The Relationship between Internal and External Customer Service - Essay Example

The relationship between internal and external service “The logic of satisfying the needs of internal s”, places the business “in a better position to deliver the quality desired to satisfy external customers”. (Palmatier et al., 2006) Introduction In today’s highly competitive market facilitated with globalisation and information technologies many firms, organizations, corporations and other business entities seek for competitive advantage in satisfying customers needs (Herington, Johnson, and Scott, 2006). Greater concern for customer and their needs is recognized to be one of the keystones to success of any business. However, the focus here is made on the relationship between the organization and its employees, as internal relationships strengthen the external customer relationship (Herington, Johnson, and Scott, 2006). Therefore, the recognition of the important relationship between internal and external customer service is increasing. More and more firms and international companies have publicly asserted that their business success is a result of their strong relationships with their employees. Thus, it is already widely accepted that internal customer service quality leads to both internal and internal customer satisfaction (Minjoon & Shaohan 2010). On the other hand, claims of the companies that their success is a result of internal relationships with employees often are not taken seriously by different stakeholders (Herington, Johnson, and Scott, 2006). The aim of this research is to provide a more detailed analysis of customer service excellence and to evaluate critically the role played by internal customer service in the delivery of external customer service excellence. Customer Service Customer service increasingly becomes a priority item in agenda of many organizations. It is widely recognized that customer service is a great opportunity for gaining competitive advantage for any type of business. Customer service enables the organization to “win customers” especially in today’s highly competitive and globalized market (Cook, 2008). Customer service quality is a widely known driver of a company’s profit. The more satisfied the customers are, the more benefits the company gains. In addition to improved profitability, customer-centred organizations enjoy the following benefits: differentiation from competitors; increased customer satisfaction and retention; improved image in the customer’s eyes; minimized price sensitivity; enhanced reputation; improved staff morale; reduced costs; increased productivity; good internal customer/supplier relationships; encourage participation among employees; continuous improvements to the company’s operations (Cook, 2008). That is why many organizations have recognized this opportunity and focused their strategies on providing superior customer care service (Cook, 2008). Thus, for example, the company Southwest Airlines always “puts their customers first” (Birkner, 2011, p.25). In order to implement this strategy, Southwest Airlines hires a specific category of people – those who are intuitive service providers. The company develops their potential and empower them to deliver customer service. One of the examples illustrating the behaviour of such employees was the pilot who has bought lunch for the passengers on his board as the flight was delayed because of air traffic control issues (Birkner, 2011). Another customer service strategy of Southwest Airlines is encouragement of employees to find flexible creative solutions to the problems. Also, the company’s employees work proactively in order to offer apologies and explanations to their customers in case of flight delays, etc. (Birkner, 2011). Another great example of customer service excellence is demonstrated by the company United Parcel Service of America Inc. This global express deliver company uses customer feedback in order to identify areas for improvement, to develop new solutions, and to design new service-enhancing tools (Birkner, 2011). The company extensively uses social media channels in order to listen to the voice of the customer. Also, the company collects daily customer’ concerns, generate reports and send it to the senior management for review (Birkner, 2011). It is worth to mention that both Southwest Airlines and the United Parcel Service of America Inc. are recognized as top companies that provide superior customer service according to the American Customer Satisfaction Index (Birkner, 2011). However, only few organizations really succeed in this activity. There are many different factors of why organizations fail in providing excellent customer service throughout their organizations. The key factors that cause customer dissatisfaction are referred to the service provided by the employees of the company or not provided at all. Employees, who ignore customers, don’t follow up, don’t listen to the customer, and fail to do what they said they will do, - are the main actors who cause customer dissatisfaction (Evenson, 2007). All these aspects are definitely referred to the internal customers. Internal Customer Service The importance of internal customer service quality is not a new concept as the first references to the concept of company employees as internal customers has emerged in the middle of the 1980s (Bouranta, Chitiris, & Paravantis, 2009). Internal customer service is defined ‘a two-way exchange process between individuals in different functional departments of a firm, in which the provider (the internal supplier) is charged with responding to his/her internal customer’ (Finn et al., 1996, p. 37 cited in Minjoon & Shaohan 2010, 206). Employees are viewed as a valuable asset of the company as they act on behalf of the organization they work for and thus are internal suppliers to external customers (Bouranta, Chitiris, & Paravantis, 2009). There are many practitioner publications, where the link between customers and employees is considered to be one of the key attributes of a firm’s success. Customer experience is often viewed in the context of how employees treat their customers (Herington, Johnson, and Scott, 2006). The main idea here is that the way the firms take care about its employees is highly correlated with the way the employees of the firm take care the customers (Herington, Johnson, and Scott, 2006). This interdependence factor enables to support the idea of chain reaction, whereas internal quality is closely interrelated with external customer service (Bouranta, Chitiris, & Paravantis, 2009). Herington, Johnson, and Scott (2006) have sketched a model summarizing this concept (see Figure 1.). Figure 1. Interrelationship model between external and internal customer service (Source: Herington, Johnson, and Scott, 2006). Similar scheme was developed by Cook (2008), where the link between internal and external customer care has been illustrated (see Figure 2). Figure 2. The link between internal and external customer care (Source: Cook, 2008). Of course, the extent of this interdependence depends on variety of factors such as: type of business activity and operations, ways of interaction with external customers, etc. Thus, for example, the concept of internal customer service becomes especially important when it refers to the frontline personnel. In this case, quality of interacting of frontline personnel with external customers is crucial in building/maintaining customer’s loyalty towards the brand/organization (Bouranta, Chitiris, & Paravantis, 2009; Cook, 2008). Internal customer As it has been already defined the quality of external customer care service is closely interrelated with the quality of services that internal customer provide each other (Cook, 2008). Therefore, before developing external customer service strategies it is important to understand who internal customer is, and what are his/her needs. In order to do this, the company’s management needs to recognize the importance of the internal customer and foster a service philosophy throughout the whole organization (Cook, 2008). Implementation of internal marketing philosophy is associated with five managerial behaviours, including the following: internal market research; internal communication; and satisfying the needs and wants of internal customers (employees) via development of relevant job-products (Lings & Greenley, 2009). Internal market research As it has been defined already, internal market research is recognized to be the first step towards formulating and implementing internal service quality improvement programs as it enables the company to listen to its internal customers (Minjoon & Shaohan, 2010). Therefore, in order to improve the quality of the service provided, some organizations develop surveys among each department and thus evaluate the level of internal customer service within the organization (Cook, 2008). In such a way, the company is able to monitor internal customer satisfaction level, and use this data for further improvement of internal supplier-customer relationships (Bruhn, 2003). Bruhn (2003) stresses the importance of fulfilling several prerequisites for carrying out such surveys. These prerequisites include the following: (1) the questionnaire should be developed in concise and comprehensive manner; (2) there should be appropriate sample size; (3) guaranteed interviewee anonymity; and (4) data gained should be evaluated/analyzed by a neutral body. Based on the findings of the surveys, the company is more likely to summarize the data and to develop action plans for dealing with problems revealed by the survey (Davis, 1992). Hyatt a global hotel network operator is one of the companies, actively practicing this method since the 1990s. The company’s management not only analyzes and sets action plans for improvement, but also provides its employees with monthly newsletter and video feedback on their ideas for internal service improvement (Davis, 1992). Internal service quality dimensions Minjoon & Shaohan (2010) have identified several key internal service quality dimensions, including the following: reliability/competence; customer intimacy; team-based continuous improvement; communication, requisition process, and tangibles. Reliability or competence dimension is related to the employees’ possession of the knowledge, expertise and skills required and employees’ ability to perform its service accurately and dependably (Minjoon & Shaohan, 2010). Thus, competent employees are expected to provide high-quality reliable services to their colleagues, their internal customers. Customer intimacy is related to the quality attribute of intimate relationships between internal customers and the purchasing department (Minjoon & Shaohan, 2010). Based on this dimension, the purchasing department and the way it treats its internal customers is recognized to be an important aspect in the internal service quality. The purchasing department should treat its internal customers in trustworthy, courteous and friendly manner and be always accessible and available to internal customers. Team-based continuous improvement is another dimension critical in internal service quality management as it concerns the team-based approach in the purchasing department. This approach is recognized to be an effective method enabling purchasing department to meet changing needs of internal customers and continuously improve its service (Minjoon & Shaohan, 2010). Communication is a vital element of any human interrelationships especially in the workplace. Communication as an internal service quality dimension is critical as it implies a dialogue between the corporate departments and internal customers (Minjoon & Shaohan, 2010). Some organizations practice holding of corporate events in order to remove the barriers between the departments and to increase understanding of employee’s roles within the organization (Cook, 2008). Thus, for example, British Airways hold “A Day in the Life of’, where every department or a team give a speech or presentation to other employees/departments, explaining their role within the company (Cook, 2008). Similar event, called “Special Emphasis Day” is carried out by the US-company Dow Chemicals. At this event employees also explain their roles within an organization and day-to-day tasks and responsibilities to their colleagues (Cook, 2008). These workshops are recognized to be very helpful in improving both internal and external customer service, as they encourage staff to better understand the corporate processes and emphasise the chain effect of service (Cook, 2008). Requisition process is a dimension which is comprised of three key elements: competence, access, and security (Minjoon & Shaohan, 2010). Based on these items it is possible to assume that internal customer should have access to reliable information provided by competent colleagues, and the information/data is received in secure manner, so that nothing is missing (Minjoon & Shaohan, 2010). Finally, tangibles dimension is referred to the appearance of physical environment, personnel, equipment and communication materials (Minjoon & Shaohan, 2010). All these factors should be taken into consideration by an organization or a company focusing on customer service excellence. As it has been already defined effective external customer service cannot exist without effective internal customer service and that is why these dimensions should be integrated to the company’s strategy. Conclusion References: Birkner, C 2011, Top-Ranked companies talk customer service 101’TOP-RANKED, Marketing News, 45, 13, pp. 24-27. Bouranta, N., Chitiris, L. & Paravantis, J. 2009, "The relationship between internal and external service quality", International Journal of Contemporary Hospitality Management, vol. 21, no. 3, pp. 275-293. Bruhn, M. (2003) "Internal service barometers: Conceptualization and empirical results of a pilot study in Switzerland", European Journal of Marketing, Vol. 37 Iss: 9, pp.1187 – 1204. Cook, S. (2081). Customer care excellence. London: Kogan Page. Davis, T. (1992). Two Conference Reports - Part I: Satisfying Internal Customer. Planning Review, 20(1), pp. 34. Evenson, R (2007). Award-Winning Customer Service, p. 2, Business Source Complete, EBSCOhost. 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