3. Customer service
3.1 Overview
Definition (Philip Kotler) first man who brought marketing into a science
= customer service includes all interactions aimed at helping the customer
before, during and after the purchase. It plays a crucial role in creating customer
satisfaction, loyalty and positive experiences.
Key insights:
Customers have expectations and want them to be filled
Good service leads to repeat purchases, while bad service can result in
complaints or lost customers
Complaints should be seen as chances to improve and retain the customer
Bad experiences are shared with 9-12 people, good ones only with 4-5
Examples:
The former example: man who bought a mountain bike = good experience
The latter example: man who bought a TV = bad service
Important terms:
Customer complaint = when a customer expresses dissatisfaction
To cast = to project or form (e.g. to cast doubt or cast data into a system)
Conversely = introduces the opposite idea (e.g. “Conversely, bad service
leads to loss of loyalty”)
Committing to goals = dedicating resources and effort to achieve targets
Customer base = a group of loyal and returning customers
Customer satisfaction = how happy a customer is with the service
Customer expectation = what the customer hopes to receive
Customer retention = keeping customers loyal to the company (=KLANTEN
HOUDEN)
Customer retention
Why is retention important?
Keeping existing customers is 5x cheaper than acquiring new ones
Loyal customers are more likely to return and promote the brand (word-of-
mouth)
A key element of long-term success is managing and enhancing the
customer experience
How to build loyalty:
Loyalty cards/ schemes and programs (frequent flyer, supermarket savings
…)
Collecting feedback and acting on it (customer feedback and surveys)
Word-of-mouth marketing
Exclusive deals and personalized offers
Data collection and analysis (targeted/ personalized marketing based on
customer data)
Excellent and consistent customer service (high-quality service)
,Data and technology:
o Loyalty cards are also data-mining tools
o Companies use them to gain insights into preferences and habits
= collect information on customer behavior, purchases and preferences
o They help improve forecasting and marketing strategies (= more targeted
and personalized marketing)
Key terms:
Churn = when customers leave or stop using a service
Churn rate = the percentage of customers who stop using a service during
a specific time period
Attrition rate = % of customers lost over a specific period
Customer defection = loss of customers = another term for churn (=
KLANTEN VERLIEZEN)
Customer allegiance = strong emotional loyalty toward a brand
CRM (customer relationship management) = managing the entire
customer experience
Over-zealous = overly enthusiastic, sometimes to the point of being
counterproductive
A chore = something that feels like an annoying or routine task (e.g.
calling customer service)
Assembled = put together from different parts (e.g. a laptop)
Subcontractor = an external company hired to do a specific part of the
service or production
Logistics = planning, coordinating and managing the flow of products and
services
Extra vocabulary:
o To defect = to leave one brand for another
o To exceed = to go beyond expectations
o To retain = to keep (e.g. customers)
o To commit to = to dedicate oneself to something
o Zealous = overly enthusiastic or eager
o Utility company = e.g. water, gas or electricity provider
o To comprise = to consist of
3.2 Customer service is getting worse – and so
are customers
Main idea
= customer service quality is declining due to poor systems, lack of empathy and
underinvestment. At the same time, customers are becoming more demanding,
less patient and more aggressive. Both businesses and customers are
contributing to the worsening situation.
Problems in customer service:
Many companies are not truly customer-centred
People often have to seek assistance or redress from big firms, which is
frustrating
Service feels impersonal – a chore rather than a helpful experience
, Customer services has become a weak point in many companies’
operations
Metrics like the American Customer Satisfaction Index (ACSI) act as a
barometer of contentment (how people feel) – and results are dropping
Even though companies claim to care, in reality, they often focus more on
profit than people
Business causes:
In sectors like banking and airlines, consolidation (= companies merging)
reduces competition and weakens service standards
Customer service is often hamstrung by clunky old systems and outdated
legacy technology
Companies invest in deploying automation software (e.g. chatbots) but
they lack human understanding
Tech is used often nascent, meaning new and not fully developed
Companies try to improve complaints- handling but many systems remain
inefficient
Customer behavior
1) Customers are also the blame:
They use foul language and verbal abuse against agents
A lack of empathy is seen from customers as well as companies
2) A recent survey, the National Customer Rage Survey, shows rising frustration
17% of customers admitted to yelling at a company representative
3) There is staff turnover and high attrition rates in contact centres, which leads
to inexperienced staff and poor service
4) All of this results in years of frustration and rage on both sides
AI as a possible solution:
New generative AI (Chat GPT) could offer more natural interactions
AI is best used as a complement to human agents, not a replacement
In simple tasks, AI might be an adequate substitute, but for emotional or
complex cases, humas are still needed
AI can help with:
o Faster response times
o Fewer mistakes
o Learning from a customer’s prior interactions
AI can improve consistency and productivity, especially for inexperienced
agents
Controversies and challenges:
Some fear that AI will obliterate entire categories of jobs, especially in
contact centres
However, others argue it could help staff by making their work easier and
less stressful
3.1 Overview
Definition (Philip Kotler) first man who brought marketing into a science
= customer service includes all interactions aimed at helping the customer
before, during and after the purchase. It plays a crucial role in creating customer
satisfaction, loyalty and positive experiences.
Key insights:
Customers have expectations and want them to be filled
Good service leads to repeat purchases, while bad service can result in
complaints or lost customers
Complaints should be seen as chances to improve and retain the customer
Bad experiences are shared with 9-12 people, good ones only with 4-5
Examples:
The former example: man who bought a mountain bike = good experience
The latter example: man who bought a TV = bad service
Important terms:
Customer complaint = when a customer expresses dissatisfaction
To cast = to project or form (e.g. to cast doubt or cast data into a system)
Conversely = introduces the opposite idea (e.g. “Conversely, bad service
leads to loss of loyalty”)
Committing to goals = dedicating resources and effort to achieve targets
Customer base = a group of loyal and returning customers
Customer satisfaction = how happy a customer is with the service
Customer expectation = what the customer hopes to receive
Customer retention = keeping customers loyal to the company (=KLANTEN
HOUDEN)
Customer retention
Why is retention important?
Keeping existing customers is 5x cheaper than acquiring new ones
Loyal customers are more likely to return and promote the brand (word-of-
mouth)
A key element of long-term success is managing and enhancing the
customer experience
How to build loyalty:
Loyalty cards/ schemes and programs (frequent flyer, supermarket savings
…)
Collecting feedback and acting on it (customer feedback and surveys)
Word-of-mouth marketing
Exclusive deals and personalized offers
Data collection and analysis (targeted/ personalized marketing based on
customer data)
Excellent and consistent customer service (high-quality service)
,Data and technology:
o Loyalty cards are also data-mining tools
o Companies use them to gain insights into preferences and habits
= collect information on customer behavior, purchases and preferences
o They help improve forecasting and marketing strategies (= more targeted
and personalized marketing)
Key terms:
Churn = when customers leave or stop using a service
Churn rate = the percentage of customers who stop using a service during
a specific time period
Attrition rate = % of customers lost over a specific period
Customer defection = loss of customers = another term for churn (=
KLANTEN VERLIEZEN)
Customer allegiance = strong emotional loyalty toward a brand
CRM (customer relationship management) = managing the entire
customer experience
Over-zealous = overly enthusiastic, sometimes to the point of being
counterproductive
A chore = something that feels like an annoying or routine task (e.g.
calling customer service)
Assembled = put together from different parts (e.g. a laptop)
Subcontractor = an external company hired to do a specific part of the
service or production
Logistics = planning, coordinating and managing the flow of products and
services
Extra vocabulary:
o To defect = to leave one brand for another
o To exceed = to go beyond expectations
o To retain = to keep (e.g. customers)
o To commit to = to dedicate oneself to something
o Zealous = overly enthusiastic or eager
o Utility company = e.g. water, gas or electricity provider
o To comprise = to consist of
3.2 Customer service is getting worse – and so
are customers
Main idea
= customer service quality is declining due to poor systems, lack of empathy and
underinvestment. At the same time, customers are becoming more demanding,
less patient and more aggressive. Both businesses and customers are
contributing to the worsening situation.
Problems in customer service:
Many companies are not truly customer-centred
People often have to seek assistance or redress from big firms, which is
frustrating
Service feels impersonal – a chore rather than a helpful experience
, Customer services has become a weak point in many companies’
operations
Metrics like the American Customer Satisfaction Index (ACSI) act as a
barometer of contentment (how people feel) – and results are dropping
Even though companies claim to care, in reality, they often focus more on
profit than people
Business causes:
In sectors like banking and airlines, consolidation (= companies merging)
reduces competition and weakens service standards
Customer service is often hamstrung by clunky old systems and outdated
legacy technology
Companies invest in deploying automation software (e.g. chatbots) but
they lack human understanding
Tech is used often nascent, meaning new and not fully developed
Companies try to improve complaints- handling but many systems remain
inefficient
Customer behavior
1) Customers are also the blame:
They use foul language and verbal abuse against agents
A lack of empathy is seen from customers as well as companies
2) A recent survey, the National Customer Rage Survey, shows rising frustration
17% of customers admitted to yelling at a company representative
3) There is staff turnover and high attrition rates in contact centres, which leads
to inexperienced staff and poor service
4) All of this results in years of frustration and rage on both sides
AI as a possible solution:
New generative AI (Chat GPT) could offer more natural interactions
AI is best used as a complement to human agents, not a replacement
In simple tasks, AI might be an adequate substitute, but for emotional or
complex cases, humas are still needed
AI can help with:
o Faster response times
o Fewer mistakes
o Learning from a customer’s prior interactions
AI can improve consistency and productivity, especially for inexperienced
agents
Controversies and challenges:
Some fear that AI will obliterate entire categories of jobs, especially in
contact centres
However, others argue it could help staff by making their work easier and
less stressful
