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Manage quality customer serviceBSBCUS501Student Workbook1st Edition
Student WorkbookBSBCUS501 Manage qualitycustomer service1st Edition 2015Part of a suite of support materials for theBSB Business Services Training Package
Copyright and Trade Mark Statement
© 2015 Innovation and Business Industry Skills Council LtdAll rights reserved. Apart from any use permitted under the Copyright Act 1968, no part of this publication may bereproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical,photocopying, or otherwise, without written permission from the publisher, Innovation and Business Industry SkillsCouncil Ltd (‘IBSA’).Use of this work for purposes other than those indicated above, requires the prior written permission of IBSA. Requestsshould be addressed to Product Development Manager, IBSA, Level 11, 176 Wellington Pde, East Melbourne VIC 3002or email email@example.com.‘Innovation and Business Skills Australia’, ‘IBSA’ and the IBSA logo are trade marks of IBSA.
Published by: Innovation and Business IndustrySkills Council LtdLevel 11176 Wellington PdeEast Melbourne VIC 3002Phone: +61 3 9815 7000Fax: +61 3 9815 7001Email: firstname.lastname@example.org
First published: March 20151st edition version: 1Release date: March 2015
ISBN: 978-1-925123-50-0Stock code: BSBCUS5011D
Table of ContentsIntroduction ………………………………………………………………………………………………………….1Features of the training program………………………………………………………………………1Structure of the training program ……………………………………………………………………..1Recommended reading……………………………………………………………………………………2About Innovative Widgets…………………………………………………………………………………2Section 1 – Plan Customer Service…………………………………………………………………………4What skills will you need? ………………………………………………………………………………..5What is customer service? ……………………………………………………………………………….5What is quality customer service?…………………………………………………………………….5Internal and external customers……………………………………………………………………….8Customer behaviour …………………………………………………………………………………….. 13Investigate, identify and assess customer needs……………………………………………. 19Customer questionnaire……………………………………………………………………………….. 21Customer service plans………………………………………………………………………………… 25Relevant legislation, standards and codes of practice ……………………………………. 33Section summary …………………………………………………………………………………………. 40Further reading ……………………………………………………………………………………………. 40Section checklist………………………………………………………………………………………….. 40Section 2 – Deliver Customer Service …………………………………………………………………. 41What skills will you need? …………………………………………………………………………….. 41Deliver customer service according to customer service plan …………………………. 42Customer service skills and attributes…………………………………………………………… 43General communication skills……………………………………………………………………….. 45Handle customer complaints………………………………………………………………………… 48Monitor customer service……………………………………………………………………………… 53Manage team performance ………………………………………………………………………….. 58Section summary …………………………………………………………………………………………. 61Further reading ……………………………………………………………………………………………. 61Section checklist………………………………………………………………………………………….. 61Section 3 – Review and Improve Customer Service……………………………………………… 62What skills will you need? …………………………………………………………………………….. 62Continuous improvement strategies ……………………………………………………………… 63Systematic quality monitoring……………………………………………………………………….. 65Variation analysis…………………………………………………………………………………………. 69Value chain analysis …………………………………………………………………………………….. 72Gather and analyse customer feedback ………………………………………………………… 73Develop, procure and use resources……………………………………………………………… 77Seven quality monitoring, reporting and analysis tools …………………………………… 79Produce and evaluate customer service solutions………………………………………….. 84Recordkeeping…………………………………………………………………………………………….. 88Section summary …………………………………………………………………………………………. 92Further reading ……………………………………………………………………………………………. 92Section checklist………………………………………………………………………………………….. 92Glossary ……………………………………………………………………………………………………………. 93Appendices ……………………………………………………………………………………………………….. 94Appendix 1: Answers to selected learning activities………………………………………… 94Appendix 2: Specifications agreement with Yore Mine Co……………………………….. 95Appendix 3: Complaints policy and procedure………………………………………………… 96Student Workbook IntroductionIntroductionFeatures of the training programThe key features of this program are:● Student Workbook – Self-paced learning activities to help you to understand keyconcepts and terms. The Student Workbook is broken down into several sections.● Facilitator-led sessions – Challenging and interesting learning activities that can becompleted in the classroom or by distance learning that will help you consolidateand apply what you have learned in the Student Workbook.● Assessment Tasks – Summative assessments where you can apply your new skillsand knowledge to solve authentic workplace tasks and problems.Innovation & Business Skills Australia has licensed the use of over 200 video vignettesfrom the Channel 9 television program, Your Business Success. The videos have beencarefully selected and embedded into relevant learning and assessment resources inorder to assist education providers and students in the learning process.Each video is accompanied by a learning activity. Videos can be found on IBSA’s YouTubechannel at <http://www.youtube.com/ibsachannel>.Structure of the training programThis training program introduces you to the knowledge and skills that are necessary tomanage a quality customer service. This is provided in three sections planning, deliveringand improving:● Plan customer service – begins with a review of who customers are and whatcustomer service is. It continues by exploring the key elements of customer serviceplanning.● Deliver customer service – is about delivering quality customer service andmanaging staff.● Review and improve customer service – looks at evaluating customer service andintroduces several problem-solving techniques.Your facilitator may choose to combine or split sessions. For example, in some cases, thistraining program may be delivered in two or three sessions, or in others, as many as eightsessions.BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 1 of 97Introduction Student WorkbookRecommended reading● Cole, K., 2010, Management: theory and practice, 4th edn, Pearson EducationAustralia, NSW.● Australian Consumer Law, viewed December 2014,<http://www.consumerlaw.gov.au/>.● ‘Customer service in your state or territory’, Business.gov.au, viewed December2014, <http://www.business.gov.au/business-topics/selling-products-andservices/customers/Pages/customer-service-in-your-state-or-territory.aspx>.● ‘Glossary’, American Society of Quality, viewed December 2014,<http://www.asq.org/glossary/a.html>.Please note that any URLs contained in the recommended reading, learning content andlearning activities of this publication were checked for currency during the productionprocess. Note, however, IBSA cannot vouch for the ongoing currency of URLs.Every endeavour has been made to provide a full reference for all web links. Where URLsare not current we recommend using the reference information provided to search for thesource in your chosen search engine.About Innovative WidgetsIn this Student Workbook, we use examples from a simulated business called ‘InnovativeWidgets’.Innovative Widgets is the largest producer of widgets in Australia. Established in 1952, itswidgets are used as components in a broad range of machinery, from domesticappliances to industrial equipment. The company is family-owned and run by the childrenand one grandchild of the founder, who collectively form the board of directors. Untilrecently, the grandchild had acted as managing director of Innovative Widgets.Innovative Widgets operates from one location. There is a stores area in the warehouse(for the raw materials used to make the widgets), a machine workshop (where the widgetsare produced) and dispatch and deliveries areas. The office block houses the followingoperational departments:● purchasing● sales● accounts● human resources● a recently established customer services team.1st edition version: 1 BSBCUS501 Manage quality customer servicePage 2 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook IntroductionInnovative Widgets Organisational ChartIn total, Innovative Widgets employs over 50 staff. Last year Innovative Widgets produceda pre-tax profit $2,240,000 on a turnover of $16,000,000.Innovative Widgets has a diverse customer base. Their largest customer is a major miningequipment manufacturer. This customer accounts for approximately 40% of total widgetsales. The other 60% of sales are to medium and small businesses and to individuals andsole traders.The following is an excerpt from Innovative Widgets’ business plan.Innovative Widgets business plan excerptVision statementTo keep every Australian business running smoothly using safe, quality widgets.Mission statement● Innovate new ways of manufacturing and testing widgets● Deliver consistently high-quality customer service internally and externally● Keep Australian businesses buying Australian widgets through quality products andsecond-to-none customer service● Have the best safety record of any widget company.BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 3 of 97Section 1 – Plan Customer Service Student WorkbookSection 1 – Plan Customer ServiceThis section introduces the concept of quality customer service, discusses internal andexternal customers and their requirements, and discusses the identification andassessment of customer needs. Finally, this section covers the key elements of acustomer service plan.
Scenario: Innovative Widgets
Innovative Widgets (IW) has been operating successfully for over 60 years and becamethe largest manufacturer of widgets in Australia. The company is owned by the sonsand daughters of the company’s founder, who all sit on the board of directors. Untilrecently the managing director was the grandson of the founder.Early in the company’s operation, IW secured an important customer in a local miningequipment manufacturer called Yore Mine Co. Innovative Widgets and Yore Mine Co.worked together to agree on widget specifications which they have maintained as theirproduct specifications ever since. These product specifications are provided inAppendix 2.The grandson was appointed managing director fifteen years ago. Little changed atInnovative Widgets during his leadership. The company had an enviable position asmarket leader and, with little competition, their market dominance was safe. About fiveyears ago it was noticed that sales were beginning to slump. The owners soondiscovered that the grandson was ill-equipped to face this challenge and they called ina firm of management consultants to help out.Initially, the consultants undertook a pre-audit by talking to staff, looking at workprocesses and departmental records. They then produced an initial report identifyingsome areas for concern. They suggested that Innovative Widgets:● were not aware of their external customer’s needs● were not aware of internal customer needs● did not have adequate policies and procedures for managing its customerservice.The managing director needed help. He admitted that he had been complacent abouthis customers, saying that he had always adopted the ‘If it’s not broken, why fix it?’approach to customer relations. He also asked what an ‘internal customer’ was – was itthe staff members who bought widgets under the employee discount scheme at adiscounted price?The consultants had a lot of work to do!
1st edition version: 1 BSBCUS501 Manage quality customer servicePage 4 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 1 – Plan Customer ServiceWhat skills will you need?In order to work effectively as a customer service manager, you must be able to: investigate, identify, assess, and include the needs of customers in planningprocesses ensure plans achieve the quality, time and cost specifications agreed withcustomers.What is customer service?Customer service relates to the level of service an organisation offers to its customersand the way an organisation interacts with a customer at all stages of the purchasingprocess. Some organisations are predominantly service providers – such as a legal firm oraccounting organisation – while other organisations provide customer service in additionto the physical product they are sell – such as a car dealership or a shoe store. Customerservices cover a wide variety of activities, including extended guarantees; regular mailingsof information; after-sales servicing, such as a repair and replacement service; and a tollfree helpline in case of complaints. The appeal of a company’s products is greatlyinfluenced by the customer services it offers.What is quality customer service?Before focusing on customer service, let’s look at some definitions of quality.The American Society for Quality (ASQ) defines quality as: ‘the characteristics of a productor service that bear on its ability to satisfy stated or implied needs’ and ‘a product orservice free of deficiencies’.1Noriaki Kano has described two important types of quality: ‘must be’ quality and‘attractive’ quality.2 Kano’s ‘must be’ quality is similar to the ASQ definition of satisfyingneeds, whereas the ‘attractive quality’ is what the customer would love, but hasn’t yeteven thought about. The key difference between the ASQ and Kano’s definitions of qualityis that Kano’s suggests that quality can exceed expectations.Clearly, quality customer service is about meeting or exceeding the needs andexpectations of customers. Customers may have needs and expectations in regard to:● characteristics and specifications of products● manufacturing quality of the product itself● delivery times● time taken to process orders , enquiries and complaints.1 ‘Glossary’, American Society of Quality, viewed December 2014, <http://www.asq.org/glossary/q.html>.2 Kano, N., 1984, ‘Attractive quality and must-be quality’, The Journal of the Japanese Society for QualityControl, vol.14, no.2, pp. 39–48.BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 5 of 97Section 1 – Plan Customer Service Student WorkbookImportantly, customers may not draw a clear distinction between the quality of a ‘product’and the quality of ‘service’, particularly when making a complaint about the quality of aproduct they have purchased.Quality customer service may, therefore, involve acting on behalf of an organisation toreassure customers and retain their business. In many such cases, quality customerservice involves identifying and satisfying customers’ emotional needs for validation andreassurance.
Learning activity: Quality customer service
Consider two times in which you complained about a product or service: one instance inwhich you came away from the experience of interacting with a customer servicerepresentative satisfied, and one instance in which you came away dissatisfied.Satisfactory experience:Dissatisfactory experience:List the reasons you felt satisfied or dissatisfied in the table provided below.Satisfied:Positive customer service experienceDissatisfied:Negative customer service experience
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Answer the following questions.1. With respect to the negative experience, what quality expectations were not met?2. In the positive customer service experience, how did the customer servicerepresentative (CSR) satisfy your:a. external needs for quick service, correct ordering, product replacement,etc.?b. emotional needs, for example, for reassurance, closure, or appreciation?3. Kano’s notion of ‘attractive’ quality refers to exceeding expectations. In what waydid the positive experience exceed expectations or satisfy expectations you didn’tknow you had?
BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 7 of 97Section 1 – Plan Customer Service Student WorkbookThe goal of an organisation should be to ensure the quality of customer service meets orexceeds the expectations of the customer to achieve a high level of customer satisfaction.Customer satisfaction refers to how a product or service meets, fails to meet or exceedsthe customer’s expectations.Quality service modelsThere are many models available to identify what a customer needs. One of the mostcommon models is the RATER model, which was developed in the mid 1980s by Zeithaml,Parasuraman and Berry.The RATER ModelMuch research has gone into what customers need from their providers. One model, theRATER model, is used extensively – particularly in the service sector. RATER stands forreliability, assurance, tangibles, empathy and responsiveness. It is believed thatcustomers, when assessing the service they want, consider the following five dimensionsof service:
Dependability and accuracy of goods or service.
Employees’ courtesy, knowledge, confidence and trust.
Appearance of employees, building, equipment, communication.
Care and attention paid to customer.
Provision of help, service and problem solving.
The focus of this section is on discovering all customer needs in order to plan and deliverquality customer service.First, however, let’s take some time to analyse the concept of ‘customer’, discuss thekinds of relationships that may exist between service providers and internal/externalcustomers, and explore customer needs in more detail.Internal and external customersA customer is the purchaser or user of a product or service. You may think of thecustomer as the buyer of a product or service, but even within an organisation, employeesare also seen as customers of the various internal services provided. In addition, citizensare viewed as customers of government services, and a logistics company can be thecustomer of a supplier, even though the goods they transport are intended for anotherend user.It is easy to recognise the customer/provider relationship when you buy bread from abaker. You are the customer; the bread is the product and the baker the provider. Thecustomer/provider relationship also applies when receiving a service, such as whenvisiting your doctor. In this scenario you are again the customer and the doctor theprovider, but what are you buying? Here, you are buying a service. The service is theadvice the doctor gives you during the consultation.1st edition version: 1 BSBCUS501 Manage quality customer servicePage 8 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 1 – Plan Customer ServiceInternal customersThe internal customer/provider relationship is often overlooked. An internal providerrefers to anyone who does something for another person or department within the sameorganisation. The person within the organisation who receives what the provider gives isan internal customer. For example, a secretary who types a letter for a manager to sign isproviding the manager with a product (the letter). In this example, the secretary is theprovider and the manager is the customer. Internal customers help and support you toprovide a quality product or service to your external customers.Every workplace consists of people interacting with each other in similar ways. In a largebakery, the flour may be stored in a storeroom. The storeman delivers the flour to thebaker. The storeman is providing a service (delivering flour) to the baker (receiving flour).The storeman is the provider and the baker is the customer.The baker bakes the bread and delivers it to the packer. Here the baker is the providerand the packer is the customer.The packer wraps the bread and delivers it to the dispatcher. The packer is the providerand the dispatcher is the customer. The dispatcher loads the bread into a van and thevan driver delivers to the retail shops. The dispatcher is the provider to the driver. Thedriver is the dispatcher’s customer.
Learning activity: Internal customers
Try to identify five internal customer/provider relationships in a workplace you arefamiliar with.12 3 4 5Describe how the customer relationship is managed to maintain quality. What policies,procedures, standards or agreed practices are in place to identify customer needs anddeliver customer satisfaction?
BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 9 of 97Section 1 – Plan Customer Service Student WorkbookExternal customersExternal customers are the people and organisations who have a need to purchase yourproduct or service. They have a budget that determines what they will provide in exchangefor a solution that meets their needs and expectations. External customers are able tochoose where and how they will spend their budget. The big question is who will receivethat money, you or your competitor? That will depend on who has earned the confidenceand trust of the customer. You and your competitor are competing for a slice of theirbudget – the business providing them with the best product/service wins. It’s importantto remember that most customers tend to vote with their money and complain withtheir feet.The Australian Consumer Survey covers the general experiences of consumers andbusinesses in dealing with consumer issues. The results of the 2011 survey showed thatconsumers are generally aware of the laws that protect their purchases, that they areaware of the consumer regulators and that they have the confidence to take action whenthey need a dispute resolved. In this environment of savvy customers, it is better toprovide customers with what they expect than have to resolve dissatisfaction at a laterpoint. It is estimated that it costs Australian businesses a total of $6.6 billion a year todeal with problems where they have a legal obligation to provide a remedy for theconsumer.3External customers and regulationsThere are bodies that exist to protect consumers and promote fair trade. The mainregulatory body is the Australian Competition and Consumer Commission, but there arealso state run offices of fair trading or consumer affairs as well as other government andprivate organisations that protect consumers. It is also important to note that on 1January 2011 the Australian Consumer Law (ACL) commenced. The ACL is a cooperativereform of the Australian Government and the states and territories, through theMinisterial Council on Consumer Affairs (MCCA). Information on the ACL, its enforcementand consumer policy in Australia is available on the Australian Consumer Law website at<http://www.consumerlaw.gov.au>.Supply and value chainsWhen you and your internal customers work as a cohesive team, your external customerswill benefit. Such teamwork means that the external customer, at the end of the supplyand value chains, receives the maximum value from their interaction with the business.Supply chains show the process of procurement, production and delivery within anorganisation. In the bakery example on page 9, the supply chain includes:● warehouse (stores)● kitchen, packaging● dispatch/despatch● delivery.3Australian Government, ‘The Australian Consumer Survey Report’, Australian Consumer Law, viewedDecember 2014, <http://www.consumerlaw.gov.au/content/Content.aspx?doc=consumer_survey/survey_overview.htm>.1st edition version: 1 BSBCUS501 Manage quality customer servicePage 10 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 1 – Plan Customer ServiceValue chains show how each process in an organisation increases the value of theproduct or service. In our bakery example, there are three processes that add value:● the kitchen adds value by turning the cheaper raw materials into bread● high quality packaging can result in receiving a higher price for bread● delivering to the customer produces delivery charges that produce a profit.Note: The storeman and dispatcher have an important role to play in the supply chain, butdo not add value to the product.The concepts of supply chains and value chains are related in that, as a product orservice passes through the supply chain, value is added to the product or service. At theend of the both chains the customer service representative (CSR) adds the value ofquality customer service to the chain.Poor internal relationships can lead to disastrous results for your external customers. It isimportant that you are able to take ownership for customer concerns. In spite ofeverything, CSRs are ambassadors for the company and should not hand over the blamefor late deliveries, poor service, and inadequate support. Customers aren’t interested inidentifying specifically who is to blame. If there is a problem, then customers want thatproblem to be fixed. It is up to the customer service team to use and direct all of thecompany’s resources to resolving their problem. Policies and procedures, servicestandards and agreements for internal relationships should be in place to ensure thesupply-value chain functions as it should.In some organisations a dedicated customer service department is established to ensureconsistent interactions with internal and external customers. However, as discussedearlier, internal customer/client relationships exist everywhere within an organisation.Everyone in an organisation is responsible for fostering quality customer service.
Learning activity: Supply chain at Innovative Widgets
Innovative Widgets have both internal and external customers. Their externalcustomers number over 1,000.Internally, the reception yard receives the raw materials from the external suppliers.The staff members in the yard are the supplier’s customers.The raw material is stored and kept in good condition until the production workshopstaff asks for a delivery.At this point the storemen are suppliers and the workshop staff members are thecustomers.Consider Innovative Widgets’ organisational chart on the following page.
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What other internal customer relationships exist?Analyse each customer relationship:● What are the service needs?● How are the needs identified?● What policies, practices, standards, service guarantees, etc. are likely to governand control the relationship to maintain quality● What actions are or could be taken by service providers to improve servicequality?
1st edition version: 1 BSBCUS501 Manage quality customer servicePage 12 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 1 – Plan Customer ServiceAnalyse the supply and value chain that ends with the external customer:● What policies, practices, standards, service guarantees, etc. might be put inplace to ensure the customer receives maximum value?Customer behaviourCustomer behaviour can be thought of as both the decision-making process and thephysical activity undertaken to purchase and use a product or service.Let’s look at a common model of consumer decision-making:With respect to customer service, potential customers may base their decision-making onthe quality of customer service, whether the customer service experience meets theoriginal need which prompted the customer’s interaction with the business and how welltheir need is met.The general process described above varies from customer to customer depending onneeds and personal characteristics. To some extent, every customer is different. Thescience of marketing of products and services, however, depends on the idea that,although individual customers vary widely from one another with respect to somepersonal attributes, with respect to their decision-making and purchasing behaviour,consumers act in similar ways.ProblemidentificationResearch intoproduct orservice solutionsEvaluation ofalternativesPost Purchase/usepurchase/useBSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 13 of 97Section 1 – Plan Customer Service Student WorkbookIn the following pages, you will be introduced to some important concepts surroundingcustomer behaviour and the relationship of customer behaviour to customer service. Wewill look briefly at influences on customer behaviour, the notion of customer value, howconsumers behave when dissatisfied with a product or service, and finally at themarketing process, how businesses attempt to influence behaviour.Influences on customer behaviourWhy do customers behave the way they do when making purchasing or usage decisions?According to Shail Patel and Antoine Schlijper in Models of Consumer Behaviour, thereare three factors which influence behaviour across 288 possible models of behaviour:● loyalty● sociology● psychology.4Loyalty describes the tendency for customers to purchase the same products or services.Loyalty is an important force in shaping decision-making. Without loyalty, decisions wouldbe made solely on the basis of current availability. In other words, customers would notseek out the services of particular businesses or wait for service if alternatives werepresent.Sociology describes the tendency for customer decision-making to be influenced by thedecisions of others.Psychology describes what and how aspects of products and services affect decisionmaking. For example, a product may appeal as a status symbol. Products may havepositive attributes or associations that consumers believe will to transfer to thepurchaser. Services, particularly those services delivered in connection to complaintshandling may appeal to a psychological need for empathy.Undeniably, rational self-interest is also an influence on behaviour. In classical economictheory individuals make purchasing decisions based on an unemotional, impartial view oftheir own needs and they attempt to satisfy these needs at the lowest possible cost.Marketers, however, presented with the task of differentiating products or services withvery similar features, emphasise the important role of social and psychological influences.Underlying this emphasis is the appreciation of how much the decision-making process –while appearing conscious and rational – is coloured by emotional reactions to productsor services.Customer service channels and consumer behaviourCustomer service is the way an organisation interacts with a customer at all stages of thepurchasing process, i.e. before, during and after the purchase. A customer servicechannel is the medium in which the transaction takes place.4 Patel, S. and Schlijper, A., 2004, Models of Consumer Behaviour, Unilever Corporate Research, availableonline, viewed December 2014, <http://www.maths-in-industry.org/miis/38/1/Consumers.pdf>.1st edition version: 1 BSBCUS501 Manage quality customer servicePage 14 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 1 – Plan Customer ServiceCustomer service channels include:● face-to-face● telephone● email● online.Face-to-face interaction provides the opportunity to respond to customer needsimmediately and influence behaviour. Many customers will respond positively to the‘personal touch’ this channel provides. For similar reasons, telephone interaction can alsobe highly effective. Businesses use these interactive channels to build relationships withcustomers in which customers actively participate and negotiate how a service is to bedelivered to them. Customer service representatives use active listening and othertechniques to seamlessly interpret customer behaviour, uncover customer needs andtailor the service they deliver to the customer.Increasingly, transactions are taking place without the need for service personnel and areundertaken entirely over the internet. The design of the web pages and processes areimportant factors in ensuring a quality service.Interestingly enough, there is some evidence that customer service needs may be betterserved through online service. Marketing researcher Yuping Liu argues that too much hasbeen made of the potential for face-to-face interaction to deliver effective service.According to Liu, not enough attention has been paid by researchers to the waycustomers actually behave in customer service scenarios. Many, but not all, customersexhibit ‘communication avoidance’ when faced with personal interactions. Far fromhelping to shape the way products and services are delivered, as naively supposed, suchcustomers may avoid communicating altogether. Consequences for businesses include areduced ability to respond to customer needs and potential loss of customers.Online alternatives, on the other hand, allow for customer interaction with customerservice personnel, but are non-threatening by virtue of being virtual interactions.Customers may prefer to correspond, for example through email, live-messaging, orpotentially through far more interactive virtual environments. As online service technologybecomes increasingly sophisticated, more and more options for enriching, customising orpersonalising the customer interaction are possible.5
Learning activity: Customer value
Consider your own organisation or an organisation you are familiar with and answer thefollowing questions.1. What channel do your customers prefer? Why?
5 Liu, Y., 2007, ‘Online interaction readiness: conceptualisation and measurement’, Journal of CustomerBehaviour, vol. 6, no. 3, pp. 283-299. Available online, viewed December 2014,<http://www.yupingliu.com/files/papers/liu_interaction_readiness.pdf>.BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 15 of 97Section 1 – Plan Customer Service Student Workbook
2. What opportunities for online customer service exist?
Customer valueFor customers of products or services, perhaps the most important influence onbehaviour is perceived value. When consumers make decisions, they will balance costagainst perceived value.The notion of perceived value includes the satisfaction of all needs, including:● satisfaction of external needs, such as the real need for product features, speed ofservice, etc.● satisfaction of sociological needs to be seen as part of a social group● satisfaction of psychological needs such as emotional validation.For example, two products with the same price and features may be perceived as havingdifferent values if one product includes friendly, dependable service.Importantly, perceived value is relative to individuals or market segments. For example,segments with low income may not attribute as much value to service as someone with ahigher income. Great service may not benefit the consumer as much as other factors. It isimportant, therefore, to know your customer and how your customer perceives value.
Learning activity: Customer value 2
Consider your own organisation or an organisation you are familiar with. Answer thefollowing questions.1. What influences your customers’ behaviour?2. How many kinds of customer/market segments do you deliver customer serviceto?
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3. How do your customers perceive value?4. How could you increase customer service value for your different customersegments?
The dissatisfied customerSo what happens if you don’t deliver value? How do customers behave? Most research inthe field of customer psychology suggests that very few customers complain if they areunhappy with a product or service, instead they never go back to that provider. They taketheir business elsewhere. In addition, they tell lots of their friends about their badexperience.Consider the following facts.● The majority of unhappy customers don’t complain because they don’t want thestress associated with complaining or they think their complaint will not do anygood.● As little as 5% of unhappy customers complain6. (Goodman-Delahunty, 2001)● If the complaint is resolved, more than half will continue to do business.● Unhappy customers tell about ten others of their experience.● Customers who complain and have their complaint resolved tell about 5 others.● On average, it is much cheaper to keep a customer than to find a new one.● Customers often behave with the herd mentality. If customers start to leave you,others will follow them just to be part of the herd.So for every customer who complains, there are likely to be many others who areunhappy, but do not complain. Customers simply leave, at great expense to the business.This final point underscores the importance many people attribute to the quality of servicethey receive. The perceived value of customer service shapes purchasing behaviour andcustom.6 Goodman-Delahunty, J., 2001, ‘ASIC’s Stakeholder Forum: Promoting Consumer Complaints in the FinancialSector’, ASIC, p. 5.BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 17 of 97Section 1 – Plan Customer Service Student WorkbookIn Section 2 of this Student Workbook we will consider ways to handle customercomplaints in such a way as to satisfy needs, benefit customers and increase the value ofthe customer experience.
Learning activity: Customer complaints
Consider your own organisation or an organisation you are familiar with. Answer thefollowing questions.1. How does your organisation handle customer complaints?2. Considering the above information regarding customer behaviour, how could yourorganisation add value to interactions with customers to:a. defuse complaints?b. retain customers?
The marketing process and customer serviceThe marketing process may be thought of as the attempt by businesses to influencecustomer behaviour by appealing to those factors thought to influence purchasing.Typically, businesses will first conduct marketing research to determine who is likely towant a particular product or service. During the marketing process, businesses willidentify target markets or segments of the total market containing potential consumerswith common characteristics.Once a target market segment has been identified, marketers analyse data and refinetheir knowledge of shared characteristics or attributes of the segment in a process calledprofiling the segment. Attributes may be psychological and influence decision-making,they may be demographic attributes, or they may be physical behaviours. Crucially,marketers will attempt to define the concept of value for customer segments.1st edition version: 1 BSBCUS501 Manage quality customer servicePage 18 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 1 – Plan Customer ServiceFinally, once businesses know enough about their potential customers, they will design amarketing mix for the product and service including price, product, promotion anddistribution elements.With regard to customer service, a key element of the marketing mix is distribution.Distribution refers to how a product or service is delivered to customers. For example,customers may make a decision to purchase or not purchase a product or service on thebasis of friendly service. On the other hand, marketing research may uncover thatknowledgeable or fast service is a more important determinant of purchasing and usagedecisions. Businesses may also promote themselves as offering superior service as a wayof attracting customers.Investigate, identify and assess customer needsIn order to market products and services effectively and satisfy customer service needs,businesses need to actively identify the needs of their customers.Depending upon the type of customer/provider relationship, there may be one or manymethods of identifying customer needs. The secretary typing a letter for the managerneed only ask a few questions to make sure the manager’s needs are identified. But amulti-national oil company would find it impossible to enter into a conversation with alltheir customers. What may be appropriate for an airline might not be appropriate for acorner cafe.The following list provides some examples of ways to investigate customer needs:● Informal face-to-face discussions are particularly useful if there are a small numberof customers.● Telephone interviews can be useful if there are large distances between thecustomers and provider.● Paper surveys, usually sent through the post, can be useful for gatheringinformation but often the return rate is low.● Internet surveys, often displayed as pop-up boxes, rely on customer traffic to yourwebsite.● Email surveys are better targeted towards your customer.● Telephone surveys, when unsolicited, are often seen as intrusive but may beeffective when connected to calls made by customers.● Suggestion boxes can be placed in store and can generate good ideas but requirefollow-up and maintenance to make customers feel valued after makingsuggestions.● Point-of-contact questioning, such as at the cash register, can often provide aninformal method of identifying customer needs.● Focus groups, where samples of customers are questioned about their needs, areuseful for organisations with large numbers of customers.BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 19 of 97Section 1 – Plan Customer Service Student WorkbookLess direct methods of identifying customer needs may also be used. Some methodsemployed are:● analysing customer interaction recordings and observations● analysing of sales data, including cross-sales and up sales data● correlating sales data, etc with other market data such as demographic data, socialor economic trends, etc● analysing market research by external providers.
Tip: Getting customer feedback
Collecting customer feedback can be deceptively simple. The following example is fromthe ‘Innocent drinks’ website.● ‘Us’, Innocent, viewed December 2014,<http://www.innocentdrinks.co.uk/us/our-story>.In the summer of 1998 when we had developed our first smoothie recipes but were stillnervous about giving up our proper jobs, we bought £500 worth of fruit, turned it intosmoothies and sold them from a stall at a little music festival in London.We put up a big sign saying: ‘Do you think we should give up our jobs to make thesesmoothies?’ and put out a bin saying ‘YES’ and a bin saying ‘NO’ and asked people toput the empty bottle in the right bin.At the end of the weekend the ‘YES’ bin was full so we went in the next day andresigned.7
Assess customer needsOnce you have gathered data on customer needs, you will need to carefully assessimplications for customer service. If you have carefully designed the tools you will use tocollect data and have considered in advance how you will interpret and use this data thistask will be much easier to carry out.Firstly, you will need to carry out a gap analysis between customer expectations and thereality of customer service. Secondly, you will need to analyse cause and effect to identifythe reasons behind customers’ unmet expectations. Thirdly, you will need to deviseactivities systems and processes to avoid poor performance and close the performancegap. Section 3 will deal with performance data analysis tools and systematic customerservice improvement in more detail.7 Sourced with permission from Innocent Drinks: ‘Our story’, Innocent Drinks, viewed December 2011,<http://www.innocentdrinks.co.uk>.1st edition version: 1 BSBCUS501 Manage quality customer servicePage 20 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 1 – Plan Customer Service
Learning activity: Assess customer needs
Consider a business you are familiar with. Answer the following questions.1. What methods are used to collect customer information?
2. How are these methods designed to collect the most useful information?
3. How is this information analysed to identify needs for the purpose of improvingcustomer service?
Customer questionnaireLet’s look at perhaps the most commonly used method of directly accessing customerinformation – questionnaires.Questionnaire designTo design effective questionnaires, you need to determine what kind of data you requireto make management decisions about how to meet customer service needs. It isimportant to consider if quantitative or qualitative data is required.Quantitative data refers to data that can be converted into numerical form and organisedinto tables and graphs. Qualitative data refers to comments such as suggestions forimprovement, where the customer is asked an open-ended question.Quantitative data is easier to process and is useful when surveying large numbers ofpeople. Qualitative data can provide richer results, but can be difficult to analyse. Often amix is used; respondents might answer close-ended questions throughout thequestionnaire followed by a space provided for further comments (an open-ended requestfor information).Questions and scales should be designed to pass two tests: validity and reliability.Question validityA question is considered valid when the responder understands it in the same way as theperson writing the question. For example, cafe owners might ask customers when theypay their bill: ‘Did you enjoy the coffee?’ every time the owners get a ‘yes’ response, theyassume that the customer was satisfied with the cafe. What if the customer found therest rooms dirty and has decided not to return? Is the owners’ question valid?BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 21 of 97Section 1 – Plan Customer Service Student WorkbookWhen writing questions for a survey they should be validated by conducting a smallersurvey and interviewing the responder to ensure that they understood the question as itwas intended to be understood.Question reliabilityA question is considered reliable if the response given would be the same as a secondresponse to the same question with the same conditions. For example, if I asked: ‘On ascale of 1–10 where 1 is ice cold and 10 is piping hot, rate your coffee’s temperature.’ Imay get different results for the same temperature of coffee. The question is not reliable.Reliability issues can be resolved by careful design of question and scale. In the coffeeexample a more reliable question would be: ‘Was your coffee too cold, just right or toohot?’Question types to avoidThere are several types of questions that need to be avoided in surveys, some examplesare provided below.
A loaded question is partial and leads the responder to a preferredresponse, e.g. ‘you wouldn’t want to buy from competitor X would you?’
Make the question as simple as possible so as not to confuse theresponder. Complex questions can also introduce too many variablesresulting in reliability issues: ‘given the problems in the Asian marketscoupled to the strength of the dollar, but excluding the economic climate inEurope, how would you describe your business confidence?’
Ask one question at a time, otherwise the responder doesn’t know which toanswer. For example ‘what is the quickest, cheapest way for us to deliverwidgets to you?’ The quickest way to deliver may not be the cheapest.
All businesses use acronyms, but not all customers understand them.Rather than ask: ‘Did you find the SW useful when undertakingBSBCUS501?’ perhaps: ‘Did you find the Student Workbook useful whenundertaking your Managing quality customer service course?’
Be aware of confidentiality issues and that some questions can be intrusive.An overly personal question will discourage a customer from completing thequestionnaire.
ScalesThere are many different types of scales used in questionnaires and careful considerationneeds to be given to their selection. The main types of scales are as follows.
These scales ask the responder to select from a list of words, such asyes/no, or sometimes/often/never.
Ordinal scales ask the responder to rank items, such as ‘Rank the followingin order of importance: price, availability, quality, one year guarantee.’
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Interval scales ask the responder to rate something on a given scale, wherethe differences on the scale are of equal strength. An example may be:‘Please circle which best describes what you consider when buying: Price isthe most important factor when I buy widgets.strongly agree/neither agree or disagree/strongly disagree’
Ratio questions ask for actual data, such as how many, how old, how much,etc.
Bi-polar scales ask the responder to place a mark between two opposites,such as: ‘Happy_ _ _ _ _ Sad’ or‘Will shop here again _ _ _ _ _ Will not shop here again’
Likert scales are designed to gather opinions or attitudes and askresponders to select from scales such as ‘stronglyagree/agree/neither/disagree/strongly disagree’
RATERRATER (previously discussed on page 8) can be used as a guide to help you identify whatquestions to ask your customers. The questions will be different for different businesses,but the following is provided as a guide.
● What precise item or service is required?● What are the specifications and tolerances?● When are the deadlines for delivering the product?● What guarantee is needed?
● What level of product/service knowledge do we expect ouremployees to have (define for any employees that come into contactwith the customer)?● What style of interrelation is preferred, e.g.friendly/formal/courteous?● Should/do our employees appear confident and trustworthy?
● How are our employees expected to appear, e.g.uniforms/formal/casual?● What should our buildings look like?● What should our equipment such as machines and vehicles looklike?● What should our letters, brochures and website look like?
● Do our staff members show adequate and appropriate care andattention?
● How quickly do you want us to respond to your requests?● If things go wrong, what should our complaints procedures look like?
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Learning activity: Customer questionnaire
Consider a business you are familiar with and design a questionnaire to identifycustomer needs for that business.
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Learning activity: Conducting surveys
Watch the video ‘BSBCUS501A: Conducting surveys’ on IBSA’s YouTube channel at<http://www.youtube.com/ibsachannel>, and answer the following questions.1. Why is the incentive suggested to Heather Howard when creating her customerquestionnaire?
2. How else could the news agency use an incentive scheme to encouragecustomers to complete the questionnaire?Suggested answers to this activity are provided in Appendix 1 of this StudentWorkbook.
Customer service plansIt is essential to have a plan to meet customer requirements. Each plan will be differentfor different business sectors and businesses within sectors, but as a guide acomprehensive plan would contain:● a customer service vision and mission● product and/or service standards● a policy and procedures for identifying customer needs● a policy and procedures for customer feedback● a policy and procedures for managing complaints● a policy and procedures for managing recordkeeping● a section on continuous improvement● a customer service charter.BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 25 of 97Section 1 – Plan Customer Service Student WorkbookThe following paragraphs explain what is normally included in each section of a customerservice plan.Customer service vision and missionIf you don’t know where you’re going, you’re likely to end up somewhere else. In order toavoid this happening in business, a vision and mission is often developed. Somecompanies use different terms for mission and vision, such as ‘values statements’ or‘guiding principles’.A customer service vision and mission are normally short statements that describe howcustomer services will be in the future (the vision). The way the vision is to be achieved isusually called the mission.
Example: Mission and vision statements:
VisionIn five years time, Company X will be considered a market leader in customer service.MissionCompany X aims to deliver friendly, innovative and quality service to all internal andexternal customers.
A customer service vision is a statement of how you see customer services being in thefuture. The future can be any time, but is normally 5–10 years time. Vision statementscan take many forms, but most tend to be short and ‘punchy’, such as the Ford Motorcompany’s:‘Our vision is to become the world’s leading consumer company forautomotive products and services.’A mission statement can also be equally short. It defines what the company will do toachieve its vision. The Ford Motor Company’s states:‘We are a global family with a proud heritage passionately committed toproviding personal mobility for people around the world. We anticipateconsumer needs and deliver outstanding products and services thatimprove people’s lives.’In addition, Ford has a Value statement which reads:‘The customer is Job 1. We do the right thing for our customers, ourpeople, our environment and our society. By improving everything we do,we provide superior returns to our shareholders.’A customer service plan should clearly identify how the business wants its customerservices to be in the future and how it intends to get there. A shared vision and missioncan be a powerful tool for guiding customer service delivery.1st edition version: 1 BSBCUS501 Manage quality customer servicePage 26 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 1 – Plan Customer Service
Learning activity: Mission and vision statements
Write customer service mission and vision statements for a company you are familiarwith.Note: Tailor your statements to reflect the actual goals of the business and needs ofcustomers. If you have access to company documentation, look at company strategicplans or vision and mission statements contained in the company’s business plan forguidance or inspiration.
Product and/or service standardsA clear description of the product or service specifications is essential in order to respondto customer queries and/or complaints. This description would normally includetolerances, guarantees, delivery times/deadlines, etc.Organisational policies and proceduresA policy is a written plan that describes what an organisation aims to achieve andprocedures are individual tasks that need to be done to achieve the organisation’s aims.The customer service vision and mission will drive policy and procedures. For example, ifthe mission is ‘providing the lowest cost solution to managing customer relations’, thepolicy will differ significantly compared to a mission of ‘providing excellence in all that wedo’. The first might be appropriate for budget accommodation and the second for a fivestar hotel.A policy is a statement of intent related to an issue or function such as customer service.A policy should include:● purpose statement – the context of the policy, why it is required, the desiredstandard or overall objective● scope – the application of the policy (particular location, workgroup, etc.)● resources – additional documents, related forms, etc.BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 27 of 97Section 1 – Plan Customer Service Student Workbook● roles and responsibilities – who is responsible for what in the implementation ofthe policy● reference to legislation that the policy specifically complies with where applicable.Procedures are developed to support the implementation of the relevant policy. Aprocedure states the complete instructions for completing an activity covered by thepolicy. Procedures include the following as applicable:● step-by-step instructions for carrying out tasks and processes● training requirements● process for monitoring, reviewing and reporting● requirements for documentation and recordkeeping.
Learning activity: Policy for customers
Visit the Monash University Policy Bank at <http://www.policy.monash.edu/policybank/> and the Derwent Valley Council policy documents website at<http://www.derwentvalley.tas.gov.au> (under ‘Council Documents’).Identify three policies from each organisation that apply to external customers.
Most organisations will have a large number of policies and procedures that determinehow to deal with internal customers across a number of areas. For examples of policiesthat cover internal customers, visit the Monash university website at<http://www.adm.monash.edu.au/workplace-policy/>.Effective policies and procedures should work to support the seamless integration ofbusiness operations from different management areas. Policies and procedures shouldalso support and reinforce company culture, or ‘how we do things at company X’.A good tactic to ensure policies and procedures from two management areas harmonise– such as customer relationship management and performance management – is toeither reduce the number of individual policies, or base the individual policies on commonprinciples or values such as commitment to corporate ethics, or high performance. Theseprinciples, in turn, should relate to or support company business or strategic goals. In thisway, individual policies and procedures will work to reinforce and support a companywide, integrated approach to doing business.1st edition version: 1 BSBCUS501 Manage quality customer servicePage 28 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 1 – Plan Customer Service
Example: Innovative Widgets – protocols for developing policies and procedures
Innovative Widgets have a few simple protocols for developing and obtaining approvalfor policies and procedures.At Innovative Widgets, all policies should have a:● statement of purpose● scope of the policy● related resources, e.g. procedures, forms, guidance material, etc.● related legislation● approval information: the authorisation date and name of the person whoapproved the policy.Procedures should be written as a number of steps where possible. For example, step1: greet the customer; step 2: ask the customer what you can help them with.
Policy and procedures for identifying customer needsThe customer service plan should contain a policy for identifying customer needs. Thepolicy may also state who is accountable for identifying the needs and what frequencyneeds would need to be identified. Policies should contain reference to relevantlegislation discussed later in this part.The procedures are the individual tasks that need to be taken to identify customer needs.They should state who is responsible for undertaking each task. Complicated tasks areusually presented as step-by-step procedures. A procedure for identifying customer needswould state what action is to be taken to identify customer needs.Policy and procedures for obtaining customer feedbackA policy for obtaining customer feedback would contain who is accountable for obtainingcustomer feedback and who was responsible for undertaking the procedure’s tasks.Procedures would include what strategies are to be used to obtain feedback. Policiesshould contain reference to relevant legislation.Policy and procedures for managing customer complaintsThe policy should state the organisation’s commitment to managing customer complaintsand provide procedures for those employees who come into contact with customers. Theprocedures should identify how to respond to customers and what limits of authorityemployees have. Policies should contain reference to relevant legislation and may alsorefer to voluntary standards.A more detailed discussion of managing customer complaints is given later in Section 2(see page 48).Policy and procedures for managing records, reports and recommendationsThe policy should state the organisation’s commitment to managing customer informationand employee information in accordance with relevant legislation such as the Privacy Act.Procedures should specify steps to take to ensure the proper use of such information.BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 29 of 97Section 1 – Plan Customer Service Student WorkbookPolicy and procedures should also be put in place for the systematic creation of andstorage of reports and recommendations for the purpose of continuous improvement ofcustomer servicePolicy and procedures and customer needsIn Section 1 the RATER system was described as a model for identifying customer needs.Having received feedback from customers it is essential to write and implement a policyand procedures that will help ensure that the organisation meets the customer needs anddelivers quality service.Consider the following customer responses to RATER questions from two airlines.
What is the maximum fare you will pay for aticket from cities A and B?
How do you expect our cabin staff to dress?
Do you expect a meal?
Do you need a dedicated check-in?
Is a non-refundable ticket OK?
Fine. It’s cheap.
No, I’d want refund.
Do you expect a frequent flyer lounge?
Will you take your rubbish with you?
Because customer needs and expectations are different, the Budget Airline’s policies andprocedures will be significantly different to the National Carrier’s. Using the feedback fromRATER guides, the development of policy and procedures in this case, results in differenceson several points:● product standards: prices, delivery times, quality tolerances, etc.● uniforms: suit and tie versus open collar● mode of contact: deference versus friendly● cleanliness: spotless versus tidy● after-sale contact: none needed (no refunds) versus telephone team to resolveissues.
Learning activity: Policies and procedures
Consider the two airlines above. Using Monash University’s policies and procedures asa guide, create customer service policies for the airlines.You may choose to use the blank policy template provided by Monash on their ‘WritingUniversity Policy’ page available at <http://www.policy.monash.edu.au/policybank/academic/education/quality/suppdocs/policy-template.rtf.> as a guide forcreating the policies and procedures.
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Answer the following questions.1. How do the policies differ? Why do they differ?
2. Consider customer service procedures that would be governed by the policies youhave written. How might these procedures differ? On which points would theydiffer? Why? On which points wouldn’t they differ, or differ minimally? Why?a. On step-by-step instructions for carrying out tasks and processes?
b. On training requirements?
c. On process for monitoring, reviewing and reporting?
d. On requirements for documentation and recordkeeping?
Continuous improvementMost plans would contain evidence of continuous improvement. There should be acontinuous cycle of updating the plan, acting on, reviewing and updating the plan. Acustomer service plan may include a section on what general process the business willfollow to ensure the continuous improvement of customer service to meet customerneeds.BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 31 of 97Section 1 – Plan Customer Service Student WorkbookCustomer service charterA customer service charter is often produced to inform customers of the customerrelevant parts of the customer service plan. It would normally not include specificprocedures for employees on how to deal with customers face-to-face or on thetelephone. A customer service charter is an important tool for organisations to managepublic relations; set expectations in line with more internal, operations-focussed customerservice plans; and promote the organisation as responsive to customer need.
Learning activity: Customer service plans
Search online for a customer service plan to refer to for this activity. An example fromQantas is available from <http://www.qantas.com.au/travel/airlines/customer-serviceplan/us/en>.1. From the information provided in the customer service plan, note down:a. who the company has identified as their internal and external customers
b. the customer service channels that they have developed standards for
c. the ways they have identified will be a measure of their level of customerservice success.
2. Find another example of a customer service plan online, and note somesimilarities and differences between the two plans.
1st edition version: 1 BSBCUS501 Manage quality customer servicePage 32 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 1 – Plan Customer ServiceRelevant legislation, standards and codes of practiceBusinesses providing customer service to consumers should take into account thelegislation that has been designed to protect consumers and business, particularly withrespect to the use of customer information and marketing activity.The following pages list relevant legislation, mandatory and non-mandatory standards andcodes of practice that will affect the design and development of customer service plansand charters.Relevant legislationPrivacy legislationThe Privacy Act 1988 regulates how personal information is handled. It covers suchthings as:● how personal information is collected● how it is then used and disclosed● its accuracy and how securely it is kept● general rights to access that information.Consider the following thirteen rules to protect consumers’ personal information.1. Only collect information that is necessary and ensure that customers know whenand why you are collecting their information.2. Customers are allowed to use a pseudonym or not identify themselves when theyare dealing with a company.3. Only collect personal information that is directly relevant to the product or serviceyou are providing. Don’t collect personal information about an individual justbecause you think that information may come in handy later.4. Don’t file or keep personal information that is provided to a company without thepermission of the individual.5. Tell people what you are going to do with the personal information you collect aboutthem.6. If you have collected personal information for one purpose, you cannot use thatinformation for a different purpose unless you have permission from the individual.7. The company must not disclose personal information they have on file to anothercompany for direct marketing purposes.8. If the company is going to be transfer personal information to another individual orcompany outside of Australia, the company must first make sure that the overseascompany or individual is going to adhere to the Australian Privacy Principles.9. Don’t use government-issued numbers or identifiers (such as a tax file number) torefer to or identify customers.10. Keep personal information accurate and up to date.BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 33 of 97Section 1 – Plan Customer Service Student Workbook11. Keep personal information secure.12. If people ask for access to their own personal information on file (not theinformation of another individual), grant them access.13. If an individual asks for their personal information to be corrected, the companymust do so.8With respect to managing customer service, privacy legislation may be relevant to policiesdealing with the treatment of customer details and records keeping.Australia’s Do Not Call Register for telemarketingAustralia’s Do Not Call legislation came into effect on 31 May 2007.It is now illegal for telemarketers to call Australian phone numbers which are mainly forpersonal or domestic use and whose owners have put their numbers on the Do Not CallRegister.Exceptions include market research calls and calls from charities, and political parties.Note that, for market research calls to be exempt there must be no intent to sell aproduct or service (to that customer within that call). In other words, you should notconduct marketing under the cover of customer service market research.9Anti-spam legislationSpam is electronic mail that is sent indiscriminately to many, many people. Spam issimilar to junk mail that you receive in your letter box; however, spam can be much moresinister. Spam is often used as a disguise to infect computers with viruses that candamage them, or worse, to extract personal data such as credit card details.As a result, spam is illegal in Australia. This means that it is an offence to send unsolicitedelectronic material to members of the public. The ACMA and the Australian High TechCrime Centre work in partnership to identify and track organisations or individuals whobreach Australia’s Spam Act 2003.Unsolicited commercial emails must contain accurate information about the origin of themail and provide a means for recipient to opt out. The regulation applies to email, SMS,MMS, and instant messaging.Material that is not of a commercial nature (i.e. is not selling a product or service) isexempt. This includes pure market research and emails from charities, political parties,and religious organisations that are seeking donations.10Anti-discrimination legislationLaws about discrimination are made at both the Commonwealth and the state/territorylevel. These laws provide a basis on which individuals may lodge a complaint includingdiscrimination because of race, sex, disability and age.8 ‘Privacy fact sheet 17’, Office of the Australian Information Commissioner, viewed December 2014,<http://www.oaic.gov.au/privacy/privacy-resources/privacy-fact-sheets/other/privacy-fact-sheet-17-australian-privacy-principles>.9 ‘FAQs’, Do Not Call Register, viewed December 2014, <https://www.donotcall.gov.au/consumerfaq.cfm>.10 Australian Communications and Media Authority, ‘Spam exemptions’, Australian Communications andMedia Authority, viewed June 2014, <http://www.acma.gov.au/Industry/Marketers/Anti-Spam/Ensuring-youdont-spam/spam-exemptions-ensuring-you-dont-spam-i-acma>.1st edition version: 1 BSBCUS501 Manage quality customer servicePage 34 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 1 – Plan Customer ServiceCommonwealth laws and the state/territory laws generally cover the same grounds andareas of discrimination. However, there are some ‘gaps’ in the protection that is offeredbetween different states and territories and at a Commonwealth level. Workplacediscrimination is unlawful. All businesses need to be familiar with relevant legislation toprevent incidences of discrimination in the workplace. Some relevant anti-discriminationActs are listed below.
● Age Discrimination Act 2004● Disability Discrimination Act 1992● Racial Discrimination Act 1975
● Workplace Gender Equality Act 2012● Sex Discrimination Act 1984.
A few areas of protection from discrimination vary from state to state, but generally, it isunlawful to discriminate on the basis of the following 18 characteristics:
● sex● relationship status● pregnancy● parental status● breastfeeding● age● race● impairment● religious belief or religious activity● physical features
● political belief or activity● trade union/industrial activity● employment activity● lawful sexual activity● gender identity● sexuality● family responsibilities● association with, or relation to, aperson identified on the basis of anyof these protected attributes.
Anti-discrimination legislation may be relevant to customer service policies dealing withthe treatment of both customers and employees. For example, all customers should begiven the same access to services regardless of the 18 characteristics listed above.Similarly, the performance management, coaching or training of employees must becarried out in a non-discriminatory manner.Health and safety legislationHealth and safety legislation (referred to as either work health and safety, WHS, oroccupational health and safety, OHS) aims to ensure the health and safety of workers andworkplaces through requiring employers to identify, assess and reduce or eliminate OHSrisks. Employers are required to consult with employees on OHS issues and respond toOHS issues raised by employees.Health and safety legislation is enacted and enforced by each individual state andterritory.Consumer LawThe Competition and Consumer Act 2010 forbids marketing practices or activities thatcould harm companies, their employees, their customers, or government agencies,regardless of the justification for such activities.BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 35 of 97Section 1 – Plan Customer Service Student WorkbookSpecifically prohibited activities include the following:● using deceptive or misleading statements● attempting to induce individuals to place their personal interests above those of thecompanies or organisations they represent● attempting to restrict competition by:○ inducing a competitor or customer to breach a contract with a third party○ obtaining unauthorised access to classified or proprietary information ordocuments○ securing an unfair competitive advantage.● violating any law or regulation● engaging in any activity that could damage the company’s reputation.Employees may only use legal, ethical and proper methods to maintain markets for acompany’s products and services and to secure additional business.Schedule 2 of the Competition and Consumer Act sets out a new national consumer law:the Australian Consumer Law (ACL). The ACL establishes consumer rights and businessobligations when selling goods and services across Australia and replaces variousnational, state and territory laws.The Competition and Consumer Act is enforced by the Australian Competition andConsumer Commission (ACCC), the Australian Federal Government’s national agencydealing generally with competition and consumer protection matters.
Learning activity: Legislation
Consider Innovative Widgets, your own organisation, or an organisation you are familiarwith.● What specific legislation would you need to consider with respect to designingand developing policies and procedures as part of a customer service plan?
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● How would provisions in legislation directly affect procedures, for example,procedures for gathering or storing customer data or procedures for monitoringcustomer service representatives to manage service quality?
● What are the risks of not considering legislation in developing customer serviceplans?
Standards and codes of practiceCustomer service plans and charters may directly reference or be informed by standards,best practice models, and codes of practice. These may be mandatory or voluntary. Codesof practice are often written to help businesses minimise their risk of breachinglegislation that is relevant to their industry or business practices. Let’s look at standardsand codes of practice in more detail.BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 37 of 97Section 1 – Plan Customer Service Student WorkbookMandatory standardsOrganisations must comply with mandatory standards under the Competition andConsumer Act 2010. Standards under the Act include various safety and informationstandards for specific products and services.Mandatory industry standards may be enforced under a number of other Acts andRegulations. For example, under the Telecommunications Act 1997, the AustralianCommunications and Media Authority (ACMA) enforces the Telemarketing and ResearchCalls Industry Standard 2007. This standard provides guidance on the application of theDo Not Call Register discussed previously and mandates times at which unsolicitedmarket research calls may be made.Voluntary standards and best practice modelsMany organisations adhere to voluntary standards in order to inspire consumerconfidence in the quality of goods and services providedTwo voluntary standards of relevance to customer service are:● The International Customer Service Standard (ICSS:2010-14)● AS ISO 10002–2006 Customer satisfaction – Guidelines for complaints handling inorganizations (ISO 10002:2004, MOD)Product and service standards define best practice models, which typically include thefollowing characteristics:● demonstrated customer focus:○ striving to establish an objective, research-based, and clear understanding ofcustomer needs and customer expectations○ having quality defined, not only in terms of product specifications, but also interms of customer expectations and perceptions○ striving to meet and exceed customer expectations● customer service charters which communicate the service level customers shouldexpect to receive and organisations should establish individual service levelagreements with key customers that se out expectations and procedures forrenewing contracts● continuous improvement of operational processes and evaluation of performanceagainst customer expectations● supplier relationships and supply chain well developed and maintained in order todeliver consistent value to customers● commitment of the organisation (from management down) to quality customerservice, all management and employees should be trained and demonstrateattitudes and behaviours that reflect commitment to customer service quality.Australian e-commerce best practice modelOne specific model is The Australian Guidelines for Electronic Commerce. This modelseeks to encourage consumer confidence in electronic commerce by providing guidanceto businesses on how to deal with consumers when engaged in business to consumerelectronic commerce.1st edition version: 1 BSBCUS501 Manage quality customer servicePage 38 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 1 – Plan Customer ServiceMandatory industry codes of practiceMandatory Industry codes of practice provide practical guidance and advice on how toachieve the standard required by legislation. Codes of practice are developed throughconsultation with representatives from industry, workers and employers, special interestgroups and government agencies.A code of practice is not law, but it should be followed unless there is an alternativecourse of action that achieves the same or better standards.The Australian Unit Pricing CodeOne example of a mandatory industry code of practice is the Unit Pricing Code of practice.This code enforces rules about displaying prices of products in supermarkets to ensurethat the prices are clear and easy to read. The code is regulated under the Competitionand Consumer Act 2010, is mandatory for large supermarkets and is enforceable by theAustralian Competition and Consumer Commission (ACCC).The code of practice can be downloaded from the ACCC website at:● ‘Unit pricing code’, Australian Competition and Consumer Commission, viewedDecember 2014, <https://www.accc.gov.au/business/industry-codes/unit-pricingcode>.Voluntary industry codes of practiceVoluntary industry codes are not directly enforceable under any Act or Regulation. Likevoluntary standards, discussed above, voluntary codes exist mainly to encourageconsumer confidence in the service level to be expected within certain industries. Theyalso allow industries to self-regulate and promote ethical practice.For example, the Australian Retailers Association sponsors the Scanning Code of Practice.This code protects consumers when buying items that are scanned for pricing details.Industry codes of practice may be developed and sponsored by industry groups ordeveloped in partnership with government agencies and regulatory bodies. Althoughindustry codes are generally voluntary, there may be cases where a statutory bodymandates adherence.
Learning activity: Standards and codes of practice
Consider Innovative Widgets, your own organisation, or an organisation you are familiarwith.● What specific standards or codes of practice would you need to consider withrespect to designing and developing policies and procedures as part of acustomer service plan?
BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 39 of 97Section 1 – Plan Customer Service Student Workbook
● How would adherence to voluntary codes benefit an organisation that wasdeveloping a customer service plan and customer service charter?
Section summaryYou should now understand who customers are and how to identify their needs. Youshould also know the key elements of a customer service plan.Further reading● Australian Consumer Law, viewed December 2014,<http://www.consumerlaw.gov.au/>.Section checklistBefore you proceed to the next section, make sure that you are able to: investigate, identify, assess, and include the needs of customers in planningprocesses ensure plans achieve the quality, time and cost specifications agreed withcustomers.1st edition version: 1 BSBCUS501 Manage quality customer servicePage 40 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 2 – Deliver Customer ServiceSection 2 – Deliver Customer ServiceThis section develops the concept of customer service and addresses how to apply thecustomer service plan to the delivery of quality products and services. The main focus ofthis section is the use of procedures by managers and individual team members todeliver aspects of customer service such as handling complaints to the desired qualitylevel. This section includes managerial skills to improve the performance of customerservice team members.
Scenario: Innovative Widgets
After the initial audit report the board of directors decided a new managing director wasneeded to take the company forward. They ‘promoted’ the grandson onto the boardand recruited a professional manager.The new managing director’s goal was to regain the market share that InnovativeWidgets had enjoyed prior to the recent slump in sales. The managing director startedby establishing a customer service department and agreeing to several new strategiesto implement:● an internal culture of excellent customer service through implementation of thecustomer service plan● a vision and mission statement that all employees support● a policy and procedure for identifying customer needs● a policy and procedure for customer feedback● a policy and procedure for managing complaints.The managing director also announced that Innovative Widgets needs to get itscustomer service delivery in line with the AS/NZS Customer Service Standard.
What skills will you need?In order to work effectively as a customer service manager, you must be able to: deliver products and/or services to customer specifications within organisation’sbusiness plan monitor team performance to consistently meet the organisation’s quality anddelivery standards assist colleagues to overcome difficulty in meeting customer service standards.BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 41 of 97Section 2 – Deliver Customer Service Student WorkbookDeliver customer service according to customerservice planAt the end of Section 1, we explored the components of the customer service plan. Mostplans would contain some or all of the following:● a customer service vision and mission● product and/or service standards● a policy and procedures for identifying customer needs● a policy and procedures for customer feedback● a policy and procedures for managing complaints● a section on continuous improvement● a customer service charter.These documents should be created after careful consideration of customer needs andshould provide a program for staff to follow to meet the requirements and expectations ofyour customers.Section 2 focuses on following customer service plans to deliver quality customer service.We will look briefly at integrating delivery with the rest of the business, general customerservice skills required to deliver effective customer service, monitoring customer serviceand improving the customer service delivery of team members.Integration with business requirementsEffective customer service cannot be delivered in isolation from the rest of the business.As you deliver customer service, you will also need to give due consideration to businessrequirements.For instance, your organisation’s business plan itself will contain mission and visionstatements for the business as a whole. Your business will also have other policies andprocedures such as those relating to privacy, for example, with which you will need tointegrate your delivery of customer service. Your business and operational plan will alsocontain over-arching strategic goals for the business. In addition, you will need to work todeliver customer service within departmental budgetary constraints.You will need to ensure that the customer service plan is aligned with businessdocumentation and anticipate the affect of customer service on the rest of the businessand work collaboratively with other managers to minimise conflict or disruption to normaloperations. You may need to consult with other managers or responsible parties toensure your delivery of customer service is integrated with pre-existing business goalsand systems.In addition to consultation with managers, team responsibilities should also be set andaligned with business requirements. Later in this section, we will look at settingperformance indicators so that these too align with business needs as a whole. You mayalso need to reassess the skills of service team members so that they can carry outcustomer service responsibilities and meet the other needs of the business as well.1st edition version: 1 BSBCUS501 Manage quality customer servicePage 42 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 2 – Deliver Customer Service
Learning activity: Integrating customer service with the rest of the business
Consider your organisation or an organisation you are familiar with.Gather business plans, strategic plans, policies and procedures. Compare these withthe customer service plan and answer the following questions.1. How do the mission and vision statements in the business plan compare with themission and vision statements in the customer service plan?
2. Does the strategic direction of the business (as evidenced by strategic goals)align with the mission, vision, policy and procedures in the customer serviceplan?
3. How would you ensure customer service delivery is aligned with the needs of thebusiness as well as the needs of the customer?
Customer service skills and attributesTo provide excellent customer service, you need specialised skills, knowledge andpersonal attributes. Kris Cole, in her 2005 book Management: theory and practice,suggests that effective customer service personnel have:● strong inter-personal skills (helps identify and meet the customer’s psychologicalneeds)● empathy (to see the problem from the customers viewpoint)● communication skills (especially active listening)● ability to recap the facts and the customer’s feeling (active listening)● high self-esteem (stops people taking complaints personally).BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 43 of 97Section 2 – Deliver Customer Service Student WorkbookThe skills and attributes above may come more or less naturally to some people. In othercases, skills can be improved and personal issues identified and worked on. In any case,access to professional development options such as training, coaching and access toinformation can help improve customer service skills.You may need to incorporate customer service training into your customer serviceplanning to ensure your team has the capability to deliver quality customer service.
Learning activity: Customer service skills and attributes
Consider your customer service skills. Use the skills matrix below to identify the skillsyou possess.Staff Skills MatrixStaff member You A B C D1 Interpersonal skills Y N Y N2 Ability to see problems from customer’s perspective Y N N N3 General communication skills Y Y Y N4 Ability to listen and paraphrase customer issues Y N Y N5 Ability to remain professional under pressure Y Y Y Y
How would you use the matrix to identify areas for customer service team members toimprove?
What are some ways to improve team skills?
Before looking at how these skills and attributes can be applied to handling complaints,let’s look at general communication skills applicable to customer interaction.1st edition version: 1 BSBCUS501 Manage quality customer servicePage 44 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 2 – Deliver Customer ServiceGeneral communication skillsGood communication is achieved through use of word choice, body language, anddemonstrating respect towards those who you are communicating with.Word choiceThe way we use words is important. Words can have a strong effect on customers; theirmoods, feelings and their attitude to themselves and others. If you challenge yourassumptions about types of people and treat everyone with respect, dignity and equality,you are less likely to unintentionally cause offense; however, there are a few things thatyou should keep in mind about the words you choose to use in your customerinteractions.1. Addressing a customer by their name.This is a good way to help them understand that you are treating them as anindividual and that you want to know what their specific need or problem is.2. Referring to a job title or group of people using nicknames, or your own terms cansound demeaning.For example, referring to the IT technician as ‘the IT kid’ can make that job soundtrivial; it is unprofessional and does not communicate respect.3. Technical terms or jargon can confuse customers if the terms are not properlyexplained.Think back to your first day in a new job and remember how difficult it was wheneverybody seemed to speak a language you didn’t understand. Where possible inthe workplace, avoid the use of technical terms unless it is necessary. Wherenecessary, make sure that your listeners understand the terminology, and explainany terms they are unfamiliar with.Body languageYour body also speaks to customers through your stance, movements and mannerisms.In order to encourage open communication with another your customers, it is importantthat you show your willingness to listen and engage.Make eye contact with your customer, when appropriate, and position yourself so that it isclear that you are paying attention. Always maintain a posture of openness andinvolvement and show you are interested. People are very sensitive to unspokenmessages and will often put more value on the way something is said, than on the wordsthey use to say it.Active listeningDemonstrate your respect for your customer by using active listening. Few of us reallyactively listen to what another person is saying and it is an important skill to develop. It istoo easy to hear only part of what another person has said, and then begin to form aresponse, counter-argument or rebuttal before they have even finished speaking.BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 45 of 97Section 2 – Deliver Customer Service Student WorkbookActive listening or improving listening behaviour requires:● the ability to concentrate● objectivity● skilful questioning● the ability to obtain feedback.You must be able to listen to obtain the information you require otherwise you are onlydoing half the job. Confirming that you understand what your customer is saying by askingquestions to confirm, or by paraphrasing parts of what they are saying shows yourcustomer that you understand them.A quiet environment with minimal distractions fosters effective listening. Active listening isan important concept. On page 48 we will revisit active listening as applied to handlingcomplaints.
Learning activity: Mystery shopper
One-way businesses monitor the customer service performance of employees is to takea mystery shopper approach. A company representative may play the role of acustomer and visit a business or call a customer service helpdesk.The next time you purchase a product or service, observe the communication skills ofthe sales person or customer service representative.Then fill out the following checklist.Did the salesperson: Yes/No● (if applicable) address customers by name?● use appropriate titles?● use easy to understand language?● match word choice to customer appropriately?● (If applicable) make eye-contact?● use open, welcoming body language?● show interest?● ask questions to find out more about the customer’s needs?● demonstrate listening by paraphrasing, etc.?
1st edition version: 1 BSBCUS501 Manage quality customer servicePage 46 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 2 – Deliver Customer ServiceMisunderstandingsMisunderstandings in customer service interactions will still occur from time to time. Insome instances, this may be a result of a misinterpretation of communication. Take sometime to complete the following learning activity with several other people to identify howmisunderstandings can occur.
Learning activity: Interpreting common interactions
The table below lists behaviour or actions that can occur during customer serviceinteractions. The right column lists possible interpretations of that behaviour.Complete the table below.
What it means
Remaining silentwhen accused ofdoing somethingwrong
I am at fault.
I am upset at being falsely accused.
Nodding andsaying ‘mmm’
I am agreeing with you.
I am only listening, but not agreeing.
I understand all that is said. I am fine.
I do not understand anything. I am shy.
I am not interested or listening to you.
I agree and enjoy what you are saying.
I disagree with you and this is how I show it.
I am polite and respectful. To look away wouldsignal dishonesty and avoidance.
I am challenging you.
Poor eye contact
I am not listening and being disrespectful.
It is rude to engage in eye contact.
I intend to carry out my threat and this is a signal.
I am using a harmless way of expressionfrustration and having fun. Threats do not haveany real meaning.
I am interested in what you’re saying.
I am attacking you by asking questions.
I am ignorant and have not prepared for themeeting.
BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 47 of 97Section 2 – Deliver Customer Service Student Workbook
Ask a friend or classmate to also complete this activity and compare your answers. Youmay be surprised how different their answers may be. What sorts of differences did youfind?
How can you check understanding and recognise misunderstanding when it occurs?
What can you do if misunderstanding occurs?
Handle customer complaintsHanding customer complaints builds on the general communication skills discussedabove and applies the skills methodically to achieve a positive outcome for both thecustomer and the business.In Section 1 we noted that customers are often likely to avoid making a complaint. Thosethat do complain are still customers, fortunately. In other words, a complaint should belooked at as an opportunity to retain valuable customers.
‘Customers don’t expect you to be perfect.They do expect you to fix things when they go wrong.’Donald Porter, Vice President, British Airways
The three steps to manage a customer complaint are: Listen – Respond – Resolve. Thefirst step is to listen to the customer using active listening techniques.Active listeningActive listening comprises four processes. The four processes are: Asking Questions,Paraphrasing, Using Verbal Prompts and Demonstrate Commitment. Active listening is askill that requires practise and will develop over time if you work at it.● Asking questions:Try to engage with the person you are listening to by asking questions. Showinterest in what they are saying and try to build a positive relationship. Seekclarification of the issue to find out what the core problem is. Be empathetic, notassertive. Do not ask a question that implies judgement (such as: ‘so you wereactually using the widget for something it wasn’t designed for?’)1st edition version: 1 BSBCUS501 Manage quality customer servicePage 48 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 2 – Deliver Customer Service● Paraphrasing:From time-to-time summarise or recap what the person has said to you. This servestwo purposes: to confirm to yourself that you understand what has been said, andalso to let the other person know that you have been listening.● Verbal prompts:Use words such as ‘yes’, ‘I see’, and ‘OK’ whilst the other person is talking to showyou’re paying attention. Take care to use these words meaningfully. Do not say ‘OK’or ‘I see’ in order to make the customer feel better when you aren’t actuallyunderstanding what they are saying.● Demonstrate commitment:Demonstrating commitment serves two purposes – to show the person you arelistening to that they have your full attention, and also to ensure you don’t getdistracted during the conversation. Demonstrate commitment by making eyecontact, or, over the phone, by eliminating potential distractions such asbackground noise. It is really important when listening to someone over the phonethat paperwork, the computer and background sounds don’t distract you. Firstly youwill miss the nuances of what they are saying and also customers will hear paperrustling or the keyboard being tapped.RespondingMost people have complained to someone over the telephone or face-to-face about poorservice or products. Think about when you have complained and the responses you havereceived. How satisfied were you?
Learning activity: Responses to complaints
Think about when you have complained to an organisation. What did you like about theway they responded and what did you dislike?Like Dislike
BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 49 of 97Section 2 – Deliver Customer Service Student Workbook
Now analyse your responses.1. Why did you like or dislike how the customer service representative (CSR)responded to your complaint?
2. What need was unanswered?a. Was the need social in nature, i.e. to be a respected part of a group?
b. Was the need psychological?
c. Was the need emotional?
d. Was the need product –related?
3. How then, would you modify the procedures of a team of CSRs to ensureresponses satisfied customer needs?
1st edition version: 1 BSBCUS501 Manage quality customer servicePage 50 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 2 – Deliver Customer ServiceMost organisations have prescriptive procedures for their employees to follow whenresponding to customer complaints. Most procedures will include principles similar to thefollowing:● assume the customer is telling you the truth● never argue with a customer● be honest if you don’t know the answer to a question● acknowledge the customer’s feelings, but concentrate on the facts● apologise if appropriate● use active listening to find out as much as you can● ask the customer how they would like to see their complaint resolved● offer what the customer wants (if within your authority)● if above your authority, explain what you are authorised to offer● if unaccepted, explain you have to refer the complaint and explain when they willhear back and from whom● make sure you refer promptly and someone gets back to the customer at thepromised time.ResolvingListening and responding by following organisational procedures is likely to resolve themajority of customer complaints. However, there are some cases which are complex bynature and may require more specialist skills, or solutions requiring a higher authoritythan the customer services are able to offer. Some examples include:● the complaint involves injury or damage requiring the organisation’s insurers to beinvolved● the complaint involves a threat of legal action requiring the organisation’s lawyersto be involved● the complaint can be resolved, but at a cost above the authority of the CustomerServices Manager. This needs to be referred to the Customer Services Manager’smanager● the complaint can be resolved by changing the product or service specifications.This will require internal inter-departmental discussions.In addition to procedures for managing customer complaints, responsibilities should alsobe assigned so that all employees are aware who is responsible for executing eachprocedure.BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 51 of 97Section 2 – Deliver Customer Service Student Workbook
Learning activity: Complaints procedures
Customer service departments often create scripts for customer service team membersto follow.Review the complaints handling procedure from Appendix 2 of this Student Workbook.Write a script in which a customer has a complaint and customer servicerepresentative from Innovative Widgets handles the complaint following theprocedures.Review your script to identify active listening, responding and resolving elements.Note: In natural conversation, the elements may not always occur in order.
1st edition version: 1 BSBCUS501 Manage quality customer servicePage 52 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 2 – Deliver Customer ServiceMonitor customer serviceMost staff and departments will have goals and objectives that have been designed tosupport the organisation in achieving its over-arching goals and objectives contained inbusiness and strategic plans. Often an individual or department might have many goalsand objectives. For example, a customer service manager may have some performancetargets such as the following:● ensure 90% of all calls are answered within three rings● reduce complaints by 30%● increase customer satisfaction rating by 20%● undertake weekly customer feedback.KRAs, KPIs and targetsCustomer service departments develop and use ‘key result areas’ (KRAs), ‘keyperformance indicators’ (KPIs) and targets to monitor the performance of customerservice team members.Key result areas (KRAs) are areas of performance that are important to the business.Common KRAs include:● financial (contributing to profit, etc.)● customers (contributing to customer focus, satisfaction, etc.)● people (performing work duties)● process (following correct processes).A key performance indicator (KPI) is a number, percentage, or ratio that serves as ameasure of performance. KPIs are directly related to specific targets that have to beachieved for each KRA. Targets detail what is to be achieved, in what timeframe, and arethen used to measure actual performance.For example, an organisation’s objective could be to ensure customer satisfaction. Theassociated target could be that all calls are answered within ten seconds. Theperformance indicator could be the average time taken to answer a call (in seconds).KPIs and targets are typically applied at role/individual level but can also be used tomeasure the performance of an organisation or department. The principle for settingtargets and measuring performance remains the same, irrespective of the level of theorganisation at which they are applied. An individual who does not meet their targets maybe coached or placed on a performance improvement plan to assist them in achievingtheir targets.Each KRA should have only two to three KPIs, and should be focused on measuring themost critical aspects of the KRA. KPIs and targets generally cover the following:cost quality quantity time safetyBSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 53 of 97Section 2 – Deliver Customer Service Student WorkbookCustomer service KPIsCustomer service KPIs are objective measures of performance that facilitate monitoringand allow for the assessment of performance against service targets.Customer service KPIs may include some of the following:● time taken to answer customer calls● percentage of complaints resolved on the same day of complaint● achieving an agreed customer satisfaction score in feedback● undertaking an agreed number of customer feedback activities● undertaking an agreed number of customer need identification exercises.
Tip: Track KPIs in Excel
Microsoft Excel is a useful and easily used application for recording, monitoring andpresenting progress towards KPIs.Simple pie charts or histograms can be quickly produced to present performanceagainst targets.
Tip: Visual management
When managing a team who are working towards common KPIs, make the KPIs visiblealong with the actual performance. The team can instantly see how well they are doingtowards their goals.For example, telephone call centres display KPIs and current performance such as:● KPI – Average Maximum Call Duration: 3 minutes● Actual – Average maximum Call Duration: 3 mins 15 secs.
Learning activity: KPIs
Write two or three KPIs for a customer service role you are familiar with.
1st edition version: 1 BSBCUS501 Manage quality customer servicePage 54 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 2 – Deliver Customer Service
Write targets associated to each KPI.
Describe how the KPIs relate to KRAs and over-arching business strategic goals.
BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 55 of 97Section 2 – Deliver Customer Service Student WorkbookMonitoring toolsOnce you have developed KRAs, KPIs and targets to monitor the performance ofcustomer service team members, how do you use these measures to monitorperformance?Customer service department use several tools. These include:● mystery shopper approaches● observations● customer feedback● balanced score cards.In mystery shopper approaches, an observer may visit a shop or customer servicedepartment and play the role of a customer. The CSR may be unaware of the identity ofthe ‘customer’.Direct observation is used extensively to monitor customer service performance. Callcentres will often warn you that your call may be recorded for coaching purposes. In asimilar way to the mystery shopper approach, the CSR is aware that they ‘may’ beobserved, but is never completely sure whether they are being observed at any one time.To avoid ethical issues, informed consent for these monitoring practices should besought.Customer feedback, while often not applying to individuals may be taken intoconsideration when determining performance on a team level.Another useful tool is the balanced scorecard. Let’s look at balanced scorecards in moredetail.Balanced scorecardsBalanced scorecards are used to ensure that an individual’s goals and objectives aredirectly linked to the goals and objectives of the organisation.Balanced scorecards are used to record individual KPIs and are provided to employees atthe commencement of the performance period to explain what they must achieve, bywhen and how it will be measured.Scorecards are a useful tool for both managers and employees, as they can be referred tothroughout the performance period to ensure that efforts are focused in the areas thathave been identified as delivering the most benefit to the organisation.Balanced scorecards typically focus on the following key result areas (KRAs):● customers● financials● people● processes.1st edition version: 1 BSBCUS501 Manage quality customer servicePage 56 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 2 – Deliver Customer Service
Example – Innovative WidgetsBalanced ScorecardJennifer Henry – Packing Team SupervisorKRA Target Weighting AchievementFinancial To achieve $30,000 sales per month. 25%Customer To handle 90% of customer complaints tocustomer satisfaction within five minutes.25%People To perform all work duties to standardquality.25%Process To follow all work processes as perInnovative Widget’s policy and procedures.25%Comments:
Learning activity: Balanced scorecards
In the previous learning activity, you developed KPIs and targets for a customer servicerole you are familiar with.Using this information, develop a balanced scorecard for the role or individual.
Describe how you would use the balanced scorecard, in conjunction with othermonitoring tools, to monitor the performance of customer service team members.
BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 57 of 97Section 2 – Deliver Customer Service Student WorkbookManage team performanceManagement skills are an integral part of being able to manage quality customer service.A manager’s role can be extensive and complex. Depending upon the size of theorganisation there may or may not be people to do some or all of the following:● recruitment● arrange pay, compensation and benefits● provide ICT support● provide office services, repairs, etc.● provide purchasing services● provide training services.In a small company, a manager may have all the above to contend with whilst stillundertaking the role of a manager. So what is the role of a manager? A manager needs toproduce department plans, prioritise and allocate work, assess individuals’ performanceand provide feedback. The manager also needs to manage non-human resources,produce budgets and reports. Attending and chairing meetings is a routine activity.
Learning activity: What a manager does
Robert Sutton of the Stanford School of Business is an author and speaker on therelationships between bosses and employees. Watch two or more of his talks onYouTube and document some of the points that you could apply to managing acustomer service team. You might want to start with the following video clips:● ‘Bob Sutton: Listening for the truth’, 2010, YouTube, viewed December 2014,<http://www.youtube.com/watch?v=4INfX3k073M>.● ‘Bob Sutton: Hallmarks of Great Bosses’, 2010, YouTube, viewed December2014, <http://www.youtube.com/watch?v=oiknN8uomPc>.
What is the role of a manager of a customer service team?
How would you apply the information provided in the video clips to managing acustomer service team?
Let’s briefly examine the four key skills and attributes of managing people: leadership,supervision, mentoring and coaching.1st edition version: 1 BSBCUS501 Manage quality customer servicePage 58 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 2 – Deliver Customer ServiceLeadershipLeadership is strategic activity often thought of as the ability to set visions and inspireothers to achieve that vision. Many of the world’s greatest leaders shared their visionsand have inspired others to achieve them. Winston Churchill rallied allies from across theglobe to help during World War Two. Martin Luther King’s famous ‘I have a dream’ speechin Washington set the USA on a course away from black oppression and ultimatelytowards the election of the first African-American President in Barack Obama.In business, it is the role of the manager to set visions for the department to achieve. Thevision needs to be shared, with all staff buying into it and being prepared to work towardsit. A customer service vision may indicate a significant change to the current practices orbe a call to improve existing performance.SupervisionSupervision involves overseeing of the performance of an individual or group regularly.This involves allocating work, assessing individuals’ performances and providingfeedback. It also involves following up on feedback with staff to ensure improvements, orto re-deploy or terminate staff. Intrinsic in this role is the need to use active listening inorder to fully understand the complex issues that can be present with personnelproblems.MentoringMentoring refers to the relationship between an experienced expert (the mentor) and thementor’s development of an employee. The manager may identify someone who appearsto have the skills to develop further within the organisation and assist with that person’sdevelopment through targeted strategies such as training, exposure or assignments. It isthe manager’s role to identify an appropriate mentor (not necessarily the manager) andobtain agreement for the mentoring assignment.CoachingCoaching refers to the act of directing, guiding and training an individual or group.Coaching often involves modelling what to do. In the sporting context a coach helps theathlete to maximise their performance and this is what coaching in the workplace shouldaim to achieve. Note that in the sporting context the athlete is the better performer, andthis can also be true in the workplace. The best manager may not be the best person torespond to an irate customer!A useful coaching model to follow is the GROW model. GROW stands for:
● Goal● Reality
● Options● Will.
Firstly, collaborate with the coachee to establish reasonable performance goals. Next,establish the reality of current performance and the existence of a performance gap toovercome. Obviously, if the coachee doesn’t believe there is a performance gap toovercome, the improvement process will stall. You may need to come prepared tocoaching sessions with evidence of underperformance.BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 59 of 97Section 2 – Deliver Customer Service Student WorkbookNext you should discuss options for closing the gap. It is important to use active listeningto uncover root causes for underperformance and talk through the possible options togenerate effective solutions that will work for the coachee.Finally, and perhaps, most importantly, you need to establish the willingness of thecoachee to improve. You should establish willingness by encouraging the coachee tocommit to taking practical, observable measures to achieve performance goals. In thisway, the coachee will be unable to hide a lack of commitment, through making vaguepromises.Note: The coaching conversation does not need to rigidly follow the order above. Anygenuinely two-way conversation will develop in unplanned ways. Nevertheless, eachelement of the GROW model should be addressed at some point in any coaching sessionthat is likely to be effective.
Learning activity: Coaching
Imagine you are the manager of a customer service team. You have a team memberwho is having trouble meeting a number of customer service performance targets.● They are rude to customers, when customers complain. According to policy,customer service team members must always remain polite.● They make mistakes during 40% of orders; the target is <5%.You plan to hold a five-minute coaching session with the team member to establishhow to help the team member reach their performance targets and determine whatsteps the team member should undertake.Complete the following coaching plan for the session. Some possible questions havebeen provided. Try to think of at least three questions to ask at each stage.Goal What are your KPIs?What performance goals have you set for yourself?Reality How do you think you are going?
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Section summaryYou should now understand how to implement a customer service plan to deliver qualitycustomer service.Further reading● Cole, K., 2010, Management: theory and practice, 4th edn, Pearson EducationAustralia, NSW.Section checklistBefore you proceed to the next section, make sure that you are able to: deliver products and/or services to customer specifications within organisation’sbusiness plan monitor team performance to consistently meet the organisation’s quality anddelivery standards assist colleagues to overcome difficulty in meeting customer service standards.BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 61 of 97Section 3 – Review and Improve Customer Service Student WorkbookSection 3 – Review and ImproveCustomer ServiceThis section addresses the question of how to gather and analyse customer service datafor the purpose of making recommendations to systematically improve customer service.Systematic improvement goes beyond improving the performance of individual teammembers, which was the focus of Section 2, and includes making changes to aspects ofthe customer service plan such as procedures that affect all team members.
Scenario: Innovative Widgets
Things were beginning to improve at Innovative Widgets. The RATER questionnaireexercise identified several deficiencies that were easy to correct. Many customerscomplained about tolerance problems, which were soon fixed by the productionmanager. Letters of apology had been sent out to the larger customers who had notbought from the company recently, apologising for the tolerance faults and offering asignificant discount on their next purchase.Meanwhile, the newly appointed customer services manager was beginning to get thecustomer services team working together as a team. A vision and mission had beenagreed collectively during a brainstorming sessions and the team had split into groupsto produce the policies and procedures for the manager to review with the managingdirector.Customer service performance monitoring and feedback gathering strategies had beensuccessfully implemented and systematic improvements, such as a uniform high levelof customer service quality across the customer service team were apparent.The managing director had been so impressed that he called his senior managerstogether and asked them to use the customer services model to implement internalcustomer service plans within their departments.Training sessions were organised to learn and practice the skills needed for handlingcustomer complaints, and also to become familiar with the new procedures.The first feedback survey had been issued to customers and the results were beginningto pour in.
What skills will you need?In order to work effectively as a customer services manager, you must be able to: develop and use strategies to monitor progress in achieving product and/or servicetargets and standards develop and use strategies to obtain customer feedback to improve the provision ofproducts and/or services1st edition version: 1 BSBCUS501 Manage quality customer servicePage 62 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 3 – Review and Improve Customer Service develop, procure and use resources effectively to provide quality products and/orservices to customers make decisions to overcome problems and to adapt customer services, productsand/or service delivery in consultation with appropriate individuals and groups manage records, reports and recommendations within the organisation’s systemsand processes.Continuous improvement strategiesAfter surveying customers, analysing their feedback, identifying problems and producingsolutions, it’s time for the continuous improvement cycle to begin – the customer serviceplan, organisation’s product or the organisation’s service is amended to resolveweaknesses or problems.You may recall from the beginning of this Student Workbook that the managing director ofInnovative Widgets used the saying: ‘If it’s not broken, why fix it?’ Continuousimprovement adopts the opposite approach – continually looking for small ways to makeprocesses and products better.Continuous improvement will not happen unless systems are in place to make it happen.A good customer service plan should contain a section on scheduling improvementactivities, documentation reviews, when procedures will be revised, etc. The advantage ofhaving a continuous improvement strategy in place is that improvement occurs regularly,doesn’t depend on the genius of one or two people, and becomes embedded in corporateculture.KaizenThe Japanese philosophy for improvement is ‘Kaizen’. Kaizen was developed in Japanafter the Second World War and the concept was used to great effect at Toyota. Itinvolves all staff within on organisation asking the following questions about whatthey do:● How can we do this better?● How can we do this easier?● How can we do this faster?● How can we do this cheaper?● How else can we do this?11Kaizen can be undertaken as an individual activity, but is more commonly undertakenthrough a team approach. As part of a strategy to produce continuous improvement,teams or workgroups meet regularly to ask the questions above and produce solutions.These proposed solutions are then trialled, and, if successful, incorporated into standardoperating procedures.11 Cole, K., 2010, Management: theory and practice, 4th edn, Pearson Education Australia, NSW.BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 63 of 97Section 3 – Review and Improve Customer Service Student WorkbookPDCA cycleA well known system structure for continuous improvement is the PDCA cycle. PDCAstands for: Plan-Do-Check-Act.Following the cycle, organisations first develop policies – such as customer servicepolicies – and then plan to implement the policies. Organisations then implement thepolicies along with monitoring strategies to check performance. On the basis ofperformance data, the system is reviewed for effectiveness. Organisations take correctiveactions, or make further plans to improve the system. The cycle repeats indefinitely.The PDCA cycle has several advantages. These advantages include:● lack of any close association with or ownership by any one organisation● simplicity● adaptability and ability to integrate with other quality systems.The PDCA cycle can be easily applied to customer service. Organisations develop andimplement customer service policies and procedures, check performance and gatherdata, and then take actions to improve performance.
Learning activity: Continuous improvement
Consider a business you are familiar with.Describe how procedures and policies have been or could be adapted to effectcontinuous improvement.
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Research continuous improvement systems such as Kaizen or the PDCA cycle. For anorganisation you are familiar with, describe how you could systematically improvecustomer service on an ongoing basis.
Systematic quality monitoringMonitoring customer service performance ensures that you are aware of how yourorganisation is tracking. It helps you to identify any corrective action you may need to taketo bring the performance back on track.Some examples of corrective action:● change your plan● implement contingency plans● increase or decrease resource levels● bring in resources with different skills● change timelines● increase budget.It is important to recognise the strategic advantage of following a monitoring system. Agood monitoring system regularly provides you with the information you need in order tounderstand how well your organisation is performing against targets and what changesare needed to keep performance on track. It allows you to manage your businessproactively rather than spending your time reacting to and resolving individual crises asthey arise. This can be a much more productive and enjoyable way to work!While individual customer service performance issues may arise, following a systemensures you notice the issue in the first place, act to resolve the problem, and ensure thatfixing the problem does not distract you from managing team performance as a whole.Let’s explore the steps of a typical monitoring system.BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 65 of 97Section 3 – Review and Improve Customer Service Student WorkbookMonitoring performanceStep 1: Decide what you will monitorThe first step in monitoring performance is deciding what it is that should be monitored.To determine this, you should think about what is most important to your organisation.For example:● expenses● quality● sales● productivity● customer satisfaction● employee engagement.You also need to consider high risk areas that could cause substantial damage to theorganisation if something went wrong – these should be included in your monitoringprogram.Determine key result areas for customer service.Step 2: Determine how you will measure performanceOnce you have identified what is most important to your organisation, you need tomeasure it. You should ensure each KRA has targets that you can measure against, andthat the data required to measure performance is easily accessible.For example, in a call centre operation ‘customer care’ might be important fororganisational success, which can be measured by the following KPIs.1st edition version: 1 BSBCUS501 Manage quality customer servicePage 66 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 3 – Review and Improve Customer Service
● How long does it take to answer a call?● How long does it take to resolve the customers query?
● How many customer issues are resolved in the first call?● How many customers have to make a repeat call to resolve their issue?
● How satisfied are customers with the service they receive?
As we saw in Section 2, it is important to determine the way you will go about monitoringperformance and what tools, such as balanced scorecards, you will use.To ensure your monitoring strategy is effective, your team understands the monitoringprocess and how it applies to them. Your team should also understand the system itselfand how it will be applied fairly. In addition, ensure your team understands how thesystem ensures that their performance relates to organisational goals.Step 3: Analyse resultsNow that you have identified what needs to be monitored and how it will be measured,you have to analyse the data produced. You will be analysing data to understand what isactually happening, compared to what should be happening.Use your monitoring tools to produce performance reports. A good performance report willspecifically address each of the identified key result areas, allowing for easy monitoring ofperformance.Using performance reports to monitor KRAs involves three simple steps:1. Identify any performance shortfalls against target:a. For example, the target is 10 units and actual result is 12 units.2. Analyse the shortfall to determine the cause:a. Is the shortfall a one-off? For example, if delivery times were missed due to ablackout and therefore computer systems could not load orders.b. Has the underperformance been building over time and therefore needsfurther investigation? For example, sales have been decreasing by 2% eachmonth for the last six months.c. Is there an explanation for the performance? For example, if sales are downfor January because the shop was closed for two weeks for holidays.d. Is there some systemic reason for the performance shortfall? Are processesand procedures as efficient as they could be?3. Take corrective action where required:a. Take individual action to improve individual performance such as coaching.b. Make changes to the monitoring system itself: improve KPIs, scorecards;increase awareness or understanding of the system.TimeQualityCustomersatisfactioBSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 67 of 97Section 3 – Review and Improve Customer Service Student Workbook
Learning activity: Apply monitoring strategies
Consider an organisation you are familiar with.Plan a monitoring system that you could deploy to monitor and analyse performanceissues.
Let’s consider some specific types of analysis you could perform as part of a systematicapproach to customer service performance management, variation management andvalue chain management.1st edition version: 1 BSBCUS501 Manage quality customer servicePage 68 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 3 – Review and Improve Customer ServiceVariation analysisThe aim of performance management is to improve performance. Performance can beimproved on an individual or on a systemic basis (covering all team members rather thanone at a time). One important concept in systemically improving performance is variation.Manufacturing quality or customer service performance may vary numerically over time.For example, the number of unanswered calls on a customer complaints line may be 25one day, 30 the next, 28 the day after, and so on. The number of widget returns is likelyto change week-by-week.To more efficiently improve performance across all team members, managers should aimto identify causes of variation and reduce performance variation.Assignable variation and natural variationOften, variation is natural or common cause variation. Natural variation may not have anyassignable cause. For example, a call centre receives on average three complaints a day.One day they may receive two complaints; on another day, they may receive fourcomplaints. The variation is a result of the times customers decide to make a call.Assignable (or also called special cause) variation describes cases in which a cause canbe found for the variation. For example, if the reports show that all the widgets that arereturned are always the 6mm size (never any other size), then it is likely that the variationis assignable. The cause can be investigated and possibly identified and corrected. It maybe, for example, that the setting on the machine that makes 6mm widgets needs to beadjusted, or that the operator who uses the 6mm machine needs additional training. Inthe previous customer service example, if ten complaints were suddenly received on thesame day about the same issue, that issue would be the assignable cause for thevariation.Once the cause of the variation has been identified, it is then possible to correct the faultand reduce the variation.Six SigmaSix Sigma is a well-known performance improvement philosophy developed by Motorola inthe 1980s. Six Sigma is also a methodology for identifying and reducing assignablevariation.The basic assumptions of Six Sigma rely on the statistics associated with a normaldistribution (the sort that produces a bell shaped curve when plotted on a graph).BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 69 of 97Section 3 – Review and Improve Customer Service Student Workbook
Example: What is ‘Six Sigma’?
If 10mm widgets were to be produced to a size tolerance of +/- 3%, then in an idealworld all the widgets produced would be within a range of 9.7mm and 10.3mm. A bellcurve showing the frequency of 10mm widgets produced would appear as below.
Almost all the widgets fall within the tolerance range. Sizes are less frequent as theyfall further from the mean. According to Six Sigma philosophy, 99.9997% of all widgetsproduced should be free of defect, i.e. produced within the tolerance range. Defectsshould be extremely rare.If a significant number are outside the tolerance range (>0.0003%), then measuresshould be taken to manufacture the widgets more accurately and reduce the number ofdefective widgets.
Reducing variation to improve customer service performanceIt is important to minimise variation in the performance of customer service teammembers. Some ways to reduce variation are introducing:
● standards● training
● procedures● performance targets.
Superficially, it may seem desirable for a customer service team to have a few memberswho outperform others by a wide margin. Obviously, this is preferable to having no highperformers; however, a customer service manager is in a much better position to increaseoverall performance if there is lower variation between high performers and lowperformers. The ideal situation is for each team member to perform at a high level andsimilarly to every other team member.The reason why low variation is important is that it allows managers to take fewer actionsto improve the team performance as a whole. Low variation in performance makes iteasier for managers to identify and assign root causes for poor performance, i.e. somecondition that affects all team members’ performance in the same way such as a faultystandard or procedure. Consequently, managers do not need to concentrate on individualperformance problems or customise performance solutions for each team memberseparately. By acting on the team as a whole, one intervention, such as an improvedtraining program or an improvement to procedures can improve the performance of allteam members in one go.
9.7mm 10.3 mmMean = 10mmNumber ofwidgetsSize
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Learning activity: variation
Consider a business you are familiar with and answer the following questions.1. What aspects of customer service performance show a high degree of variation?
2. Can you assign a cause to the variation?
3. What systemic measures (as opposed to one-off, individual activities) could youtake to:a. reduce variationb. improve performance?
4. How do your proposed systemic measures contribute to continuous improvementof customer service?
BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 71 of 97Section 3 – Review and Improve Customer Service Student WorkbookValue chain analysisThere are opportunities for your organisation to create a competitive advantage if you canmanage any of the stages of the customer service process better. For example, a hotelmay perform better if it directs more attention towards the check-in component of theirvalue chain.Conducting a value chain analysis involves three steps:1. Identify activities – Break down your organisation’s processes involved withproviding the customer a product or service into individual activities.2. Identify value – For each activity, determine the value to the customer.3. Plan strategies – Evaluate what changes could be made to increase yourorganisation’s competitiveness by maximising value for customers.
Learning activity: Value chain analysis
Consider your current workplace, or the training organisation you are currently enrolledwith, and conduct a value chain analysis using the steps outlined above.You may wish to read a more in depth description of each step in the article ‘Valuechain analysis: Achieving excellence in the things that really matter’ available at<http://www.mindtools.com/pages/article/newTMC_10.htm>.
planstrategies1st edition version: 1 BSBCUS501 Manage quality customer servicePage 72 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 3 – Review and Improve Customer ServiceGather and analyse customer feedbackCustomer feedback data mainly refers to the results of any surveys that have beenundertaken, data collected and recorded by customer service representatives, or datacollected through systematic collection under an automated customer relationshipmanagement (CRM) System. The data is likely to be a mix of quantitative and qualitativedata.Feedback analysisAnalysing quantitative data that is directly related to KPIs is straightforward. To presentresults for analysis, you could use spreadsheet software (such as Microsoft Excel) anduse suitable charts. You can then relate data to customer service KPIs and compareresults with targets. In this way, you can determine areas of concern and take systemicsteps, such as amending procedures, or introducing training to improve performance.In addition, quantitative data can help you to identify and analyse any gaps that existbetween service levels and customer expectations. For example, if the customer expectsa five minute wait for service and your average waiting time is ten minutes, a gap exists.The relative importance of waiting times may also be gathered and analysed as a quantitythrough the use of scales as discussed in Section 2 in connection with questionnaires.Questions to ask when analysing quantitative data include:● what does the data represent● is there a significant gap between expectations and service● what is the cause for the gap● is the cause related to customer service or some other aspect of businessoperations such as manufacturing● what actions would close the gap?Feedback strategyA good strategy for gathering data for analysis is to design your data gathering tools todeliver quantitative data that:● is unambiguously related to KPIs● allows you to easily identify gaps between important expectations (those that willdrive purchasing behaviour) and service levels?
Learning activity: Design a feedback tool to gather (easily analysable) data
Review the customer service KPIs you developed in an earlier learning activity inSection 2. In the space provided on the following page, design a customer feedbacktool such as a survey or questionnaire to gather service performance data that isdirectly relatable to the KPIs.Note: Refer to Section 1 for information on effective questionnaire design.
BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 73 of 97Section 3 – Review and Improve Customer Service Student Workbook1st edition version: 1 BSBCUS501 Manage quality customer servicePage 74 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 3 – Review and Improve Customer ServiceRefining your feedback strategySuch a strategy as outlined above, however, runs the risk of gathering only a narrowrange of data. At worst, by limiting customer feedback to what can be quantified, you maylose the opportunity to gain insight into less obvious and more complex customer needs.For this reason, businesses may gather qualitative data that is more open tointerpretation, but may lead to unexpected breakthroughs in the understanding ofcustomer needs and expectations.Qualitative data can be problematic. Complete the following learning activity beforereading on.
Learning activity: Customer survey
Your customer survey had a space for customer suggestions. The results are givenbelow.
● It’s too dark at the back of the cafe.● I didn’t feel myself. I felt out ofplace.● I think your sign should be larger.● I’d prefer seats with cushions.● I’d appreciate free newspapers.● Only one toilet in the ladies – it’snot enough.● Colour scheme is dated.● There was a noisy group of studentsin the corner and I couldn’t hear myconversation with my friend.● Can you offer organic milk?
● No magazines to read!!!● My coffee was cold.● I didn’t feel welcome.● Can you offer pastrami as sandwichfiller?● I’d prefer classical music to the ABCRadio News.● I felt old.● I think you’d all look better in redaprons instead of the blue ones.● Tablecloths would be appreciated.● Can you ban mobile phones????
How would you attempt to analyse the data?
Are there gaps between customer expectations and actual service level? What is thepriority assigned to each gap?
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Would you take any further steps to help you determine priorities for customer serviceimprovement and improve the customer experience?
It is difficult to evaluate qualitative data such as the data above. There is no informationregarding how many people would agree with each suggestion. Also, there is no weightingto each suggestion. For example, if the person who complained about the lack of toiletssaid it would stop her visiting the cafe in future, would that change yourrecommendations for improvement? If the person who asked for classical music wouldspend more time (and money) each day, would you implement that suggestion? What’sneeded is some way of prioritising qualitative data to guide your analysis and decisionmaking.Bullseye diagramsA bullseye diagram is one of many tools that can assist in this process. It is used with afollow-up survey of your customers where you share the comments you received from thefirst survey.Your customers add weight to the comments by placing them into a bullseye diagramwhere the outer circle represents ‘no importance’, the middle ‘might make me visit moreoften’ and the inner circle ‘critical – a must do item’.It will soon become apparent which items should be given priority.1st edition version: 1 BSBCUS501 Manage quality customer servicePage 76 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 3 – Review and Improve Customer ServiceDevelop, procure and use resourcesYour quality monitoring and analysis may reveal gaps between the present capacity of theorganisation to deliver quality customer service and requirements. In order to putcustomer service plans into effect, you may need to develop, procure or use resources.Resource requirements may include human, physical and financial resources.To fulfil resourcing needs, you will need to consider the organisation’s customer servicerelated strategic directions, operational needs, and policies and procedures. You should:● identify gaps between organisational needs for quality customer service deliveryand current organisational capacity● consider all relevant policies and procedures such as performance managementpolicy, recruitment policy, procurement policy and delegations policy.● if applicable, consider the business case for acquiring the resource: compare thecosts of the resource to the organisational benefit.Let’s take a brief look at developing and procuring resources for use in implementingcustomer service planning.PersonnelYour monitoring activities may reveal issues with individual or team performance. In suchcases, as discussed previously, you will need to develop the capacity of customer servicestaff through such measures as training or coaching. Sometimes, however, the issue isnot quality but the ability of the team to handle the sheer volume of work. In this case,you may need to consider recruitment of additional staff. You will need to conductrecruitment in accordance with organisational policies with regard to, for instance,planning and approval, advertising, selection, interviewing, assessment, and induction.Procure physical resourcesYou may need to acquire physical resources such as product stock, raw materials, ortechnology for employees to deliver quality customer service. A typical procurementprocess is outlined below.1. Research potential suppliers.2. Request quotations, or implement tender process.3. Select supplier.4. Review proposed details of contracts such as service level, warrantees, installation,training, maintenance.5. Negotiate details, such as final pricing, delivery schedules, training schedules andsigning of contracts.6. Use, maintain and dispose.7. Review performance of suppliers8. Determine renewal details if applicable.BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 77 of 97Section 3 – Review and Improve Customer Service Student WorkbookTechnology: customer relationship management (CRM) systemsTo help customer service representatives deliver customised service to customers, youmay need to consider developing or acquiring technological solutions to informationmanagement issues.Customer relationship management (CRM) refers to those organisational activitiesdesigned to establish and cement strong links with customers.Large organisations utilise computerised customer relationship management systemsthat comprise an integrated database of information about all customers, activityschedulers and reports.Typically, the database can provide instant access to all the information held about thecustomer, from preferred name, family relationships, past purchases, past complaintsetc. This enables all staff members who come into contact with the customer to be able tocarry out the customer interaction with a full history and profile of the customer at theirfingertips.CRM systems can also schedule calls, meetings, invitations or mail-outs as appropriatefor the particular customer.CRM systems can also act as an intelligence gathering opportunity with information aboutthe customer being used by other internal departments such as the sales department,who would be interested in any upgrading or replacement opportunities.
Learning activity: Investigate Customer Relationship Management systems
There are several computerised customer relationship management systems availableto purchase. Some of the more common systems are listed below:●Workbooks● Nimble● Microsoft Dynamics● Salesforce.Use the internet as a source to gather information about a variety of systems. List thecommon features below.
1st edition version: 1 BSBCUS501 Manage quality customer servicePage 78 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 3 – Review and Improve Customer Service
Consider a business you are familiar with. List some ways that a computerisedcustomer relationship management system could help improve the delivery ofcustomer service.
Note: Some of the computerised systems that you investigated require significantinvestment both to purchase and operate and are intended for large organisations. Thebenefits that they provide, however, can often be achieved manually through committed,systematic application of the performance monitoring and feedback strategies discussedso far.Seven quality monitoring, reporting and analysis toolsThe following seven quality tools are a group of tools originally developed by KaoruIshikawa for solving quality problems in manufacturing. These tools have achievedwidespread use for solving quality problems in all fields including customer service.These tools may be used to help identify and represent performance issues so thatappropriate solutions can be developed.Let’s take a short survey of the tools. Some of these tools will be referred to later in thesection in connection with developing customer service solutions.BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 79 of 97Section 3 – Review and Improve Customer Service Student WorkbookCheck sheetsA check sheet is a simple tool for gathering numerical evidence of problems. They areusually used to make a tally prior to producing a Pareto chart, histogram chart or scatterdiagram. These types of diagrams are discussed later in this section.
Sales Team 1
Sales Team 2
Sales Team 3
The chart above captures data from customers after they have visited a store. The chartshows that customers indicated four instances in which they felt pressure from SalesTeam 1. Possible interpretations of this data include:● Customer service representatives may not be following policy and procedures.● Policy and procedures may need to change to reflect customer expectations.● KPIs and targets for sales may be incompatible with customer expectations.Check sheets may be used within a continuous improvement system to identify andcorrect issues with individual performance, systems or customer service planning.HistogramsHistograms are used to present the relative frequency of performance issues. Frequencyinformation may be used to determine which problems in a system, if fixed couldgenerate the greatest overall performance improvement.Let’s compare histograms with Pareto charts.1st edition version: 1 BSBCUS501 Manage quality customer servicePage 80 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 3 – Review and Improve Customer ServicePareto chartsVilfredo Pareto was an Italian economist in the late 19th and early 20th century. Hecommented that 20% of the people had 80% of the wealth. This observed ratio has beenapplied to quality issues, notably by Joseph Juran who stated that 20% of the qualityproblems resulted in 80% of the financial loss. It is now usually referred to as the ‘80:20Rule’ or the Pareto principle.A Pareto chart is a bar chart or histogram, where the number of observations of a problemis plotted on the y-axis while the faults are described on the x-axis. It is normal to sort theresults with the highest number closest to the y-axis. In addition, a line indicatingpercentage is included.As with histograms, the Pareto chart can quickly help identify areas of potentialimprovement that would have the greatest overall effect.Scatter diagramsScatter diagrams help to identify correlations between variables. For example, if thenumber of complaints received on a particular day was higher than on other days, ascatter diagram might help identify day-specific problems.BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 81 of 97Section 3 – Review and Improve Customer Service Student WorkbookIn this example, the number of calls unanswered by the customer complaints team clearlyshows problems on Fridays.Control chartsControl charts can be used to monitor quality over a period of time.In this example, there appears to have been a peak of unanswered calls between 12 pmand 2 pm.Cause and effect diagramsSometimes called ‘Fishbone Diagrams’ (after the way they look) or ‘Ishikawa Diagrams’(after the inventor) these diagrams are a useful way of showing the relationships of theproblem and its possible causes.The head of the fishbone represents the problem whilst the bones represent the factorsthat contribute to the problem. The number of bones coming from the backbone varies,depending on the nature of the problem. The inventor suggests four bones are useful forservice industries:● surroundings● suppliers● systems● skills.We will look at fishbone diagrams in more detail on page 86.Flow chartsFlow charts can present workflows in a graphical way. They are used to better understandrelationships between work processes. A simple complaints flow chart is presented on thenext page.1st edition version: 1 BSBCUS501 Manage quality customer servicePage 82 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 3 – Review and Improve Customer Service
Learning activity: Analysis tools
Consider a business you are familiar with and answer the following questions.1. Which of the seven tools are used to present and analyse data for the purpose ofdeveloping ideas for performance improvement?
Do I have theauthority to applythe solution?
Identify appropriate solution
Refer to supervisorImplement solution
Complete complaint form
Assigned uniquecomplaint number
NoYesBSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 83 of 97Section 3 – Review and Improve Customer Service Student Workbook
2. Choose a tool and describe how it was used (or could be used) to help identifyand resolve a customer service performance issue.
Produce and evaluate customer service solutionsThere are many tools to assist in problem solving customer service performance issues.This section will explore four:● brainstorming● root cause analysis● fishbone diagrams● force field analysis.1. BrainstormingBrainstorming, for the purpose of identifying performance solutions, usually takes place ina meeting room. One person, a management team member, for instance performs in therole of facilitator. The facilitator’s role is to state the performance problem and encouragethe participants to call out solutions. The solutions are written on a flip chart, whiteboardor similar.Brainstorming can be used to capture creative ideas to solve problems. It relies on a fewsimple rules and conventions that are designed to maximise creativity:● participants are encouraged to call out unusual, novel or bizarre solutions● seeing bizarre solutions often triggers other ideas from the other participants● there must be no judging of the solutions.At the end of the session the results are normally typed-up and time is given for reflection.A follow-up meeting then reviews the suggestions and tries to identify any successfulsolutions.1st edition version: 1 BSBCUS501 Manage quality customer servicePage 84 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 3 – Review and Improve Customer Service2. Root-cause analysisRoot-cause analysis is a technique used to try and pinpoint the precise reason for aperformance problem. The following table shows the steps that are taken and gives asimplified customer service application to help illustrate the use of the tool.
1. Define the problem
● People have started to leave the cafe withoutfinishing their coffees.
2. Gather evidence aboutthe problem
● Most cups are left half full.● Some customers say they don’t like the taste.● Others say it tastes ‘gritty’.● On examination, the coffee has a gritty residue atthe bottom of the cup.
3. Identify cause andeffect relationships
● Gritty coffee can be caused by the grind being toofine and passing through the basket into the cups.● The grinder wearing out and becoming faulty cancause this.● Setting the grinder to the wrong setting can alsoresult in a grind that’s too fine.● Gritty coffee can also be caused by the holes in thebasket being too large.
4. Identify the cause orcauses that if removedor fixed would preventthe problem
● The size of the basket holes looks OK.● The grinder is new and works OK when tested.● All staff asked if they know how to use the grinder.● Recent hires have not been trained.
5. Identify solutions
● Train staff.
6. Implement solutions
● Staff members are trained in how to grind coffeecorrectly.
7. Observe impact toensure the initialproblem is fixed and nonew problems havebeen caused as a resultof the solution
● All customers are drinking full cups.● Apologise to past customers and offer a free refill.
BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 85 of 97Section 3 – Review and Improve Customer Service Student Workbook3. Fishbone diagramsFishbone diagrams are another tool for helping identify the root causes of complexperformance problems. They are sometimes known as a cause and effect diagrams.The possible causes ofproblems are clusteredaround the 5Ms, namely:1. Man2. Machine3. Method4. Materials, and5. Measurement.If you ran a coffee shop andcustomers were complaining about your coffee, what could be the reasons?● poor quality coffee (material)● machine temperature is out of calibration (measurement)● machine is not clean (machine)● new operator is working the machine (man)● operator is not following procedure (method).A fishbone diagram forces you to expand on all of these possible causes. Once thepossibilities are identified, you may then attempt to eliminate some causes or identifyroot causes. You may then attempt to develop and trial solutions.1st edition version: 1 BSBCUS501 Manage quality customer servicePage 86 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 3 – Review and Improve Customer Service4. Force field analysisForce field analysis is a tool that helps managers makes decisions about changes. Anexample of a change might be a performance improvement measure such asimplementing a monitoring system.Changes rarely have simple outcomes; they often result in complex shifts within anorganisation. Each shift can be seen as having pros and cons, and force field analysishelps to quantify these qualitative pros and cons.1. The process begins by describing the proposed change in the middle of a flip chartor whiteboard.2. All the forces for (pros) the proposed change are listed on the left side of the flipchart. All the forces against (cons) the proposed change are listed on the right ofthe flip chart.3. A score is given for each force. This seems arbitrary at first, but can be refined later.When all the forces have been scored, revisit the scores to make sure a fair weighthas been assigned to all.4. Finally, when all the scores have been agreed, add both sides up. The highest scoreindicates whether a particular course of action is appropriate.The following is a simplified example of a force field analysis for installing an extra toilet inthe ladies room in the cafe. The calculation was not in favour of the proposal:
Install extra toilet inthe ladies’ roomin the cafe
Customer retention = 2
Cost = 5
New customers = 2
Loss of space = 2
Extra income = 1
TOTAL = 5
TOTAL = 7
Learning activity: Develop solutions
Consider a business you are familiar with.Describe how the following four methods have been or could be used to identifysystematic solutions to customer service performance issues:● brainstorming
BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 87 of 97Section 3 – Review and Improve Customer Service Student Workbook
● root cause analysis
● fishbone diagrams
● force field analysis
RecordkeepingEffective recordkeeping is essential to an organisation’s day-to-day operations andcontinuous improvement. Recordkeeping helps support communications within anorganisation and also provides data that can be analysed over time to identify trends inregard to performance and evolving customer requirements.To ensure effective customer service performance, records should be kept of:● the customer service plan (including out-dated versions)● procedures for updating the plan● minutes from meetings● customer complaints● identification of customer needs● customer feedback surveys● KPIs and performance towards targets.1st edition version: 1 BSBCUS501 Manage quality customer servicePage 88 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 3 – Review and Improve Customer ServiceCustomer recordkeeping (databases)To stay competitive, organisations have an increasing need to gather and hold customerinformation. For this purpose organisations may use:● computerised CRM systems● databases● other electronic-based documentation● paper-based documentation.The systemic use of the above items allows organisations to track the contact they havewith customers. This practice can prevent errors from occurring with orders, andsubsequently lead to fewer complaints. Customer feedback may also be used to improvesystems and processes.Legal and ethical considerationsAlong with the many benefits of gathering and storing customer information come theethical and legal responsibilities related to storing information securely and using theinformation appropriately. Legal and ethical considerations also apply to the storage anduse of employee data such as performance data, for example.Some key legislation and ethical documentation that impacts the storage of bothcustomer and employee information includes:
● Privacy Act 1988● anti-discrimination legislation
● Do Not Call Register Act 2006● industry codes of practice.
It is essential to be familiar with your legal and ethical obligations and industry codes ofpractice so that you store and use information appropriately.The Privacy Act, for example, outlines the Australian privacy principles that must befollowed when storing individuals’ private information. When participating in customerinteractions for example, following the privacy principles means that you must be openabout your organisation’s policies regarding the use of personal information. You mustallow individuals access to information you hold about them. You must also, in mostcases, refuse to disclose information to third parties without the consent of the individualconcerned. You will need to have policies and procedures in place to ensure informationis only given to authorised people. Many organisations, for example require identificationto be presented before discussing customer accounts.Ethical considerationsWhile some information is clearly protected by legislation, such as personal or financialinformation, some information may not be. Whatever the case, records in your possessionor the information about those records in your possession should be governed at all timesby principles of ethical recordkeeping such as the following:● Avoidance of conflict of interest – A conflict of interest is a situation in whichfinancial or other personal considerations have the potential to compromise or biasprofessional judgment and objectivity. It is important that conflicts of interest do notimpede your ability to handle records with impartiality.BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 89 of 97Section 3 – Review and Improve Customer Service Student Workbook● Disclosure – Disclosure deals with the obligation to make known information thatwould potentially bias you in one way or another. Disclosure is to explain yourreasons for wanting the information and what you intend to do with the informationonce you have collected it. This could be particularly important in dealing withcustomers and explaining your organisation’s interest in customer data.● Protection of confidentiality – Confidentiality is ensuring that information isaccessible only to those authorised to have access and is protected throughout itslifecycle. Confidentiality is an important principle in business because it imposes aboundary on the amount of personal information and data that can be disclosedwithout consent. As you collect customer information, you will become responsiblefor the protection of that information from unauthorised access and to keep itconfidential.Recordkeeping policy and proceduresYour organisation should have clear policies and procedures in place governing the useand storage of customer information and customer service performance information.Having such policies and procedures is important for several reasons:● achieving legal compliance and ethical standards● achieving customer and employee confidence and goodwill● achieving operational efficiency and high customer service performance● achieving effective integration with existing systems, processes and strategic goals.Company policy often reflects legislation, business ethics and industry codes of conduct.For customer service employees, following company policy and procedures is often amore practical and less time consuming way of achieving legal compliance than readingthe relevant Acts. Procedures should outline specific steps to take, such as asking forproof of identity and specifying what constitutes proof, for example, before releasingpersonal information. In addition, having policies and procedures allows you to promoteyour organisation’s respect for the rights of employees and customers to have theirpersonal information treated appropriately. To maximise consumer goodwill andunderstanding, you may wish to publicise your records policy in customer service plans orcustomer service charters targeted at customers.Effective policy and procedures allows your organisation to ensure that recordkeepingpractices are standard and are not entirely dependent on the foresight, thoroughness,helpfulness and personal ethics of individual employees. Standard procedures allow foreasy retrieval and use of customer or employee information and, and, for that reason,facilitate better performance. Having standard procedures also ensures that performancemanagement is applied on the same basis to all employees and reduces the potential forquality variance.As discussed in Section 1, effective policies and procedures should work to support theseamless integration of business operations. Policies and procedures should also supportand reinforce company culture. To this end, ensure recordkeeping policies shouldharmonise with one another and with other policies and procedures from different areasof the business.1st edition version: 1 BSBCUS501 Manage quality customer servicePage 90 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Section 3 – Review and Improve Customer Service
Learning activity: Recordkeeping
Consider a business you are familiar with. What legislation or ethical principles apply tocustomer recordkeeping?
Research the Australian Privacy Principles and the Do Not Call Register and, on thefollowing page, write a customer recordkeeping policy.Write procedures for:● safe storage of customer information● disclosure and use of customer information.
BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 91 of 97Section 3 – Review and Improve Customer Service Student Workbook
Suppose your company strategic goals include:● building company brand reputation● delivering best-of-breed customer service● growing market share.How could your policy and procedures support other aspects of customer service andintegrate with company strategic goals?
Section summaryYou should now understand how to develop and use monitoring and feedback strategies,analyse the data received from customer information and performance data, identifyproblems and produce solutions to customer service issues.Further reading● Cole, K., 2010, Management: theory and practice, 4th edn, Pearson EducationAustralia, NSW.Section checklistBefore you proceed to the next section, make sure that you are able to: develop and use strategies to monitor progress in achieving product and/or servicetargets and standards develop and use strategies to obtain customer feedback to improve the provision ofproducts and/or services develop, procure and use resources effectively to provide quality products and/orservices to customers make decisions to overcome problems and to adapt customer services, productsand/or service delivery in consultation with appropriate individuals and groups manage records, reports and recommendations within the organisation’s systemsand processes.1st edition version: 1 BSBCUS501 Manage quality customer servicePage 92 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook GlossaryGlossary
Customer Relationship Management system. Usually softwarebased automated system to gather and organise customerinformation for the purpose of assisting CSRs to managecustomer relationships.
Customer Service Representative: customer service teammember, etc
A person within an organisation who receives goods or servicesfrom another within the same organisation.
A person outside an organisation who receives goods or servicesfrom the organisation.
A continuous improvement philosophy and methodology. TheJapanese word for improvement is ‘Kaizen’.
An item that is being offered for sale
The person or organisation who is selling or otherwise makesavailable a product or service
A type of survey used to collect information or feedback fromcustomers. Questionnaires consist of lists of questions forcustomers to answer.
A methodology for identifying customer needs. RATER stands forreliability, assurance, tangibles, empathy and responsiveness.
Supply chains are the process of procurement, production anddelivery within an organisation.
Any information gathering tool used to collect information orfeedback from customers
A concept relating to manufacturing quality. The range withinwhich a product attribute, such as widget length, width, etc,must fall in order to be considered to be at an acceptable qualityor fit-for-purpose.
Value chains show how each process in an organisationincreases the value of the product or service
BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 93 of 97Appendices Student WorkbookAppendicesAppendix 1: Answers to selected learning activities
Learning activity: Conducting surveys
Watch the video ‘BSBCUS501A: Conducting surveys’ on IBSA’s YouTube channel at<http://www.youtube.com/ibsachannel>.Why is the incentive suggested to Heather Howard when creating her customerquestionnaire?It is done to help the customer be encouraged to complete the survey and helpestablish in the customers mind that the newsagency want to be part of the localcommunity.How else could the newsagency use an incentive scheme to encourage customers tocomplete the questionnaire?Other methods could be to have more winning entries such as 5 X $20 in-storevouchers for the five best examples of feedback given, a free newspaper for a monthfor the best feedback, a lucky dip box with small prizes to be given if you complete thequestionnaire, a numbering system on the questionnaire or a draw taken with the luckynumber winning a $30, $50, $100 in-store voucher.
1st edition version: 1 BSBCUS501 Manage quality customer servicePage 94 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook AppendicesAppendix 2: Specifications agreement with Yore MineCo.When Innovative Widgets made an agreement with a local company Yore Mine Co. to betheir main supplier of widgets, they agreed on some requirements for widgetspecifications and customer service. This long-standing agreement was made in 1958.
Widget product and customer service specifications
Widgets must be safe for use:● able to take a load force of 24 kilonewtons (kN)● every widget must be tested to half its rated strength (12 kN)● 1% of every batch must be tested until they break to ensure that they can take aload force in excess of 24 kN● Any widget, or quantity of widgets, that are accidentally dropped must bedisposed of.At least 95% of widget deliveries must be on time (delivered 3–7 business days afterthe order date)Complaints or queries from Yore Mine Co. to Innovative Widgets must be resolvedaccording to the Innovative Widgets complaints policy and procedure.
BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 95 of 97Appendices Student WorkbookAppendix 3: Complaints policy and procedureInnovative WidgetsComplaints Policy and Procedure
The purpose of this policy is to ensure the management of complaintsis carried out consistently, fairly and transparently and in accordancewith organisational requirements.
The scope of this policy covers the management of customercomplaints by employees and contractors of Innovative Widgets.
Specific procedures for the implementation of this policy are availablebelow and on the company intranet.
Responsibility for the implementation of this policy rests withemployees and management of Innovative Widgets with responsibilityfor managing customer complaints.
• Privacy Act 1988 (Cwlth)• Equal Opportunity Act 2010 (Vic)• Competition and Consumer Act 2010 (Cwlth)
10/2011 – John Doe CFO
To manage complaints1. Greet the customer courteously and give them your name.2. Listen fully to what the customer is saying. Try to gather all the facts about thecomplaint and jot them down. Ask questions and summarise what they are saying.3. Never argue with the customer.4. Apologise for any product fault or poor service. Be sympathetic. Ask if the customerwill allow us to send the faulty item to our quality department for testing.5. When you have all the details about the complaint, ask the customer how theywould like it to be resolved.6. All staff members can use their professional judgement and refund an additional10% of the value of the faulty product up to a maximum value of $25.1st edition version: 1 BSBCUS501 Manage quality customer servicePage 96 of 97 © 2015 Innovation and Business Industry Skills Council LtdStudent Workbook Appendices7. Complaints involving damage to other property are covered by our insurance. Helpthe customer to complete the Claims Form and ask if the customer can obtainquotes for repairs.8. All complaints involving injury must be referred to the Customer Service Manager.Agree a suitable time for the Customer Service Manager to call the customer.9. Any complaint that is not covered in the above procedures must be directed to theCustomer Service Manager. Agree a time for the Customer Service Manager to callthe customer.BSBCUS501 Manage quality customer service 1st edition version: 1© 2015 Innovation and Business Industry Skills Council Ltd Page 97 of 97
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