Customer Service Defined

Customer Service - Levels of Involvement

While customer service has no single widely used definition, customer service is often viewed in three principal ways.

Customer service as an activity.

This level treats customer service as a particular task that a firm must accomplish to satisfy the customer's needs. Order processing, billing and invoicing, product returns, and claims handling are all typical examples of this level of customer service. Customer service departments, which basically handle customer problems and complaints, also represent this level of customer service.

Customer service as performance measures.

This level emphasizes customer service in terms of specific performance measures, such as the percentage of orders delivered on time and complete and the number of orders processed within acceptable time limits. Although this level enhances the first one, a firm must look beyond the performance measures themselves to ensure that its service efforts achieve actual customer satisfaction.

Customer service as a philosophy.

This level elevates customer service to a firm-wide commitment to providing customer satisfaction through superior customer service. This view of customer service is entirely consistent with many firms' contemporary emphasis on quality and quality management. Rather than narrowly viewing customer service as an activity or as a set of performance measures, this interpretation involves a dedication to customer service that pervades the entire firm and all of its activities.

The least important level of involvement for most companies would be viewing customer service simply as an activity. From this perspective, customer service activities in logistics are at the transaction level. For example, accepting product returns from customers in a retail store adds no value to product: it is merely a transaction to appease the customers. With the possible exception of making it extremely convenient for customers to return products, this level of customer service typically offers limited opportunities to add value for the customers.

The focus upon performance measures for customer service is very important because it provides a method of evaluating how well the logistics system is functioning. Over time, such measures provide benchmarks to gauge improvement, which is especially important when a firm is trying to implement a continuous improvement program. But this level of involvement is not sufficient.

The final level, customer service as a philosophy, broadens the role of customer service in the firm. However, this still may not be sufficient unless the value-added dimension is included as the goal of the corporate customer service philosophy.

A definition of customer service that can be used is as follows:

Customer service is a process for providing competitive advantage and adding benefits to the supply chain in order to maximize the total value to the ultimate customer.

John Berry, Agricultural Marketing Educator
Penn State Cooperative Extension
4184 Dorney Park Road, Allentown, PA 18104
phone: 610-391-9840       jwb15@psu.edu

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