Is the situation in which employees are terminated or Empty positions are left unfilled once someone leaves an organization?

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Who among the following is an example of external customers?

Subordinates

Suppliers

Co-workers

Security personnel

External customers are the people outside the organization who purchase or lease products and

services. This group includes vendors, suppliers, and others not from the organization.

References

Multiple ChoiceLearning Objective:

01-05 List the six

major components of

a customer-focused

environment.

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1. 1. ©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education. Chapter 1 The World of Customer Service
2. 2. ©McGraw-Hill Education. Learning Outcomes LO 1-1 Define customer service. LO 1-2 Describe factors that have impacted the growth of the service sector in the United States. LO 1-3 Identify societal factors that have influenced customer service. LO 1-4 Recognize the changes in consumer behavior that are impacting service. LO 1-5 List the six major components of a customer- focused environment. LO 1-6 Explain how some companies are addressing the changes impacting the service sector.
3. 3. ©McGraw-Hill Education. LO 1-1 Defining Customer Service 1 Goals vary depending on industry • Employee’s ability to deliver products and services to internal and external customers • Satisfying customers’ needs and resulting in positive word-of- mouth publicity and return business • Key terms • Service industry • Product • Customer-focused organization • Customer relationship management (CRM) • Service sector
4. 4. ©McGraw-Hill Education. Home Visits Before distribution systems were modernized, peddlers went from house to house, particularly in rural areas, to deliver merchandise or services. Doctors often went to the sick person's home for patient visits. How do these methods of delivery differ from those used today? Do you think the ones used today are better? Why or why not? © H. Armstrong Roberts/Retrofile/Getty Images
5. 5. ©McGraw-Hill Education. Figure 1.1 Customer-Focused Organizations 1 Some common characteristics for leading-edge customer-focused organizations • They have and support internal customers (for example, peers, co-workers, bosses, subordinates, people from other areas of their organization) and/or external customers (for example, vendors, suppliers, various telephone callers, walk-in customers, other organizations, others not from within the organization). • Their focus is on determining and meeting the needs of customers while treating everyone with respect and as if he or she is special. • Information, products, and services are easily accessible by customers. • Policies are in place to allow employees to make decisions in order to better serve customers.
6. 6. ©McGraw-Hill Education. Figure 1.1 Customer-Focused Organizations 2 Some common characteristics for leading-edge customer-focused organizations continued • Management and systems support and appropriately reward employee efforts to serve customers. • Reevaluation and quantitative measurement of the way business is conducted is ongoing and results in necessary changes and upgrades to deliver timely quality service to the customer. • Continual benchmarking or comparison with competitors and related organizations helps maintain an acute awareness and implementation of best service practices by the organization. • The latest technology is used to connect with and provide service to customers, vendors, or suppliers and to support business operations. • They build relationships through customer relationship management (CRM) programs.
7. 7. ©McGraw-Hill Education. LO 1-1 Defining Customer Service 2 The Concept of Customer Service • Cottage industries • A term adopted in the early days of customer service when people started small businesses out of their homes and bartered with neighbors
8. 8. ©McGraw-Hill Education. LO 1-1 Defining Customer Service 3 Post-World War II Service in the U.S. • Increase in the number of people in service occupations in the U.S. • As U.S. economy grew, Americans increased demand for meals, repairs, and other services
9. 9. ©McGraw-Hill Education. LO 1-1 Defining Customer Service 4 The Shift to Service • Economy shifted focus from manufacturing to providing service • Age of the service economy • International Council of Customer Service Organizations (ICCSO) • International Organization for Standardization
10. 10. ©McGraw-Hill Education. Figure 1.2 From Pre-World War II Occupations to Service Occupations Typical Former Occupations Farmer Ranch Worker Machinist Engineer Steelworker Homemaker Factory worker Miner Tradesperson (for example, watchmaker) Railroad worker Typical Service Occupations Salesperson Insurance agent Food service Administrative assistant Flight attendant Call center representative Repair person Travel professional Child care provider Security guard
11. 11. ©McGraw-Hill Education. LO 1-2 Growth of the Service Sector 1 U.S. Bureau of Labor Statistics • One in five customer service representatives works part time. • Median hourly wage in 2015 - $15.25 • Projected to grow 10% by 2024 • Largest sector – health care and social assistance
12. 12. ©McGraw-Hill Education. LO 1-2 Growth of the Service Sector 2 Impact of the Economy 1. Quantity of jobs being created 2. Distribution of jobs among industries, occupations, geographic areas, and organizations of different sizes 3. Quality of jobs, measured by wages, job security, and opportunities for development
13. 13. ©McGraw-Hill Education. LO 1-2 Growth of the Service Sector 3 Impact of the Economy continued Quantity of Jobs Being Created • Impacted by interest rates, consumer demand, new technology Distribution of jobs • Need for employees to be able to have regular access to personal and professional networks and to engage in collaborative exchanges • Ease of transmission and exchange of information by means of technology. • Telework
14. 14. ©McGraw-Hill Education. Telecommuting Today, many employees work from their homes all or part of the time. Telecommuting, as this is called, is used frequently by companies in large cities, such as Los Angeles, to decrease travel time. Do you think you would need different skills or abilities to telecommute? Why or why not? © Martin Novak/123RF RF
15. 15. ©McGraw-Hill Education. LO 1-2 Growth of the Service Sector 4 Impact of the Economy continued Quality of Service Jobs • More competition for jobs • Need for networking
16. 16. ©McGraw-Hill Education. LO 1-3 Societal Factors Affecting Customer Service 1 Shifts in Consumer Needs, Wants, and Expectations • Companies must monitor societal changes • Demand curves • Demographic shifts • Aging population • Immigrants
17. 17. ©McGraw-Hill Education. LO 1-3 Societal Factors Affecting Customer Service 2 Global Economic Shifts • Economic indicators in turmoil • BREXIT • Impact of new legislation • Customer service has become a “must”
18. 18. ©McGraw-Hill Education. LO 1-3 Societal Factors Affecting Customer Service 3 Shifts in the Population and Labor Force • The present labor force • Older, more diverse, and has more women • Expected to grow at a slower rate than in previous decades • Immigration will play a major role in U.S. racial and ethnic composition. • Will there be a need for more consumer goods and services to provide for diverse customers?
19. 19. ©McGraw-Hill Education. Figure 1.5 Labor Force Participation by Age and Sex 2015–2024 Jump to long image description in Appendix
20. 20. ©McGraw-Hill Education. LO 1-3 Societal Factors Affecting Customer Service 4 Increased Efficiency in Technology • Increased production and quality • Equipment working continuously • Enhanced ease of service delivery and faster processing • Easy access to information from anywhere • Driven by increased access to the Internet
21. 21. ©McGraw-Hill Education. Technology For many customer service jobs, skill in using technology will increase your value as a source of information for current and future customers. How can you keep up with the changes in technology? © Tim McGuire/Corbis/Getty Images
22. 22. ©McGraw-Hill Education. LO 1-3 Societal Factors Affecting Customer Service 5 Increased Efficiency in Technology continued • Globalization of the Economy • Globalization has opened new markets and allowed decentralized worldwide access for production, sales, and service • Business-to-business (B2B) initiatives • Offshoring • Outsourcing • Insourcing
23. 23. ©McGraw-Hill Education. LO 1-3 Societal Factors Affecting Customer Service 6 Deregulation of Many Industries • Deregulation of U.S. public services • Increased competition • Breakdowns in service quality • Closure or restructuring of companies • Opportunities for new companies to step up and to better serve customers
24. 24. ©McGraw-Hill Education. LO 1-3 Societal Factors Affecting Customer Service 7 Geopolitical Changes • Have reduced U.S. business access and competition within some areas of the world • North American Free Trade Agreement (NAFTA) • Greater need for better understanding of diversity- related issues and more multinational mergers and partnerships • European Union
25. 25. ©McGraw-Hill Education. LO 1-3 Societal Factors Affecting Customer Service 8 Changing Values • Different cultures have different values • Values affect what people consider important • Clashes can result from differing perspectives • Affecting companies’ approach to doing business
26. 26. ©McGraw-Hill Education. LO 1-3 Societal Factors Affecting Customer Service 9 More Women Entering the Workforce • Women’s traditional roles in society have shifted to service providers (cleaners, cooks, and child care providers) • Women’s income levels have risen, which provides more disposable income
27. 27. ©McGraw-Hill Education. LO 1-3 Societal Factors Affecting Customer Service 10 A More Racially and Ethnically Diverse Population is Entering the Workforce • New ideas, needs, and levels of knowledge, experience, and ability • Better understanding of the needs of the group that they represent
28. 28. ©McGraw-Hill Education. LO 1-3 Societal Factors Affecting Customer Service 11 More Older Workers Entering the Workforce • Median age of people in the United States is rising • Return to work due to economic necessity and/or social reasons • Companies admire their work ethic
29. 29. ©McGraw-Hill Education. Figure 1.6 2010–2020 Workforce Percentage of Labor Force by Age In 2020, baby-boomers will be age 56 to 74 years, and this age group will be the largest age group in the workforce, comprising 25.2 percent. Other age groups comprise the remainder of the workforce in the following percentages: 45–54 years = 20.1 percent 35–44 years = 21.4 percent 25–24 years = 22.2 percent 16–24 years = 11.2 percent Source: Bureau of Labor Statistics Division of Industry Employment Projections, www.bls.gov/ooh/About/ProjectionsOverview.htm
30. 30. ©McGraw-Hill Education. LO 1-3 Societal Factors Affecting Customer Service 12 Growth of E-commerce • Consumers can surf the net for products and services without leaving their homes or offices • People can provide products and services worldwide without ever physically coming into contact with a customer
31. 31. ©McGraw-Hill Education. LO 1-4 Consumer Behavior Shifts 1 Different Mindset • People are being more careful with their spending • Younger people want fewer financial obligations • Computers allow consumers to do research before buying
32. 32. ©McGraw-Hill Education. LO 1-4 Consumer Behavior Shifts 2 Expectation of Quality Service • Consumers expect value for their dollar • Combined buying power has created “crowd clout” • Need for better trained and educated customer service professionals
33. 33. ©McGraw-Hill Education. LO 1-4 Consumer Behavior Shifts 3 Enhanced Consumer Preparation • Consumers today are well informed about the price, quality, and value of products and services. • Spurred on by the Internet • Customer satisfaction
34. 34. ©McGraw-Hill Education. LO 1-5 The Customer Service Environment 1 Components of a Customer Service Environment 1. The customer 2. Organizational culture 3. Human resources 4. Products/deliverables 5. Delivery systems 6. Service
35. 35. ©McGraw-Hill Education. LO 1-5 The Customer Service Environment 2 The Customer • The central component in a customer-focused environment • External customers • Current or potential customers or clients • Internal customers • Cafeteria workers, human resources staff, print shop employees, security personnel
36. 36. ©McGraw-Hill Education. Figure 1.7 - Components of a Customer-Focused Environment
37. 37. ©McGraw-Hill Education. LO 1-5 The Customer Service Environment 3 Organizational Culture • What the customer experiences • The values and beliefs that are important to the organization, its employees, and its managers
38. 38. ©McGraw-Hill Education. LO 1-5 The Customer Service Environment 4 Human Resources • Companies go to great lengths to recruit, select, train, and retain qualified people. • Although all employees provide customer service, certain employees are trained in the customer-service function. • Attracting and keeping qualified employees can be a challenge
39. 39. ©McGraw-Hill Education. Figure 1.9 Competencies of Customer Service Professionals There are many things that make one successful in the service profession and life. Many skills and competencies that someone possesses can carry over into other situations throughout life. The following are some general competencies or qualities that can make you successful when interacting with internal and external customers: Adaptable Detail-oriented Good business acumen Compassionate Collaborative Good communicator Lifelong learner Creative thinker Diversity-aware Results-oriented Takes initiative Good judgment Ability to negotiate Solid organizational knowledge Problem-solving skills Professional Quality-oriented Reliable Resilient Self-aware Service-oriented Technically-oriented Good time manager
40. 40. ©McGraw-Hill Education. LO 1-5 The Customer Service Environment 5 Deliverables • Tangible item manufactured or distributed by the company • Quality and quantity affect customer satisfaction
41. 41. ©McGraw-Hill Education. LO 1-5 The Customer Service Environment 6 Delivery Systems • Industry standards • Customer expectations • Capabilities • Costs • Current and projected requirements Service • The manner in which a company treats its customers
42. 42. ©McGraw-Hill Education. LO 1-6 Addressing the Changes Customer-based organizations • Must become learning organizations • Can no longer take a reactive approach to customer service • Employees must take personal responsibility for customer care • Employees should be empowered to do what is necessary to satisfy the customer • Service recovery
43. 43. ©McGraw-Hill Education. Appendix of Image Long Descriptions
44. 44. ©McGraw-Hill Education. Appendix 1 FIGURE 1.5 Labor Force Participation by Age and Sex, 2015–2024 Age ranges 2015 annual averages Women 2015 annual averages Men 2024 projections Women 2024 projections Men 16-19 years 35% 35% 25% 27% 20-24 years 68% 71% 65% 68% 25-34 years 72% 87% 73% 86% 35-44 years 73% 90% 72% 89% 45-54 years 72% 85% 75% 82% 55-64 years 57% 69% 61% 69% 65-74 years 21% 30% 35% 35% 75 years and older 5% 8% 6% 11% Return to original slide

• This chapter defines customer service, describes factors that impacted the growth of the service sector in the United States, identifies societal factors that have influenced customer service, and recognizes the changes in consumer behavior.
• customer service The ability of knowledgeable, capable, and enthusiastic employees to deliver products and services to their internal and external customers in a manner that satisfies identified and unidentified needs and ultimately results in positive word-of-mouth publicity and return business.
  internal customers People within the organization who either require support and service or provide information, products, and services to service providers who interact with external customers. Such customers include peers, coworkers, bosses, subordinates, and people from other areas of the organization.
  external customers Those people outside the organization who purchase or lease products and services. This group includes vendors, suppliers, people on the tele-phone or Internet, and others not from the organization.
  service industry A term used to describe businesses and organizations that are engaged primarily in service delivery. Service sector is a more accurate term, since many organizations provide some form of service to their customers even though they are primarily engaged in research, development, and manufacture of products.
  product Something produced or an output by an individual or organization. In the service environment, products are created to satisfy customer needs or wants.
  customer-focused organization A company that spends energy and effort on satisfying internal and external customers by first identifying customer needs, then establishing policies, procedures, and management and reward systems to support excellence in service delivery.
  customer relationship management (CRM) Concept of identifying customer needs: understanding and influencing customer behavior through
  ongoing communication strategies in an effort to acquire, retain, and satisfy the customer. The ultimate goal is customer loyalty.
  service sector Refers to organizations and individuals involved in delivering service as a primary product.
  
• Figure1.1 – Customer-Focused Organizations
  Customer relationship management (CRM): Understanding and influencing customer behavior through ongoing communication strategies in an effort to acquire, retain, and satisfy the customer
  Customer-focused organization: Company that spends energy and effort on satisfying internal and external customers by first identifying customer needs, then establishing policies, procedures, and management and reward systems to support excellence in service delivery
  
• customer relationship management (CRM) Concept of identifying customer needs: understanding and influencing customer behavior through ongoing communication strategies in an effort to acquire, retain, and satisfy the customer. The ultimate goal is customer loyalty.
  customer-focused organization A company that spends energy and effort on satisfying internal and external customers by first identifying customer needs, then establishing policies, procedures, and management and reward systems to support excellence in service delivery.
• service economy A term used to describe the trend in which businesses have shifted from primarily production and manufacturing to more service delivery. As part of this evolution, many organizations have developed specifically to provide services to customers.
• As shown in Figure 1.2, since the end of World War II, people have moved from other occupations to join the rapidly growing ranks of service professionals.
• By 2022, the U.S. civilian labor force age 16 and over is expected to number 163.5 million.
• Prevailing interest rates and consumer demand, typically cause companies to evaluate how many people they need and which jobs will be established
  Technology
  Has increased the need for many new technical skills in the areas of computer hardware and software operation and maintenance
  Has created an opportunity for organizations to transfer to automation tasks previously performed by employees
• It is called either telework or telecommuting and various other terms to describe it (e.g., e-work and work shifting). The practice does not include people who are self-employed.
  downsizing is the term applied to the situation in which employees are terminated or empty positions are left unfilled once someone leaves an organization.
• networking The active process of building relationships and sharing resources.
• Demand curves illustrate shifts in consumer behavior in a particular market. They show trends or movements at different points and see upward or downward deviations in spending habits.
• Increased efficiency in technology
  Has increased production and quality and has resulted in:
  Acquisition of equipment that enhances customer service.
  Increased need for service organizations.
  Decrease in manufacturing and blue-collar jobs.
  Machines and equipment can work 24 hours, seven days a week with few lapses in quality, with no need for breaks, and without increases in salary and benefits.
  They also potentially enhance the ease of service delivery and provide faster processing.
• globalization The term applies to an ongoing trend of information, knowledge, and resource sharing around the world. As a result of a more mobile society and easier access to transportation and technology, more people are traveling and accessing products and services from international sources than ever before.
  business-to-business (B2B) Refers to business-to-business customer service.
  offshoring Refers to the relocation of business services by an organization from one country to another (e.g., services, production, and manufacturing). The work may be kept in another entity of the organization that is located in another country or contracted (outsourced) to a third party. Typically, this is done to cut costs with cheaper worker salaries and/or tax savings.
  outsourcing Refers to the practice of contracting with third-party companies or vendors outside the organization (often in another country) to deliver products and services to customers or to produce products.
  insourcing The opposite of outsourcing, this occurs when organizations decide to have internal employees assume functions and perform work instead of contracting it out to third parties or outsourcing it.
  
• deregulation Occurs when governments remove legislative or regulatory guidelines that inhibit and control an industry (e.g., transportation, natural gas, and telecommunications).

  Deregulation of many industries
  Create opportunities for newly established companies to step in with improvements and innovations to close the gaps and better serve customers.
  Disadvantages
  Major industry shakeups.
  Breakdowns in service quality.
  Closure or restructuring of the company.
  These events have created opportunities for newly established companies to step in with improvements and innovations to close the gaps and better serve customers.

• Economic embargoes, political unrest, and conflicts and wars involving various countries have reduced U.S. business access and competition within some areas of the world.
  North American Free Trade Agreement (NAFTA)
  Eliminates trade barriers.
  Promotes fair trade across borders.
  Increases investment opportunities.
  Promotes and protects intellectual property rights.
  There is a greater need for better understanding of diversity-related issues.
  European Union
  Ensures free movement of people, goods, services, and capital.
  Majority of member states have adopted the euro.
  Eliminates the need for a passport from people of member countries traveling throughout the Union.

  North American Free Trade Agreement (NAFTA) A trade agreement entered into by the United States, Canada, and Mexico to help, among other things, eliminate barriers to trade, promote conditions of fair trade across borders, increase investment opportunities, and promote and protect intellectual property rights.

• As the world changes, so do individual values.
  As a result of societal values, companies change their approach in doing business as a competitive strategy and to attract and hold customers.
  This includes shifting the way they do business, the products that they deliver, and their manner of service.
• By 2022, the U.S. civilian labor force age 16 and over is expected to number 163.5 million. Among the major race and ethnicity groups, labor force participation rates according to race are projected to be whites, 61.7 percent; blacks, 59.8 percent; and Asians, 63.2 percent. People of Hispanic origin are expected to account for 31.2 million workers by 2022 because of their younger population, higher fertility rates, and increased immigration.
• More older workers entering the workforce
  Median age of people in the United States is rising because of the aging of the “baby-boom” generation.
  More people return to work due to economic necessity or because they miss the work and/or the opportunity to interact with others and feel useful.
  
• e-commerce An entire spectrum of companies that market products and services on the Internet and through other technology, and the process of accessing them by consumers.
• Economic reports are now indicating that people have begun to shift from a “cutting back” mentality to a slightly more optimistic “cautious spending” approach.
• customer satisfaction The feeling of a person whose needs have been met by an organization.
• customer service environment An environment made up of and influenced by various elements of an organization. The key components are the customer, organizational culture, human resources, products, delivery systems, and service.
• external customers Those people outside the organization who purchase or lease products and services. This group includes vendors, suppliers, people on the telephone, and others not from the organization.
  internal customers People within the organization who either require support and service or provide information, products, and services to service providers. Such customers include peers, co-workers, bosses, subordinates, and people from other areas of the organization.
• organizational culture Includes an element of an organization that a customer encounters.
• human resources Refers to employees of an organization.
• Figure 1.10 - Competencies of Customer Service Professionals
  These are some of the competencies required for customer service professionals to be successful.
• deliverables Products or services provided by an organization.
• learning organizations A term used by Peter Senge in his book The Fifth Discipline to describe organizations that value knowledge, education, and employee training. They also learn from their competition, industry trends, and other sources, and they develop systems to support continued growth and development in order to remain competitive.
  service recovery The process of righting a wrong or correcting something that has gone wrong involving provision of a product or service to a customer. The concept involves not only replacing defective products, but also going the extra step of providing compensation for the customer’s
  inconvenience.

What is the situation in which employees are terminated or Empty positions are left unfilled once someone leaves an organization?

Which term refers to the technique used by organizations to determine how customers perceive the value of services and products received?

Which of the following guidelines should customer service professionals follow to meet the expectations of customers quizlet?

What is rumba in customer service?