CUSTOMER SERVICES

In the very competitive world of marketing a product or
service, what consumers will buy and when, where, and
how they will purchase it is often determined by the type,
level, and quality of customer service provided by competing
marketers. This purchase determination has become
even more of a strategic issue with the advent of new marketing
channels such as the Internet and televisionshopping
networks. A growing number of organizations
are giving increased attention to customer service. Financial
institutions, hospitals, public utilities, airlines, retail
stores, restaurants, manufacturers, and wholesalers are just
a few of the businesses that face the problem of attracting
new customers and retaining the patronage of existing
customers.
Building long-term relationships with customers has
been given a high priority by the majority of America’s
most successful enterprises. These companies realize that
customer satisfaction is an important key to success. Customer
service can be defined as those activities that
enhance or facilitate the purchase and use of the product
or service. Today’s emphasis on customer satisfaction can
be traced to a managerial philosophy that has been
described as the marketing concept.
THE MARKETING CONCEPT AND
CUSTOMER SERVICE
The significant increase in the desire to provide effective
consumer service is a direct result of a shift to the marketing
concept in the early 1950s. The marketing concept
has three major components: (1) identifying what the
consumer needs and wants, (2) developing products/services
to meet those needs/wants, and (3) designing marketing
plans to effectively and efficiently deliver the
products/services in a manner that will satisfy the customer
and the long-term objectives of the organization.
The foundation for the success of the marketing concept
is a business philosophy that leaves no doubt in the mind
of every employee that customer satisfaction is of primary
importance. All energies are directed toward satisfying the
consumer. The degree to which customer satisfaction is
dependent on the quality of service varies greatly with different
products/services. The service continuum (see Figure
1) shows the significant difference between a necktie
(tangible product with little service involved) and a lawn
mowing service (no tangible product).
SERVICE QUALITY
Whether consumers patronize an organization on a continuing
basis is often strongly influenced by the level and
quality of service they receive from that firm. Since this
service experience is an important determinate of future
purchase behavior, then it becomes important to examine
how consumers evaluate the service provided and how a
business might assess how well they deliver quality service.
Research has found that consumers often evaluate the
quality of the service they receive based on five criteria.
Businesses and organizations should consider these criteeobf_

186 ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION
Customer Service
ria when they examine how well they are satisfying their
customer’s needs:
• Tangibles—Physical facilities, equipment, employees’
appearance, etc.
• Reliability—Dependable and accurate service
• Responsiveness—Prompt customer assistance
• Empathy—Firm/employees show concern about the
individual needs of the customer
• Assurance —Employees instilling trust and confidence
in the service provider through their knowledge,
courtesy, and helpfulness
Gap Theory. One method of examining the degree to
which a firm is meeting the service expectations of the
consumer on these five dimensions is called the gap theory.
The gap theory first determines the difference
between the customer’s service expectations and the customer’s
perception of the service actually received. This
gap is referred to as the service gap and is considered the
most important because it determines the level of satisfaction/
dissatisfaction with the service and, ultimately, the
organization.
If a service gap exists, management should examine
four other gaps that most likely are the reason for the service
gap. These four gaps are:
1. Knowledge gap—The difference between the consumer’s
service expectations and management’s perception
of consumer’s expectations
2. Standards gap—The difference between the management’s
perception of consumer’s expectation and the
standards established by the organization for service
delivery
3. Delivery gap—The difference between the established
standards and the actual quality of service
delivered by employees
4. Communications gap—The difference between the
actual quality of service provided and the quality of
service communicated to consumers through promotional
material and activities
If any of these gaps exist, a service gap will follow—with
the probability of customer dissatisfaction.
THE NEW CUSTOMER
Customers, and the type and quality of service they
demand, are constantly changing. This requires businesses
to stay alert for changes and adjust to meet new service
challenges. In an article by Ron Zemke (2002), the consumer
of the twenty-first century was briefly characterized
by customer service professionals. Zemke described new
consumers as more knowledgeable about the products
they purchase, possessing more sophistication, being a little
more impulsive and less patient, wanting to be treated
as individuals rather than numbers, and desiring to be
treated fairly and like everyone else or knowing a clear reason
why not.
At the end of the article Zemke presented a laundry
list of fourteen customer needs identified by Chip Bell, a
Dallas-based consultant and author of Customer Love:
Attracting and Keeping Customers for Life.
1. Make me smarter.
2. Help me do it myself.
3. Make the response fast … but don’t sacrifice quality—
quick and rushed aren’t the same.
4. Help me customize the experience like I want it.
5. Anchor your offering to a cause I like and believe in.
Good works sell.
6. Entertain me. Make the experience bright, shiny,
and memorable.
7. Don’t invade my privacy; never let me worry about
whether you know too much about me.
8. Respect my time by making your offer super easy to
deal with.
9. Anticipate my needs.
10. Treat me with respect when things go wrong … not
some cheap, generic atonement that is unmatched
to the incident.
The service triangle
The
Service
Strategy
The
Systems
The
Customer
The
People
Figure 1

ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION 187
Cyber Crime
11. Never take me for granted. I will drop you in a
heartbeat.
12. My time is as important as my funds … maybe
more.
13. Help me integrate … link stuff together to increase
the efficiency of my life.
14. Life is complex: Make service simple. Life is harried:
Make service calm. Life can be shallow: Make service
have resonance and depth. Life can be painful:
Make service joyful. Life is too fast: Help me keep up. Life can be lonely: Make service a value connection