unit3Logistics Customer Service.docx
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unit3Logistics Customer Service.docx
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unit3LogisticsCustomerService
UnitThreeLogisticsCustomerService
PartOneText
LogisticsCustomerService
.CustomerServiceProgram
Whatiscustomerservice?
Customerserviceiswhatyourbusinessdeliverstoachievecustomersatisfaction.Somebusinessesdeliverphysicalproductsandmaynotseethemselvesasbeingaservicebusiness.However,theircustomersstillmeasurethebusinessontheservicethattheyexperiencebothpre-saleandafter-sale.Socustomerserviceisanincreasinglyimportantpartofabusinessactivities.
Acustomerserviceprogramconsistsofstandardsandtraining.Allstafffollowthesestandardstoensurethatserviceismaintainedatthenecessaryleveltokeepyourcustomershappy.
Whyisitimportant?
Thegoalofcustomerserviceiscustomersatisfaction.Customersatisfactioniswhatthecustomerfeelssubjectivelyandsometimesirrationally.Thereisallthedifferenceintheworldbetweenacustomerbeingsatisfiedandbeingnotdissatisfied⒈.
Marketinghasmovedfromtransactionalmarketingtorelationshipmarketing:
—Transactionalmarketingfocusedonattractingnewcustomersandsimplygettingthesale.
—Relationshipmarketingfocusesongettingcustomersandkeepingtheminthelongertermusingacombinationofmarketing,qualityandcustomerservice⒉.
Excellenceincustomerservice,usingtheideaofrelationshipmarketing,canhelpyoutoretaincustomers.Thismeans:
—Theyarelesslikelytogotoyourcompetitorsintheincreasinglycompetitivemarketswherecustomershavemorechoicethanever.
—Assatisfiedcustomers,theywillrecommendyoutoothers,resultinginanincreaseinnewbusiness.Itissaidthatitcostsupto10timesasmuchtowinanewcustomerthantokeepanexistingone⒊.
—Theyarelesslikelytotellotherpeopleofbadexperiences.Customersexperiencingpoorservicearelikelytotellupto20peopleabouttheirexperience,whichisnotagoodadvertisementforyourbusiness.Thismaydeterothersfromeventryingyouout,andsoyouwillnotgetthechancetoimpressthem,evenwiththebestormostinnovativeproductsandservices⒋.
Byfocusingyourattentiononthecustomersthathavethehighestpotentiallifetimevalue,youcanimproveprofitability⒌.
—Yourstaffwillfeelgoodbecauseoftheenvironmentandatmospherethatleadtohappycustomers.Thiscanhelptoattractfurthernewcustomersovertime.
Whatshouldyoudo?
Marketingisaboutidentifying,anticipatingandsatisfyingcustomerneeds.Itappliestotheproductsyouofferaswellastocustomerservicedelivery⒍.Tointroduceacustomerserviceprogram,youneedtotake4mainsteps:
1.Identifyyourinternalandexternalcustomers.
2.Identifywhichofyourexternalcustomersarethemostvaluable.
3.Findoutwhatlevelofservicecustomerswant.
4.Developcustomerservicestandardsandaprogramtoprovidecustomersatisfactionandhelpbuildloyalty.
.Customers'LogisticsServiceExpectationsandTheirSatisfaction
Customersatisfactionisfundamentaltobusiness.Thedegreetowhichcustomersaresatisfieddetermineswhethercustomersmakeadditionalpurchasesandrecommendthecompanyanditsproductstoothers.Improvingthequalityoflogisticsserviceisparticularlyimportantbecauseitincreasescustomersatisfaction,whichinturnheightenstheoccurrenceofstrategicpartnerandcorporateprofitability⒎.Inlogistics,increasingattentionisbeingpaidtotheaspectsoflogisticspolicythatcanincreasecustomersatisfaction.Animportantdeterminantofcustomersatisfactionishowwelltheproductperforms.However,incompetitivemarkets,achievingacompetitiveadvantagebyprovidingaproductwithoutstandingperformanceisdifficult.Sincethemajorplayersareeachstrivingtogainmarketshare,productperformancebecomessimilar.Similarly,priceparitycanbeachievedwithamazingspeed⒏.Businessescan,however,haveapositiveimpactoncustomersatisfactionbyprovidingoutstandinglogisticsservices.Sincehighlevelsoflogisticsservicesarenoteasilycopiedandaresometimesignoredasacompetitivetool,theycanbesuccessfullyusedtodevelopasustainablecompetitiveadvantage.
Theprimarydeterminantofcustomersatisfactionisthegapbetweencustomers’expectationsoflogisticsserviceperformanceandactuallogisticsserviceperformance⒐.Specifically,logisticsmanagersshouldunderstandandshapethecustomer’spre-purchaselogisticsserviceexpectationsinordertoincreasecustomersatisfaction.Logisticsmanagerscanincreasecustomersatisfactionbyfocusingonspecificpost-purchasecustomerinteractions.Forexample,ifacustomerisdissatisfiedwithlogisticsserviceperformance,logisticsmanagerscanincreasesatisfactionbylisteningtoandpromptlyrespondingtothecustomer’sdissatisfaction.
Providingsuperiorlogisticsservicehasbeenusedtodevelopastrategicadvantagebymanyfirms.Firmsshouldnot,however,attempttoprovideoutstandinglogisticsserviceonalldimensions.Todosowillbeexpensive,anditislikelythatresourceswillbewastedonservicesthatareunimportanttocustomers⒑.Thus,itiscriticaltomonitorandattempttounderstandcustomers’expectationsregardinglogisticsservicewhendevelopingandadjustinglogisticsservicepolicies.
Studiesonlogisticsservicerequirementshavehadalongtradition.Thefollowingattributesareconsistentlyrankedasveryimportantbycustomers:
1.)AvailabilityofItem---theabilityofthesuppliertosatisfycustomerorderswithinaspecifiedtime.
2.)AfterServiceandBackup---theabilitytoquicklyreplacedefectiveordamageditemsandsubsequentfollowuptodetermineifuserishappywiththepurchase.
3.)EfficientLogisticsServiceCommunications---theabilitytoquicklyandintelligentlyhandlecustomerqueriesabouttheproductorservice.
4.)Paperwork---theabilitytoefficientlyandaccuratelycompletenecessarypaperworkthatcatertothecustomers’systems.
5.)DeliveryTime---theabilitytosupplygoodswithinthecommittedtimewithlittlevariation.
Overtime,customersgainexperiencewithvariouslogisticsservicesprovidersanddevelopexpectationswithregardtowhatleveloflogisticsservicetheyshouldreceive.Thesuccessoflogisticsserviceprogramsislargelydependentuponhowcloselycustomers’expectationsoftheservicesparallelstheactuallevelofserviceprovided⒒.Logisticsserviceexpectations,however,existinassociationwiththeothercomponentsofthemarketingmix.Thus,incompetitivemarkets,itiscriticalforfirmstounderstandcustomers’logisticsserviceexpectations,aswellasothermarketingmixvariables.Thisunderstandingofexpectationsisakeystrategicelementforgainingasustainablecompetitiveadvantage.
Customershaveexpectationsoflogisticsserviceperformancebeforetheybuytheproduct.Theleveloflogisticsservicecanbebetterthanexpected,equaltoexpectations,orworsethanexpected.Itisdifficulttoenticenewormaintaincurrentcustomersifthesecustomershaverelativelylowexpectationsoftheseller’slogisticsservice,i.e.,lowerthantheiractualservice.Insuchasituation,thesellershouldattempttoraisetheseexpectationsbytoutingtheiractualservicelevels⒓.However,ifacustomerhashighinitiallogisticsserviceexpectations,i.e.,higherthanactuallogisticsservice,thecompanyshouldlowertheexpectationstorealisticlevelssoastoreducepost-purchasedissatisfactionorimprovetheservice.Itisimportanttodeterminethesourceofthehighexpectations.Researchhasfoundthatitispartlybecausesalespeoplearenotaccurateaboutwhattheircustomerswantandhaveatendencytoinflatetheircompany'sperformancelevels⒔.Thus,managersshouldmonitorsalespeople'scommunicationswiththeircustomers.Similarly,anexaminationoftheexpectationformationprocesshasrevealedthattheexaggeratedinformationsourceoriginateswithanothermedia---directmail.Althoughhavinghigherexpectationsthanactuallogisticsservicemayenticecustomerstotryafirmonce,itmayultimatelyleadtoloweroverallsatisfaction.Ultimately,lowersatisfactionwithlogisticsservicesreducescustomerloyalty,leadingtolowerrepeatingpurchases⒕.
Logisticsserviceexpectationsthatareequivalenttoactualservicelevelsmayleadtolowerinitialsales,comparedtoserviceexpectationsthatarehigherthanactuallevels.Thissituation,however,alsoresultsinhighersatisfaction,andultimately,greaterrepeatingpurchases.Sincerepeatingpurchasesisakeysuccessfactor,thefirmanditssalespeopleshouldhelpbuildrealisticlogisticsserviceexpectations.However,inanextremelycompetitiveenvironmentorwhenattemptingtobuildmarketsharewithnewcustomers,thecompanyanditssalespeoplemaynotbereadytoreducetheexpectationsoftheirlogisticsserviceforfearoflosinganordertoacompetitor.Inthissituation,thecompanyshouldprovidecustomerswithdataonitslogisticsservicelevelsversusitscompetitors.Aslongasthesellingfirmisinarelativelystrongposition,thedatacanhelpreducethecustomer’sexpectationsfortheentireindustrywhileretainingrelativelyhighexpectationsforthesellingcompany⒖.
Awrittenlogisticsservicepolicyshouldbeprovidedtoallcustomers.Thishelpscustomersdeveloprealisticexpectationsoflogisticsserviceandallowsforgreatersatisfactionwiththeservicetheyreceive.Writtenlogisticsservicepoliciesalsoenableallemployeesintheorganizationtobeawareoftheminimumservicestandardsrequiredsothattheycansetappropriateobjectivesfortheirownperformance,whichleadstoincreaseincustomersatisfactionandretentionaswell.
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