Chapter 17 – Customer Service
17-1
CHAPTER 17
CUSTOMER SERVICE
ANNOTATED OUTLINE
INSTRUCTOR NOTES
• Customer Service is the set of activities and programs
undertaken by retailers to make the shopping experience
more rewarding. These activities increase the value
customers receive from the merchandise and services they
purchase. All employees of a retail firm and all elements of
the retailing mix provide services that increase the value of
the merchandise.
See PPT 17–3
Generate a discussion among
students about their experience
with customer service at various
I. Balancing Customer Service: Personalization Versus
Standardization
• Personalized and standardized are two approaches
retailers use to develop a sustainable customer service
advantage.
• Personalized service requires that service providers
tailor their services to meet each customer’s personal
LO 17-1 Identify how retailers
balance customer service
through personalization versus
standardization.
See PPT 17–6
Ask students for examples of
retailers that use personalized and
A. Personalized Approach
• Personalized customer service is less consistent than
standardized service. The delivery of personalized service
depends on the judgment and capabilities of each service
See PPT 17–7
Chapter 17 – Customer Service
17-2
provider.
B. Standardized Approach
• Standardized, particularly automated services improve the
speed and reliability of the retail interaction for customers.
But this form of customization is also distinctly impersonal.
See PPT 17–8
II. Customer Evaluations of Service Quality
• When customers evaluate retail service, they compare
their perceptions of the service they receive with their
expectations.
LO 17-2 Explain how customers
evaluate a retailer’s customer
service.
Chapter 17 – Customer Service
17-3
A. Perceived Service
• Customers’ perceptions of a retailer’s customer service
depend on the actual service delivered. However, because
1. Reliability is the ability to perform the service dependably
and accurately, such as performing the service as promised
or contracted or meeting promised delivery dates.
3. Tangibility is associated with the appearances of physical
facilities, equipment, personnel, and communication
materials.
4. Empathy refers to the caring, individualized attention
provided to customers.
B. Role of Expectations
• Customer expectations are based on knowledge and past
experiences with a retailer and its competitors.
See PPT 17–12
Describe the role of expectations.
Relate the role of expectations to
retailer.
III. The Gaps Model for Improving Retail Customer Service Quality
• When customers’ expectations are greater than their
LO 17-3 Indicate the activities a
retailer can undertake to
provide high-quality customer
Chapter 17 – Customer Service
Four factors affect the service gap:
• Knowledge gap: The difference between customer
expectations and the retailer’s perception of customer
expectations.
• Standards gap: The difference between the retailer’s
perceptions of customer’s expectations and the customer
service standards it sets.
A. Knowing What Customers Want: The Knowledge Gap
• The most critical step in providing good service is to know
what the customer wants.
• Retailers can reduce the knowledge gap and develop a
better understanding of customer expectations by
undertaking customer research, increasing interactions
See PPT 17–15
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1. Social Media
• Retailers can learn a lot about their customer expectations
and perceptions of their service quality by monitoring what
Discuss with students how reviews
on products could be a factor in
understanding customer
sentiment. Ask if bad reviews are
2. Surveys, Panels, and Contests
• Many retailers survey customers immediately after a retail
transaction has occurred.
Work with students to develop a
procedure for conducting a
customer panel. How many
customers? What types of
3. Interact with Customers, Either Directly or through
Observation
• Owner-managers of small retail firms typically have daily
Ask students what retail
managers can do to improve
communications with contact
4. Customer Complaints
• Complaints allow retailers to interact with their customers
and acquire detailed information about their service and
merchandise.
Ask students what retailers could
do to stimulate comments and
complaints about service.
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5. Feedback from Store Employees
• Salespeople and other employees in regular contact with
customers often have a good understanding of customer
6. Using Customer Research in a Timely Manner
• The knowledge gap diminishes only when retailers use this
information to improve service.
Ask students if retail managers
really need to interact with
customers to determine customer
expectations and perceptions.
B. Setting Service Standards: The Standards Gap
• Service standards should be based on customers’
perceptions rather than on internal operations.
See PPT 17–6
Ask students what a retailer can
do to remind employees about the
1. Commitment to Service Quality
• Service excellence occurs only when top management
provides the leadership and demonstrates commitment.
See PPT 17–17
2. Defining the Role of Service Providers
• Managers can tell service providers that they need to
provide excellent service, but not clearly indicate what
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3. Setting Service Goals
• Retailers often develop service goals based on their beliefs
about the proper operation of the business rather than the
Ask students to give specific
examples of services goals that
store.
4. Measuring Service Performance
• Retailers need to continuously assess service quality to
ensure that goals will be achieved.
Query students on the types of
information that could be
C. Meeting and Exceeding Service Standards: The Delivery Gap
• To reduce the delivery gap and provide service that
exceeds standards, retailers must give service providers
See PPT 17–19
Ask students to indicate the kind
1. Give Information and Training
• Service providers need to know about the retailer’s service
standards and the merchandise it offers, as well as the
customers’ needs.
See PPT 17–20
Chapter 17 – Customer Service
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2. Empower Store Employees
• Empowerment means allowing employees at the firm’s
lowest levels to make important decisions regarding how
service is provided to customers. When the employees
See PPT 17–21
3. Provide Instrumental and Emotional Support
• Service providers need to have instrumental support
(appropriate systems and equipment) to deliver the service
desired by customers.
Ask students to give examples of
emotional and instrumental
service support they might have
received when working in a retail
outlet.
4. Provide Incentives
• Many retailers use incentives, like paying commissions on
sales, to motivate employees.
Ask students about the benefits
and problems with offering
incentives. Review the material
on incentives in Chapter 17.
5. Improve Internal Communications
• When providing customer service, frontline service
providers often must manage a conflict between
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customers’ and their employer’s needs.
6. Use Technology
• Retailers have been actively engaged in implementing a
vast variety of technology tools in their stores and websites
to help their customers.
• Widespread technologies already in place include self-scan
checkout stations, web-linked kiosks, service personnel
See PPT 17–24 and 17–25
Ask students to describe customer
service technologies they have
encountered in retail stores.
D. Communicating the Service Promise: The Communications
Gap
• The fourth factor leading to a customer service gap is the
difference between the service promised by the retailer
and the service actually delivered.
See PPT 17–26
Discuss the paradox of wanting to
tell customers about great
customer service but not wanting
1. Realistic Commitments
• Advertising programs are typically developed by the
Chapter 17 – Customer Service
17–10
2. Managing Customer Expectations
• Information presented at the point of sale can be used to
manage expectations.
Ask students to indicate some
complaints they have made about
service provided by a retailer. Use
these situations in a role-playing
exercise assigning one student to
IV. Service Recovery
• Rather than dwelling on negative aspects of customer
problems, retailers should focus on the positive
opportunities the problems generate.
• Service problems also enable a retailer to demonstrate its
commitment to providing high-quality customer service.
• Most retailers have standard policies for handling
problems, however, in many cases, the cause of the
LO 17-4 Articulate retailers’
service failure strategies.
See PPT 17–27
Have students relate service
A. Listening to Customers
• Customers can become very emotional about their real or
imaginary problems with a retailer. Often, this emotional
reaction can be reduced by simply giving customers a
chance to get their complaints off their chests.
Ask students why it is important
for an employee to listen carefully
to the complaint. Why is the best
policy always to give the
complaining customer what he or
Chapter 17 – Customer Service
17–11
B. Providing a Fair Solution
• Favorable impressions arise when customers feel they have
been dealt with fairly. When evaluating the resolution of
• Distributive fairness is a customer’s perceptions of the
benefits received compared with his or her costs in terms
of inconvenience or loss. Customers typically prefer
See PPT 17–29
Ask Students: What is distributive
and procedural fairness? Which
one is more important? Why?
• Procedural fairness is the perceived fairness of the process
used to resolve complaints.
• Customers typically feel they are dealt with fairly when
store employees follow company guidelines.