are current."
10: Keep the customer informed
Your customers will become upset if you treat them the same way. Keep them
informed of developments involving them, particularly with regard to technical
problems and outages. In particular, keep them apprised even if nothing is going
on. For example, let them know you've contacted the vendor but still haven't
heard anything back. No news is still news.
If a customer leaves you a request via voicemail or e-mail, let the customer
know you received it, even if you are still in the process of handling it. Doing so
gives the customer one less matter to worry about.
When a problem is resolved, let the customer know that, too. Nothing is more
frustrating to customers than finding out that they could have been working
sooner if they had only known.

4.12 Voice Inflection - Using your Voice as a Tool to Communicate.

Did you know that you can change the entire meaning of a word or sentence
simply by using what’s called inflection. Inflection is a change in the pitch or
tone of your voice at different times through-out the call. When inflection is
missing, your voice can sound very boring and tedious.
Change the Meaning of a Sentence using Inflection
You can change the entire meaning of a sentence simply by using voice
inflection as a tool. You can use inflection when talking to customers to express
surprise, become more subdued or assertive, make something sound like a
secret, turn it into a question, become more excited, positive or enthusiastic. In
other words, the same words can have different meanings with each tone of
voice.
Example: The following sentence, "Ms. Bunting isn’t in the office today?"
changes in feeling, meaning, and tone when you:
 Say it with a surprise in your voice
 Say it casually
 Make it sound like a secret

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 Turn it into a question
 Sound confident
 Sound bored
 Sound angry
Changing the Stress on the Words using Inflection
Another way to improve your inflection is to be aware of how stressing certain
words changes the feeling of what you're saying. The following sentence, "What
would you like us to do about the problem?" changes in feeling, meaning, and
tone when you:
 Say it defensively (emphasizing the words "would you"). "What would
you like us to do about the problem?"
 Say it with curiosity (emphasizing the words "like us"). "What would you
like us to do about the problem?"

4.13 Telephones and Customer Service

Talking with a customer on the phone can often be a difficult task. Without
seeing an individual’s face, messages can become muddled and meanings
misinterpreted. To improve your telephone communication skills, be sure to
master the following tips:
1. Adopt a Positive Tone
Projecting an enthusiastic, natural, and attentive tone while on the phone
can help a customer feel comfortable during a conversation.
When you answer the phone, smile as you greet the person on the other line.
Although it may be a bit of a cliché, a smile can truly be heard through the
telephone. Smiling as soon as you connect with the customer will begin the
interaction positively and create room for a productive and friendly exchange.
Also, be aware of your vocal qualities throughout the call. Control your rate of
speech, your pitch, and your overall timbre. The average individual speaks at a
pace of 130 to 150 words per minute. Match this rate while on the phone.
Anything faster will be difficult for the customer to understand while anything
slower will give the impression that you are slow and lazy.

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Try timing yourself in order to ensure that the rate at which you’re speaking
falls into the 130 to 150 words per minute range. Keep the pitch of your voice
in mind while you’re on the phone as well.
A high pitch connotes youth and often fails to suggest an authoritative image.
Meanwhile, a low pitch can sound harsh, especially over the phone. Find a
middle ground, and always vary your inflection in order to make yourself sound
natural and interested. A monotone sounds boring and unenthusiastic.
Controlling these factors and smiling will ensure a positive tone on the
telephone and will greatly improve your customer service skills.

2. Clear Enunciation
The ability to understand what someone is saying on the phone separates a
productive conversation from one filled with tension.
Whenever you are on the telephone, speak clearly. Enunciate and use simple
words and phrases. Don’t employ overly complex vocabulary.
The last thing you want to do is confuse the customer on the line or make them
feel inferior. Also, avoid slang and filler words. Saying things like “dude,”
“yeah,” and “um” will detract from the quality of the interaction, making
constructive problem solving harder to attain. If you have a tendency to use
filler words such as “um” or “like.” practice taking a pause instead.
Chewing gum or eating during a conversation can also lead to mumbled speech
so avoid both of these practices in order to optimize your customer service.
3. Be Sincere
Starting with the greeting, conversations over the phone must be sincere.
Say hello and be genuine. Try to avoid scripted greetings as most sound
artificial and inauthentic.
Include the company’s name, your name, and offer your assistance as soon as
you answer the phone. If you’re receiving a transferred call or if you’re
working on the switchboard, state the name of the department you are a part of
in order to give the client the appropriate information. Doing this will ease the
customer into the exchange and let he or she know that you are calm and ready
to help.

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Once you’re in the middle of the conversation, give the person on the other end
of the line genuine answers. Be sure to word these in a positive manner, as you
don’t want to inject any negativity into the exchange.
Avoid phrases such as “I don’t know,” “I can’t do that,” or “Just a second.”
Specify how long completing a task will take, and state what you can do rather
than what you cannot.
Answering a customer’s questions with sincerity and positivity will not only
satisfy them by the end of the conversation but will also help calm an angry
caller.

4. Use the Name

As soon as you receive a customer’s name, use it.
Write down the individual’s initials in order to “monogram” the call. This will
help you remember the client’s name and will personalize the call for you.
While you should use the customer’s name, don’t abuse it.
Include it naturally throughout the conversation. Also, don’t be afraid to ask
them for the proper pronunciation. Most customers will appreciate this gesture.
Get the spelling correct, too.
Callers will value the personal touch you provide with a name.

5. Leave the Customer Satisfied

As with most things, finishing a conversation on the right note can create
lasting positivity and a satisfied customer.
In order to achieve a great ending to a telephone call, make sure that the caller
understands the information you passed along before you hang up. Ask the
customer, “Is there anything else I can help you with?” Answer any final
questions he or she may have to ensure complete comprehension and
satisfaction. Also, provide any information that the customer might need in the
future. If he or she needs to call back, share optimal contact times and whom he
or she should call.
Once all of the necessary information has been shared, finish the call in a
friendly manner. Say, “Have a nice day” or, “It was nice talking with you”.

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This will let the customer know that you happily helped them and that you
would be willing to aid them again in the future.
Finishing a conversation in a positive manner can transform what may
have started as an angry phone call to a pleasant experience for the
customer.
Effective communication results in productive relationships and can yield better
customer service and sales.
Whenever you’re handling clients over the phone, remain positive and do all
that you can to satisfy them. Empathize with them when necessary and be
personable.
Customers will certainly recognize when they’re being treated with
courteousness, care, and consideration, which will translate to repeat business.

4.14 Words to Use/ Avoid

We all recognize that the words we use can impact how others see us. But every
day, many of us use phrases that can chip away at our credibility—and a
customer's service experience.
We call these Tragic phrases. They are phrases that:
 Put distance between you and a customer
 Create uneasiness
 Imply a lack of action or responsibility
 Are impersonal or vague
 Are inappropriate slang
A Tragic Moment

Have a look at a Tragic experience that a friend of ours had to go through:

“I needed an audio cassette recorder, so I went to a well-known electronics
establishment. A store associate helped me select one he thought would meet
my needs. This device came packaged in a molded plastic casing that must be
cut apart to remove the device for actual use.

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“The performance of this device was nothing short of terrible. I elected to
exchange it for a different model.
“When I approached the counter with the new recorder, I had to wave an
associate over from the other side of the counter as he appeared to be ignoring
me. He then motioned to the manager, who came to ‘help' me. The manager's
name tag had ‘Elite Status' printed on it.
“He asked me a number of questions on how I was using the recorder. As I
answered his questions he began to replace the batteries and proceeded to test
the machine. (I was beginning to feel like he thought I didn't know how to use a
tape recorder.) Eventually, I reiterated that the device wasn't broken and that I
just wanted to exchange it for this different model.
“The manager replied that for him to do anything for me, he would need the
original packaging. I let him know that I did not have that because I had to cut it
open and that that packaging would now be useless to him anyway.
“He then held up my receipt displaying the back side full of fine print—literally,
right in my face. He said: ‘If you had read our return policy, you would know
that all returns require their original packaging or they are not accepted.' In
disbelief, I said, ‘I had to destroy the case just to get the device out. That
package is useless!'
“He then reluctantly said he'd be willing to discuss it further if I could at least
produce the owner's manual. But until that happened, he wouldn't help me.
“At that point, I gave up and went across the street to the competition.
“I'll never buy from that particular location of this electronics store again.
Apparently, Mr. Elite Status let his nametag go to his head.”
Where's the “Tragic” in this anecdote? Let us count the ways:
 Confrontational words: “If you had read our return policy…”
 Condescending questions that suggested our friend couldn't operate a
simple tape recorder.
 Outright refusal to help.
There are additional examples—both in speech as well as in action—but this
incident of Tragicbehavior is about as subtle as getting beaned with a two-by-
four. From the very outset of the conversation, the manager appears to be

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steadfast in his overall posture of refusal—a refusal to listen to our friend and
appreciate his perspective, let alone provide any alternatives.
Also notice:
 There's no attempt at any type of personal contact or interaction—rather,
an ongoing deferral to abstract “policy” that's made to sound like one of
the Ten Commandments.
 There's no specificity geared to the situation at hand. Instead of asking
specific questions geared to identifying why this particular machine didn't
fit the customer's needs, the manager gave the impression that our friend
was some sort of nitwit who—provided he had even a sliver of
intelligence—could easily make this tape recorder work properly.
 Certainly, there isn't a hint of empathy to be found anywhere—no attempt
whatsoever on the manager's part to find common ground from which to
build a fair and equitable solution.
The bottom line of this series of tragic missteps – our friend's concern was never
addressed.
And, the most tragic result of all – our friend will never step inside that store
ever again and will likely tell others of this unpleasant experience (after all, he
told us!) Tragic, indeed.
4.15 Tragic Words to Avoid
To take your understanding of Tragic words and expressions further, here's a
sampling of actual Tragic phrases we have heard in customer interactions.
We've categorized them as sloppy, non-committed or authoritative. See how
many are familiar to you.
Sloppy:
 “Hold on.” or “Hang on.”
 “What's your problem?”
 “Just a sec”
 “Here's what I'm gonna do…”
 “Pull you up” (on my screen)
Non-committed:

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 “I can't do that.” or “We can't do that.”
 “He's very busy now.”
 “That's not my department. You'll have to speak with someone else.”
 “I don't know.”
 “We'll have to call you back.”
Authoritative:
 “You have to…/You should have…”
 “That's against company policy.”
 “Calm down.”
 “Like I said…”
 “If you had read your manual...”
There are a variety of unfortunate themes and characteristics that weave their
mischief through these phrases. First off, they're all impersonal—instead of
phrases that bring you closer to the customer, these suggest a sense of distance,
a lack of connection.
There's also a common sense of rigidity—a “my way or the highway”
intransigence. It's a communications form of brinksmanship. Either you can like
it, or you can lump it. End of story.
4.16 Subtle Tragic Words and Phrases
Unlike our earlier Tragic example that was about as low-key as a nuclear blast,
these are a bit more subtle. What makes the following phrases tragic? The
speakers' implied messages shown in the right column, are good clues.
 “As soon as possible” “When I get around to it.”
 “I'll try.” “Not sure I can do it.”
 “The truth is…” “I probably shouldn't tell you this.”
 “To be honest...” “I was lying up until now.”
 “Hopefully…” “Who really knows?”
How to Avoid Being Tragic

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Having gone through a variety of Tragic words and phrases, the question
justifiably comes up: “Okay, what can you do about them?”
First, pinpoint the Tragic words and phrases you tend to use.
Then, choose alternative language and practice it in your conversations. For
instance:
 Instead of: “You've got the wrong number.”
 Use: “I'm sorry, you've reached the billing department. I would be happy
to connect you to…”
 Instead of: “She not here right now.”
 Use: “She's in a meeting now and I expect her back by three. I'll see that
she receives your message then. Or, if you prefer, I would be happy to put
you through to her voicemail.”
These examples show how being personal, being specific and showing empathy
—can transform any phrase, however Tragic, into one that establishes a genuine
connection between you and the customer.
On a final note, think of some Tragic phrases, tech speak or jargon you use
every day. Jot them down and see how you can make them MAGIC.
Remember, the key to moving your conversations from Tragic to MAGIC is
awareness and practice.

4.17 Power of Phrases in Customer Service

If you work in customer service, then you know that words are incredibly
powerful.
According to psychologists Mark Waldman and Andrew Newberg, words are so
powerful, in fact, that even just the sight of a negative word like “no” can
release dozens of stress-producing hormones in your brain.
But the right words also have the power to create happy, life-long customers.
Using positive phrases can enhance customer engagement, and luckily for you,
all you have to do is remember several simple rules and commit to positive
customer service phrases.
Establish a Good Rapport

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Once you replace negative thoughts with positive ones, you’ll start having
positive results. — Willie Nelson
Helping a customer should start from a sincere and positive place. The aim is to
be open and receptive to customers’ pain points, so your positive phrasing will
come out organically.
If you focus on starting from a place of understanding, the rest will follow
naturally. So remember: introduce yourself. lf and ask for the customer’s name.
Then ask how you can be of service without assuming that there is a problem to
begin with. You want to start from a positive place and move the conversation
forward with solution-building language.
Do say:
“Hi, my name is X. May I ask your name?”
“Great to meet you, Y. How can I assist you today?”
“How can I help you?”
“What can I help you with today?”
Don’t say:
“What is wrong?”
“Are you unsatisfied?”
“Are you confused?”
“What’s your problem?”
Remember, if a customer says something nice about your company, respond
positively to the compliment! Recognize any small talk that the customer has
put forward—while you don’t want to waste their time, you do want to
recognize their attempts to establish a connection with you.
Repeat after Them
When you rephrase a customer’s comment or complaint, you do two important
things:
1) you make them feel heard and understood
2) you clarify what was said so that you don’t make any mistakes.

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This is especially important because many customers aren’t used to typing out
their complaints via chat, so their communication may be rushed or confusing.
However this technique does have to be used carefully—never retype what a
customer has said word for word. That would be very frustrating and could
potentially offend a customer. Instead, summarize what they have said
efficiently.
For example, if a customer says something vague like:“I want to receive my
package. Can you make it get here faster?”
Try responding with:
“I am sorry if you are having trouble with your package. Just to clarify, are you
experiencing a delay?”
“Correct me if I’m wrong, but are you saying that your package should have
arrived by now?”
These answers are helpful because the customer’s original statement was vague.
By summarizing a customer’s statement, you also have the chance to clarify
your interpretation.
Do not respond with:
“So what I’m hearing is that there is a problem with the shipping.”
“Are you saying that we failed to deliver on time?”
“I’m sorry, I don’t understand you.”
“No, I cannot make the package come faster. That’s not my job.”
Pepper with Positive Words
Positive phrases are built from positive words. If you focus on using an
affirming and energetic vocabulary, you will find that your great attitude may
actually be very infectious.
Use positive, affirmative words to describe:
 Definitely
 Surely
 Absolutely
 Gladly
 Certainly
 Fantastic

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 Great
 Good
 Terrific
 Will
 Assure
 Understand
Here is how you can start phrases with these positive words:
 “I completely understand…”
 “I do know where you are coming from…”
 “I assure you, we will…”
 “I’m so glad to be of help…”
Eliminate Negative Words
Positive words are part of the positive phrase puzzle, but avoiding negative
words can be equally important. Sometimes if you use negative words even
with good intentions, you can come off as patronizing, or as if you pity the
customer.
Consider how you would feel if someone said the following to you:
“That sucks so badly.”
“You don’t deserve that!”
“That is terrible!”
“We are sorry for giving you bad service!”
“It must be awful to be you right now.”
It may be a little too easy to make this kind of mistake. You want to be
empathetic, and that’s a good. But when you use negative words you encourage
a feeling of helplessness. Remember, you are there to be friendly, not a friend.
Empathetic friends go out to drink with you and wallow in your misery when
they can’t change your situation. Empathetic customer support
representative are friendly, but they have answers and solutions.
Avoid intensely negative words like:
 Awful
 Sucks
 Terrible
 Bad
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 No (if it can be avoided, sometimes it can’t)
 Never
 Dumb
 Rude
Sometimes customers ask for something you can’t give them. For example, they
may ask for a refund after several months, which exceeds your company’s two
week refund policy. So what are you to do? Here are some positive phrases to
help you out:
“I would love to help, but…”
“Unfortunately, that’s not our policy.”
“While I can’t offer you X, I can implement Y.”
Using soft words like “unfortunately” and “but” can help you lead the
conversation to a more positive direction. Suggest or recommend other
resources or options. For example, just because you can’t refund someone
doesn’t mean you can’t give them store credit. Never let a customer leave
before knowing all of their options.

4.18 Communicating Confidence

We’ve all had the experience when we run into a question we don’t know the
answer to, or we’ve encountered a point in the conversation where we’re unsure
of what to say next.
Generally this happens when we lack certain information, or the customer is
very anxious or upset and catches us off guard. Use the following phrases to
communicate that you have it all under control, even when things feel a little
shaky:
To assuage or calm a customer:
“Rest assured that this will be…“
“I assure you…”
“I understand where you’re coming from.”
To prevent doubt when you don’t know:
“One moment please.”

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“Let me find that out for you.”
“Let me forward you to our X specialist.”
To express professionalism:
“Thank you for bringing that to our consideration.”
“We’re very happy to…”
“On behalf of our company, I would like to say thank you for your patience.”
Remember, you may not know everything, but you know more than the
customer does. It’s your job, so take pride in your role and use the right words
and phrases to communicate your confident attitude.
Creating positive phrases is as much about the attitude as it is about the exact
words and rules you follow. Remember the information above, but don’t ever
forget the feeling you want to convey and the solutions you want to provide.
Positive phrasing will create happy customers who are motivated to support
your company and continue to recommend you for years to come.

4.19 Power of Eye Contact

There has been considerable research on how nonverbal cues, particularly those
coming from the eyes, affects our behavior. Here are 5 interesting results:
1. Eye-to-Eye Contact Causes Arousal.
Staring directly into someone’s eyes causes an arousal reaction. How that
arousal is interpreted, however, depends on the parties involved and the
circumstances. Being stared at by a stranger who appears large or ominous can
be seen as a threat and elicit a fear response. This is common in social animals.
A direct stare from a human to a dog or an ape can be interpreted as a threat
from the large (and strange) human. However, the gaze of a potential sexual
partner causes arousal that can be interpreted positively—as a sexual invitation.
2. The Eyes Will Tell You if a Smile is Real or Not.
Psychologist Paul Ekman has distinguished between smiles that represent
genuinehappiness (“Duchenne” smiles) and fake smiles that might be used to
feign happiness, or cover some other emotion. The key to telling a fake smile
from a real one is in the eyes. When forming real smiles, the eyes narrow and
create lines, or “crow’s feet,” at the outer corners.

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3. Pupil Dilation is a Sign of Interest (and It Can Make You Sexy).
When we are interested in something or someone our pupils will dilate. In one
study, a woman’s eyes were altered to make her pupils look dilated. The exact
same photos of the woman with dilated eyes was rated as more attractive than
those with normal-size pupils.
4. Mutual Gaze is a Sign of Love.
Research on love and attraction has found that mutual gaze—staring into each
other’s eyes—is a good predictor of two individuals being “in love.”
5. Eye Contact is a Valid Cue to Deception, But Not in the Way That You
Think.
Everyone assumes that a liar won’t look you in the eye, but research on the
nonverbal cues associated with deception suggests that a liar engages
in more eye contact than a truth-teller. The explanation is that the deceiver goes
the extra mile to try to convince you of his or her veracity and so “overdoes” the
eye contact in order to appear truthful.

4.20 How to Use Technology in Customer Service

In any business, communication is key. But as technology evolves, so do the
ways we reach our customers—ideally, for better. Will new technologies help
us keep our connection with customers personal, and if so, how do we avoid
sacrificing service for efficiency?
There's no denying the fact that customer service is important to a small or mid-
sized business. The quality of that service will either enhance or degrade
customer loyalty to your brand and your business. With the economy in
recession, customers have more alternatives than ever. The business that proves
to be responsive to customer questions, complaints, or other needs can gain a
clear competitive advantage. That's why it's so important to understand how
new technologies can help you anticipate customer needs, tailor business
processes to best serve customers, and ultimately improve the efficiency of your
business – the latter of which can keep costs down.

Customer Service Technology

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There are a few major areas in which technology now is able to help provide
key advantages to businesses in engendering customer loyalty by improving
customer service:
 Websites. Providing areas on your website where customers can answer
their own questions or seek answers from others.
 E-mail. Using e-mail as a way to improve customer service and more
quickly respond to certain needs or help requests.
 Communications. Unifying communications so that you know that the
customer who left a voice mail also sent an e-mail with the same request
a few days ago.
 Software. Better managing customer relationships with more
sophisticated data-gathering tools, such as customer relationship
management software.
Giving Customers What They Want, When They Want It
The goal of your business in terms of its customer interactions is the generate
loyalty. There's no better way to do that than to offer quality products and
services and to be responsive to your customers. But as new technologies have
come to market to make it easier for businesses to provide customer service,
they may also be increasing the number of channels through which you interact
with customers and the complexity of those interactions. Accenture, the
technology consulting firm, suggests that businesses that want to use technology
to raise the quality of their customer service focus on the following:
 Data management and analytics. Using data collected from customer to
analyze their preferences.
 Insight-driven marketing. Gaining insights into your business from
customer data so you can more effectively target marketing.
 Marketing automation. Streamlining and automating business processes
to improve efficiency and keep costs low.
 Self-service optimization. Finding ways for customers to interact with
your business when they want.
 Workforce effectiveness. Encouraging your staff to embrace new ways
improving customer treatment by providing tools and training to deliver
better service.

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4.21Trends in ICTs for Communication

1. The Physical World Will Be Used to Reach Customers

As mobile becomes better at interpreting the physical world around us through
augmented reality, RFID, iBeacon, geolocation, etc., and as speech recognition
continues to evolve to a basic functional lexicon (Siri and Google), we will be
able to literally talk to the objects, find out more about them and then connect to
people regarding those objects. Whether it is stores, products, landmarks, etc.,
the physical world will be interpreted to create real-time conversation.
2. Brands Will Use Online Platforms to Listen to Customers
Brands used to work on marketing programs for months before launching their
messages to the world. Now, brands need to learn to adapt to real-time
communications, which means every brand should be listening to its customer
base (and the customers of competitors) to find relevant messaging and
engagement opportunities.
3. Current Platforms Will Further Improve Customer Engagement
An expansion of current platforms such as Skype is likely, and savvy small
business owners will incorporate Skype (as well as other services) into their
strategy to further improve customer engagement. One promising idea is the
expansion of live video chat. The ability to have a customer call in and receive
information and product demos from an actual person via video is sure to serve
a budding business well.
4. Instant Messaging Will Be A Game-Changer
Communication will become more on demand and permission based. There are
too many emails and unsolicited calls happening at the moment. Also, instant
messaging will become a game-changer in the business world and will replace
emails because they are faster and allow for an instant response.
5. Communication Will Take An Omni-Device Approach
As technology evolves, consumers will move across devices even more
frequently. Whether interactions occur while consumers are in front of their
desktops at work, running in between meetings with their iPhones or sitting on
the couch with an iPad and watching TV, brands will need to access and

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optimize these interactions with consumers accordingly. Using pattern
recognition, technology will continue to evolve, optimize and improve each
individual's content based on the time of day, location and device type.
6. Brands Will Deliver Instant Gratification
With the combination of wearable technology, faster data aggregation and
processing and consumers sharing their desires more openly, major brands will
focus on delivering instant gratification. Brands will compete by delivering both
customized messaging and offers at the exact time of consumer demand. It will
be very convenient (as well as creepy and weird) when Hugo Boss shoots me a
discount on a formal suit because I am in New York and just received an invite
to a wedding in my inbox.
7. Brands Will Use More Local Targeting
In communication, it's important to be reaching the right people with your
message. I believe brands will get better at using services that allow targeted
local promotions to reach more relevant audiences. For instance, a promotion in
Seattle won't do you much good if the people in New York City see it. Hint: use
Facebook's location-targeting tools for your Facebook page updates.
8. Consumers Will Determine The Offers They Receive
Real-time communication is useless if it interrupts dinner and serves something
people don't want. Consumers, not brands, will determine the type of offers they
receive based on category, frequency or even service requests. Communication
that's customized to meet consumer interests is really in the best interest of
brands -- a safeguard against wasted marketing investments and negative
consumer engagement.
9. Brands Will Need The Right Context
Real-time communication technologies necessitate real-world context. In the
future it will not be enough for brands to reach consumers at the right time
because they will need the right message as well. Matching message and timing
requires smart data collection and technology to really personalize each
communication with each consumer at scale. Having context that feels real and
human will be key to brands successfully reaching consumers in real time.
10. Customers Will Talk To Brands With One Click
Talking to a company and other site users will become as simple as a click of a
button. This type of communication will rely less on phone numbers and more

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on Internet-based communication technologies. WebRTC is a great example of
an emerging technology that is making this possible.
11. The Timing of Messages Will Be Optimized
Our phones and computers capture a lot of information regarding how and when
we interact with these devices, and advertising entities are going to use this
information more and more to optimize the timing of each delivery. Habits and
calendars will help personalize opportunities.

Chapter Five
Managing Difficult Customers and Coping with
Challenging Customers

5.1. Chapter Learning Objectives

 Exhibit confidence when involved in difficult customer interactions.
 Develop better relationships with internal customers.
 Use the six-step Problem-Solving Model in handling difficult customer
situations.
After completing this chapter, you will be able to:
 Recognize a variety of difficult personality types.
 Use the Emotion-Reducing Model to help keep difficult situations
from escalating.
 Determine appropriate strategies for dealing with various types of
customers.

5.2. Dealing with Difficult Customers

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With some customer service problems, your customer may remain calm and
reasonable no matter how upset they might actually be. In other situations, no
matter how trivial the problem, your customer may be very difficult,
demanding, angry, rude, and even potentially violent. Short of hanging up or
calling security, there are certain fundamental yet important steps you can take
to deal with difficult customers.
One of the first steps to take when dealing with a challenging customer is to
protect yourself with the proper mindset and attitude. Just because your
customer is agitated or angry does not mean you need to absorb it or respond in
kind. Studies show that just a few minutes of a strong negative emotion such as
anger can demolish your body’s immune system for many hours afterward.
Remember you can’t always control how a customer reacts to a given problem,
but you can control how you respond. Rather than escalate an unpleasant
situation, you can try some tactics to defuse it. You can do this by remaining
focused, alert, understanding, caring, unemotional, and—most of all—patient.

5.3 Defusing Customer Misbehaviour

Earlier in the course we considered just what it is a customer wants. The answer
applies to upset customers just as much as any other: they want to be treated
with respect and polite, helpful service. There is an ancient adage that a gentle
word turns away wrath, and that’s as true today. A rude, angry, or belligerent
customer may be calmed with a simple, “I’m sorry this has upset you … let’s
see how we can fix it.”
It’s when dealing with difficult customers that your communication skills will
be put to the highest test. It may be best to let your customer vent a little before
you come back with a response. Remember to speak slowly, use short
sentences, be tactful, and follow the golden model of customer service: listen,
empathize, and take charge. It helps to use a customer-centric perspective that
puts you in the place of your customer. Try to see the situation as they do. What
exactly is causing them stress? What are the solutions they might find
satisfactory? How can those solutions be applied with minimum effort by your
customer? You should also employ tactics of effective listening.
This helps your customers feel their message is coming through, and you
understand their problem clearly. The first step is to smile, to show that you are
a friendly ally on their side to fix it. Smile even if you are on the phone—that
gesture may sound in your voice. Do not interrupt while your customer is

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explaining a problem, other than to help clarify an issue. If it’s in person, lean
towards your customers and turn an ear their way to show you are intently
listening. Especially if it’s a conversation on the telephone, be sure to use
affirmative words and sounds such as uh-huh, yes, I see, to demonstrate that you
are listening, and to encourage your customer to continue.
5.4 Customer Service Do’s and Don’ts
Before we get into some best tips on what to do when dealing with difficult
customers, let’s start by considering some important things not to do. As
mentioned earlier, be sure not to get angry yourself, even if the customer starts
to attack you personally as uncaring or incompetent. The reason you have been
placed in your position is because you have demonstrated a concern for
customer service and the skills to perform your job well. The customer is
responding with a perspective muddled by emotion, and you should keep that in
mind.

You should also avoid telling your customer to calm down. That may make you
appear adversarial to agitated customers, rather than as a helper trying to
understand how they feel. Likewise, don’t feel a need to defend yourself. This
can also create an adversarial relation. Rather, try to assure your customers you
hear their concern, and you sincerely want to help. Try not to interrupt your
customers, especially while they’re venting some of their anger. Once they have
raged for a bit, they may be easier to ration with if you simply acknowledge
their anger, and let them share some of it with you. That said, let’s summarize a
roster of best tips to settle an upset customer, including a review of some points
we may have considered earlier
 Show empathy for the customers’ problems. Let the customers know
their problems concern you as well (without letting it actually upset you,
of course). Remember to use the magic words, “I’m sorry.”
 Encourage an extremely agitated customer to vent a little before taking
on the steps to resolving the problem. You can use such phrases as “tell
me about what happened.”
 Don’t take a customer’s anger or insults personally. Instead show you are
on the customer’s side. You might say something like, “I can understand
why you’re upset.”
 Remain objective and calm. Take responsibility and keep a focus on
achieving results. Assure the customer, “I’m sure we can fix this.”

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 Involve the customer. This returns a sense of empowerment to a
customer who may be feeling powerless. Ask, “How would you like to
see this resolved?”
 Provide clear options and steps to a resolution. Say, “Here is what we are
going to do.”
 Exceed a customer’s expectations. Let the customer know, “… and here
is what else we have for you.”
 Finally, assure the customer that the problem will be brought to the
attention of management, to ensure a similar situation may be avoided in
the future. If you can apply these simple tips, you may be able to handle
most of the difficult customer interactions that come your way.
 And of course, the final best tip, is when in need, call for help! Your
supervisor and co-workers will be quick to come to your aid. Someday it
may be one of them that will need the help of your service skills and cool
head.

5.5 Summary:
 An attitude of calm detachment can help you deal with difficult
customers.
 An upset customer can best be defused with a little empathy and an
apology.
 When dealing with angry customers, employ active listening skills, and
assure them you’re on their side.
 Don’t get caught up in a customer’s personal attacks.
 Turn the interaction to a focus on fixing an issue, empowering the
customer to help seek suitable solutions.
 Exceed the customer’s expectations.
You will also need to address the following questions:
 What is your perspective on the importance of customers in your
industry? In my view, without external customers, our company would
not be in business, so it is always very important to explain to employees
the importance of taking care of these customers and making sure their
experience at our business is as enjoyable as possible. Additionally,
internal customers are very important as well. Without them, you could
not complete some of the tasks the organization strives to reach. It is very

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important to recognize and reward our internal customers for jobs well
done. After all, they are the ones that make a difference in our business.

 How do you define “difficult” customers? Why? A difficult customer in

my mind is a person who tries to provoke you to react in an
uncontrollable manner. The important thing to remember—always have
control of the situation! 3 What is the most common types of difficult
customer situations that you and your staff encounter? How do you
typically handle them? For example in a theatre business, the most
common types of difficult customer would be problems with customers
disturbing others in an auditorium. For example, customers want to talk
on cell phones or talk loud enough to disturb others while watching a
movie. You could try to improve these disturbances by making
announcements before each movie starts asking our guests to turn off all
cell phones and pagers. You can also go in each auditorium numerous
times throughout the night to check for other disturbances. Sometimes
parents bring young children to see a movie. The child can be a
disturbance by crying or running around the auditorium. When this
happens you can ask the parent to take the child to the lobby area so other
customers can enjoy the movie.
 What type of training do you feel is needed by service personnel to help
them better deal with difficult customer situations in today’s service-
oriented world? Give your employees examples of situations that arise
from time to time and ask how they would handle them. Have discussions
on ways to please the customer in these difficult situations. Make sure
you have videos or DVDs available that employees can watch during
slow periods. This will enhance their knowledge of customer service and
enhance their confidence when dealing with difficult customer situations.

 What advice can you give to someone who wants to get into a customer
service occupation? Read lots of literature on customer service, always be
in control of your emotions and the situation, have lots of patience, and
stay calm. In short, be prepared to handle any type of situation.

5.6 Self – Test (True or False)

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1. An important realization that will assist you in better serving customers is to
acknowledge that they all have needs and expectations.
2. Customer needs are driven by internal motivators and can be broken down
into five categories.
3. Behavioral style preferences do not affect customer needs or satisfaction
levels.
4. An upset customer is usually annoyed with a specific person rather than the
organization or system.
5. An effective strategy for dealing with angry customers is to let them know
exactly what your company policy is.
6. When you cannot comply with the demands of an angry customer, you
should try to negotiate an alternative solution.
7. In some cases, indecisive customers truly do not know what they need or
want.
8. Demanding customers often act in a domineering manner because they are
very self-confident. This is a function of behavioral style.
9. Rude customers need to be controlled or “put in their place” to prevent a
repetition of the behavior.
10. Some service providers have difficulty handling talkative customers.
11. Adopting a “good neighbor policy” can help in dealings with internal
customers.
12. As part of trying to help solve a customer problem, you should assess its
seriousness.
Successful service will ultimately be delivered through effective communication
skills, positive attitude, patience, and a willingness to help the customer. You
may think of difficult customer contacts as those in which you have to deal with
negative, rude, angry, complaining, or aggressive people. These are just a few
of the types of potentially difficult interactions. From time to time, you will also
be called upon to help customers who can be described in one or more of the
following ways:
 Lack knowledge about your product, service, or policies.
 Dissatisfied with your service or products.
 Demanding.
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 Talkative
 Internal customers with special requests.
 Speak English as a second language
 Elderly and need extra assistance
 Have a disability.

Each of the above categories can be difficult to handle, depending on your

knowledge, experience, and abilities. A key to successfully serving all type of
customers is to treat each person as an individual. Avoid stereotyping people
according to their behavior. Do not mentally categorize people (put them into
groups) according to the way they speak or act or look—and then treat everyone
in a “group” the same way. If you stereotype people, you will likely damage the
customer-provider relationship.
Ultimately, you will deliver successful service through your effective
communication skills, positive attitude, patience, and willingness to help the
customer. Your ability to focus on the situation or problem and not on the
person will be a very important factor in your success. Making the distinction
between the person and the problem is especially important when you are faced
with difficult situations in the service environment.
Although you may not understand or approve of a person’s behavior, he or she
is still your customer. Try to make the interaction a positive one, and if
necessary ask for assistance from a coworker or refer the problem to an
appropriate level in your operational chain of command. Many difficult
situations you will deal with as a service provider will be caused by your
customer’s needs, wants, and expectations.
Handling difficult customers will be one of your biggest challenges, so be
prepared. How would you deal with an unhappy customer?
Why People Buy Concept: Understanding the drive behind customers’ needs,
wants, and emotional reactions will help you know why people buy. You will
be able to give better customer service once you understand the customer better.
Factors such as needs, wants, and emotional reaction cause customers to buy
things. Each of these factors provides a stimulus for the customer to shop,
compare, and possibly purchase a product or service.
Needs are things that a customer feels compelled to address or believes are
necessary. Needs are an individual matter and arise from internal sources or
motivations that vary from one customer to the next according to their situation

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and background. Wants are desired objects or experiences that a customer
would like to have. They are not necessary, yet often bring personal
appreciation, value, or satisfaction. You will be helped in serving your
customers if you understand that all people have needs. Since each person’s
needs are different, no two customers are going to like the same thing or buy the
same product or service for the same reason. Therefore, although some of the
basic customer service techniques discussed in earlier chapters will help you in
determining and addressing customer needs, there will be times when these
techniques will not help you at all.
Customer diversification along with customer expectations and the various
circumstances in which you and your customers find yourselves, also affects
your success. Depending on the customer, situation, emotions, and other factors,
you will find that some customer contacts are challenging or difficult. These
situations are not hopeless if you plan ahead and mentally prepare yourself for
them. You should understand, too, that needs alone do not cause customers to
make purchases.
Research has shown that emotion often influences buying decisions. A classic
example of this was demonstrated when the Coca-Cola Company decided to
introduce the “New Coke.” Company executives had become concerned about
sales. They were losing ground to their major competitors, Pepsi and 7UP, and
also to their own Diet Coke. Also, they had seen the price of sugar rise and were
looking for ways to reduce costs and increase revenue. They decided that they
would introduce a new product and gradually take the original Coca-Cola off
the market. The decision was affected also by the fact that Pepsi and Diet Coke
had a smoother, sweeter taste than Coca-Cola. Before making such an important
decision, Coca-Cola managers did all the right things. They experimented to
find just the right combination of ingredients, and they market-tested their
product through blind taste tests (in which consumers were blindfolded and
asked to sample various products including the original Coke, Pepsi, and Diet
Coke). During the tests, consumers overwhelmingly selected the “New Coke”
as their product of choice.
Coca-Cola then put together fancy advertisements and an advertising campaign
to introduce the product with great fanfare. Coca-Cola executives were sure that
they had a huge success on their hands and believed that they would leave Pepsi
far behind in the market ratings. Instead, they failed partly because Coca-Cola
had kept secret its plan to remove the original Coke from the shelves the same
week that the new product was released. The public was outraged. Coca-Cola

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had one of the greatest marketing fiascoes of the twentieth century on its hands.
What Coca-Cola had failed to reckon with was the emotional reaction of the
public. Even before people tasted the new product, they felt betrayed by a
company they trusted.
As a result, they rebelled. They wanted the original Coke back. After all, they
had grown up with this product. The New Coke was introduced on April 23,
1985. Within days, Coca-Cola received thousands of calls and letters of
complaint. On July 11, 1985, at a press conference, the chairman of Coca-Cola,
Roberto Goizeuta, and president and CEO, Donald Keough, announced, “We
have heard you.” New Coke faded into oblivion and “Classic Coke,” made with
the original formula, was born. The public celebrated (with a Coke of course!).

5.7 The Basis of Customer Needs

To address customer needs, you must first understand the origin of needs and
why people buy different products. As psychologist Dr. Abraham Maslow once
stated, “The human being is a wanting animal and rarely reaches a state of
complete satisfaction except for a short time. As one desire is satisfied, another
pops up to take its place. When this is satisfied, still another comes to the
foreground and so on. It is characteristic of human beings throughout their
whole lives that they are practically always desiring something.”
Maslow’s Hierarchy of Needs Theory also applies to customers’ needs. Needs
are often derived from internal motivators or things that make us happy and
satisfy us. A classic study on human motivation conducted by Maslow after
World War II might help you understand human needs. Although his work
focused on the needs of employees in the workplace, it has application in many
other environments. In his research, Maslow found that people have specific
needs starting at the basic or physiological level, at which they need items that
will sustain life (e.g., food, shelter, clothing, water, and air). Once people have
satisfied their basic needs, they can move up the hierarchy to other needs, such
as the second level, safety or security. At that level, people focus on products
and services that will help them feel protected (e.g., insurance, firearms,
security devices, and fault-free electrical or mechanical products). The third
level identified by Maslow was social, which concerns the need to feel accepted
or loved. Products or services that can help people fulfill their social needs can
go a long way toward making them feel successful (e.g., flowers, gifts, or other
items that demonstrate love, affection, and caring). Anything that makes people

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feel as if they belong to a group or subculture will help fulfill this need. The
fourth level of need is that of esteem or ego. Items that can help customers feel
better about themselves (self-esteem), project status or prestige, or gain the
respect of others are important (e.g., clothing, cars, furniture, jewelry, body
adornments, or grooming products). The highest level on Maslow’s hierarchy is
self-actualization or, in the words of a U.S. Army recruiting slogan, “Be all you
can be.” Anything that can help customers attain their highest potential
addresses this final need category (e.g., educational software, professional
development seminars, or tools that enhance effectiveness and efficiency).
To relate this theory to reasons why customers become dissatisfied and difficult
to deal with, think about a situation like the following: A customer goes into a
convenience store on the way home from work. He has a very stressful job. He
earns minimum wage, and his wife is unemployed. Recently, he had to quit
taking classes at a local college, where he was trying to get an associate degree
in order to qualify for a higher-paying job, because he had to take a second job
to help support the family. He has two sick toddlers at home and has stopped in
at the store to get cough medicine. He specifically chose this store because he
had seen a flyer in the morning paper indicating that cough syrup was on sale.
When he checked the shelf, the product was out of stock. The customer is not
happy! A knowledge of Maslow’s work can help you determine your
customer’s level of need.
Customers come to you expecting that certain things will occur related to the
products and services they obtain. Customers typically expect the following:
 Expectations related to people
 Friendly, knowledgeable service providers
 Respect (they want to be treated as if they are intelligent)
 Empathy (they want their feelings and emotions to be recognized)
 Courtesy (they want to be recognized as “the customer” and as someone
who is important to you and your organization)
 Equitable treatment (they do not want to feel that one individual or group
gets preferential benefits or treatment over another)
 Expectations related to products and services
 Easily accessible and available products and services (no lengthy delays)
 Reasonable and competitive pricing Products and services that adequately
address needs
 Quality (appropriate value for money and time invested)

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 Ease of use Safe (warranty available and product free of defects that
might cause physical injury)
 State-of-the-art products and service delivery
 Easy-to-understand instructions (and follow-up assistance availability)
 Ease of return or exchange (flexible policies that provide alternatives
depending on the situation)
 Appropriate and expedient problem resolution

5.8 The Role of Behavioral Style Concept

Behavioral preferences have a major impact on the interactions of people. The
more you know about style tendencies, the better you will understand your
customers. Behavioral style preferences play a major part in how people
interact. Styles also affect the types of things people want and value. For
example, people with high expressive tendencies will probably buy more
colorful and people-oriented items than will people who have high decisive
tendencies. The more you know about style tendencies, the easier it becomes to
deal with people in a variety of situations and to help match their needs with the
products and services you and your organization can provide.

Carefully observe your customer’s behavior and use the information you
learned about each style as an indicator of the type of person with whom you
are dealing. Do not use such information as the definitive answer for resolving
the situation. Human beings are complex and react to stimuli in various ways—
so adapt your approach as necessary. In addition, learn to deal with your
emotions so that you can prevent or resolve heated emotional situations.

5.9 Handling Emotions With the Emotion-Reducing Model

It is important to remember when dealing with people who are behaving
emotionally (e.g., irritated, angry, upset, crying, or raising their voice) that they
are typically upset with the structure, process, organization, or other factors over
which you and/or they have no control. They are usually not upset with you
(unless you have provoked them by exhibiting poor customer service skills or
attitude). Before you can get your customer to calm down, listen, and address
the situation, you must first deal with her or his emotional state. Once you do
this, you can proceed to use problem-solving strategies to assist in solving the

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problem. Until you reduce the customer’s emotional level, he or she will
probably not listen to you or be receptive to what you are saying or your
attempts to assist.
In some cases, she or he may even become irritated because you seem non-
empathetic or uncaring. To help calm the customer down, you must send
customer-focused verbal and nonverbal messages. You need to demonstrate
patience and use all the positive communication skills. Most important among
those skills are the ability and the willingness to listen calmly to what the
customer has to say without interrupting or interjecting your views. This lesson
is taught to many law enforcement officers to help them deal with crisis
situations such as domestic disturbances.
If your customer perceives that you are not attuned to his or her emotional needs
or thinks that you are not working in his or her best interest, you become part of
the problem, rather than part of the solution. Keep in mind that a customer
generally wants to be respected and acknowledged as an individual and as being
important. As you interact with the customer, you can soften the situation and
reduce emotion by providing customer-focused responses. Simple customer-
focused messages can put you on a friendly (human) level while at the same
time helping to calm the emotion.
Here’s how the Emotion-Reducing Model works: Assume a customer has a
problem. As the customer approaches (or when you answer the telephone), greet
him or her with “Good morning (or afternoon),” a smile, and open body
languageand gesturing (customer-focused message). Then, as the customer
explains the problems (emotion), you can offer statements such as, “I see,” “I
can appreciate your concern, frustration, or anger,” or “I understand how that
can feel (customer-focused).” Such statements can help you connect
psychologically with the customer. Continue to use positive reinforcement and
communication throughout your interaction. Once the problem has been defined
and resolved (problem resolution), take one more opportunity at the end of your
interaction to send a customer-focused message by smiling and thanking the
customer for allowing you to assist. Also, one last apology may be appropriate
for inconvenience, frustration, mistreatment, and so on (customer-focused).

5.10 Working With Difficult Customers Concept

You will need to be calm and professional when dealing with difficult
customers. Most customers have a specific type of product or service in mind

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when they make contact with your organization. They are also willing to let you
help them if you do so in a positive, pleasant, and professional manner. There
are others who, because of their outlook on life, attitude, personal habits, or
background, may cause you frustration and require additional effort. You should
expect to encounter difficult people and try to serve them to the best of your
ability. With difficult customers, you should remain calm and professional.
Angry Customers
Dealing with angry people requires a certain amount of caution. For you to
effectively serve an angry customer, you must move beyond the emotions to
discover the reason for his or her anger. Here are some possible tactics:
 Be positive. Tell the customer what you can do, rather than what you
cannot do. If you say, “Our policy won’t permit us to give you a refund,”
you can expect an angry response. On the other hand, you might offer,
“What I can do is issue a store credit that may be used at any of our 12
branch stores in the city.” Note: Before dealing with customers, check
with your supervisor to find out what your policies are and what level of
authority you have in making decisions. This relates to empowerment
discussed earlier in the book. By having this information before a
customer encounter, you will have the tools and knowledge necessary to
handle your customers effectively and professionally.
 Acknowledge the customer’s feelings or anger. You cannot and should
not try to deny the customer’s anger. Doing so could result in a serious
confrontation. Instead of saying, “You really don’t have to be upset,” try,
“I can see you’re upset. I want to help solve this problem, so could you
please help me understand what’s happened?” By taking this approach,
you’ve acknowledged the customer’s feelings, demonstrated a
willingness to assist, and asked the customer to participate in solving the
problem.
 Reassure. Reassure the customer. Indicate that you understand why he or
she is angry and that you will work to solve the problems. Statements
such as these can help ease the frustration of your customers: “I’m going
to do my best to help resolve this quickly,” “I can assure you that this will
be resolved by Monday,” “You can rest assured that I am going to make
this a priority.”
 Remain objective. As mentioned earlier, becoming part of the problem is
not the answer. Even if the customer raises his or her voice or uses
profanity, remain calm. This may be difficult, but it will help keep the

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situation from escalating. If necessary, count to ten in your head and take
a deep breath before responding. Remember, angry customers are usually
angry at the organization, product, or service that you represent, not at
you. If they do not settle down, calmly but assertively explain that
although you want to assist, you cannot do so until they help by providing
information. If possible, suggest moving to a private area away from
other customers and ask for help from a supervisor or team leader, if
appropriate.
 Determine the cause. Through a combination of asking questions,
listening, feedback, and analyzing the information you receive, try to
determine the cause of the problem. The customer may simply have
misunderstood what was said. In such an instance, a clarification may be
all that is required. Try something like, “There seems to be some
confusion. May I explain?” or possibly, “It appears that I was unclear.
May I explain?”
 Listen actively. When people are angry, they need a chance to vent their
frustration and be heard. Avoid interrupting or offering “Yes, but . . .”
types of remarks. This only fuels their anger. Suppose that a customer
calls to make an appointment for an oil change and is told that the special
sale ended yesterday. The customer then says that there was no indication
in the newspaper advertisement that there was an expiration date. You
respond with, “Yes, that’s true, but we always run our sale ads for only
one week. Everybody knows that.” Naturally, the customer is now upset.
A better response would be something like, “Although that sale ended
yesterday, we will honor the coupon because the expiration date was
inadvertently omitted from the advertisement.” Whether the customer is
“right” or “wrong” makes no difference in situations like these. You will
build stronger customer relationships when you make this kind of
concession, because you are bringing in money you might not have
received if the customer got upset. Moreover, the customer is now
satisfied, may tell others, and will likely return. In cases such as this,
inform your supervisor of the problems caused by the omission of
expiration dates in ads.
 Reduce frustrations. Don’t say or do anything that will create further
tension. For instance, don’t transfer a caller to another extension if the
customer told you he or she has already been transferred several times,
interrupt to serve another customer (especially for a telephone caller—
unless your organization’s policy requires that you do so), or put the

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person on hold repeatedly to handle other customers or tasks not related
to serving the original customer.
 Negotiate a solution. Elicit ideas from the customer on how to solve the
problem. If the customer’s suggestions are realistic and feasible,
implement them. Or negotiate an alternative. By using customers’
suggestions, you are likely to gain their agreement. Also, if something
goes wrong later, they may be less likely to complain again since it was
their idea in the first place.
 Conduct a follow-up. Don’t assume that the organization’s system will
work as designed. If there is a breakdown, the customer has your name
and may complain to your supervisor. Or, the customer may not complain
but instead go to a competitor. Either way, you lose. Once an agreed-
upon solution has been implemented, take the time to follow up to ensure
that all went well. This may involve personally calling the accounting
department to ensure that proper credits were made, delivering an order
or materials or shipping them yourself, or calling or writing the customer
after a period of time to make sure the customer is satisfied and to offer
future assistance. Whatever it takes, do it to ensure customer satisfaction.
As a rule of thumb, underpromise and overdeliver.

Dissatisfied Customers
Occasionally, you will encounter customers who are dissatisfied or unhappy
when you meet them. Possibly they have been improperly served by you or
one of your peers, or by a competitor in the past. Even if you were not
personally involved in their previous experience, you represent the
organization or you may be considered “just like that last service employee.”
Unfair as this may be, you have to try to make these customers happy. To do
so, try the following strategies:
 Listen. Take the time to listen actively. Often, when people are upset, all
they want to know is that you’re willing to attend to their concerns.
 Remain positive. Even though angry customers drain your energy, don’t
get drawn into mirroring their anger or agreeing with their putdowns of
your company, competitors, peers, products, or services. This only fuels
the fire. If appropriate, smile and interject positive comments into the
conversation as you listen, and try to determine an effective course of
action. Keep in mind what you read about the power of positive wording.

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 Smile, give your name, and offer assistance. Sometimes a typically
cheerful greeting is not possible because a customer verbally attacks first
(e.g., you pick up a ringing phone or a customer walks up as you are
serving another customer or looking down or away). In such instances,
listen to what the customer is saying, use positive nonverbal cues (e.g.,
nodding, open or nonthreatening body posture, and possibly smiling) and
inject paralanguage (e.g., Uh-huh, Hmmmm, Ahhhh, or other
vocalizations). By demonstrating positive nonverbal behaviors, you may
be able to psychologically “bond” with the customer. People usually do
not attack a “friend,” someone they know, or someone who is trying to
assist them. This is why many law enforcement officers are trained to
introduce themselves and to use a person’s name.
 Don’t make excuses. Typically, customers are not interested in why they
did not get the product or service they wanted or thought they paid for;
they just want the problem solved (in their favor). Look for ways to
correct a mistake rather than cover it up. Remember: if you get
defensive, you become part of the problem and not part of the solution.
 Be compassionate. Try to remain warm, compassionate, and empathetic
while you are trying to uncover the cause of the problem. You can then
attempt to service the customer properly and promptly. An approach
often used by service and sales professionals to help defuse a customer’s
emotion when he or she is upset or frustrated (not really angry) is known
as the “feel, felt, found” strategy. When using it, the service provider
might state something like: “I know how you feel Ms. Winston. Others
have said they felt the same way when they experienced this problem.
However, we have found that by making a small adjustment to the
________ that the problem is quickly resolved.” In effect, what this
strategy does is empathize with the customer, shows he or she is not
alone in the way he or she feels and shows there is a solution. Many
times this strategy can begin by using statements such as:
 I see.
 I can relate to that.
 I understand what you’re saying.
 I can appreciate your point.
 I know how you feel. (Use caution with this statement if someone is very
emotional. This type of comment could increase the customer’s anger and
escalate the situation).
 Ask open-ended questions. By using specific open-ended questions,
you can obtain the information you need to serve the customer. For
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example, “Mr. Washington, can you explain exactly what you
expected from our service contract?”
 Verify information. To prevent misunderstandings or the possibility of
escalating an uncomfortable situation, be sure that you received the
correct message. Too often, we believe we understand the meaning of
a message, only to find out later that we misinterpreted it. Test your
interpretation of a customer’s message by stating it in your own
words. For example, “Mr. Rasheed, if I heard you correctly, you were
told by the clerk who sold you this table that it would be assembled
upon delivery, but the driver refused to do so. Is that correct?”
 Take appropriate action. After you have gathered all pertinent
information you need to make a decision, work with the customer to
satisfy his or her needs.
Indecisive Customers
You will encounter people who cannot or will not make a decision. They
sometimes spend hours vacillating. In some cases, indecisive customers
truly do not know what they want or need, as when they are looking for a
gift for a special occasion. Sometimes such customers are afraid that they
will choose incorrectly. In these situations, use all your communication
skills. Otherwise, indecisive customers will occupy large amounts of your
time and detract from your ability to do your job effectively or to assist
other customers. Be aware, however, that some people really are just
looking as they check out sales, kill time between appointments, relax, or
they may be lonely and want to be around others. Strategies for dealing
with an indecisive person are given in the following sections.
 Be patient. Keep in mind that, although indecisive people can be
frustrating (especially if you have a high D behavioral style
preference), they are still customers. Greet such customers just as
you would any other customer and offer assistance. If the customer
refuses your help or wants to browse, that’s fine, but indicate
where you will be and watch for the customer to signal for
[Link] open-ended questions. Just as you would do with a
dissatisfied customer, try to get as much background information
as possible. The more data you can gather, the better you can
evaluate the situation, determine needs, and assist in the solution of
any problems.

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 Listen actively. Focus on verbal and nonverbal messages for clues
to determine emotions, concerns, and interests.
 Suggest other options. Offer alternatives that will help in decision
making and reduce the customer’s anxiety. For example, “Ms.
Sylvester, if you find that the color of the fabric doesn’t match your
wallpaper, you have 30 days to return it.” This approach shows that
you are informed and trying to assist, and it may help the person
make up his or her mind. Suggesting a warranty or exchange
possibility may make the customer more secure in the decision-
making process.
 Guide decision making. By assertively, not aggressively, offering
suggestions or ideas, you can help customers make a decision.
Note that you are helping them, not making the decision for them.
If you push your preferences on them, they may be dissatisfied and
return the item. Then you, or someone else, will have to deal with
an unhappy customer.
Demanding or Domineering Customers
Customers can be demanding or domineering for a number of reasons.
Many times, domineering behavior is part of a personality style. In
other instances, it could be a reaction to past customer service
encounters. A demanding customer may feel a need to be or stay in
control, especially if he or she has felt out of control in the past. Often,
such people are insecure. Some strategies for effectively handling
demanding customers are discussed in the following sections:
 Be professional. Don’t raise your voice or retaliate verbally.
Children engage in name-calling, which often escalates into
shoving matches. Unfortunately, some adults “regress” to
childish behavior. Your customer may revert to negative
behavior learned in the past. Both you and the customer lose
when this happens.
 Respect the customer. Showing respect does not mean that you
must accommodate your customer’s every wish. It means that
you should make positive eye contact (but not glare), remain
calm, use the customer’s name, apologize when appropriate
and/or necessary, and let the customer know that he or she is
important to you and your organization. Work positively
toward a resolution of the problem.

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 Be firm and fair and focus on the customer’s needs. Assertive
behavior is an appropriate response to a domineering or
demanding person; aggression is not. Also, remember the
importance of treating each customer as an individual.
 Tell the customer what you can do. Don’t focus on negatives or
what can’t be done when dealing with your customers. Stick
with what is possible and what you are willing to do. Be
flexible and willing to listen to requests. If something
suggested is possible and will help solve the problem,
compliment the person on his or her idea (e.g., “Mr. Hollister,
that’s a good suggestion, and one that I think will work”), and
then try to make it happen. Doing this will show that you are
receptive to new ideas, are truly working to meet the
customer’s needs and expectations, and value the customer’s
opinion. Also, remember that if you can psychologically
partner with a customer, he or she is less likely to attack. You
do need to make sure that your willingness to assist and comply
is not seen as giving in or backing down. If it is, the customer
may make additional demands or return in the future with
similar demands. To avoid this, you could add to the earlier
statement by saying something like, “Mr. Hollister, that’s a
good suggestion, and although we cannot do this in every
instance, I think that your suggestion is one that will work at
this time.” This puts the customer on alert that although he or
she may get his or her way this time, it will not necessarily
happen in the future. Another strategy is to make a
counteroffer. If you are thoroughly familiar with your
organization’s policies and procedures and your limits of
authority, you will be prepared to negotiate with demanding
customers. If they want something you cannot provide, you
might offer an alternative that will satisfy them. Remember that
your goal is customer satisfaction.
Rude or Inconsiderate Customers
Some people seem to go out of their way to be offensive or to get attention.
Although they seem confident and self-assured outwardly, they are often
insecure and defensive. Some behaviors they might exhibit are raising the voice,
demanding to speak to a supervisor, using profanity, cutting in front of someone
else in a line, being verbally abrupt (snapping back at you) even though you’re

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trying to assist, calling you by your last name, which they see on your name tag
(e.g., “Listen, Smith”), ignoring what you say, or otherwise going out of the
way to be offensive or in control. Try the following strategies for dealing with
rude or inconsiderate customers:
 Remain professional. Just because the customer is exhibiting
inappropriate behavior does not justify your reacting in kind. Remain
calm, assertive, and in control of the situation. For example, if you are
waiting on a customer and a rude person barges in or cuts off your
conversation, pause, make direct eye contact, smile, and firmly say, “I’ll
be with you as soon as I finish with this customer, sir or madam.” If he or
she insists, repeat your comment and let the person know that the faster
you serve the current customer, the faster you can get to the person
waiting. Also, maintaining decorum may help win over the person or at
least keep him or her in check.
 Don’t resort to retaliation. Retaliation will only infuriate this type of
customer, especially if you have embarrassed him or her in the presence
of others. Remember that such people are still customers, and if they or
someone else perceives your actions as inappropriate, you could lose
more than just the battle at hand.

Talkative Customers
Some people phone or approach you and then spend excessive amounts of time
discussing irrelevant matters such as personal experiences, family, friends,
schooling, accomplishments, other customer service situations, and the weather.
The following tips might help when dealing with talkative customers:
 Remain warm and cordial, but focused. Recognize that this person’s
personality style is probably mainly expressive and that his or her natural
inclination is to connect with others. You can smile, acknowledge
comments, and carry on a brief conversation as you are serving this
customer. For example, if the person comments that your last name is
spelled exactly like his or her great aunt’s and then asks where your
family is from, you could respond with “That’s interesting. My family is
from . . . but I don’t believe we have any relatives outside that area.” You
have responded but possibly cut off the next question. Anything less
would probably be viewed as rude by the customer. Anything more could
invite additional discussion. Your next statement should then be business-
related (e.g., “Is there anything else I can assist you with today?”).

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 Ask specific open-ended questions. These types of questions can assist in
determining needs and addressing customer concerns.
 Use closed-ended questions to control. Once you have determined the
customer’s needs, switch to closed-ended questions to better control the
situation and limit the opportunity for the customer to continue talking.
 Manage the conversation. Keep in mind that if you spend a lot of time
with one customer, other customers may be neglected. You can manage a
customer encounter through questioning and through statements that let
the customer know your objective is to serve customers. You might say,
“I know you said you have a lot of shopping to do, so I won’t keep you
any longer. Thanks for coming in. Please let me know if I can assist in the
future.” Imply that you are ending the interaction to benefit the customer.

5.11 Working With Internal Customers (Co-workers) Concept

Relationships with your internal customers are important. You should meet
your commitments and build a professional reputation. As we discussed in
earlier chapters, you have to deal with internal as well as external customers.
Although your interactions with internal customers may not be difficult, they
can often be more sensitive than your dealings with outsiders. After all, you see
peers and coworkers regularly, and because of your job, office politics, and
protocol, your interactions with them are ongoing. Therefore, extend all the
same courtesies to internal customers that you do to external ones—in some
cases, more so. Some suggestions that might help you enhance your interactions
with internal customers are given in the following sections.
 Stay Connected
Since relationships within the organization are so important, go out of your
way to make contact with internal customers periodically. You can do this
by dropping by their work area to say hello, sending an e-mail, or leaving a
voice mail message. This helps keep the door to communication open so that
if service does break down someday, you will have a better chance of
hearing about it and solving the problem amiably. You might describe your
coworkers as your “normal” internal customers, but do not forget the
importance of your relationships with the cleaning crew (they service your
office and work area), security force (they protect you, your organization,
and your vehicle), and the information technology people (they maintain

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computer equipment). All these groups and many others within the
organization add value and can be a big help to you.
 Meet All Commitments
Too often, service providers forget the importance of internal customers.
Because of familiarity, they sometimes become lax and tend to not give the
attention to internal customers that they would give to external customers.
This can be a big mistake. For example, if you depend on someone else to
obtain or send products or services to external customers, that relationship is
as crucial as the ones you have with external customers. Don’t forget that if
you depend on internal suppliers for materials, products, or information,
these people can negatively affect your ability to serve external customers by
delaying or withholding the items you need. Such actions might be
unintentional or intentional, depending on your relationship. To prevent, or
at least reduce, the possibility of such breakdowns, honor all commitments
you make to internal customers. If you promise to do something, do your
best to deliver, and in the agreed-upon time. If you can’t do something, say
so when your customer asks. If something comes up that prevents you from
fulfilling your commitment, let the internal customer know of the change in
a timely manner. Remember, it is better to underpromise and overdeliver
than vice versa. If you beat a deadline, they will probably be pleasantly
surprised and appreciative.
 Don’t Sit on Your Emotions
Some people hold on to anger, frustration, and other negative emotions
rather than getting their feelings out into the open and dealing with them.
Not only is this potentially damaging to your health, for it might cause
stress-related illnesses, but it can also destroy working relationships.
Whenever something goes wrong or you are troubled by something, go to
the person and talk about the situation. Failure to do so can result in
disgruntled internal customers, damage to the customer-supplier
relationship, and damage to your reputation. Don’t forget that you will
continue to rely on your customer in the future, so you cannot afford a
relationship problem.
 Build a Professional Reputation
Through your words and actions, go out of your way to let your customer
and your boss know that you have a positive, can-do, customer-focused
attitude. Let them know that you will do whatever it takes to create an
environment in which internal and external customers are important.

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Also, regularly demonstrate your commitment to proactive service. This
means gathering information, products, and other tools before coming
into contact with a customer so that you are prepared to deal with a
variety of situations and people. It also means doing the unexpected for
customers and providing service that makes them excited about doing
business with you and your organization.
 Adopt a Good-Neighbor Policy
Take a proactive approach to building internal relationships so that you
can head off negative situations. If your internal customers are in your
department, act in a manner that preserves sound working relationships.
You can accomplish this in part by avoiding the following negative work
habits:
• Avoid gathering of friends and loud conversation in your work space.
This can be especially annoying if the office setup consists of cubicles as
sound travels easily. Respect your coworkers’ right to work in a
professional environment. If you must hold meetings or gatherings, go to
the cafeteria or some other place away from the work area.
• Maintain sound grooming and hygiene habits. Demonstrate
professionalism in your dress and grooming. Avoid excessive amounts of
colognes and perfumes.
• Don’t overdo call forwarding. Sometimes you must be away from your
work space. Company policy may require that you forward your calls. Do
not overdo forwarding your calls. Your coworkers may be
inconvenienced and resentful if you do.
• Avoid unloading personal problems. Everyone has personal problems
now and then. Do not bring personal problems to the workplace and
burden coworkers with them. If you have personal problems and need
assistance, go to your supervisor or team leader or human resources
department and ask for some suggestions. If you get a reputation for often
having personal problems—and bringing them to the workplace—your
career could suffer. • Avoid office politics and gossip. Your purpose in
the workplace is to serve the customer and do your job. If you have time
to spread gossip and network often with others, you should approach your
supervisor or team leader about the job opportunities in which you can
learn new skills. This can increase your effectiveness and marketability in
the workplace.
• Pitch in to help. If you have spare time and your coworkers need
assistance with a project, volunteer to help out. They may do the same at

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some point in the future when you are feeling overwhelmed with a project
or assignment.
• Be truthful. One of the fastest ways for you to suffer a damaged
relationship, or lose the trust and confidence of your coworkers and
customers, is to be caught in a lie. Regard your word as your bond.

5.12 The Problem-Solving Process Concept

To solve a problem, you need to first identify the problem and determine if the
problem is one that should be solved. Once you decide to solve the problem,
follow the six proven steps to problem [Link] customers have a
complaint or a problem to be solved, they want solutions, not excuses. To
ensure that you address customer needs effectively in these situations, you need
to be effective at problem solving. Before you being to solve a customer’s
problem, consider the fact that he or she may not really want you to “solve the
problem.” In some cases, a person simply wants to vent frustration or be heard.
This is where the empathetic listening you have read about will come in handy.
In many cases, your customer will often have a solution in mind when he or she
calls or comes in. Your role may be to simply listen and offer to facilitate the
implementation of the suggested solution. In some situations, you may have to
“plant a seed” by asking an open-ended question that suggests a solution. If the
customer picks up on your “seed” and nourishes it, you end up with an outcome
for which he or she feels ownership.
For example, assume that a customer wants a product that you do not have in
stock. Instead of saying, “I’m sorry, that item is out of stock,” you could ask a
question such as, “How do you think ________ would work as an alternative?”
You have now subtly made a suggestion without saying, “You could use
________ instead. It does the same thing.” If you jointly solve a problem, the
customer feels ownership—that he or she has made the decision. This customer
is likely to be a satisfied customer.
The following sections describe some key actions involved in this process.
Step 1: Identify the Problem
Before you can decide on a course of action, you must first know the nature and
scope of the problem you are facing. Often, a customer may not know how to
explain his or her problem well, especially if he or she speaks English as a
second language or has a communication-related disability. In such cases, it is
up to you to do a little detective work and ask questions or review available

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information. Begin your journey into problem solving by apologizing for any
inconvenience you or your organization has caused. The customer probably
wants someone to be responsible. A simple “I’m sorry you were
inconvenienced. How may I assist you?” coupled with some of the other
techniques covered in this book can go a long way toward mending the
relationship. Take responsibility for the problem, even if you didn’t actually
cause it. Remember that, in the customer’s eyes, you represent the organization.
Therefore, you are “chosen” to be responsible. Don’t point fingers at other
employees, policies, or procedures. It is also important to let the customer know
that you are sincerely regretful that the problem has occurred and will do
whatever possible to quickly and effectively solve itTo learn as much about the
problem as you can, start by speaking directly to the customer, when possible.
Collect any documentation or other background information available. Ask
Questions Ask specific questions so that you can gather the information you
need to help identify and solve a customer’s problem. The only way to get the
information you want is to ask the right questions. You might use a variety of
question types. Here are some examples.
• Open-ended. Open-ended questions are good for defining issues, clarifying,
gathering information, and getting involvement. When asking open-ended
questions, phrase them in a manner that allows the customer to respond as he or
she feels necessary. You are not making a decision or forcing a response, as you
can do with other types of questions; you are providing a vehicle for sharing
information. Help focus the customer’s response by asking specific open-ended
questions. Note the difference between the sample questions that follow.
Nonspecific: “How do you like this new product?” Specific: “What uses can
you see for this new product?” Although the first question may yield a useful
response, you have not asked for a specific, focused piece of information. On
the other hand, the second question will get the same bit of information but will
also lead the customer to think of specific applications. You have thereby
created a need (in the customer’s mind) and she or he may now buy your
product or service.
• Closed-ended questions. Closed-ended questions are sometimes valuable for
getting a quick response, gaining minimal involvement, controlling the
conversation, verifying information, and clarifying or confirming points. For
example: [Link], didn’t you say that your son would be the primary user of this
product? (yes or no) [Link], how many times have you used our services?
(a specific number) Ms. Hyland, do you prefer the blue or yellow one? (a choice
between two items) An important aspect of asking questions is to find out the

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customer’s true concerns and solve his or her problems. For example, a
customer may call and say that he or she wants to return a television set because
it doesn’t work. By asking questions, you may be able to help the person solve
the problem without the added expense of shipping or having a service
technician call on the customer. You may ask for background information about
the television set and then ask some specific questions about the problem.
Questions such as the following might be appropriate: What model is it? What,
exactly, is wrong? Does it have an antenna attached? Is there a remote control?
Have you checked to see that the power cord is firmly attached? Have you tried
using a different electrical outlet? Have you checked to make sure that the
power strip is turned on?

Step 2: Compile and Analyze the Data

To be able to effectively determine a course of action, you need as much
information as possible and a thorough understanding of what you are dealing
with. To get that data requires active listening and a little investigative work.
You may need to collect information from a variety of sources, such as sales
receipts, correspondence, the customer, public records, the manufacturer, and
files. In gathering data, you should also do a quick assessment of how serious
the problem is. You may hear about one instance of a defective product, or you
may hear about a pattern of inefficient service. Once you have collected
information through questioning and from other sources, spend some time
reviewing what you have found. If time permits and you think it necessary or
helpful (e.g., the customer is not present or on the telephone), ask for the
opinions of others (e.g., coworkers, team leader or supervisor, technical
experts). Ultimately, what you are trying to do is determine the choices
available to you that will help satisfy the customer and solve the problems.
Step 3: Identify Alternatives
Let customers know that you are willing to work with them to find an
acceptable solution to the problem. Tell them what you can do, gain their
agreement, and then set about taking action. Since you are new to the situation
when a customer notifies you of a problem or their dissatisfaction, you have an
objective perspective. Use this perspective as a basis on which to offer
suggestions or viewpoints that the customer may not see or has overlooked.
Also, make sure that you consider various possibilities and alternatives when
thinking about potential solutions. Look out for the best interests of your

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customer and your organization. To do this, be willing to listen to the
customer’s suggestions and to think creatively. Perhaps you will come up with
ideas other than the ones that you and your organization typically use. Don’t
sacrifice customer satisfaction for convenience. If necessary, seek approval
from higher authority to use creative solutions (e.g., to make a special purchase
of an alternative item for the customer, or to give a refund even though the time
frame for refunds has expired).
Step 4: Evaluate Alternatives
Once you have collected all the facts, examine your alternatives or options. Be
careful not to let cost be the deciding factor. A little extra time and money spent
to solve a problem could save a customer and prevent recurring problems.
Consider the following factors in this evaluation process: What is the most
efficient way to solve this problem? Which are the most effective options for
solving this problem? Which options are the most cost-effective? Will the
options being considered solve the problem and satisfy the customer?
Step 5: Make a Decision
Based on the factors in step 4, and any others you wish to use in your evaluation
process, make a decision on what your course of action will be. To do this ask
the customer “Which option would you prefer?” This simple question puts the
customer into the decision-making position and makes the customer feel
empowered. The customer chooses. If the request is reasonable and practical,
proceed and solve the problem. If not, negotiate a different alternative.
Step 6: Monitor the Results
Once you make a decision, monitor the impact or results. Do not assume your
customer is satisfied, especially if any negotiation occurred between the two of
you. You can monitor the situation with a follow-up call, asking if he or she
needs anything else when you see him or her, or sending a written follow-up
(e.g., thankyou letter with query concerning satisfaction, service survey, or e-
mail). If you determine that your customer is not satisfied or additional needs
are present, go back to step 1 and start over.
5.13 Chapter Summary
Dealing with various types of people can be frustrating, but it can also be very
satisfying. Many times, you will have to deal with a variety of external and
internal customers, including those who are angry, indecisive, dissatisfied,
demanding, domineering, rude, or talkative. Your goal in all your efforts should

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be to work harmoniously with all customers. Whenever you can address
customer needs in a variety of situations and find acceptable solutions, you, the
customer, and the organization win. To assist customers effectively doesn’t take
magic; all it takes is a positive attitude, preparation, and a sincere desire to help
others. If you use the techniques outlined in this chapter, and others in this
book, you’re on your way to providing stellar customer service and satisfying
customer needs.

5.14 Chapter Review Questions

1. What are the five levels of needs identified in Maslow’s hierarchy of needs,
and how do they affect customer service?
2. What causes customers to become dissatisfied?
3. What tactics can you use to deal with angry customers?
4. What can you do to assist indecisive people in coming to a decision?
5. Why might some customers feel they have to demand things from others?
6. How can you effectively deal with rude or inconsiderate customers?
7. What are some steps to help regain control of a conversation with a talkative
customer without causing offense?
8. What strategies can you use to build strong relationships with coworkers?
9. List the strategies for effective problem solving.

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Chapter Six
Motivation Theory and Customer Service

6.1 Introduction
Motivation is essential to almost any aspect of life. Nature has an intrinsic
motivation; it does what it does in and out of itself, without further reflection.
What difference with human activity! There are few humans on this planet who
don’t question or reflect on their motivation for certain tasks every day. And
yet, it’s such an underdeveloped field of research. There are many theories, but
from their diversity we can gleam their inability to capture the complexity of
human motivation in a simple, natural way. Maybe it’s because the word
‘motivation’ is most often used in reference to work. While activity is an
innately human activity, work is not necessarily. Our modern-day work
arrangement is a large-scale system aimed (amongst many other things) at
creating global productivity and scalability. We participate in it out of free will,
but also because there is little other choice. No work; no pay! This is where
human motivation comes in: how do you motivate people that aren’t really
doing it because it’s their birth right and they feel subconsciously compelled to
it?

6.2 Meaning of Motivation

The dictionary says… to motivate [v.] to provide with a motive or motives;
incite; impel. · S: (n) motivation, motive, need (the psychological feature that
arouses an organism to action toward a desired goal; the reason for the action;
that which gives purpose and direction to behavior) "we did not understand his
motivation"; "he acted with the best of motives" · S: (n) motivation (the
condition of being motivated) "his motivation was at a high level" · S: (n)
motivation, motivating (the act of motivating; providing incentive)

6.3 An Overview of Motivation Theories

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There are different theories about what constitutes and creates motivation. I’ve
selected the most well-known ones and summarised them here. I looked up
several resources for each and created a short description, as well as practical
implications on the workfloor. I can’t claim absolute correctness or
completeness – this is not an academic but an independent publication – but I
dare say I’ve come pretty close. A. Need Theories Need theories revolve around
the fulfillment of an internal state, that makes certain outcomes appear
attractive. These theorie form the basic foundations of motivation theories, and
are the most straightforward. There are three main needs theories: Maslow’s
Pyramid Hierarchy of Needs Maslow’s theory states that people have a
pyramide hierarchy of needs that they will satisfy from bottom to top. There are
deficiency needs, that will stifle any other movement if they’re not satisfied, and
growth needs, that can be progressively satisfied once the basics have been
covered. Alderfer’s ERG Model Alderfer’s model condenses Maslow’s five
human needs into three categories: Existence (material and physiological),
Relatedness (social and external esteem) and Growth (internal esteem and self
actualisation). McClelland’s Achievement Motivation Theory McClelland’s
acquired needs theory states that an individual’s specific needs are acquired
over time according to one’s life experiences. He described three types of
motivational need: achievement motivation (n-ach), authority/power motivation
(n-pow) and affiliation motivation (n-affil). B. Adams’ Equity Theory Equity
theory states that people seek to maintain a balance between their inputs and the
outcomes they receive, also in relation to the outputs of others. Fair treatment
creates motivation. It adds a crucial additional perspective to motivation theory,
of comparison with ‘referent’ others (people we consider to be in a similar
situation). C. Herzberg’s Job Design Model Herzberg’s model is the most
widely replicated and used in business. It splits hygiene factors from motivation
factors. Hygiene factors are related to pain-avoidance and lead to dissatisfaction
when they’re not satisfied. Motivation factors are related to the ability to
achieve and experience psychological growth. The model introduces ‘job
enrichment’ for true motivation, as oppposed to ‘job loading’.

6.4 Vroom’s Expectancy Theory

Vroom’s theory separates effort from performance and outcomes. It works on
perceptions, and assumes that behavior is the result of conscious choices among
alternatives aimed at maximizing pleasuring and avoiding pain. He introduces
the concepts of Expectancy (increased effort will lead to increased results),

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Instrumentality (if you perform well you will receive a valued outcome) and
Valence (value placed on the expected outcome).
6.5Hackman and Oldham’s job characteristics model
The job characteristics model focuses on the task itself. It identifies five core
job characteristics (Skill variety, Task identity, Task significance, Autonomy,
Feedback) that influence three critical psychological states (Meaningfulness,
Responsibility, Knowledge of outcomes). These, in turn, influence motivation
and work outcomes (job satisfaction, absenteeism…). The theory goes on to
suggest one can design the key components of a job for maximum motivation.
6.6 Need Theories of Motivation
According to need theories, motivation is ‘the willingness to exert high levels of
effort toward organizational goals, conditioned by the effort’s ability to satisfy
some individual need’. A need in this context is an internal state that makes
certain outcomes appear attractive. An unsatisfied need creates tension that
stimulates drives within the individual. These drives then generate a search
behavior to find particular goals that, if attained, will satisfy the need and lead
to the reduction of the tension. Needs are physiological or psychological
deficiencies that arouse behavior. These vary over time and place, as the can be
strong or weak and influenced by environmental factors.
1. Maslow – deficiency needs vs. growth needs Maslow’s theory states that
people have a pyramid hierarchy of needs that they will satisfy from bottom to
top. Starting from mere physiological subsistence, they cover belonging to a
social circle to pursuing your talent through self-actualization. Important to this
theory is that Maslow felt that unfulfilled needs lower on the ladder would
inhibit the person from climbing to the next step
The needs are divided into two categories: deficiency needs (physiological and
safety) and growth needs (belonging, self-esteem and self-actualisation). If the
deficiency needs aren’t satisfied, the person will feel the deficit and this will
stifle his or her development. In the workplace

Maslow’s hierarchy of needs applied to work situations implies that managers

have the responsibility, firstly, to make sure their people’s deficiency needs are
met. This means, in broad terms, a safe environment and proper wages.
Secondly, it implies creating a proper climate in which employees can develop
their fullest potential. Failure to do so would theoretically increase employee

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frustration and could result in poorer performance, lower job satisfaction, and
increased withdrawal from the organization. For example, in this theory job
insecurity and the threat of layoffs, will block the person from their higher
growth needs. They might work harder to get security, but without fulfilling
their other needs. If security doesn’t return they will fulfill their needs
elsewhere or burn out.
However, if you manage to implement at least some of these strategies you will
most likely be looked at as more considerate, supportive and interested in your
people’s welfare.
2. Alderfer’s ERG model
Clayton P. Alderfer’s ERG theory from 1969 condenses Maslow’s five
human needs into three categories: Existence, Relatedness and Growth.
1. Existence Needs: includes all material and physiological desires (e.g.,
food, water, air, clothing, safety, physical love and affection). This
corresponds closely to Maslow's first two levels.
2. Relatedness Needs: encompass social and external esteem; relationships
with significant others like family, friends, co-workers and employers. This
also means to be recognized and feel secure as part of a group or family.
Corresponds to Maslow's third and fourth levels.
3. Growth Needs: internal esteem and self actualization; these impel a
person to make creative or productive effects on himself and the
environment (e.g., to progress toward one's ideal self). Maslow's fourth and
fifth levels. This includes desires to be creative andproductive,and to
complete meaningful tasks. Even though the priority of these needs differ
from person to person, Alberger prioritises in terms of the categories’
concreteness. Existence needs are the most concrete, and easiest to verify.
Relatedness needs are less concrete than existence needs, which depend on a
relationship between two or more people. Finally, growth needs are the least
concrete in that their specific objectives depend on the uniqueness of each
person. Relationships between the concepts There are three relationships
among the three needs: Satisfaction-progression: moving up to higher-level
needs based on satisfied needs. This is the main movement of Maslow’s
model. Individuals move up the need hierarchy as a result of satisfying lower
order needs.
In Alderfer’s ERG theory, this isn’t necessarily the case. The progression
upward from relatedness satisfaction to growth desires does not presume the
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satisfaction of a person’s existence needs. Frustration-regression: if a higher
level need remains unfulfilled, a person may regress to lower level needs that
appear easier to satisfy. Frustration-regression suggests that an already
satisfied need can become active when a higher need cannot be satisfied. For
example: if a person is continually frustrated in his/her attempts to satisfy
growth, relatedness needs can resurface as key motivators. Satisfaction-
strengthening: iteratively strengthening a current level of satisfied needs.

Satisfaction-strengthening indicates that an already satisfied need can maintain

satisfaction or strengthen lower level needs iteratively when it fails to gratify
high-level needs. Differences with Maslow’s model ERG theory differs from
Maslow's theory in three ways:
(1) a lower level need does not necessarily have to be gratified for a higher level
to become relevant (i.e., a person may satisfy a need at hand, whether or not a
previous need has been satisfied);
(2) if a relatively more significant need is not gratified, the desire to gratify a
lesser need will be increased (i.e., the frustration in meeting high-order needs
might lead a person to regress to a more concrete need category);
(3) ERG theory does have some form of hierarchy according to concreteness,
but it also allows the order of the needs to differ for different people (e.g., it
accounts for the "starving artist" who may place growth needs above existence
ones). In the workplace On a work level, Alderfer’s model implies thatmanagers
must recognize theiremployees’ multiple simultaneous needs. Focusing
exclusively on one need at a time will not motivate your people. The frustration-
regression principle impacts workplace motivation. For example, if growth
opportunities are not provided to employees, they may regress to relatedness
needs, and socialize more with co-workers. If you can recognize these
conditions early, steps can be taken to satisfy the frustrated needs until the
employee is able to pursue growth again.
6.7 McClelland’s achievement motivation theory
In his in his 1961 book ‘The Achieving Society’, David McClelland expounded
on his acquired-needs theory. He proposed that an individual's specific needs
are acquired over time and are shaped by one's life experiences. A person's
motivation and effectiveness in certain job functions are influenced by these
three needs. * achievement motivation (n-ach) The n-ach person is 'achievement
motivated' and therefore seeks achievement, attainment of realistic but
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challenging goals, and advancement in the job. There is a strong need for
feedback about achievement and progress, and a need for a sense of
accomplishment. People with a high need for achievement seek to excel and
thus tend to avoid both low-risk and highrisk situations. Achievers avoid low-
risk situations because the easily attained success is not a genuine achievement.
In high-risk projects, achievers see the outcome as one of chance rather
thanone's own effort. High n-ach individuals prefer work that has a moderate
probability of success, ideally a 50% chance. They prefer either to work alone
or with other high achievers. * authority/power motivation (n-pow) The n-pow
person is 'authority motivated'. This driver produces a need to be influential,
effective and to make an impact. There is a strong need to lead and for their
ideas to prevail. There is also motivation and need towards increasing personal
status and prestige. A person's need for power (n-pow) can be one of two types -
personal and institutional. Those who need personal power want to direct
others, and this need often is percieved as undesirable. Persons who need
institutional power (also known as social power) want to organize the efforts of
others to further the goals of the organization. Managers with a high need for
institutional power tend to be more effective than those with a high need for
personal power. * affiliation motivation (n-affil) The n-affil person is 'affiliation
motivated', and has a need for friendly relationships and is motivated towards
interaction with other people. They need harmonious relationships with other
people and need to feel accepted by other people. The affiliation driver
produces motivation and need to be liked and held in popular regard. These
people are team players. High n-affil individuals tend to conform to the norms
of their work group. They prefer work that provides significant personal
interaction. They perform well in customer service and client interaction
situations. How to interpret the model McClelland stated that most people
possess and exhibit a combination of these characteristics. Some people exhibit
a strong bias to a particular motivational need, and this motivational or needs
'mix' consequently affects their behaviour and working/managing style.
McClelland's theory also allows for the shaping of a person's needs; training
programs can be used to modify one's need profile. Mcclelland suggested that a
strong n-affil 'affiliation-motivation' undermines a manager's objectivity,
because of their need to be liked, and that this affects a manager's decision-
making capability. A strong n-pow 'authority-motivation' will produce a
determined work ethic and commitment to the organisation, and while n-pow
people are attracted to the leadership role, they may not possess the required
flexibility and people-centred skills.

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McClelland argues that n-ach people with strong 'achievement motivation' make
the best leaders, although there can be a tendency to demand too much of their
staff in the belief that they are all similarly and highly achievement-focused and
results driven, which of course most people are not. In the
workplaceMcClelland’s needs are found to varying degrees in all workers and
managers, and their mix of motivational needs characterises a person's or
manager's style and behaviour. Both in terms of being motivated and in the
management and motivation others. People with different needs are motivated
differently. • High need for achievement - High achievers should be given
challenging projects with reachable goals. They should be provided frequent
feedback. While money is not an important motivator in itself. Rather, it is an
effective form of feedback.
• High need for affiliation - Employees with a high affiliation need perform
best in a cooperative environment.
• High need for power - Management should provide power seekers the
opportunity to manage others. Relation to other theories McClelland's concept
of achievement motivation is also related to Herzberg's motivation-hygiene
theory. People with high achievement motivation tend to be interested in the
motivators (the job itself). Achievement-motivated people want feedback. They
want to know how well they are doing on their job. On the other hand, people
with low achievement motivation are more concerned about the environment.
They want to know how people feel about them rather than how well they are
doing. An overview of needs theories A short comparison of the different needs
within the theories. Some overlap, most don’t. It goes to show that even though
all three theories focus on needs, they’re still all distinctly different.

6.8 Equity Theory

Equity theory helps explain why pay and conditions alone do not determine
motivation. It also explains why giving one person a promotion or pay-rise can
have a demotivating effect on others. When people feel fairly or advantageously
treated they are more likely to be motivated; when they feel unfairly treated
they are highly prone to feelings of disaffection and demotivation. Employees
seek to maintain equity between the inputs that they bring to a job and the
outcomes that they receive from it against the perceived inputs and outputs of
others. The belief is that people value fair treatment which causes them to be

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motivated to keep the fairness maintained within the relationships of their co-
workers and the organization. Words like efforts and rewards, or work and pay,
are an over-simplification - hence the use of the terms inputs and outputs. Inputs
are logically what we give or put into our work. Outputs are everything we take
out in return.
Inputs encompasses the quality and quantity of the employees contributions to
his or her work. Typical inputs include time, effort, loyalty, hard work,
commitment, ability, adaptability, flexibility, tolerance, determination,
enthusiasm, personal sacrifice, trust in superiors, support from co-workers and
colleagues, skill… Outcomes Outputs are defined as the positive and negative
consequences that an individual perceives a participant has incurred as a
consequence of his/her relationship with another. Outputs can be both tangible
and intangible. Typical outcomes are job security, esteem, salary, employee
benefits, expenses, recognition, reputation, responsibility, sense of achievement,
praise, thanks, stimuli… Payment however, is the main concern and therefore
the cause of equity or inequity in most cases. In any position, an employee
wants to feel that their contributions and work performance are being rewarded
with their pay. If an employee feels underpaid then it will result in the employee
feeling hostile towards the organization and perhaps their co-workers, which
may result the employee not performing well at work anymore. Equity is all
about perception Adams' Equity Theory is a far more complex and sophisticated
motivational model than merely assessing effort (inputs) and reward (outputs).
Equity Theory adds a crucial additional perspective of comparison with
'referent' others (people we consider in a similar situation). Equity does not
depend on our input-to-output ratio alone - it depends on people’s comparison
between our own input-output ratio and the ratio of others. People form
perceptions of what constitutes a fair ratio (a balance or trade) of inputs and
outputs by comparing their own situation with other 'referents' (reference points
or examples) in the market place as they see it.
When people feel that their inputs are fairly rewarded by outputs (the fairness
benchmark being subjectively perceived from market norms and other
comparable references) then generally they are happier in their work and more
motivated to continue inputting at the same level. If they feel, however, that
their ratio of inputs to outputs is less beneficial than the ratio enjoyed by
referent others, then they become demotivated in relation to their job and
employer. Subtle variables play an important role for the feeling of equity. Just
the idea of recognition for the job performance and the mere act of thanking the
employee can cause a feeling of satisfaction and therefore help the employee

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feel worthwhile and have more outcomes. Generally the extent of demotivation
is proportional to the perceived disparity with other people or inequity, but for
some people just the smallest indication of negative disparity between their
situation and other people's is enough to cause massive disappointment and a
feeling of considerable injustice, resulting in demotivation, or worse, open
hostility. Some people reduce effort and application and become inwardly
disgruntled, or outwardly difficult, recalcitrant or even disruptive. Other people
seek to improve the outputs by making claims or demands for more reward, or
seeking an alternative job.
Mechanisms Equity Theory identifies four mechanisms for (de)motivation:
1. Individuals seek to maximize their outcomes (where outcomes are defined as
rewards minus costs).
2. Groups can maximize collective rewards by developing accepted systems for
equitably apportioning rewards and costs among members. Systems of equity
will evolve within groups, and members will attempt to induce other members
to accept and adhere to these systems. The only way groups can induce
members to equitably behave is by making it more profitable to behave
equitably than inequitably. Thus, groups will generally reward members who
treat others equitably and generally punish (increase the cost for) members who
treat others inequitably.
3. When individuals find themselves participating in inequitable relationships,
they become distressed. The more inequitable the relationship, the more distress
individuals feel. According to equity theory, both the person who gets “too
much” and the person who gets “too little” feel distressed. The person who gets
too much may feel guilt or shame. The person who gets too little may feel angry
or humiliated.
4. Individuals who perceive that they are in an inequitable relationship attempt
to eliminate their distress by restoring equity. The greater the inequity, the more
distress people feel and the more they try to restore equity. In the workplace
Equity Theory in business introduces the concept of social comparison.
Employees who perceive inequity will seek to reduce it, either by distorting
inputs and/or outcomes in their own minds ("cognitive distortion"), directly
altering inputs and/or outcomes, or leaving the organization.
Thus, the theory has wide-reaching implications for employee morale,
efficiency, productivity, and turnover. It also explains why people can be happy
and motivated by their situation one day, and yet with no change to their terms

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and working conditions can be made very unhappy and demotivated. They
might learn that a colleague (or worse: an entire group) is enjoying a better
reward-to-effort ratio. It shows why and how full-time employees will compare
their situations and input-to-output ratios with part-time colleagues. These
probably earn less, however it is the ratio of input-to-output - reward-to-effort -
which counts. If the part-timer is perceived to enjoy a more advantageous ratio,
it will have a negative effect on the full-timer's sense of Equity, and with it,
their personal motivation.
6.9 How to motivate people using Equity Theory
Equity Theory reminds us that people see themselves and crucially the way they
are treated in terms of their surrounding environment, team, system, etc - not in
isolation - and so they must be managed and treated accordinglyEquity theory
has several implications for business managers:
• People measure the totals of their inputs and outcomes. This means a working
mother may accept lower monetary compensation in return for more flexible
working hours.
• Different employees ascribe personal values to inputs and outcomes. That
means that two employees of equal experience and qualification performing the
same work for the same pay, may still have quite different perceptions of the
fairness of the deal.
• Employees are able to adjust according to purchasing power and local market
conditions. A teacher from Alberta may accept lower compensation than his
colleague in Toronto if his cost of living is different.
• Although it may be acceptable for more senior staff to receive higher
compensation, there are limits to the balance of the scales of equity and
employees can find excessive executive pay demotivating.
• Staff perceptions of inputs and outcomes of themselves and others may be
incorrect, and perceptions need to be managed effectively. For example, an
employee who believes he is over-compensated may increase his effort.
However he may also adjust the values that he ascribes to his own personal
inputs. It may be that he or she internalizes a sense of superiority and actually
decrease his efforts.
• Relation to other theories
The comparative aspect of Equity Theory provides a far more fluid and dynamic
appreciation of motivation than typically arises in motivational theories and
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models based on individual circumstance alone. There are similarities with
Maslow and Herzberg in that the theory acknowledges that subtle and variable
factors affect each individual's assessment and perception of their relationship
with their work, and thereby their employer. However, awareness and
cognizance of the wider situation - and crucially comparison - feature more
strongly in Equity Theory than in other earlier motivational models.
6.10 Herzberg’s Job design Model
Herzberg’s theory is one of the most empirical and compelling theories about
motivation. It’s the only theory that splits out demotivating factors from
motivating factors; it introduces the concept ofmovement vs. motivation. And it
“has produced more replications than any other research in the history of
industrial and organizational psychology. " Kicks In The Ass (KITAs) Herzberg
researched hundreds of employees and companies and determined that most
companies use what he unceremoniously refers to as KITA. These are widely
used under the erroneous belief that they will motivate their employees. He
identified a score of KITAs, in varying degrees of subtlety and impact. First off,
you have negative physical KITA. The literal kick up the buttocks and
whiplashes may have helped build the pyramid, they’re just not what today’s
workers are looking for in a job. Secondly, there’s negative psychological
KITA. This entails all kinds of emotional games and manipulations to make
someone perform more. This happens a lot, as it can give quite an ego boost to
the person administering it. It doesn’t help to get anyone excited to get to work
in the mornings though. And then there is positive KITA, meaning any kind of
quid pro quo that an organisation may use. A reward, an incentive, more status,
a promotion… Many companies believe that these positive KITAs truly do
motivate people. As Herzberg shows, they don’t really. They may create a pull,
a kind of “dog biscuit to wave in front of employees to get them to jump”
(Herzberg). Positive KITA, Herzberg explains, is seduction. Where negative
KITA is truly a practice to be abhorred, positive KITA makes employees party
to their own motivational downfall. “It’s the American Way. The organisation
doesn’t have to kick you, you kick yourself”.
Herzberg goes on to show the ways positive KITA is administered. What
Herzberg sees as true motivation is an engine inside a person that makes them
keep going out of their own accord, without needing a constant pull from the
company. What’s fascinating about this is that even things like human relations
training and job participation don’t intrinsically motivate people. They may
charge a person’s battery, but it will run flat again at some point of no real

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motivation is instilled. Hygiene vs. Motivators ‘How do you install a generator
in an employee?’, Herzberg wonders. He first suggests that “the factors
involved in producing job satisfaction (and motivation) are separate and distinct
from the factors that lead to job dissatisfaction.” Semantically, this may seem
strange but as Herzberg states, these two feelings are not opposites of each
other. Herzberg explains this by turning to the different sets of needs human
beings have in a way that is very reminiscent of Maslow’s division of needs into
two categories (the deficiency needs, and growth needs).
The first set stems from our animal nature – “the built-in drive to avoid pain
from the environment, plus all the learned drives that become conditioned to the
basic biological needs. For example, hunger makes it necessary to earn money,
and then money becomes a specific drive”. The other set of needs relates “to
that unique human characteristic, the ability to achieve and, through
achievement, to experience psychological growth”. The stimuli for the growth
needs are tasks that induce growth, in the industrial setting, they are the job
content. Motivation factors are achievement, recognition, responsibility,
advancement and the work itself. According to Herzberg, the factors leading to
job satisfaction are separate and distinct from those that lead to job
dissatisfaction. Therefore, manager who seek to eliminate factors that create job
dissatisfaction can bring about peace, but not necessarily motivation. Herzberg
suggests that work be enriched (or ‘vertically loaded’) for true motivation to
spark up. This is different from horizontal job loading, which reduces the
personal contribution rather than giving opportunities for growth. Some
examples are: - Challenging the employee by increasing the amount of
production expected. - Adding another meaningless task to the existing one -
Rotating the assignments of a number of jobs that need to be enriched -
Removing the most difficult parts of the assignment
6.11 Motivating people with Herzberg’s model
Imagine that after reading about all the ways people AREN’T motivated, you’d
like to hear some good news. Well, here you go. Herzberg offers seven
principles for vertically enriching jobs:
Principle Motivators Involved
Removing some controls while Responsibility and personal
retaining accountability achievement
Increasing the accountability of Responsibility and recognition
individuals for own work
Giving a person a complete natural Responsibility, achievement and

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unit of work (module, division, recognition
area…)
Granting additional authority to Responsibility, achievement and
employees in their activity; job recognition
freedom
Making periodic reports directly Internal recognition
available to the workers themselves
rather than to supervisors
Introducing new and more difficult Growth and Learning
tasks not previously handled
Assigning individual specific or Responsibility, growth and
specialized tasks, enabling them to advancement
become experts

6.12 Vroom’s Expectancy Theory

Vroom’s expectancy theory emphasizes the mental processes regarding choice,
or choosing. It looks at self-interest in the alignment of rewards with people’s
wants and the connections among expected behaviors, rewards and
organizational goals.
For organizations, it helps them to relate rewards directly to performance and to
ensure that the rewards provided are those rewards deserved and wanted by the
recipients. Vroom's theory assumes that behavior results from conscious choices
among alternatives whose purpose it is to maximize pleasure and to minimize
pain. Vroom realized that an employee's performance is based on individual
factors such as personality, skills, knowledge, experience and abilities. He
stated that effort, performance and motivation are linked in a person’s
motivation. He uses the variables Expectancy, Instrumentality and Valence to
account for this. Expectancy is the belief that increased effort will lead to
increased performance i.e. if I work harder then this will be better. This is
affected by such things as: 1. Having the right resources available (e.g. raw
materials, time) 2. Having the right skills to do the job 3. Having the necessary
support to get the job done (e.g. supervisor support, or correct information on
the job) Instrumentality is the belief that if you perform well that a valued
outcome will be received. The degree to which a first level outcome will lead to
the second level outcome. i.e. if I do a good job, there is something in it for me.
This is affected by such things as: 1. Clear understanding of the relationship
between performance and outcomes – e.g. the rules of the reward ‘game’ 2.
Trust in the people who will take the decisions on who gets what outcome 3.

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Transparency of the process that decides who gets what outcome. Valence is the
importance that the individual places upon the expected outcome.
For the valence to be positive, the person must prefer attaining the outcome to
not attaining it. For example, if someone is mainly motivated by money, he or
she might not value offers of additional time off. Relationship between the
elements The three elements are important behind choosing one element over
another because they are clearly defined: effort-performance expectancy (E>P
expectancy) and performance-outcome expectancy (P>O expectancy). E>P
expectancy: our assessment of the probability that our efforts will lead to the
required performance level. P>O expectancy: our assessment of the probability
that our successful performance will lead to certain outcomes. Crucially,
Expectancy theory works on perceptions – so even if an employer thinks they
have provided everything appropriate for motivation, and even if this works
with most people in that organisation, it doesn’t mean that someone won’t
perceive that it doesn’t work for them. In the workplace
At first glance this theory would seem most applicable to a traditional-attitude
work situation where how motivated the employee is depends on whether they
want the reward on offer for doing a good job and whether they believe more
effort will lead to that reward. However, it could equally apply to any situation
where someone does something because they expect a certain outcome. The
expectancy model is not about self-interest in rewards, but about the
associations people make towards expected outcomes and the contribution they
feel they can make towards those outcomes. Expectancy theory predicts that
employees in an organization will be motivated when they believe that:
* putting in more effort will yield better job performance
* better job performance will lead to organizational rewards, such as an
increase in salary or benefits
* these predicted organizational rewards are valued by the employee in
question.
In order to enhance the performance-outcome tie, managers should use systems
that tie rewards very closely to performance. Managers also need to ensure that
the rewards provided are deserved and wanted by the recipients. In order to
improve the effort-performance tie, managers should engage in training to
improve their capabilities and improve their belief that added effort will in fact
lead to better performance.

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6.13 Comparison to other Models
Whereas Maslow and Herzberg look at the relationship between internal needs
and the resulting effort expended to fulfil them, Vroom separates effort (which
arises from motivation), performance, and outcomes. Vroom’s model partly
resembles the Equity theory of motivation: people will also compare outcomes
for themselves with others. Equity theory suggests that people will alter the
level of effort they put in to make it fair compared to others according to their
perceptions. So if we got the same raise this year, but I think you put in a lot
less effort, this theory suggests that I would scale back the effort I put in.
Other theories don’t allow for the same degree of individuality between people.
This model takes into account individual perceptions and thus personal
histories, allowing a richness of response not obvious in Maslow or McClelland,
who assume that people are essentially all the same. Expectancy theory could
also be overlaid over another theory (e.g. Maslow). Maslow could be used to
describe which outcomes people are motivated by and Vroom to describe
whether they will act based upon their experience and expectations.

6.14 Hackman&Oldham’s Job Characteristics Model

Hackman and Oldham’s theory is based on the idea that the task itself is key to
employee motivation. Specifically, a boring and monotonous job stifles
motivation to perform well, whereas a challenging job enhances motivation.
Variety, autonomy and decision authority are three ways of adding challenge to
a job. Job enrichment and job rotation are the two ways of adding variety and
challenge. It states that there are five core job characteristics (skill variety, task
identity, task significance, autonomy, and feedback) which impact three critical
psychological states (experienced meaningfulness, experienced responsibility
for outcomes, and knowledge of the actual results), in turn influencing work
outcomes (job satisfaction, absenteeism, work motivation, etc.). The five core
job characteristics can be combined to form a motivating potential score (MPS)
for a job, which can be used as an index of how likely a job is to affect an
employee's attitudes and behaviors.
Psychological states :
1. Meaningfulness of work: that labour has meaning to you, something that you
can relate to, and does not occur just as a set of movements to be repeated. This

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is fundamental to intrinsic motivation, i.e. that work is motivating in an of itself
(as opposed to motivating only as a means to an end)
2. Responsibility: that you have been given the opportunity to be a success or
failure at your job because sufficient freedom of action has given you. This
would include the ability to make changes and incorporate the learning you gain
whilst doing the job.
3. Knowledge of outcomes: This is important for two reasons. Firstly to
provide the person knowledge on how successful their work has been, which in
turn enables them to learn from mistakes. The second is to connect them
emotionally to the customer of their outputs, thus giving further purpose to the
work
Characteristics of the job
1. Meaningfulness: The work must be experienced as meaningful (his/her
contribution significantly affects the overalll effectiveness of the organization).
This is derived from:
o Skill variety: using an appropriate variety of your skills and talents: too many
might be overwhelming, too few, boring
o Task Identity: being able to identify with the work at hand as more whole and
complete, and hence enabling more pride to be taken in the outcome of that
work (e.g. if you just add one nut to one bolt in the same spot every time a
washing machine goes past it is much less motivating than being the person
responsible for the drum attachment and associated work area (even as part of a
group)
o Task Significance: being able to identify the task as contributing to something
wider, to society or a group over and beyond the self. For example, the theory
suggests thatI will be more motivated if I am contributing to the whole firm’s
bonus this year, looking after someone or making something that will benefit
someone else. Conversely I will be less motivated if I am only making a
faceless owner wealthier, or am making some pointless item (e.g. corporate
give-away gifts)
2. Responsibility is derived from autonomy, as in the job provides substantial
freedom, independence and discretion to the individual in scheduling the work
and in determining the procedures to be used in carrying it out)
3. Knowledge of outcomes. This comes from feedback. It implies an employee
awareness of how effective he/she is converting his/her effort into performance.
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This can be anything from production figures through to customer satisfaction
scores. The point is that the feedback offers information that once you know,
you can use to do things differently if you wish. Feedback can come from other
people or the job itself.
6.14 Key components of the design of a job
1. Varying work to enable skill variety
2. Assigning work to groups to increase the wholeness of the product produced
and give a group to enhance significance
3. Delegate tasks to their lowest possible level to create autonomy and hence
responsibility
4. Connect people to the outcomes of their work and the customers that receive
them so as to provide feedback for learning

6.15 Chapter Summary

Factors that influence your employee’s motivation and how to address them: -
Needs of the employee – Employees have multiple needs based on their
individual, family and cultural values. In addition, these needs depend on the
current and desired economic, political and social status; career aspiration; the
need to balance career, family, education, community, religion and other
factors; and a general feeling of one’s satisfaction with the current and desired
state of being. - Work environment – Employees want to work in an
environment that is productive, respectful, provides a feeling of inclusiveness,
and offers friendly [Link] – Given that one feels competent to
perform in a more challenging capacity and has previously demonstrated such
competencies, an employee may feel a need to seek additional responsibilities
and be rewarded in a fair and equitable manner. - Supervision – Managers and
other leaders more frequently than others feel a need to teach, coach and
develop others. In addition, these individuals would seek to influence the
organization’s goals, objectives and the strategies designed to achieve the
mission of the organization. - Fairness and Equity – Employees want to be
treated and rewarded in a fair and equitable manner regardless of age, gender,
ethnicity, disability, sexual orientation, geographic location, or other similarly
defined categories.
With increased effort and higher performances employees also expect to be
rewarded more significantly than counterparts who provide output at or below
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the norm. The employee’s effort and performance at a particular level is
influenced by his/her individual goals and objectives and which would vary by
each individual. An outcome or reward that is perceived to be highly significant
and important can result in a higher level of effort and performance by the
individual employee. - Effort – Even though employees may exert higher levels
of effort into a position based on a perceived significant reward, this could be a
short-term success if the task itself does not challenge or provides satisfaction to
the employee. - Employees’ Development – Employees prefer to function in
environments that provide a challenge, offers new learning opportunities,
significantly contributes to the organization’s success, offers opportunities for
advancement and personal development based on success and demonstrated
interest in a particular area. - Feedback – Individuals prefer to have timely and
open feedback from their supervisors. This feedback should be an ongoing
process during the year and not limited to formal performance reviews once or
twice per year. In addition, the feedback should be from both the employee and
the supervisor.

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Chapter 7
Leadership in Customer Service

7.1 Introduction
Organizations that achieve high performance through customer service have
four critical elements in place:
 They are citizen-centric; that is, they organize their services and
information around their citizens’ needs and circumstances.
 They use a variety of channels to provide information and services to
people and strive for seamless coordination between these channels.
 They work together at the local, regional and national levels to provide
integrated services.
 They actively reach out to their customers; working to ensure that people
are well informed about the services they offer so that customers can use
their services easily, and understand what is expected of them in return.

When customers (or worse, potential customers) feel they received substandard
customer service, they automatically blame the person across the counter or on
the other end of the phone. However, the culpability ultimately rests on the
leaders of the organization. What happens at the customer ‘touch point’ is the
responsibility of upper management. If they want to keep customers they need
to lead out in the efforts to elevate customer service.
Following are five leadership practices for improving customer service:

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 Decide to create the culture: The leaders of an organization must decide
that customer service will be a top priority. They need to establish this
culture at all levels. The decision will come from the top of the
organization and permeate through all levels. It must be done on purpose.
 Hire the right people: The leaders will hire people who know how to
work with customers. They will look for people with experience at
helping customers understand the products and get the most value from
their services. Leaders will look for people with a proven track record of
doing the right thing for customer (which occasionally might mean
referring them to another company’s product). Leaders looking to hire the
right people will do thorough background checks and ask a lot of
questions.
 Coach them: As you establish a culture of customer service and hire the
right people, train them to effectively work with customers and teach
them how to handle difficult situations. Identify a few of the top
performers and put them to work coaching others in the company. This
infuses the service culture more deeply and promotes a more unified
approach throughout the company. If you do not yet have people in-house
who are capable, hire a coach to train your teams, and work with the
coach to identify people within the organization who can extend the right
principles throughout.
 Inspire them: Motivate the people in your organization — at all levels
— to want to serve others. Establishing the right culture is key. Financial
incentives and career advancement only go so far. When the leaders of
the organization place customer service as one of their top priorities, they
have the prerogative to expect everyone to do the same. Let your actions
and behaviors inspire others. As Ralph Nader said: “The function of
leadership is to produce more leaders, not more followers.”
 Empower them: Finally, grant people — at all levels of the organization
— the authority to make decisions. The scope and magnitude of decisions
will vary by title and responsibility. However, every person at any level
should be empowered to make decisions on behalf of the organization.
Start by asking leaders at all levels to make a list of five things their
people can do without having to escalate to their supervisor. Place
appropriate guidelines around the actions that can be taken, and trust your
people to make the right decisions. Provide a “back door” in case they get
into a tight spot. The “back door” should instill confidence that the

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organization will back people at any level in their decisions. When people
know they work for a customer-focused organization they will give much
more to their individual efforts.
We live in the information age and quality customer service is becoming more
important as time moves forward. Each of these steps is critical for true
customer service. It must come from the top and permeate the entire
7.2 The Product Management Perspective:
Customer service is at the heart of product management. Whether gathering
customer inputs, writing problem statements or creating requirements the next
product or release, the customer is (or definitely should be) the focus of what
product managers do. While they may not hire people into the company, they
have an influence on the people who get hired. Furthermore, product managers
are in a key position to affect the culture of the company. The interactions with
both internal and external people provide excellent opportunities for product
managers to spread the culture of customer service.
7.3 Customer Focussed Leadership
Customer Focus is an aligned organization-wide approach to customer
satisfaction and service, leading to customer loyalty and advocacy. The result is
sustainable profitability.
In a Customer Focused organization, Leadership, Processes and People are
customer-aligned. This requires that:
 Every action is shaped by a relentless commitment to meeting and
exceeding customer expectations regarding product and service quality.
 Customer touch points and supporting internal processes are constantly
evaluated and improved to meet or exceed those expectations.
 Every employee understands what he/she must do in order to maintain
and add value to every relationship with both the paying customer and
those within the organization that rely on them for the work they do.
While Customer Focus and service excellence is everyone’s responsibility, this
is particularly true for anyone who manages and supervises others. That’s why
we believe that…

7.4 Customer Focus is a Leadership issue.

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To become a customer-focused leader, it is helpful to look at the best practices
of other organizations when it comes to management and leadership practices
and tailor these to your specific situation.
Why is this important?
Truly customer-focused organizations are run and managed on a day-to-day
basis by Customer-Focused Leaders. The buck stops with you.
 Customer-contact and support employees are rarely the biggest obstacle
to service improvement.
 It’s up to management to create an environment in which employees can
deliver excellent service.
The reality is that you can talk about how important service is from the highest
levels of your company, you can begin to change processes and procedures
company-wide which reinforce customer-focus, and your staff can work
diligently at trying to provide service excellence. But, at the end of the day, the
only way to ensure sustainable service excellence is for those in management
positions throughout your company to do things which create an environment
where service flourishes. You will make it happen.
Your Key Role as a Leader is to:
 build and maintain the conditions that make service excellence possible
and worthwhile
 make it real operationally
 make it stick culturally
….in other words, to be a Customer-Focused Leader.
Organizations that deliver top quality service have a number of things in
common. These best practices have been summarized into ten key customer-
focused leadership principles.
These are:
I. Commit to Service Excellence
II. Lead with a Customer Focus
III. Listen to the Voice of the Customer
IV. Enhance and Align the System

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V. Build and Strengthen Service Partnerships
VI. Define Service Boundaries and Provide Autonomy
VII. Be Pro-Active in Service Recovery
VIII. Measure What’s Important
IX. Hold Everyone Accountable
X. Recognize and Reward
Let’s take a look at each of these in more detail.

1. Commit to Service Excellence

Most managers and staff typically say that service is important. The question is,
do they act consistently in a way which demonstrates that service is important?
A true commitment to service is based on the belief that service excellence is a
competitive advantage. The term commitment in this principle means action. It
is what you do as leaders, not what you say that counts. The best evidence of
your commitment is found in what customers and your internal service partners
say about you and your team. It is also evident if your commitment extends to
holding everyone accountable for excellence in the customer experience rather
than accountability for following procedures. That is not to suggest that
procedures and rules are not important but customer-focused leaders are
continually looking for ways to modify how business is done in order to make it
easier for customers to do business with your Organization.
It is a matter of choice. Customer-Focused leaders choose to commit because
they know it is a winning business strategy.

2. Lead with a Customer Focus

Like most organizations, you probably have a Responsive Up Mind-Set where
upper management is responsible for setting and communicating the
organization’s vision, direction and goals. In this structure the frontline and
support staff are responsive to the needs of middle management who are
responsive to the needs of upper management. To visualize this, think of your
company structure as a pyramid with senior management at the top, customer
contact staff at the base and your customers below the base of the pyramid

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he Service Mind-Set inverts this structure so that upper management views itself
as serving the needs of middle management who service the needs of the
frontline and support staff who in turn service the needs of the customer. This is
the mind-set that supports leadership with a customer focus. This means seeing
yourself as a service organization for your employees.
Recognize that excellent service is impossible if you over-control. Remember
that frustrated employees do not deliver good service.
View your staff as your partners. Do things which put them in a position to
succeed. As a boss, people will respond to you because they have to. As a
customer-focused leader, people respond to you because they want to.

3. Listen to the Voice of the Customer

Listening to customers and continually realigning systems and actions to what
customers want and need is critical. While periodic customer surveys are
important, listening to the customer should be a routine part of day-to-day
business practices especially at the point of contact with customers. Enable
every customer-contact person to truly listen to what customers say and don’t
say. Recognize that customers’ perceptions are their reality. Create processes to
catalogue your customers’ reactions and act on this intelligence by aligning
your operational practices wherever possible to positively impact on your
customers’ perceptions.
Customers also make dramatic conclusions about product quality and service
based on minor details, so pay attention to the little things.

4. Enhance and Align the System

An organization’s long-term success depends upon fast, continuous
enhancement to all processes, policies and systems which impact on the
customer. Many processes are designed to meet regulatory, compliance and
fiduciary standards. Other processes have evolved to expedite workflow. You
need to be continually examining all processes, policies and systems which
impact on the customer and looking for ways to make them less burdensome
from the customer’s perspective. Management’s role in the development and
implementation of improvement plans must be strong, and highly visible.
Sustained quality improvement efforts require the highest level of commitment
from managers and continual attention and action.
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Employees at all levels of the organization must be actively involved in the
implementation of improvement plans. Managers play a critical role in
identifying and removing barriers to the delivery of service excellence. Minor
improvements can be perceived as major improvements by the customer.
Encourage your staff to constantly look for better ways of doing business in a
way that your customers value and enable your staff to make these changes or
communicate the changes required to those who are empowered to do so.

5. Build and Strengthen Service Partnerships

If you want to get it right for your customers, you need to get it right internally
FIRST.
Mutual cooperation among employees from different functions and departments
is essential if your goal is to deliver superior value your customers. When it
comes to customer service there is no place for an “It’s not my job” attitude.
Customer service must be viewed as everyone’s job… everyone’s most
important job. The simple reality is… without the customer there is no job!
The only way to succeed is for everyone to believe that his or her job is not a
series of tasks and duties, but rather an integral part of creating value for
customers.
Everyone should know the negative impact they have on customers when they
fail to provide help or assist co-workers.
Building and maintaining highly effective internal partnerships takes constant
attention and focus. It is your role to see that this happens.

6. Define Service Boundaries and Provide Autonomy

Each employee needs to understand your organization’s service values and be
able to connect these values to everyday actions. A leader must define service
performance boundaries that will allow employees to handle the routine
deviations from normal customer transactions or interactions. These boundaries
must be wide enough to allow employees to handle all routine transactions and
interactions, as well as the predictable and routine exceptions they face, and
narrow enough to protect the financial integrity of the business operation. Each
employee must have clearly defined goals, boundaries, standards and guidelines

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which enable him or her to deliver quality service. It must be clear how
achieving performance goals will contribute to service quality.
Setting effective service goals requires that every employee thoroughly
understands the basic promise your company makes to your customers and the
Moments of Truth for which he or she is responsible and can identify how to
impress the customer. The customer-focused leader creates service boundaries
and standards that allows people to succeed. Clearly define measurable and
achievable goals and boundaries based on employee capabilities and guidelines
to enable them to deliver quality service.
Every employee needs to understand why what he or she does is important in
the context of service quality. Ensure that every employee has the requisite
knowledge and skill relative to their specific job function combined with a clear
understanding of their boundaries and standards. When employees demonstrate
this understanding and these capabilities, give them the autonomy to take
action; set them up for success, not failure.
Don’t micro-manage. When people show they can do their job, then let them do
the job. Too many rules make it difficult, if not impossible, for service providers
to effectively perform their jobs. Rules and procedures designed to protect
against a small percentage of individuals convey a message of mistrust to the
majority of honest customers. Enable your employees to use their judgment.

7. Be Pro-Active in Service Recovery

Recovery is a term which describes your actions in response to a customer’s
complaint or problem. While most service providers have a goal of “zero
defects,” the reality is that people make mistakes. It is important to remember
that the vast majority of customers don’t complain about the quality of the
service they receive, they just leave. Problems will happen and should be
viewed as opportunities to impress the customer.
In the world of service recovery, the faster the problem is resolved the more
likely the customer will be satisfied. Work with your staff to ensure that the
solutions provided to customers are designed to at the very least satisfy, but
whenever possible impress.
Since the most frequent complaints and problems are predictable, you can work
with your staff to plan recovery strategies for handling these situations and
empower your staff to take action.

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Being pro-active also means seeking out disgruntled customers before they have
a chance to complain, particularly when you know that as a result of a change in
a process or procedure, complaints are likely to result. It’s about building solid
relationships with each customer based on trust, honesty and a sincere desire to
earn their loyalty.

8. Measure What’s Important

Some say “You get what you measure.” … The reality is… “You get what you
pay attention to.”
A major responsibility of a leader is to create effective and accurate measures
from the customer’s perspective. Good measurement allows employees to
understand how to be successful within the organization. You can do this by
translating these measures into actions and service standards that will allow
employees to understand what good service looks like and how to succeed.
Measurement is about paying attention to the service performance you want,
and focusing on outcomes rather than activities. Set service performance goals
and standards that are realistic while at the same time strive to go beyond the
basics in an effort to exceed customers’ expectations. Ensure that every
employee understands and agrees to what is being measured, why it is important
and how these measures reflect their performance boundaries. The scorecard
you use to assess success should be developed from the customer’s point of
view.

9. Hold Everyone Accountable

You have an obligation to your customers, to employees, and to the company to
be unyielding in your demands and expectations for service excellence.
Employees will pay more attention if they know they will be provided with
solid, fair and constructive positive feedback on their performance. Employees
give credibility to service quality if they are held accountable to the outcomes of
their performance.
Measurement must be followed by action. Action means giving timely feedback
on both good service performance and poor service performance, equally.
Provide feedback as close to the service performance occurrence as possible. A
lack of action communicates that service is not important, individual

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performance does not make a difference, there are no clear-cut performance
expectations, and that the organization’s leadership is not credible.

10. Recognize and Reward

Successful service leaders ensure attention is paid to those who serve customers
well and to those who assist in that effort. They show their appreciation to those
who make sure the organization’s customers are served properly. Consistent
recognition of achievement is an integral part of building and maintaining a
customer-focused culture. A positive and effective work environment is
dependantupon positive feedback, so “Catch people doing things right.”
Recognize the positive changes in service performance and provide rewards
when you see a sustained improvement in service performance outcomes.
Ensure employees know what they need to do to earn a reward. Provide rewards
that are valued from the employees’ perspective and ensure that you reward
those who deserve it.
7.5 Formal and Informal Leaders

Leadership rests on the ability to articulate a vision and persuade others to

pursue that vision. As your business grows, you need to identify and encourage
leaders in various departments who can help you lead employees in the
direction of fulfilling your vision. You and these leaders can lead formally or
informally. Both styles can lead to the same result, but the way you get there
can be quite different.
Authority of Formal Leadership
When you assign a leadership role to an individual, that person has decision-
making authority. You expect employees to respect the position as much as the
person who holds it. Formal leaders have the ability to help or hinder their
subordinates’ career progress through performance reviews, recommendations
to management and disciplinary action. Overall, formal leadership has a top-
down feel. That is, the leader is at the top of an implied or explicit hierarchy.
Authority of Informal Leadership
An informal leadership style relies on camaraderie and shared self-interest. The
informal leader motivates employees by pointing out the fate all employees will
share if they work to reach a goal. This type of leader also tends to listen to all
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points of view before making decisions and gains respect from followers
through a demonstration of reasoning ability and positive results.
Communication
Communication from formal leaders tends to take the form of directives the
leader expects employees to follow. Under this style of leadership, employees
are seldom included in the process that leads up to the decision. After the
decision is made and delivered, employees may have an opportunity to ask
questions and offer opinions, but their input won’t change the decision.
Informal leadership, however, involves employees in the decision-making
process. Employees may offer ideas and suggestions for solving the problem,
though the leader may make the ultimate decision. The sense under informal
leadership is that employees can affect decision-making.
Relationships
Formal leaders tend to have boss/employee relationships. The hierarchy that
exists in formal settings implies that in any disagreement with the leader, the
leader’s view will prevail. Employees operate under formal leadership with the
assumption that the leader is concerned about the company and may view
employee desires as counter to what would benefit the operation. Informal
leaders welcome disagreement and though such a leader may have authority to
ignore opposition, this seldom happens. Informal leaders usually persuade the
opposition to see the bigger picture and at least understand the reason the leader
sticks with a point of view.
Advice vs. Approval
Under formal leadership, employees tend to seek approval from the leader. With
informal leaders, employees often seek advice. The formal leader tends to judge
employees and this makes communication somewhat intimidating. The informal
leader is more likely to mentor employees and therefore may give guidance
instead of reprimands.
7.6 Characteristics of Excellent Leaders in Customer Service
Excellent customer service begins with customer service leaders who are
committed to excellence in the service department. However, it can be difficult
for business owners and managers to evaluate prospective leaders to determine
whether they have the qualities necessary to effectively lead. This list of traits to
look for in customer service leaders will aid in that process, by providing a
checklist of characteristics that will increase your odds of service success.

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Focuses on the Customer

A good customer service leader demonstrates customer focus in all aspects of

his job, whether dealing with other departments, selling a product or handling a
complaint. Every procedure and policy is examined from a customer’s
perspective to determine whether it will place any obstacles in the customer’s
path of completing transactions.
Drafts Clear Goals

High quality service leaders are able to draft and communicate clear
expectations and goals to the staff. Through training materials, role play
activities and other teaching tools, the service leader demonstrates the goals to
the staff in order to help employees meet those goals well. Standards are
maintained through careful observation by the leader and addressing problems
and inconsistencies that arise. This quality produces a consistent service
department with clear guidelines on how to handle every type of customer
transaction, question or issue.

7.7 Empowers Customer Service Employees

The best customer service leaders want to see their employees succeed above all
else. They provide the training and flexibility to care for customers in all
situations. They do not control the department, requiring staff to come to them
for the majority of problems that arise. Instead, they teach employees how to
handle those problems on their own, and reward them for a job well done.
Regular training is offered so that customer service employees can continue to
hone their skills, as well as their abilities to independently manage a wide range
of customer situations.
Consistently Raises Service Bar
Top customer service leaders are never satisfied with the status quo. They are
constantly encouraging themselves and their staff to find new ways to exceed
customer expectations. Once one level of service is mastered by the department,
the customer service leader launches new processes that will take the service
quality to the next logical level. This leader also provides a team approach to

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the improvement process that involves the staff in determining how to enhance
service and the implementation of the new plan.

Provides Ongoing Motivation

With a constant desire to improve the quality of service in the department,
service leaders are always on the lookout for new, effective ways to motivate
employees to achieve those new standards as well. Top customer service leaders
know how to recognize the highest performance in the department to inspire
other employees to the same level. They take the time to work with employees
that are struggling to help them become the best service reps they can be.
Top customer service leaders can be one of your most effective tools in creating
a customer-centric business environment. By choosing these professionals
carefully, with these guidelines in mind, you can effectively up your service bar
with the right individuals in your leadership positions

7.8 Creating a Customer Service Culture

1. Management must make the measurement of service quality and feedback
from the customer a basic part of everyone's work experience. This
information must be available and understood by everyone, no matter
what their level. The entire organization must become obsessed with what
the customer wants.

A printing firm has signs all over the shop saying, "Is it good enough?
Ask the customer." This statement serves as a constant reminder to
everyone that customers are the ultimate judge of whether the service is
what it should be, and that all employees must be constantly surveying
customers for what and how they want it. The firm regularly sends out
questionnaires about the quality of their service and then posts these
results for all to see.

When you survey your customers on the quality of service, make sure
that everyone, from the top down, knows of the results and receives
recognition for the things that are going well. Behavioral research has
shown that you get more of the behavior you reward. So don't make the
mistake of mentioning only the area of poor performance; also mention

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and reward those who are doing well, and involve all employees in
brainstorming ways to improve the things that are unsatisfactory.
2. Be very clear about specifying the behavior that employees are expected
to deliver, both with external customers and their coworkers.
3. Explain why giving excellent customer service is important -- not only
for the company, but for the world. What does your company do that
makes life easier for everyone? What does your product or service add?
Be sure to include this in the reasons for achieving customer service
excellence.

A good example of this principle at work is in the field of health care.

People are often drawn into this profession because they enjoy helping
and caring for people. Smart health care organizations show how their
desired customer service behaviors enable employees to help and care for
the patients and their families.

Reward people for their good service behaviors. Cash awards are nice,
yes, but there are many other ways to say, "job well done." Extra time off,
for instance, or an article in the company newsletter, a trophy or plaque
awarded at a special recognition dinner, tickets to special events tied to an
employee's interests, or a simple written note are all ways to reward the
kinds of behaviors you want to see more of.
4. Create ways to communicate excellent examples of customer service both
within and outside the company. Institute celebrations, recognition
ceremonies, logos, and symbols of the customer service culture and its
values. This is where you want the mugs, buttons, and banners. Have a
customer service bulletin board to feature service incidents that were
special. Seize every opportunity to publicize the times when employees
do it right.

A newsletter should be developed to boast of customer service successes

so that the idea of service is constantly in front of everyone. One
company, a major utility, devoted an entire issue of the company
magazine to "24 Karat Customer Service." It featured examples of how
individual employees defined customer service, stories of humorous or
unusual customer service situations, an article on the importance of
internal customer service, and other ideas designed to keep employees

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aware of the importance of their efforts in achieving quality customer
service.

A hospital not only touts their customer service "hero stories" in their
newsletter, they also have a giant pep rally once a quarter for everyone to
share their stories. Individual teams get together often to focus on what
has gone right as well as wrong in their patient and other customer
relations.

Even if you are a very small business with only a few employees, post
instances of superior customer service of your own and others that you
read about. Talk about customer service and its importance every day.
5. Indoctrinate and train everyone in the culture as soon as they are hired.
Disney is famous for this. It puts all newcomers through a "traditions"
course that details the company history with customer relations and how
it is the backbone of Disney. Your orientation program is a key part of the
ultimate success of your customer service efforts. Make sure that it
contains more than an explanation of benefits and a tour of the facilities.
It can be an important element in planting the customer service culture of
the company so it can flourish and grow.
6. Encourage a sense of responsibility for group performance. Help
employees see how their performance affects others. Emphasize the
importance of "internal customer service." Help everyone to see that if
you don't serve each other well, you can never hope to serve your
ultimate customer.

Does accounts payable or shipping see that the timeliness of their service
to other employees makes a big difference in how the customer is served?
Does the cook realize how important it is to get the order exactly right in
the kitchen so the waitstaff can please the restaurant customer? Even
something as seemingly insignificant as returning from lunch break on
time can affect the quality of the customer service you offer by
determining whether you have enough coverage to serve employees
promptly.

Repeat again and again that customer service is the responsibility of

everyone in the organization, not just the "customer service department."

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7. Establish policies that are "customer friendly" and that show concern for
your customers. Eliminate all routine and rigid policies and guidelines.
Knock yourself out to be a company that is easy to do business with.
Never let your customer service representatives say, "Those are the rules
I have to follow; there's nothing I can do about it." There is always a way
to satisfy the customer. You must give your employees the power to do
so.
8. Remove any employees who do not show the behavior necessary to
please customers. Too many companies allow frontline service
representatives to remain on the job when they are not suited to a
customer service position. If employees don't want to serve the customer
in the best way possible, document their behaviors and use this
information to help them change or to move them to areas away from
customer interaction.

In order for a culture of customer service excellence to grow and thrive,

management must have a burning desire for it to be that way and the
energy to ensure that this desire spreads throughout the organization and
remains there permanently. You must become a totally customer-focused
organization. Everyone, from the top down, must believe that they work
for the customer.

7.9 The Customer as the Boss

Seeing your customer as a boss is a mental shift to help business owners adjust
their thinking and potentially increase their overall profits. Visualizing the
customer as a boss and you as the employee can dramatically change your daily
operation. Look for opportunities to shine. An employee who wants to impress
the boss is always on the lookout for ways to go above and beyond. Getting the
report done three days before it's due, taking on extra duties, staying late to get
the project finished, are ways in which a motivated employee seeks to gain the
favour of their employer. It's not so different with your customers. Do you look
for ways to go above and beyond? Your customers will notice when you are
making an effort to provide exceptional service, and, just like an employer, they
will reward you for your efforts. Accept responsibility for your mistakes. An
employer tends to be much more forgiving to an employee who comes clean
when they've blown it, than to one who lies, blames others, or tries every trick
in the book to get out of it.

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The same goes for your customers. They're smart and they know when you've
made a mistake and are trying to cover it up. Your boss would likely fire you
for making a big mistake and trying to sweep it under the rug. Your customers
can fire you too! If they ever find out they've been deceived or lied to, they will
never come back. Chances are, they'll also tell their friends never to hire you
either! Be upfront and honest and offer to put things right, and you will prove
that you are worthy of their loyalty. Ask for feedback.
An exceptional employee is regularly checking in with the boss to see how
they're doing. They take everything the boss says seriously, and work hard to
improve any areas that he / she points out. They ask questions about their
performance, and demonstrate a willingness to change. When was the last time
you asked your customers about anything? Have you sent out a customer
service survey asking them how you're doing? Have you taken their suggestions
seriously and looked at whether improvements can be made? The only way you
can find out whether you are performing to their standards is to ask them. You
can assume you're doing OK, but until you ask, you really have no idea. The
next time you're tempted to complain about a customer, cut corners, fudge a
little, or be lazy, imagine that the customer is holding your paycheck in their
hand. What you do makes a difference as to whether you're going to continue to
receive that paycheck. Your customer is your boss - start thinking like that and
watch how things change - for the better!

Chapter 8
Customer Retention and Measurement of Satisfaction
8.1 Definition of Customer Retention
Customer retention refers to the activities and actions companies and
organizations take to reduce the number of customer defections. The goal of
customer retention programs is to help companies retain as many customers as
possible, often through customer loyalty and brand loyalty initiatives. It is
important to remember that customer retention begins with the first contact a
customer has with a company and continues throughout the entire lifetime of the
relationship.
8.2 Customer Retention Benefits

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While most companies traditionally spend more money on customer acquisition
because they view it as a quick and effective way of increasing revenue,
customer retention often is faster and, on average, costs up to seven times less
than customer acquisition. Selling to customers with whom you already have a
relationship is often a more effective way of growing revenue because
companies don’t need to attract, educate, and convert new ones.
Companies that shift their focus to customer retention often find it to be a more
efficient process because they are marketing to customers who already have
expressed an interest in the products and are engaged with the brand, making it
easier to capitalize on their experiences with the company. In fact, retention is a
more sustainable business model that is a key to sustainable growth. The proof
is in the numbers: according to studies done by Bain & Company, increasing
customer retention by 5% can lead to an increase in profits of 25% – 95%, and
the likelihood of converting an existing customer into a repeat customer is 60%
– 70%, while the probability of converting a new lead is 5% – 20%, at best.
8.3 How to Improve Customer Retention
Obviously, established companies and organizations need to focus on customer
retention. More important, companies are finding that customer profitability
tends to increase over the life of a retained customer, so employing customer
retention strategies is a worthwhile use of company resources. We have
compiled some of the more successful customer retention strategies and
techniques and outline them here, for your convenience:
 Set customer expectations – Set customer expectations early and a little
lower than you can provide to eliminate uncertainty about the level of
your service and ensure you always deliver on your promises.
 Become the customers’ trusted advisor – You need to be the expert in
your particular field, so that you can gain customers’ trust and build
customer loyalty.
 Use relationships to build trust – Build relationships with customers in a
way that fosters trust. Do this through shared values and fostering
customer relationships.
 Take a proactive approach to customer service – Implement anticipatory
service so that you can eliminate problems before they occur.
 Use social media to build relationships – Use LinkedIn, Twitter, and
Facebook to connect and communicate with customers and give them a

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space for sharing experiences with your company, so they can become
brand ambassadors.
 Go the extra mile – Going above and beyond will build strong
relationships with customers and build long-term loyalty by paying
attention to their needs and issues.
 Make it personal – Personalized service improves customer experience
and is something customers are expecting and demanding. Make their
experience personal to strengthen the bond with your brand.
Rather than try to manage customer retention with a mishmash of customer
retention strategies, many companies usecustomer retention software systems
and targeted customer retention plans to improve customer retention. Some
companies offer customer experience management solutions that enhance
customer retention rates.
8.4 Measuring Customer Retention and Key Metrics
Attrition rate compliments retention rate. For example, if a company has a 20%
attrition rate, it has an 80% retention rate. Companies’ attrition rates can be
defined by the percentage of customers the company has lost over a given
period.
Specifically, companies can determine retention rate by using a simple customer
retention rate formula: Retention rate = ((CE-CN)/CS))100. CE = number of
customers at end of period, CN = number of new customers acquired during
period, and CS = number of customers at start of period. At first glance, the
formula may look complicated, but it’s not too difficult once you start using it.
For example, if you start the given period with 200 customers and lose 20
customers but gained 40 customers, at the end of the period you have 220
customers. 220-40 = 180. 180/200 = 0.9, and 0.9 x 100 = 90. The retention rate
for the given period was 90%. It is beneficial to track retention rates so
companies can put their customer retention metrics into perspective and
measure results over time.

8.5 Value of Existing Customers

“In a perfect world, it’s both and everything in between. In the real world the
general marketing rule is that retention is a lot more cost effective than
acquisition…”

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Carde Johnson – Forrester Research

It costs six or seven times more to acquire a new customer than to maintain an
existing one and a slight increase of 5% in customer retention can result in a
profit increase of up to 95%.

Peter Drucker stated that the purpose of business is to create and keep
customers. Business needs to understand customer acquisition is important. For
without customers, no business will survive. Business also needs to understand
customer retention is even more vital as if you are losing them, you are back to
ground zero, Loyal customers are the life blood of any business and they create
real values and drives revenue. Businesses need to work their due diligence to
keep them and the cost of losing one customer translates to a spending of 6, 7
times more acquiring a new one.

Your loyal customers will spend more money with you, they cost you less to
gain repeat business from, and they’re probably more loyal and less sensitive to
price than new customers. This cannot be more true.

Loyal customers always return & become a dependable lifetime sales stream
and they brag about your service/product creating Word of Mouth advertising
which is the most effective advertising, and it is free!

Every business should put their existing customers at the heart of their
marketing strategy. Customer Loyalty is the strategic competitive advantage of
any business.
Below are some common sense ways to maximize your most valued asset, your
current clientele.
 Delight your clients! Anyone can satisfy a customer, but when you
continually delight them they will keep coming back.
 Aim to exceed your customer expectations on every level and they will
keep coming back! If you think a client might benefit from an article or
discount get in touch with them just to say hello.
 Give your client a reason to stick around. Personalize, personalize,
personalize! The message here is simple. You want to lavish personal

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attention on customers who are going to reciprocate by being consistently
good purchasers of your product or service.
 Give them an incentive to share information about themselves that you
can use when you contact them next. The more your customer feels they
are being treated individually the more likely they are to continue their
relationship with you.
 Provide Guarantees! A guarantee is a powerful tool to keep customers
who might go elsewhere. Tell your customers where and how to complain
and that doing so is worth their time and effort. It shows that you care,
after all your service is so good that backing it should be no problem at
all!
 Ask for Feedback! If you don't know what your customers think about
you, your business, your product or your services you might as well close
shop. People will endorse your business not because they think it might
be good, but because they know it is. Asking for feedback lets the client
feel involved in your business and most likely to send other people your
way.
 Reward them for Loyalty! Loyalty marketing provides a vital link
between your business and your customers.
Here are some commonly used ideas for creating a loyalty program of your
own:
* preferable rates for loyal customers
* provide a bonus product if they have bought before
* programs that provide multiple purchases (buy one get one)
* institute a points program (amass points for a reward or discount)
 Keep in Touch! Maintain relationships. If customers feel they have a
strong relationship with you, trust you and your service, they will most
likely stay loyal.
 Stay in contact, email, news, tips, industry information or useful
recourses and do it frequently. Implement a Referral process
 Thank them every time! Tell clients what you are looking for in a client
and ask if they know of anyone who could benefit from an introduction.
Find a way to thank your customers for referrals, let them know that you
value them for their efforts. There are many ways to go one step further
with the people who already buy from us. Make this a focus of your

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marketing efforts this year and you will soon see the rewards come back
in the form of increased referrals and therefore increased sales.

8.6 What is Customer Churn?

Customer churn refers to when a customer (player, subscriber, user, etc.) ceases
his or her relationship with a company. Online businesses typically treat a
customer as churned once a particular amount of time has elapsed since the
customer’s last interaction with the site or service. The full cost of customer
churn includes both lost revenue and the marketing costs involved with
replacing those customers with new ones. Reducing customer churn is a key
business goal of every online business.
The Importance of Predicting Customer Churn
The ability to predict that a particular customer is at a high risk of churning,
while there is still time to do something about it, represents a huge additional
potential revenue source for every online business. Besides the direct loss of
revenue that results from a customer abandoning the business, the costs of
initially acquiring that customer may not have already been covered by the
customer’s spending to date. (In other words, acquiring that customer may have
actually been a losing investment.) Furthermore, it is always more difficult and
expensive to acquire a new customer than it is to retain a current paying
customer.
Reducing Customer Churn with Targeted Proactive Retention
In order to succeed at retaining customers who would otherwise abandon the
business, marketers and retention experts must be able to (a) predict in advance
which customers are going to churn and (b) know which marketing actions will
have the greatest retention impact on each particular customer. Armed with this
knowledge, a large proportion of customer churn can be eliminated.
While simple in theory, the realities involved with achieving this “proactive
retention” goal are extremely challenging.

The Difficulty of Predicting Churn

Churn prediction modeling techniques attempt to understand the precise
customer behaviors and attributes which signal the risk and timing of customer
churn. The accuracy of the technique used is obviously critical to the success of
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any proactive retention efforts. After all, if the marketer is unaware of a
customer about to churn, no action will be taken for that customer. Additionally,
special retention-focused offers or incentives may be inadvertently provided to
happy, active customers, resulting in reduced revenues for no good reason.
Unfortunately, most of the churn prediction modeling methods rely on
quantifying risk based on static data and metrics, i.e., information about the
customer as he or she exists right now. The most common churn prediction
models are based on older statistical and data-mining methods, such as logistic
regression and other binary modeling techniques. These approaches offer some
value and can identify a certain percentage of at-risk customers, but they are
relatively inaccurate and end up leaving money on the table.
A Better Means of Predicting Customer Churn
Optimove uses a newer and far more accurate approach to customer churn
prediction: at the core of Optimove’s ability to accurately predict which
customers will churn is a unique method of calculating customer lifetime value
(LTV) for each and every customer. The LTV forecastingtechnology built into
Optimove is based on advanced academic research and was further developed
and improved over a number of years by a team of first-rate PhDs and software
developers. This method is battle-tested and proven as an accurate and effective
approach in a wide range of industries and customer scenarios.
Without revealing too much about the “secret sauce” of Optimove’s customer
churn prediction technology, the approach combines continual dynamic micro-
segmentation and a unique, mathematically-intensive predictive
behaviormodeling system. The former intelligently and automatically segments
the entire customer base into a hierarchical structure of ever-smaller behavioral-
demographic segments. This segmentation is dynamic and updated continually
based on changes in the data. The latter is based on the fact that the behavior
patterns of individual customers frequently change over time. In other words,
the “segment route history” of each customer is an extremely important factor
determining when and why the customer may churn.
By merging the most exacting micro-segmentation available anywhere with a
deep understanding of how customers move from one micro-segment to another
over time – including the ability to predict those moves before they occur – an
unprecedented degree of accuracy in customer churn prediction is attainable.
8.7 Beyond Preventing Customer Churn: Preventing Customer Value
Attrition

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Optimove goes beyond simply predicting which customers will abandon the
business by providing early warnings regarding customers whose lifetime value
prediction has declined substantially during the recent period, even though they
are still active and may not abandon the business entirely in the near future.
Optimove’s ability to identify customers which fall into this “decliner” category
helps marketers increase revenues from existing customers, while
simultaneously reducing the number of customers who may fall into the risk-of-
churn category.
Now What? Targeted Proactive Retention
Predicting customer churn is important only to the extent that effective action
can be taken to retain the customer before it is too late. A central – and unique –
aspect of Optimove is the software’s combination of cutting-edge churn
prediction capabilities and a marketing action optimization engine.
Once those customers at risk of churning have been identified, the marketer has
to know exactly what marketing action to run on each individual customer to
maximize the chances that the customer will remain a customer. Since different
customers exhibit different behaviors and preferences, and since different
customers churn for different reasons, it is critical to practice “targeted
proactive retention.” This means knowing in advance which marketing action
will be the most effective for each and every customer.

8.8 Developing and Improving Customer Retention Programmes

Customer retention programs reduce churn, boost customer lifetime value and
increase revenue.
1. Deliver proactive customer service
This involves anticipating problems before they occur and proactively offering
solutions before problems get out of hand. Companies with high retention rates
have systems in place to prevent problems from happening, and when they do
happen, they have procedures that get the problems solved, quickly.
Proactive service is about anticipating customer complaints and addressing
concerns before they happen. A great example of anticipatory service is
displayed by many major airlines. Everyone hates a delayed flight, there’s
nothing worse than having to wait hours at an airport. The best airlines
proactively contact their customers to inform them of delays. A simple text

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message with something like, “Flight BS150 has been delayed by 50 minutes
due to air traffic” is a common way they deliver proactive customer service.
Think about what services and day to day tasks you can take a more anticipatory
approach towards.
2. Offer a consistent customer experience
Consistency is important to delivering amazing customer experiences that build
loyalty. A loyal customer is a lot less likely to defect to a competitor. The Net
Promoter Systemfound that promoters (what they call loyal customers) defect
at lower rates than other customers; resulting in longer, more profitable
relationships with a company.
Offering a consistent customer experience involves having all departments
talking to each other. Marketing needs to talk to sales; sales needs to talk to
customer support. All departments should have shared goals in what customer
experience needs to be delivered to each customer.
The best companies recognize that customers interact with different parts of the
organization and across multiple touch points. They know customers engage
with different employees when they make a purchase, when they’re getting
service and support, and when they’re talking to billing or accounts.
Implement a customer experience strategy and start delivering a service that
builds loyalty.
3. Focus on exceeding customer expectations
etting, meeting and exceeding customer expectations is still the number one way
to increase customer retention. Your customers love being WOWed and they
love it when you go above and beyond what is expected.
Exceeding customer expectations involves delivering a service that goes the
extra mile. Whether it is remembering a special occasion,
spontaneously sending a bouquet of flowers, or offering a free ticket to an
event; these are all examples of exceptional service.
When customers have high expectations and the reality fall short, they will be
disappointed and will likely rate their experience as less than satisfying. For
this reason, luxury resort, for example, might receive a lower satisfaction rating
than a budget motel—even though its facilities and service would be deemed
superior in ‘absolute’ terms.” –Marketing Metrics

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Customer expectations set the bar for customer satisfaction and also affect
repurchase decisions. If a customer feels like you under-delivered, they won’t
come back and buy from you again.
4. Learn, measure and use the Net Promoter Score
The Net Promoter Score (NPS) is a powerful tool to measure and evaluate
customer loyalty. Since we know customer loyalty directly affects customer
retention, it can be used to help increase retention rates.
The NPS works by sending a quick, one question survey to your customers that
asks them;
“How likely is it that you would recommend Company X [or Product X] to a
friend or colleague?”
The question has a 1-10 rating scale for respondents to answer. With 10 being
extremely likely to recommend and 0 being not at all likely.
NPS is used to better understand how happy your customers are. This in term
gives you a good indication of how many customers are not happy and likely to
defect to competitors. NPS calls your unhappy customers “Detractors” and they
are the ones you should be concerned about and are ‘at risk’.
By using the NPS, you can see who your Detractors are, and follow them up to
quickly resolve any problems and retain their business. It’s a great tool to
proactively address concerns before it’s too late.
5. Track and trend customer satisfaction
Measuring customer satisfaction will give you more insight into how happy
your customers are. 96% of your customers won’t tell you when they are
unhappy and will not repurchase. Using a customer satisfaction tool, you can
proactively gather customer feedback and see how happy they are with your
service.
Tracking changes in customer satisfaction is important so you can see whether
the initiatives you have implemented are having a positive or negative impact.
You want to be able to see if overall satisfaction has improved, and whether
individual satisfaction for unhappy customers has improved.
On the flip side, you also want to know if satisfaction has declined. This gives
you the ability to proactively flag them and follow up. By knowing who is
unhappy, you can quickly address ‘at risk’ customers and retain their business.

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6. Delight customers by being personal
Personalized service builds rapport, trust and stronger customer relationships.
Your customers don’t want to feel like they are speaking to a ‘brand’,
‘company’, or an automated email system.
Being personalized with all communication is important to show that you care.
It shows that you value their business and are genuinely interested in a two way
business relationship.
Implementing a personalized service is easier than you think.
Here are five quick tips I recommend:
 In all communications, always address customers by their name.
 Show that you can by remembering special occasions.
 Check in with customers spontaneously, invite them to business events
and share interesting content.
 Tailor marketing messages based on customer profiles – send relevant
offers, content and emails.
7. Build dependency by becoming a trusted advisor
Become the trusted advisor on all things inside your area of expertise. For
example, if you’re an IT Support company, be the IT Guy that offers advice
around anything to do with technology, even mobile phones!
This takes a bit of extra commitment and means you will offer some services
and time, free of charge. But it significantly improves your business
relationships and creates ‘sticky’ customers that won’t defect to competitors.
Start by offering free advice around particular topics of interest to customers. I
like to recommend starting a blog and offering webinar Q&A’s around specific
topics. Keep the conversation open and encourage engagement.
By becoming a trusted source, you can build a relationship which leads to a
dependency. They trust you and rely on you to give the best advice; you become
an integral part of their business success. Now all of a sudden, your value isn’t
just in the service or product you sell, it’s also in the intangible advice and
experience you offer by being their trusted advisor.
Retention programs boost revenue and reduce churn
Customer retention is important to all growing businesses.

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How can a company grow if it keeps churning customers?
Use these customer retention programs to build stronger relationships and create
a better experience for your customers. This will help you increase customer
retention, reduce customer churn and increase overall revenue.
By increasing retention you also boost customer lifetime value. Your
customers will spend more money and they’ll make more repeat purchases.

8.8 Measurement of Customer Satisfaction

91% of unhappy customers will never purchase from you again. The number 1
objective of any business should therefore be the creation of happy customers.
Businesses that create happy customers grow and flourish, while the ones that
don't, stagnate and perish.
Yet for the #1 objective it is severely underrepresented in companies' goals and
metrics. This is partly due to the fact that measuring customer satisfaction is not
as straightforward as e.g. measuring revenue streams or website visitors,
making it hard to set up clear goals. There are however some great metrics and
tools out there designed for this purpose. Let's go through some that can be
applied in your business today.
1. Surveys to Measure Overall Satisfaction
This assesses your customers' experience with your product or service. It’s the
direct response to perceived quality based on the perceived needs and
expectations customers had.
Overall satisfaction can be measured through a survey conducted from your
customers after they finished the purchase process.
2. Objective Measurement Approach For Loyalty
Customer loyalty is an excellent mirror for customer satisfaction as it’s used to
describe the behaviour of repeat customers, as well as those who offer good
ratings, reviews and testimonials. Loyalty can also be measured via a survey
after the purchase process, it is however more powerful to measure the actual
behaviour than the intention. This framework allows you to analyse the
historical records inside your CRM system - for example purchase scores or
online behaviour - and relate them to other metrics related to your business
model, such as consistency of subscription renewals.

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3. Apps for Attributional Satisfaction
One of the best ways to measure the satisfaction regarding a certain product or
feature (could be with your support service) is by providing a reasonable
context which customers can relate to. Asking your customers whether the
support team was friendly or whether they felt rushed allows you to understand
how important these elements are for the whole picture.
One popular tool to assess attributional satisfaction is Qualaroo a platform
which allows you to gather the answers from these questions as well as set up
the linking webpages from your website in order to make it easy for your
customer’s to let you know their review.
4. Measure your Exit and Abandonment Rates With Tracking Tools
A high exit or abandonment rate measured in your analytics tool is a direct
behavioural indication of customer dissatisfaction. Exits and abandonments are
natural phenomenons in eCommerce, but an unnatural high percentage indicates
that your page and process could be [Link]'s hard to make a judgement
about exactly what is wrong with your page based solely on the numbers inside
your tracking system. To get insight about the true causes it is useful to
implement a feedback tool on these pages, for example a live chat window that
pops up after a certain time.
5. Net Promoter Score
This may well be the most popular way of measuring your clients' loyalty. It
measures the likeliness of a customer referring you to someone else. The
customer is asked how likely he would recommend you on a scale from 1 to 10.
6. "Things gone wrong"
This is a negative measure and your goal is to minimise its score to zero points.
What you’ll be measuring with the TGW is the rate of complaints per product
you sell. In the worst possible scenario your score is 1 or higher, meaning that
you get at least 1 complaint per unit sold. TGW is calculated by dividing the
number of complaints by the total number of units sold.
However you should be careful when analyzing the results from this measure as
many people don’t autonomously complaint, they simply never buy from you
again. Therefore having a good TGW score doesn’t necessarily mean that things
are going well.
Benefits of Measuring Customer Effectivenes

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Customer service is a vital component to any successful business today, but
how do you know if you are making the grade with your own quality of
customer interactions? Measuring your customer service is an important step to
ensuring consistency and quality in all your company's dealings with their most
important asset.
There are many good ways to accurately assess the quality of your customer
service, and we have five of them right here.
Consider Your Supply and Demand
One of the easiest metrics for measuring the quality of your customer service is
simply your number of sales. Happy customers tend to purchase more products,
so if sales are increasing, it could be attributed in part to your level of service.
However, this method alone will not give you the most accurate assessment on
the quality of service; an increase in sales could also be attributed to the season,
economic climate or recent price markdown. This gauge is more effective when
combined with other measurement tools.
Ask Your Customers
One way to determine whether customers are happy with your level of service is
to simply ask them. You can do this informally, by inquiring when they come
into your establishment. You can offer follow-up phone calls or emails to ask
customers about the quality of their last visit to your business. Or you can make
the process more formal by creating surveys that ask questions about different
aspects of your service and ask customers to fill them out and return them to
you.
Number of Customer Complaints
Some companies evaluate the quality of service by the number of complaints
they receive. A common assumption is that when the number of disgruntled
customers is decreased, that the quality of services has increased. Take note: by
not paying attention to your quality of service, you may be inadvertently
sending those disgruntled customers down the street to a competitor.
Identify Your Weaknesses
Effective measurement of the quality of your customer service will help you
identify specific weaknesses within your operation. For example, perhaps
customers are not happy with the length of time they have to wait for assistance,
or they are frustrated because a certain product always seems to be on

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backorder. No matter what metric tool you use to evaluate your current level of
service, it should be able to help you identify very specific areas where you
have room for improvement.
Assess the Competition
Knowing what your competitors are offering in terms of customer service can
also help you know whether you are on track with your own service level. Send
an employee down the street to act as a customer and find out how they are
treated. Talk to customers who have worked with both businesses and ask them
which company's service they like better and why.
Measuring your customer service will help you know if your service level is on
par and where it can be improved. Through these easy tools, you can get an
accurate idea of whether the quality of your customer service is where it needs
to be or what you can do to raise the bar on your current service level.
8.9 Business Benefits from Measuring Customer Satisfaction
Quality customer service is the key element required for a successful business.
In this customer driven market, where competition is becoming stiffer day by
day and critical deadlines are rife, one cannot think of business growth without
exceptional customer service. A number of organizations underestimate the
importance of customer satisfaction, while laying the foundation of their
business. They focus on the quality of services, organizational infrastructure but
often overlook the fact that it is consumers who can make or break a business.
Quality customer service can benefit your business in countless ways and by
observing the importance of customer service you can take measures to provide
your consumers with a positive experience.
Here is a quick look at some of the many benefits your business can reap by
taking good care of customers’ satisfaction and providing them quality customer
service:
Business Promotion
The best way to promote your business products and services is word of mouth
marketing. When customers receive satisfactory and quality services from an
organization, they tend to discuss it in their social network, which leads to direct
publicity and increased popularity of an organization.
Satisfied Shareholders

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Satisfactory response from consumers means increased sales, which ultimately
leads to increased satisfaction of shareholders. They tend to invest more in your
organization, which can dramatically improve the ROI of your business.
Increased Business Growth
Quality service can boost your business growth. Quality services can help you
expand your client base but great customer service is the key to retain your
clients and stand out of the crowd.
Successful Business Strategies
Encouraging consumers for feedback and comments is an integral part of
quality customer service. Following consumers’ feedback for analyzing the
strengths and weaknesses is probably the best way to understand the
expectations of consumers and adopt successful business strategies.
Critical Learning Experience
Customer service can provide business owners a critical learning experience to
understand the dynamics of the corporate world and keep up with the latest
business trends.
Reduced Risk of Business Failures
Understating the expectations and mindset of consumers can considerably
reduce the risk of business failures and losses.
Consumer Satisfaction
If your customers are happy, your investors and business partners will be happy
as well, and this ultimately leads to higher profits. With a strong client base you
can win the trust of investors and make the most of every viable business
opportunity.
Reduced Employee Turnover
With increased sales and higher profits, you can offer employees good salary
packages and additional bonuses, thus reducing employee turnover.
Employee Motivation
Client satisfaction directly influences the working environment of business
organizations. With decreased pressure of meeting targets and financial
stability, employees can work in a comfortable corporate atmosphere, thus
encouraging them to work to their maximum capacity.

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Increased Efficiency
The above mentioned benefits lead to overall increased productivity of the
organization.

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