Customer Service (OCR GCSE Business): Revision Note

The Importance of Customer Service

• Customer service includes a businesses actions and behaviours experienced by customers before, during and after their purchase

• Good customer service involves meeting clients' needs and keeping them happy

Benefits of good customer service

• Providing good customer service can be beneficial for a business for several reasons:

Repeat sales

• It persuades people to buy time and again and increase their average spend from a business with whom they have enjoyed a good experience, boosting revenue

Reputation

• It enhances a businesses reputation and increases the chance of word-of-mouth promotion

  • Customers tell others about how well a business has taken care of them, resulting in additional sales through free promotion

Ability to compete

• Small businesses that may be unable to compete with larger rivals on price may be able to maintain sales by offering good customer service

  • Customers are often willing to pay a premium price for good customer service, increasing profitability

Competitive advantage

• Providing excellent customer service can set a business apart from its rivals, creating a valuable competitive advantage that can help smaller businesses increase their market share

Employee morale

• Employee morale is likely to be high in businesses with a good reputation for customer service, leading to greater efficiency and productivity

  • Attitudes such as respect for others, kindness, and going the extra mile are aspects in which they can have pride

Drawbacks of poor customer service

• Failing to provide good customer service can cause significant problems for a business, including:

  • Unhappy customers are likely to take their business elsewhere, especially in competitive markets where there are many alternatives, reducing revenue

  • They can easily share negative experiences online through reviews, social media, etc, tarnishing the business's reputation

  • Poor service erodes customer loyalty over time, making it more difficult to retain existing customers without expensive price promotions, increasing costs

  • Customer complaints about poor service can overwhelm employees, affecting their motivation and productivity

  • Providing replacements, dealing with customer returns and offering compensation also increase costs

Delivering Good Customer Service

• Good customer service is defined in different ways by different customers

• Examples of ways well-known businesses provide good customer service include:

• The customer service expectations of customers differs according to the type of product sold

  • Customers shopping for holidays are likely to be satisfied with customer service if sales representatives are knowledgeable about destinations and make appropriate recommendations, according to their needs

  • Those interested in purchasing technology items such as laptops or mobile phones may be more satisfied by clear product demonstrations and other in-store support

• Customer service needs may also differ according to the type of business in which a product is purchased

  • Customers purchasing a drink in a restaurant expect a different level of service to those purchasing a drink from a supermarket

    • Restaurant customers expect serving staff to be able to recommend appropriate drinks, serve them attractive products at the table and replenish them promptly

    • Supermarket customer expect a well-stocked product range, short queues and a quick transaction