Chapter 13
Customer Service and Support in Web Space
Learning Objectives:
By the time students complete this chapter they should be able to:
• Explain the evolutionary stages of customer service provision.
• Understand the role of customer service in creating sustainable competitive advantage.
• Explain the importance of integrating customer service with other customer-facing
Chapter Perspective
Depending on your own perspective, you may want to begin coverage of this chapter with an
argument for elevating customer service to a major, strategic role in marketing. My own
perspective is that it should be the “5th P” (people) of marketing. That elevates it to a planning
and operational variable that would receive the attention and resources that the data at the
beginning of this chapter imply it deserves. The chapter carries on the example of Harrah’s by
emphasizing the role customer service has played in the turn-around first described in Chapter 4.
The Importance of Customer Service and Satisfaction
Data from Accenture indicates that poor customer service or product quality was the most
common reason for consumers to switch providers (61% of those who switched) and that poor
service has potential to damage the brand image. Burke Marketing Research expands on that by
a study of the insurance industry that shows 274 customers out of 6,000 lost to poor service in a
The high cost of poor customer service is illustrated in Table 13.1. It offers global data to make
the point that people want good, proactive customer service. The continuing case of Harrah’s
American Express provided the B2C data from their annual study of customer service. It is also a
good place to go for updates, especially because they offer different segmentations in some of
the annual studies. They don’t post on a single page so search American Express Customer
Service Barometer 2011, etc. The 2010 data in Figure 13.2 is especially compelling because of
the willingness of young professionals and affluents to spend more than the average customer
when they believed good customer service was available.
In the B2B arena, Accenture’s study of CRM programs shows that excellent customer service
has the greatest impact on profitability of any of the three key dimensions of CRM. The impact
on profitability is substantial. This study doesn’t seem to have been repeated.
Students should have a variety of interesting (and probably strongly-felt) answers to what they
want in terms of customer service. I find that “know what they are doing/can answer my
questions” usually comes up quickly. Figure 13.4 is interesting in that it shows “To be treated
with dignity” as by far #1. The gap between what customers want and what they get is
substantial. It seems even more inexcusable in light of the fact so many of the items appear to be
no cost. They do, of course, require careful customer service training, which is not inexpensive,
but all the data in this section point to the fact that the expenditures are worth it.
Figure 13.7 shows customer service evolving in terms of automation and information
intensiveness. Most businesses offer live customer service and some offer no more than that.
The second stage is to migrate service to the web. It may be more effective to do so first with
extensive live support as the attempt is made to migrate customers to automated self-service to
the greatest extent possible. There should also be a live customer rep available, however, when
This concept includes only telephone and Internet channels for customer service. While that is
appropriate to the focus of this text, customer service can be delivered in other channels such as
the retail store. Cost data, however, makes it clear why the Internet is such a focus and that even
Internet channels vary in cost per contact. Costs range from $9.00 for contact with a live
telephone rep to $2.50 email, presumably not an automated one, and to 10 cents for a self-service
contact. This makes it clear why most marketers are eager to encourage Internet channels and
various forms of customer self service.
Eddie Bauer is a good example of self service in the corporate DNA; L.L. Bean is another. You
might want to go live to the customer service page of either one to show the options and think
about why and how they can be used. Or you might want to ask students for recommendations on
sites that have provided good customer service for them. You’re likely to get more age-
appropriate recommendations that way.
This example of the New York Department of Motor Vehicles is a good one, but this section is
an excellent opportunity to go live to a site like the DMV in your own state, the local voter
These themes summarize the lessons that emerged from the three case studies. They are:
• Excellent customer service cannot be delivered by an isolated customer service
department.
• Superior customer service requires long-term commitment of both management and
resources. Management must make an enduring public commitment (“talk the talk”) to
Price Waterhouse Cooper’s perspective on the evolution of customer care in an enterprise
focuses on the effective use of information and technology (Figure 13.10). It begins with simple
customer profiles, then moves on to segmentation and analysis of customer needs by segment,
and finally arrives at the stage where technology delivers genuine solutions and customers can
have a seamlessly satisfactory experience, no matter how they choose to access service. Each
stage presents its own challenges, some of which should be apparent to students by now. PWC
You may want to simply list these technologies, which are in common usage on the assumption
that students are familiar with many or most of them. On the other hand, you may want to take a
little more time and give at least one example of each. Note that these are essentially standard
technologies in widespread use. A list of newer technologies comes at the end of the chapter.
Telephone (Call Center) Technologies include:
• Interactive Voice Response (IVR). How do students feel about the use of IVR
technology in your own school, say by the registrar’s office?
Website technologies include:
• Email response management systems. Automated systems that produce immediate
confirmation of site registration or an e-purchase are easy to see. Students may be vocal
about whether applications of automated response to queries are useful or not. The ones
that are not are very visible. Some are so good that it is difficult to tell whether they are
automated or composed by a live person; most are obvious but acceptable for routine
communications.
• Embedded devices. From a dishwasher that senses how dirty the dishes are to a shirt that
has a security authentication device sewn in, there are computer chips in many of the
items we use every day. Many of them do perform services of one kind or another.
• Mobile applications. Again, there are many devices including smart phones and tablets
that can send and receive communications wirelessly.
Themes in Strategic Customer Management
This is another approach to suggesting that customer service does not exist in isolation from
overall customer care and customer experience.
Differentiated customer service, while efficient, does have a dark side. Sometimes customers can
tell that they are being forced into low-cost customer contact channels. Computer and software
Forrester gives the steps in building anticipatory customer service as:
1. Build customer service scenarios, based on call center and Internet data. Scenarios are an
3. Design the process for seamless escalation to higher levels of service as needed.
Not much has been said about escalation in the chapter. Used in this context, it simply means to
move the customer to the next level of service when the current level cannot satisfy him. The
pattern might be from self-service to automated email to a chat room. How many times have you
been passed along such a chain, only to have to repeat your story (as well as your identifying
information, which is even more infuriating) at every level? That is the opposite of seamless!
The final themes relate to the broader issue of customer experience. The content in the text
Discussion Questions
1. Throughout the chapter, reference is made to exceptional customer service as the basis
for sustainable competitive advantage. Do you agree with this perspective? Why or
why not?
Identification of customer service as a basis of competitive advantage is common among
2. The Internet has the capacity to increase customer expectations about service levels and
also to be the vehicle that delivers service that meets or exceeds those expectations.
Take a position on this statement and be prepared to discuss it.
The discussion that supports this statement goes back to the first chapter in which the strategic
3. Do you believe that good customer service has a direct impact on the profitability of a
business? Can you provide evidence to back up your position?
In the chapter Figures 13.1, Table 13.1, Figure 13.2, and the Harrah’s and British Airways case
histories all make the point.
4. True or False: Customer service is less important in B2B markets than in B2C. Why or
why not?
The discussion on service in B2B markets at the top of p. 353 stresses the importance of service
5. Moving all service delivery to the web where customers can access it when they need it
is the most important aspect of building a successful customer service program. Do you
agree or disagree? Why?
Moving services to the web where customers can access them as needed is important. It can
6. What are the customer service channels people are most willing to use to resolve
problems? The least willing?
Figure 13.5 provides the best summary. It is clear that most people would really like to talk to a
7. What are the highest cost service channels? The lowest cost? What implications does
that have for effective customer service strategy?
In a general sense, the highest cost channels involve a human being, supported by a good
8. What is the concept of anticipatory customer service? What role can it play in
successful customer service delivery?
The concept of anticipatory (also referred to as preemptive because the aim is to prevent
9. Bloomberg Businessweek recently published a debate feature entitled “Virtual Agents
Will Replace Live Customer Service Reps.” Would you take the pro or the con
position? Why?
10. Can you identify industries or specific businesses for which mobile customer service
apps seem especially desirable?
It almost seems reasonable to ask whether there are any industries or specific business for which
mobile customer apps are NOT desirable. That’s how fast the world is changing. Students may
11. Can you find other examples, besides Zappos and Best Buy, of companies that are
actively using social networks for customer service?
12. Can you identify any ethical issues that are inherent in sophisticated customer service
programs?
One was alluded to above. Customers who are not connected to the Internet or who are not
13. How does customer experience differ from customer service?
Customer experience is the broader concept, including all interactions with the business.
14. Think about the issue of organizational issues and their impact on the delivery of
exceptional customer service. Have you encountered any customer service instances in
which people in the same organization seemed to be giving you different information or
advice? Why do you think this happened?
Most of us can recount numerous examples of poor customer service and asking questions like
1. Internet Career Builder Exercise.
2. Find a reason to contact a website or social network service page (asking for
information, searching for support for a previously-purchased product or service, etc.)
and make the contact. Keep track of the timeliness, correctness, and completeness of
the responses. Be prepared to describe them and to characterize your overall
experience.
The experiences of individual students will be interesting, especially to the degree that some are
3. Identify a website that has a significant customer self-help component. Websites for
consumer software and consumer electronics companies are especially good candidates,
but there are many others. Think of a specific problem or question that you might have
in relation to this product. Visit the site and try to solve the problem or answer the
question. Describe the nature of your experience and your degree of overall
satisfaction.
There are a number of sites that students might choose. The larger the site and the more specific
4. Visit the websites you are tracking. Learn as much as you can about their customer
service policies. Be alert to how easy it is to find the information you would need as a
customer and how complete it appears to be. Note any aspects of the way the site
provides customer service that look like they are particularly good or especially
problematic. Establish several criteria that identify good service policies. Rank the sites
according to your perception of their customer service policies and practices. Be
prepared to discuss your criteria and rankings in class.
As suggested in the lecture notes, Eddie Bauer not only provides good customer service, but their
Key Terms
agent a piece of software that triggers an activity when a specified event occurs; performs a
variety of repetitive tasks on the Internet, ranging from searching for content for the search
engines and directories to searching for product offerings by e-merchants to provide comparison
prices for users.
embedded service module a device, usually a chip, that is part of a product and that is used to
provide remote monitoring and diagnostics of the product’s performance.
ERMS (email response management system) set of applications that handles large volume of
email from customers and prospects ensuring that messages receive prompt responses and are
distributed to the appropriate agent; provides other functions like metrics
virtual agent a program that simulates the conversation of a human being and uses artificial