1. 5 Operations Management
On his birthday, a husband and wife visit a store together. She goes off on her own to the home furnishings department. She tells her husband that she will meet up with him in 30 minutes.
When she arrives back she can’t find him anywhere. The Store Manager, seeing her slightly flustered demeanour, approaches her. “Madam”, he says, “You’re husband has been shot”. She turns and stares. “Not only that” says the Store Manager, “He has also been held under water for over five minutes!” Before she can open her mouth to say anything the Store Manager continues. “And that was before he was found hung”.
The woman laughed and left the store ten minutes later. “Thank you for such fantastic customer service” she said to the Store Manager. “I’ll definitely be back again”.
Why was the woman so pleased?
5 Operations Management
5.2 Customer Service
5.2 Customer Service

2. 5.2 Customer service In this topic you will learn about
Importance of customer service
Consumer protection
Impact of ICT
5.2 Customer Service

3. Importance of Customer Service
Customer service is the meeting of customer expectations before, during and after purchasing a good or service
For a small business it is essential to have good customer service in order to
Distinguish the product from the competition
Obtain repeat custom
Gain a good reputation
Customer service in the restaurant industry
5.2 Customer Service

4. Importance of Customer Service
It is important to provide good customer service in a number of areas:
Reliability
Product information
After sales service
Can you think of two examples of products or services where each of the above areas of customer service are important to you.
5.2 Customer Service

5. Importance of Customer Service
Reliability
Customers want a product that will meet their requirements each and every time
Consistent quality will earn customer loyalty and repeat custom
Customers expect predictability when buying a product – does the good or service meet expectations?
5.2 Customer Service

6. Importance of Customer Service
Product information
To obtain the full benefit of a product the customer needs to know how it works
Expert knowledge of how a product works will allow the firm to inform customer needs when making a sale
Good customer service based on product information can make the difference between making and losing a sale
How can a firm ensure staff are both knowledgeable and able to provide customers with the service level required?
5.2 Customer Service

7. Importance of Customer Service
After sales service
Many products require an ongoing service
A good website, online helpdesk and a reliable repair/support team can provide this
This will increase the likelihood of repeat custom for new products aimed at a loyal customer base
Recommendation will also be key for small firms to increase their customer base
Can you identify these forms of after sales service?
Eager Tuna (1 word)
Yam Wart ( 1 word)
Princely Tours (2 words)
5.2 Customer Service

8. Service with a smile The Nasty Tourist
A group of Americans were touring Ireland. One of the women in the group was a real dragon, constantly complaining. The bus seats are uncomfortable. It's too hot. It's too cold. The food is terrible. The accommodation is awful. The group arrived at the site of the famous Blarney Stone. "Good luck will be followin' ya all your days, if you kiss the Blarney Stone," the guide said. "Unfortunately, it's being cleaned today so no one will be able to kiss it. Perhaps we can come back tomorrow." "We won't be here tomorrow," the nasty woman shouted. "We have some other boring tour to go on. So I guess we can't kiss the stupid stone." "Well now", the guide said, "It is said that if you kiss someone who has kissed the stone, you'll have the same good fortune." "And I suppose you've kissed the stone," the woman scoffed. "No Ma'am," the frustrated guide said, "but I've sat on it."
5.2 Customer Service

9. Customer Service
Tracey runs an independent travel agents, that prides itself on excellent customer service. She offers tailor made trips to cities across Europe. She spends time with each potential customers helping them plan the perfect itinerary to meet their needs. The service offered includes everything from planning the trip, booking hotels, flights and excursions and even offers to pick them up by taxi from home and drop them at the airport.
Question time
What is meant by the term ‘customer service’? (2 marks)
Explain 1 reason why product information will be important for Tracey’s customers. (3 marks)
Explain 1 way Tracey could offer a good after sales service (3 marks)
Explain 2 benefits to Tracey of offering excellent customer service (4 marks)
5.2 Customer Service

10. Consumer Protection
Trade Descriptions Act 1968 – retailers are not allowed to mislead consumers regarding the quality of a product
Sale of Goods Act 1979 – retailers must sale goods as described, of reasonable quality and that are fit for their purpose. Failure to do so entitles the consumer to a refund or a replacement
Food Safety Act 1990 – strengthened the law in a number of areas to improve quality in the food industry
Competition Act 1998 – prohibited anti-competitive behaviour by firms
5.2 Customer Service

11. Consumer Protection Customers are protected by law
This has an influence on business who must abide by consumer protection law or face the legal consequences
Advantages
Disadvantages
Better reputation for UK firms
Increased costs
More customers due to confidence in the product
Increases the likelihood of legal action
Reduces risk of UK products being undercut by poorly made products from home and abroad
A continuous process to keep up with new legislation regarding consumer protection
5.2 Customer Service

12. Impact of ICT on Customer Service
You may enter - but you can’t come in!
I have space - but no room!
I have keys - but open no lock!
What am I?
5.2 Customer Service

13. Impact of ICT on Customer Service
Advances in ICT have allowed customer services to develop
These developments have been made possible through:
Websites
E-commerce
Global/International markets
Some may also argue it has had a negative impact.
Do you consider these ICT developments to be positive or negative?
Touch tone telephones to choose options rather than speak to an operator.
FAQ on a web site rather than a person at a help desk.
E mail customer service rather than a help line.
5.2 Customer Service

14. Impact of ICT on Customer Service
Websites
Websites allow consumers to access a firm’s products through the internet
They are cheap and easy for a firm to set up
They allow the consumer to identify and purchase products
They provide for after sales service with extensive information accessible to customers
5.2 Customer Service

15. Impact of ICT on Customer Service
E-commerce
Electronic commerce is any form of business transaction between the firm and a consumer through the use of ICT
The Internet allows access to customers 24 hours, 7 days a week
E-commerce improves the speed of sales
Small firms can source cheaper supplies through the Internet
Expansion through E-commerce is likely to be much less expensive than opening new stores
5.2 Customer Service

16. Impact of ICT on Customer Service
Global/International markets
ICT has opened up a global economy for small firms
Small firms no longer have to remain in local or regional markets
This also increases the threat of competition from abroad
ICT will help to improve customer service through quicker response times – an takes no longer to reach Australia than somewhere in the UK
Selling abroad may create problems due to cultural and legal issues in other countries
5.2 Customer Service

17. Unit 5 Operations management
You have now completed the second section of the course – Finance
During this time you will have learnt a lot of new terminology. It is a good idea to write down a glossary of key terms.
See how many technical terms you can think of under each heading
5.1 Production methods
5.2 Customer Service
Use your notes to ensure you have a complete list and then write a short definition for each one
5 Operations