Customer Service Toolkit - Microsave
Offices across Africa, Asia and Latin America www.MicroSave.net info@MicroSave.net Customer Service Toolkit June 2005
2 MicroSave Customer Service Toolkit Acknowledgements This toolkit was developed by MicroSave, namely Graham A.N. Wright, David Cracknell and Lisa Parrott. We received invaluable inputs and assistance from Marion Hudson, Employee Services Manager, Tsogo Sun; Volodmyr Tounitsky, John Guzowski, Dorata Szubert, Agata Szostek – MFC staff and trainers; Cecilia Kariuki, Hermann Messan, Angela Mutua, Corrine Ngurukie, Henry Sempangi – MicroSave staff. In particular we would like to thank Cheryl Frankiewicz, who helped us to develop our Customer Service Training course. All errors, omissions and howlers remain the property and responsibility of MicroSave. Acronyms 8 Ps AIMS ATM CI CRM EBL ERM FGD FINCA-Tz KPOSB MFI PDA POS PRA SEEP SWOT TEBA TPB UMU Product, Place, Price, Physical Evidence, Positioning, Promotion, Process, People Assessing the Impact of Microenterprise Services Automated Teller Machine Credit Indemnity Customer Relationship Marketing Equity Bank Limited Employee Relationship Marketing Focus Group Discussion FINCA Tanzania Kenya Post Office Savings Bank Microfinance Institution Personal Digital Assistant Point Of Sale device Participatory Rapid Appraisal Small Enterprise Education and Promotion Network Strengths, Weaknesses, Opportunities, Threats Teba Bank Tanzania Postal Bank Uganda Microfinance Union
3 MicroSave Customer Service Toolkit Table of Contents Acknowledgements . 2 Acronyms . 2 Table of Contents . 3 Putting Customer Service Strategy into Context . 6 Where Does Customer Service Fit into a Market Led Financial Institution? . 6 What Is Customer Service? . 7 Why Invest in Customer Service?. 7 We All Know that Customer Retention Is Important, But Is It Really THAT Important? . 8 What’s the Big Deal about Word-of-Mouth Business? . 9 How Can Good Service Make Us More Competitive? . 9 Is Good Service Really Easier?. 10 How Can Good Service Help Us Work More Efficiently? . 10 What’s the Price for Ignoring Customer Service? . 10 So, What Are the Main Challenges to Watch Out For? . 11 How Can this Toolkit Help Us Deal with those Challenges? . 12 The Strategic Dimensions of Customer Service . 14 Why Aim for Excellence? . 14 How Can We Create Excellent Customer Service? . 14 What Are the Four Fallacies? . 14 What Does It Mean to “Create a Customer Centric Organisation”? . 16 What are the 8 Cs? . 16 The Eight Dimensions of Customer Service . 17 How Can We Be Proactive About Managing Our Customer Relationships? . 20 Remember, Customers Act on Perceptions. 22 So, How Do We Design an Optimal Customer Service Strategy? . 22 The Process: Determining the Role of Customer Service in Your Institutional Strategy. 24 Customer Service and Differentiation. 24 Why Start Here?. 24 How Can We Decide What the Role of Customer Service Should Be in Our Institution? . 24 Is Misalignment Common? . 25 How Can We Ensure that Customer Service Plays the Role that It Should Play within Our Institution? . 25 Why Put Commitments in Writing?. 26 Where Should Customer Service Fit in Our Organisational Structure? . 27 Consider a Customer Service Team . 27 Remember, Customer Service Begins at the Top . 27 How Can We Achieve Buy In from Others? . 27 Ready to Move On? . 27 The Process: Diagnosis and Analysis .28 How Does MicroSave Recommend Implementing this Step? . 28 What Is a Service Level Driver and How Do We Identify Them? . 28 The Questions You’ll Want Answers To . 29 How Can We Use Our Existing Information Systems? . 29 How Can We Gather Information from Clients and Staff? . 30 What About Gathering Information on the Operating Environment? . 32 Assessing Current Performance and Identifying Possible Actions . 32 What Is the Customer Service Diagnosis and Analysis Tool? . 32 What Other Tools Can We Use to Focus Our Research and Analysis? . 33 Confused and Do Not Know Where to Start? . 36 Who Should Collect and Analyse the Data? . 36 How Do We Analyse All This Data? . 37 What Does it Mean to “Triangulate Data”? . 38 How Do I Use the Customer Service Assessment Tool? . 38 How Can We Use the Data and Analysis Tools to Identify Strengths? . 39 How Can We Use the Data and Analysis Tools to Identify Weaknesses? . 39 What Should We Do With Our Strengths? . 39 What Should We Do With Our Weaknesses? . 40 Is There An Alternative Approach? . 40
MicroSave Customer Service Toolkit 4 Can You Give Us More Information on the Four Main Gaps? . 41 Remember: Prioritise Customer Service Quick Wins! . 42 How Can We Identify High Value, Quick Wins? . 42 Can You Give Us Some Examples of High Value Quick Wins? . 43 What about the “Prepare to Monitor” Step? What Does that Involve? . 43 Two Case Studies. 44 The Process: Developing a Strategy, Action Plan and Budget . 47 Why Develop a Customer Service Strategy? . 47 Why Go Through All the Trouble to Put the Strategy in Writing? . 48 Who Should Develop the Strategy? . 48 How Long Should the Strategy Document Be? . 49 What Should Be Included in a Customer Service Strategy? . 49 I. Executive Summary. 49 II. The Role of Customer Service in Our Institution . 50 III. Who Are Our Customers and What Do They Want? . 51 IV. Our Customer Service Commitment. 52 V. Our Current Performance . 54 VI. Strategic Objectives for the Period . 54 VII. Key Indicators and Targets . 55 VIII. Monitoring and Communication Strategy . 56 IX. Activity Plan . 57 X. Resources Required . 58 Is There Anything Else We Should Keep in Mind? . 59 Final Checklist . 60 Can We See an Example of what a Customer Service Strategy Might Look Like? . 60 The Process: Implementing a Customer Service Strategy . 61 If You Were to Give Us Your Top Ten Implementation Tips, What Would They Be? . 61 Implementation: Setting Customer Service Standards . 63 Why Set Standards? . 63 What Makes a . 63 Service Standard Effective? . 63 What Should We Measure? . 63 Can You Give Us Some Examples of Service Standards for a Financial Institution? . 63 Why Do We Have to Prioritise Our Customer Service Standards? . 64 What Is Benchmarking All About? . 64 An Example of Benchmarking at Equity Bank . 65 Is a Customer Charter a Service Standard? . 65 What is a Banking Code? . 66 The Power of a Service Guarantee . 67 But Shouldn’t Our Internal and External Standards Be the Same? . 67 What Happens if We Fail to Meet Our Customer Service Standards?. 67 Why Is Service Recovery So Important? . 68 Implementation: Leveraging Technology . 70 Why Consider E-Banking? . 70 What Can Technology Do for Customer Service? . 71 What Are the Key Challenges? . 72 What Technology Options Do We Have?. 72 How Can We Choose from Among the Many Options? . 73 Make Sure You Pilot Test! . 73 Are There Customer-Related Issues that We Should Be Aware Of? . 73 Is There Anything Else to Consider as Technology Becomes Part of Our Solution? . 75 Implementation: Training and Motivating Staff . 76 Why Focus on Staff?. 76 What Is Employee Relationship Marketing (ERM)? . 76 How Can We Implement ERM in Our Institution? . 76 What Are the Principles for Launching an ERM Programme? . 79 How Can We Measure the Effectiveness of ERM? . 80 What about Staff Incentive Schemes? . 80
MicroSave Customer Service Toolkit 5 Implementation: Developing a Customer Service Culture . 81 What Is Corporate Culture? . 81 What Does a Service Culture Look Like?. 81 Is It Possible to Systematically Build a Customer Service Culture? . 81 Step A: Obtain Management Buy In . 81 Step B: Start Early—From Recruitment . 82 Step C: Clearly and Regularly Communicate Your Customer Service Commitment . 82 Step D: Ensure that Everyone Keeps in Touch with the Customer . 82 Step E: Continuously Plan, Act, Measure and Review . 83 Step F: Optimise Client and Staff Feedback Mechanisms . 83 Step G: Develop Customer Service Awareness and Skills among All Staff . 83 STEP H: Motivate and Provide Incentives for Good Customer Service. 84 Doesn’t the Creation of a Customer Service Culture Seem Like a HUGE Undertaking? . 84 The Process: Monitoring and Communication .85 Why Monitor? . 85 What Tools Can We Use to Monitor Effectively? . 86 How Do We Move from Monitoring to Communication? . 86 What Is a Customer Service Focal Point? . 86 What Is a Help Desk? . 87 What Resources Does a Help Desk Require? . 87 Should the Help Desk be Focused Internally or Externally? . 88 What Is an Intranet? . 88 What about Internal Newsletters and Customer Communications? . 89 Beware! One-Way Communication Is Not Enough. 89 What Is the Feedback Loop?. 89 Why Study the Feedback Loop in Our Institution?. 90 How Can We Help Information Flow Faster? . 91 A Final Word . 93 The Relationship between MicroSave Tools and Customer Service . 93 References . 94 Annex 1: Sample Customer Service Strategy . 96
MicroSave Customer Service Toolkit 6 Putting Customer Service Strategy into Context Where Does Customer Service Fit into a Market Led Financial Institution? Many financial institutions find it difficult to place customer service within their organisation. It largely, though not completely, falls into the delivery of services. MicroSave and TMS Financial (a South African marketing company with extensive experience in marketing financial services) developed a framework called the Strategic Marketing Framework that seeks to explain the components of a market led financial institution. The three main pillars of that framework focus on: 1. Corporate Brand and Identity, which is the design and presentation intended to differentiate the MFI from its competition. 2. Product Strategy, which encompasses product development and differentiation, as well as costing/ pricing and sales/promotion strategies used by MFIs. 3. Product Delivery and Customer Service Strategy, which focuses on how and where the MFI’s products are delivered and the customer experience. All three components are vital if an institution is to become truly market led. This Customer Service Toolkit focuses on the third component, “Product Delivery and Customer Service Strategy,” but does not do so in isolation. It is important to recognise that although customer service is described as a separate strategy in the framework it is intimately related to both “Corporate Brand Strategy” and “Product Strategy.” Many Corporate Brands are defined partly by high levels of customer service and brand promises must align with actual levels of service being delivered. In turn, careful product based communications help to align customer expectations with respect to customer service and delivery. Later in this toolkit, we’ll look at how to align your Customer Service Strategy with your overall business strategy, so that the customer service you deliver supports your brand, your products, and the achievement of your institutional objectives.
MicroSave Customer Service Toolkit 7 What Is Customer Service? Customer service has been defined in many ways (see box). The challenge is that appropriate service means different things to different people. It is often easier for customers to identify inappropriate service, than to define what they should experience. Some Common Definitions of Customer Service “Customer service is a commitment of all employees in a company to make being a customer a completely positive experience one that everyone customer will want to experience time and time again.” Jack Ferreri “Customer service is the ability of an organization to constantly and consistently give the customer what they want and need.” ACA Group Customer service means exceeding customer expectations. Service is judged by how it matches expectations. If the treatment the customer receives is better than his or her expectations, this is excellent service. From Be Our Guest, Disney Institute “Excellent customer service is the process by which your organization delivers its services or products in a way that allows the customer to access them in the most efficient, fair, cost effective, and humanly satisfying and pleasurable manner possible.” Jack Speer, BizWatch Publisher “Customer Service is the collection of skills, knowledge, and attitudes presented to your customers by your staff.” Center for Business, Industry and Labour, St. Louis Community College In this toolkit, MicroSave seeks to ensure that service levels in a financial institution exceed customer expectations despite the continuous challenges of growth and change. This has multiple implications. First, financial institutions need to understand customer expectations. Second, they must understand the internal factors that drive an appropriate institutional response to customer expectations. Third, performance needs to be continuously monitored and communicated to ensure it meets required service levels. This process occurs in a dynamic environment and therefore needs to be driven by an appropriate strategy. Why Invest in Customer Service? The simple answer is because your customers want you to. Quality of customer service consistently ranks high on any list of customer preferences for financial services. In a qualitative study in Uganda in 2003, Mukwana and Grace found staff attitude, flexibility of terms and speed of service to be key reasons for choosing a particular financial institution. Similarly, the companion quantitative survey found that the second most common reason for customers to leave financial institutions was congestion in branches and the poor service associated with it. Competing financial services often don’t differ greatly from each other, so the way that a financial institution supplies its customers can become more important than the service itself. There are five compelling reasons why excellent customer service must be a “prime directive” for any market led MFI: 1. 2. 3. 4. Good service keeps customers Good service builds word-of-mouth business Good service can help you overcome competitive disadvantages Good service is easier than many parts of your business 5. Good service helps you work more efficiently
8 MicroSave Customer Service Toolkit We All Know that Customer Retention Is Important, But Is It Really THAT Important? Absolutely! Repeat customers are of vital importance to microfinance programmes. As a rule of thumb, it is 5-10 times more expensive to attract a new customer than it is to retain an existing one.1 Furthermore, reducing customer defections can boost profits by 25-95%. 2 There are many reasons why retaining customers is so profitable. These include the ability to retain business, to cross sell products to existing customers, and to amortise initial costs over a longer period. Satisfied customers are also more likely to provide referrals and may be willing to pay a price premium. PROFIT As a general rule, the longer an institution retains a client the lower the costs of serving and the greater the opportunities for earning income from that client. This concept is illustrated in the following diagram: COST TIME Acquisition Crossselling Repeat clients Referrals Source: Neil Russell-Jones and Tony Fletcher, The Marketing Pocketbook (1998) Acquisition: To acquire a new customer, a typical bank undertakes expensive marketing campaigns. A credit-based microfinance programme often performs even more expensive one-on-one personal selling or client mobilisation. After acquisition, the customer has to learn the bank’s processes, or has to receive training from the loan officer. Early in a new customer relationship, these costs can be greater than the revenue generated. Cross Selling: Once the customer is with an institution, there are frequent opportunities to sell additional products to the same customer. These opportunities can be enhanced through carefully targeting products towards customers that are more likely to need or want that product. The more products that an institution can sell to a single customer, the more profitable that customer will be. Repeat Clients: Repeat customers are those customers reusing the same servic
"Customer service is a commitment of all employees in a company to make being a customer a completely positive experience one that everyone customer will want to experience time and time again." Jack Ferreri "Customer service is the ability of an organization to constantly and consistently give the customer what they want and need."
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documents available for each template type 6 How to Access the Toolkit. ID NOW MARKETING TOOLKIT 7 Toolkit Templates: Printable MAILER POSTER SHELF TALKER/ SIGN. ID NOW MARKETING TOOLKIT 8 Toolkit Templates: Digital SOCIAL MEDIA AD SOCIAL MEDIA POST WEB CONTENT BLOCKS
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Customer satisfaction has identified as an important influencer on customer loyalty. Further, customer trust impacted by customer satisfaction which proved that customer satisfaction is an antecedent of customer trust. Moreover, an indirect relationship between customer satisfaction and loyalty through customer trust was observed.
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