Describe with reference to different customer service functions, the different methods used to attract and retain customers for a selected service/product.

UNIT 11

RELATIONSHIP MARKETING

RIZWAN ZAID

BTEC BUSINESS NATIONAL

P4: Describe with reference to different customer service functions, the different methods used to attract and retain customers for a selected service/product.

In this assignment, I will be describing the different methods that are used to attract and retain customers for a selected organisation. The organisation that I have chosen for this assignment is McDonalds. With reference, I will see how McDonalds retain their customers and describe the methods they use to retain customers.

What is customer service?

Customer service is the process in which an organisation tries to propel themselves according to their ability to supply customers with their needs and wants. It allows customers to believe that they are the main priority of any profit making organisation and that receiving good customer service before, during and after their transactions can lead the organisation in securing customers. However, bad customer service can lead to potentially customers being let down on behalf of the organisation and them losing customers, therefore less profit can potentially be made.

Customer service is very important for all organisations and by creating good relationships with customers, they are giving their own company a good name, this by keeping customers happy at all times. A happy customer is more likely to spend more at the organisation and can help persuade potential customers to shop there as well. This can lead to higher profits for an organisation such as McDonalds, as repeat business with a customer is the backbone of their type of business.

The purpose of customer service and the role it plays

The purpose of customer service, in terms of the customer, is that it allows customers to feel part of the organisation in which they make transactions at. An organisation that offers their customers a department in which they can put forward suggestions and queries forward, they are able to interact with the organisation directly to ensure that any doubts or concerns regarding the organisation are answered. Also customers are able to make any complaints about the service they may receive or if they are concerned on how the organisation runs, this can be put forward through customer services so that customers’ voices are heard.

This can benefit the organisation as they are able to deal with problems quickly and they are able to analyse what customers feel is a negative factor and suggestion methods in which they can improve on this problem. When an organisation receives feedback form its customers, this allows an external view of how customers see the image of the organisation and their perspective of the services they provide. This is valuable for an organisation as they can correct any flaws in their operating system and can keep customers by taking up their ideas. This data that the customer service department have received by customers can be analysed and can help organisations to propel themselves in the future.

The role of training

Training plays an important role for any business as it enables them to run more efficiently as an organisation. If the employees are not trained properly to offer good customer service, this can lead to the organisation not being able to run efficiently and can eventually lead to customers being unhappy with the service they have received. This can lead to the organisation such as McDonalds to receive less custom if customers are unhappy, they would go to another rival and shop there instead.

Training itself can be broken down into 3 different departments that relate to customer service:

Pre-transactional

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Training itself can be broken down into 3 different departments that relate to customer service:

Pre-transactional

This is transactions that are made before the actual one is made. This can be internally through an employee receiving training and be given the opportunity to improve their customer service skills. Employee may need skills such as communication skills and motivation skills so that they provide their customers with the customer service in which the organisations need them to do. Also, building relationships is something that has to be done before the transaction can be made so that they understand why customer service is so important to an organisation such as McDonalds. McDonalds offer their employees with incentives such as a pay-rise or a promotion in position if employees deliver good customer service on a consistent basis.

During transactional

This is the process in which the actual transaction is being made. This is processed when the actual customer is face to face with the employee and is paying for the transaction that they are willing to do. However, although McDonalds only make transactions when face to face only, there are some organisations such as ‘Dominoes’ in which transactions can be made over the phone. Any complaints or queries customers may have are mostly gone through a phone call or in a local restaurant in which the customer may be given a number to contact to help them with their queries.

Post transactional

This is the process in which customers are looked after once they have made their transactions. This is vitally as important as the other 2 transactions as customers rely on ‘after service’ to see their entire trancsaction through. If an orgnasiation can still look after their customers after they have made an transaction, this can work in favour of the organsaition retaining customers.

Customer service that McDonalds offer

McDonalds have their ‘drive-thru’ to help their customer service process as it enables customers to sit in their car and order their products without having to step outside their vehicles. This helps customers services as it speeds up the process in which customers are served and it decreased the amount of queues that can be occurring inside.

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McDonalds also offer customers to be more involved with the organisation as the company website shows the organisation aims and objectives for the future, which keeps customers more notified about the plans they are thinking about making. Schemes such as the ‘Prince’s Rainforest Project’ allows customers to read up on these charity events that McDonalds are involved in and take part in. McDonalds also have their own charity scheme in which it is named after ‘Ronald McDonald House Charities’, which is a charity that provides free accommodation for families in which they have children in hospital.

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McDonalds offer their customers quick and efficient services every time they purchase at McDonalds. They do this making sure that orders are met within the time period of 5 minutes to ensure customers are not kept waiting for their orders. Although this is an aim in which the organisations have set themselves, this allows customers to receive their orders when it is hot and fresh. If the organisation fail to serve within the time limit, the customer that is kept waiting can have their order for free, this being a form of apologising with the customers and making sure that the problem is a non-occurring one.

What is a customer charter?

A customer charter is a statement that says how an organization aims to treat both internal and external customers. It is similar to a mission statement but relates specifically to the customer. McDonalds use this to always keep their customers first at all times and that they try and keep their stay at McDonalds stores a ‘pleasant experience’.

McDonalds use their motto, ‘I’m lovin it’’, as a method that they use to attract customers and keep customers award of their products and services that they offer to the public. As customers hear this motto, they immediately are aware that the products or services advertised are from McDonalds.

Attracting new customers

It is difficult to retain current customers than it is to attract new customers. Many organisations would agree with this as organisations such as McDonalds as it is easier to use the modern-day media and invest heavily into but, if customers are unhappy with the services they may have received, this could lead to McDonalds losing customers. This is why retaining customers is so important as not only are an organisation benefiting from having customers, but this could lead to a bigger customer base for an organisation such as McDonalds. If an organisation has a big customer base, this usually means that they have a lot of customers and this could only mean profit.

However, if an organisation would like to increase their customer base, this could be timely and costly at the same time for the organisation itself. For example, if McDonalds wanted a bigger customer base for their ‘McFlurry’, McDonalds would spend money on introducing new flavours for this product so that they attract more customers to buy this product.

This could be costly as introducing new products can be expensive for some organisations but an organisation such as McDonalds have heavy turnovers so they are able to do so. This could be time consuming as advertising and the overall promoting of the product can’t be done over night. However, retaining customers can be the hardest aspect for an organisation that profits from customers spending; they must also encourage their customers to make sure that they stay loyal to the organisation.

As McDonalds cannot force customers to only shop at the restaurants, they have to make sure that they meet customers’ needs and wants. By doing this, they are able to attract and retain customers as they are returning to shop. This process is called customer loyalty.

The 6 steps to customer loyalty

Prospect- customers that potentially may shop at the organisation or be persuaded to do business with you.

Purchaser- individuals that have made transactions with your organisation and are the users of your product or service.

Client- customers that have done business with the organsaition before and have experience in the past of the services they received.

Supporter- someone who supports through decisions or schemes that may allow the organsaition to take up on. They may influence or recommend ideas to the organsaition.

Advocate- an individual that recommends you to other groups.

Partner- an individual that has a say in the organisation and helps run the organisation on a whole. They can influence decisions and be integral in making final decisions.

How McDonalds use the above steps to customer loyalty

They introduce products such as McFlurrys and release newer flavours that give customers a wider range to choose from. Customers tend to be eager to try out the new product so they will purchase.

As McDonalds know they have a wide customer base, this allows their customers need and wants to be met. McDonalds do this by making sure that their customers get their moneys worth and that their food quality is good.

They encourage their customers to buy more than they actually first came in to buy. An employee that is serving would most likely to encourage a customer to buy a ‘meal deal’ package if they only bought the burger and drink.

As McDonalds love to hear what their customers think about certain aspects of the business, they allow customers to have their thoughts and recommendations put forward as they can access the company site or the customer service desks in each restaurant.

McDonalds advertise their business regularly through the internet on common website such as MSN and Hotmail sites. This allows their products to be more customers aware.

Segmentation and how they use it towards their customers

Segmentation is a method used by organisations to break down the market in order to target the ‘correct’ customers in the market in which the organisation believe they will benefit from. An organisation can break down the market in many different ways in order to identify its customers. Some are the factors in which an organisation can break down the market are stated below:

Age: identifying the correct age barrier that will actually buy the product or service will be essential as targeting the right age group can depend on how much profit an organisation could make. For example, McDonalds will target the age range of 5-14 year olds for the ‘Happy Meal’ product, this being labelled as a ‘kids’ product.

Gender: As gender could play a part in many other organisations such as Boots and clothes-ware, McDonalds do not segment their market depending on the sex of their customers, as the products could be consumed by either males or females. However, organisations such as Boots could offer products such as shaving blades that are specifically targeted for men and other products that are specifically targeted for women.

Socio-economic: this is dependant on how much customers are willing to spend on products and services dependant upon the level of income they earn. If one has a high level of income, they are more likely to spend more on products or purchase expensive products that one who has a relatively low income. However, as the prices at McDonalds are deemed ‘competitive’, they are affordable by the majority of the public.

Religion: this is an important factor for McDonalds because not all religions eat the food in which those that contain meat products. As religions such as Islam only accept ‘Halal’ meat, which McDonalds do not provide, they are restricted in trying to target customers who have a religious background from Islam. However, this doesn’t restrict McDonalds from serving such products to customers who have an Islamic background as McDonalds clearly state that they do not sell ‘Halal’ meat.

M2: Analyse the effectiveness of methods that are used to attract and retain customers within a selected organisation.

This assignment will be focusing on the analysis of different methods that are used to attract and retain customers within a selected organisation. The chosen organisation that has been chosen for this assignment is McDonalds. The methods in which McDonalds use in order for them to attract and retain will be fully explained and will make an analysis on why McDonalds use the methods they do.

Advertising

McDonalds invest millions of pounds into advertising as they believe that this method is the best way to attract millions off customers to shop at McDonalds. McDonalds use nearly all types of advertisement there possibly is such as the internet, billboards, bus tickets and TV adverts are the few that they use. Also, as McDonalds is a multi-national organisation, it is vital to advertise on the internet so customers anywhere around the world could see what McDonalds have to offer.

Also, in regards with internet advertising, McDonalds advertise on common website such as MSN and Yahoo so that it becomes more customers aware when millions of people access such sites. However, McDonalds do not keep the same advert advertised and change regularly depending on the new products or services they offer. This helps McDonalds retain their customers as McDonalds are always offering products on a regular basis in which they can persuade customers to purchase. McDonald’s slogan of ‘I’m lovin it’ suggests that customers would have the same feeling if they were to shop at McDonalds.

An example of this would be McDonalds ‘McFlurry’ as when this was released with a different flavour, this was advertised on billboards to encourage and make it more customers aware to the public.

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Customer service

McDonalds will always ensure that their employees offer good customer service at all times. This is vital for any profit making organisation as failing to offer good customer service could potentially mean that customers are lost, this leading to a loss in profits. McDonalds realise this as a vital aspect of the organisation so they ensure that their customers are taken care off properly when they shop at McDonalds. They do this by ensuring their customers of the ‘7 minute’ rule, where customers should have their products ready within this time-limit once their orders have made.

This suggests that McDonalds are a quick service restaurant in which customers would not have to wait long for the food. However, if McDonalds do not keep up with this rule, the customers are allowed their order for free if it takes more than 7 minutes, this being a way of apologising for taking long to make the order ready.

Also, McDonalds allow the use of customer desks in their stores in which customers can put forward any complaints, questions or queries they may have in order to enhance the performance in the future. McDonalds acknowledge the views of their customers and are happy to meet customer’s needs and wants in order to make McDonalds a better place to be rather than having their customers at a rival restaurant such as KFC.

This helps retain customers as not all customers will have a positive viewpoint of McDonalds, there being a minority in which they may not be pleased with a certain point. For example, a customer may not be pleased by the number of fries they receive when they ordered a large meal. By allowing their customers to put forward this complaint to the McDonalds customer service, this ensures the customer that their complaint will be followed up and would be evaluated if more customers complain about the same problem. By just having such services, it gives customers the satisfaction that they have complained and that they would return if this problem was solved. This ensures that McDonalds retain their customers by using this method.

Rizwan Zaid BTEC Business