Do Business Well

There are many definitions of service. To many, it means being friendly, delivering on time and attending promptly to the customer’s needs. While this behaviour certainly is a part of service, there is more to it.

Service refers to all the activities which create a bond between organisations and their clients or customers. This is a very broad definition, but it is fully justified because all organisations, be they manufacturers, retailers, restaurants, banks or government departments, have a service component. Certainly the extent of the service component varies from organisation to organisation, but everyone ultimately has a role in service.

Types of service

There are ‘assist me’ services:

* assist me to find and buy a house

* assist me to keep the books of my business

* assist me to regain my health

And there are ‘repair it’ services. Customers have come to expect and demand that a manufacturer’s obligation to guarantee the performance of a product should extend further than the date of delivery. The quality of a company’s ‘repair it’ service contributes significantly to its success in the marketplace.

The capacity of a motor manufacturer to deliver a high-quality repair service sets it apart in its industry. Numerous research studies have shown that the average customer who is happy with a product tells at least three people of his satisfaction. The average customer who has a problem with an organisation or product will tell nine or ten people about it! The implication for manufacturing companies is that service is an intrinsic part of the product.

There are also ‘guarantee it’ services. These relate to the product itself, be it a hacksaw blade, a motor car or a grilled steak. Factors that play a part are the basic design of the product, and the quality control in its manufacture. A poor design or a badly manufactured product leads to unhappy customers.

‘Help me buy it’ services highlight the sales activity in a firm and include the messages the company sends out to potential customers in advertising and promotion programmes. How it chooses and monitors sales staff, intermediaries or distributors must convey a positive attitude to the customer.

Protect me’ services cover after-sales activities such as parts availability, warranties, complaint handling and overall responsiveness to customer problems. These activities extend beyond ‘repair it’ services.

Yet another service is that of adding value.

Value-added service is more easily understood in terms of experience than in definition. It provides the feel of politeness and caring when delivered in a person-to-person context. The friendly waiter who calls you by your name when you sit down to a meal, or an airline stewardess who notices you are feeling a bit tired and brings you a rug, addsintangible value to the delivery of good service.

Regardless of the type of service, one thing should be abundantly clear: everything revolves around the customer.

The Cost of Bad Customer Service

Some companies may think that they can get away with bad service but there is no doubt that it is costly. Costs arise in handling complaints; in paying refunds or handling returns; in legal action dealing with customerprotection bodies; and in the necessary corrective public relations.

But indirect costs are likely to be far higher and will accrue from lost sales to those directly affected, lost sales to those who are told about the bad service and, above all, from the cost of acquiring new customers toreplace those lost. The latter cost can be ten times greater than the cost of retaining existing customers through good service. The greatest cost of all is the cost of lost opportunities.

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