In Person Customer Service vs Online

Can Supply Chain Management Practices Influence Customer Satisfaction and Loyalty

Table of Contents

Introduction 4

Literature Review 4

Definition of Customer Service 7

Before and After 7

Types of Customer Service 8

Pre/Post-Purchase and Retention/Loyalty 8

Interactive Customer Service 9

What is the Optimal Mix? 11

Identifying Cost-Effective Customer Service Strategies 12

Conclusion 13

References 15

Abstract

This paper identifies the types of customer service and shows how supply chain management practices can influence customer satisfaction and loyalty. Customer service is the process of providing assistance and support to customers. It can take many forms, including phone support, online chat, and in-person service. Supply chain management is the process of overseeing and coordinating the activities that are necessary to move goods from one location to another. supply chain management practices can have a significant impact on customer satisfaction and loyalty. This paper will identify the different types of customer service and discuss how supply chain management practices can influence customer satisfaction and loyalty. By understanding the link between supply chain management and customer service, businesses can ensure that they are providing the best possible experience for their customers.

Introduction

During a period in America’s history when so-called “quiet quitting” is replacing pride in workmanship and organizational loyalty in the workplace, it is not surprising that customer service has been adversely affected in the process. In response, a growing number of companies are seeking to identify cost-effective strategies that can be used to improve customer service (Gurnani et al., 2022). Because there are many different types of customer service strategies available and each has its strengths and weaknesses, it is important to determine which strategy or combination of customer service strategies is best suited to a given organization’s customer service needs. From a supply chain management perspective, customer service should be considered an important element in the overall equation (Heikkilä, 2002). Therefore, that is why this paper aims to identify cost-effective strategies that organizations of all sizes and types can use to improve their customer service function.

Literature Review

The literature shows that there are a number of cost-effective strategies that organizations can use to improve their customer service function. One such strategy is to focus on employee training (Haque & Islam, 2013). By ensuring that customer service representatives have the skills and knowledge they need to effectively resolve customer issues, organizations can make a significant impact on the quality of their service. Another strategy is to make use of technology (Heikkilä, 2002). Automated call systems and live chat features can help to improve the efficiency of the customer service process, making it easier for customers to get the help they need. Finally, organizations should also focus on creating a culture of customer service within their company. By instilling a sense of ownership and responsibility in employees, companies can foster a more customer-centric environment and improve the overall quality of their customer service (Chavez et al., 2016).

Chavez et al. (2016) note that customer pressure tends to lead to better operational performance and customer satisfaction in automobile manufacturers in China; the researchers arrived at this conclusion by evaluating links between customer-centric green supply chain management (GSCM) and other factors, such as customer pressure and performance outcomes (like operational performance and customer satisfaction). Their findings are similar to those provided by Ellinger et al. (2012), who sought evidence of a link between supply chain management and firm performance. Ellinger et al. (2012) found that companies which are routinely recognized by peers and experts for superior SCM tend to achieve higher levels of customer satisfaction and shareholder value than their peers in their respective industries.

Additionally, Haque and Islam (2013) explain that SCM practices can impact customer satisfaction in the pharmaceutical industry. Their research focused on how SCM practices impact customer satisfaction in terms of specific dimensions. They used quantitative data obtained through the survey method in the pharma industry in Bangladesh. Interestingly, they found that three dimensions of SCM (collaboration and information sharing, logistics design and IT infrastructure, organizational culture) impact customer satisfaction but that only the first two have an effect. This was essentially supported by prior research by Heikkilä (2002), who showed that in order to maintain good customer satisfaction and efficient supply chain management, fast-growing industries need to have a good relationship between customers and suppliers. Heikkilä (2002) used the case study approach, but the main takeaway was that flexibility and being able to adapt to customer needs in a fast-growing industry is essential for achieving customer satisfaction.

But there is another take on SCM that also needs to be considered, which is the purchasing power of the consumer. Mappesona et al. (2020) examined the impact of product quality on purchasing decisions partially, promotion on purchasing decisions partially, and product quality and promotion on purchasing decisions simultaneously using a case study approach. The authors found in their quantitative analysis of data obtained through survey that product quality affects purchase decision partially, promotion affects purchase decisions partially, and product quality and promotion together also affect purchase decision. The research by Mappesona et al. (2020) is relevant because it highlights the association between purchasing and customer satisfaction.

In summation, supply chain managers need to consider how their role impacts customer service, and how customer service should impact their decision-making. Excellent customer service has always been essential for businesses, but in recent years it has become even more important. With the rise of the internet and social media, customers now have a louder voice than ever before. A single poor experience can quickly spiral into a PR nightmare, while a strong customer service reputation can generate buzz and attract new business. For supply chain managers, this means that their decisions can have a major impact on customer satisfaction. When planning inventory levels or choosing suppliers, they need to keep customer service in mind and make sure that their actions will lead to the best possible outcomes for both the company and the customer. By taking a customer-centric approach to supply chain management, businesses can ensure that their customers always have a positive experience.

Definition of Customer Service

Although there is no universally accepted definition of customer service, most consumers readily recognize when they have been treated appropriately by companies, especially when things go wrong. Indeed, it is reasonable to posit that virtually all consumers have been forced to deal with customer service for a constellation of varied reasons, and these experiences can have a profound effect on customer loyalty and brand reputation. Therefore, it is critically important to develop a comprehensive understanding concerning the construct of customer service that is involved. A useful working definition of customer service that will be used in the final version of this study is “the support you offer your customers — both before and after they buy and use your products or services — that helps them have an easy, enjoyable experience with your brand” (Why customer service is important, 2022, para. 3).

Before and After

The “before and after” aspects of customer service are a common theme in many definitions of customer service, which reinforces the importance of ensuring that follow-up support is provided for all products and services. Moreover, there is a growing recognition among business leaders in all industries and sectors that customer service is more than just a way to resolve consumers’ problems. In this regard, Grant et al. provide some additional definitional clarity to the construct by advising, “Customer service is the interaction between the buyer of a product and the company that sells it.Recent innovations have focused on automating customer service systems, but the human element is, in some cases, indispensable” (Grant et al., 2022, para. 4).

In sum, customer service is an integral part of any competitive business model, but there are also a number of different types of customer service that can be used, as discussed further below. Supply chain managers may want to consider these types more carefully when planning out the supply chain, as every element impacts another in the consumption process.

Types of Customer Service

Customer service is the process of providing assistance to customers before, during, and after a purchase. As such, there are generally three types of customer service: pre-purchase, post-purchase, and retention/loyalty. Each plays a special role in the process of serving the customer (Grant et al., 2022).

Pre/Post-Purchase and Retention/Loyalty

Pre-purchase customer service includes activities such as providing product information and advice, answering questions, and addressing concerns. Post-purchase customer service includes activities such as resolving problems, exchanging or returning merchandise, and providing follow-up support. Retention/loyalty customer service includes activities such as offering discounts and special deals, sending thank you notes, and maintaining a good relationship with customers. Each of these types of customer service is important in its own way and helps to create a positive customer experience.

To refine it a bit more: pre-purchase customer service is the type of customer service that helps customers make a purchase decision by providing information about products or services before they buy. This type of customer service is important because it can influence a customer's decision to buy from a particular company.

Post-purchase customer service, on the other hand, helps customers with questions or problems after they have made a purchase. This type of customer service is important because it can help to ensure that customers are satisfied with their purchase and are likely to continue doing business with the company in the future.

Finally, retention/loyalty customer service is designed to keep customers coming back by providing rewards or incentives for continued business. This type of customer service is important because it can help to build long-term relationships with customers and create repeat business.

Each of these different types of customer service is important in its own way and should be considered when developing a customer service strategy for a business. But they are not the only types of customer service. Other considerations have to be made as will be seen below (Grant et al., 2022). Supply chain managers should also be aware of interactive customer service options.

Interactive Customer Service

Most consumers intuitively understand what good customer service means, especially when they fail to receive it. Dissatisfied consumers are also the most likely to take to social media platforms to complain loudly about their experiences (Naidu & Reich, 2018). Fortunately, companies today have a wide range of customer service types available to them that can be used to help them improve their relations with their consumers, including the ten most commonly used strategies listed below.

1. Traditional walk-in customer service;

2. Telephone support;

3. Self-service customer support;

4. Email support;

5. Live chat customer service;

6. Chatbots;

7. Social media customer service;

8. Interactive voice response customer service;

9. On-site customer service; and,

10. Customer-focused communities and forums (Willis, 2022).

Thus, as one can see, there are many different types of customer service, each with its own advantages and disadvantages. Traditional walk-in customer service is often the most personal and responsive, but it can also be the most expensive and time-consuming. Telephone support can be more convenient and less costly, but it can also be less personal and responsive.

Self-service customer support can be very fast and convenient, but it can also be frustrating if the problem is not easily resolved. Email support can be a good compromise between speed and convenience, but it can also be slow to receive a response (Willis, 2022). Live chat customer service is becoming increasingly popular, as it is fast and convenient, but it can also be less personal than other forms of customer service.

Chatbots are a newer form of customer service that are becoming more popular, as they are often faster and more convenient than live chat, but they can also be less personal. Social media customer service is becoming more popular as well, as it is often very fast and convenient, but it can also be less personal (Willis, 2022). Interactive voice response customer service is another newer form of customer service that is becoming more popular, as it is often very fast and convenient, but it too can be less personal. On-site customer service is often the most personal form of customer service, but it can also be the most costly and time-consuming. On-site customer service is a form of customer service that takes place in person, either at the customer’s home or place of business. It allows for a direct interaction between the customer and the company representative.

Lastly, customer-focused communities and forums are a great way to get help from others who have had similar experiences (Willis, 2022). By sharing information and stories, members of these communities can provide valuable insights and perspectives that can be helpful to others. In addition, these communities can also serve as a valuable source of customer feedback for companies. By monitoring these forums, companies can identify potential problems or areas for improvement and take action to address them. As a result, customer-focused communities and forums can be a valuable resource for both customers and companies alike. However, one drawback of these forums is that they can also be slow to get a response.

What is the Optimal Mix?

While conventional brick-and-mortar retail stores may continue to elect to use traditional walk-in customer service, they may also incorporate one or more of the other types listed above to maximize the effectiveness of this function. In addition, companies may need to change the types of customer service they provide as their offerings change over time, so it is essential to determine the optimal mix at any given time and plan for future customer service needs, as discussed further below.

Selecting the most appropriate type of customer service strategy is essential to ensure customer satisfaction with their purchase and build brand loyalty and a company’s business in an increasingly competitive marketplace. In fact, optimized customer service can help companies achieve and sustain a competitive advantage over their counterparts that fail to provide these services efficiently.

Identifying Cost-Effective Customer Service Strategies

In this context, “cost-effective” means achieving the most effective customer service for the resources that are invested in the function. For example, it would make little sense for a small, home-based company with few employees serving international customers to offer walk-in customer service, just as it would be ineffective for them to provide a combination of customer service types that are redundant. A growing number of companies of all sizes, however, have found that providing customer service through various social media platforms which can deliver real-time assistance is among the most cost-effective strategies that are available (Gunarathne et al., 2018).

Although providing customer services using social media platforms requires staff to monitor these sites continuously in order to provide timely information and assistance, many consumers are already members of these platforms and are comfortable using them for various purposes, including obtaining customer service when they experience problems with products or services. Because social media platforms provide a way for companies to offer customer service by live humans, it is a superior strategy compared to other, more costly alternatives.