 Namaskar! This is Professor Devdeep Purukayastha from IIT Bombay. Welcome to my course, Business Fundamental for Entrepreneurs Part 2, External Operations. This is the seventh module of the course, and this module is about Customer Service Management. But before I get into the module itself, let me very quickly recap about the flow of the course. We started with how you can study markets, customers, products, friends, competitors. Then we talked about discovering customers that needs and creating great value proposition for which customers are willing to pay you an acceptable price so that your business grows and you become profitable. Then we talked about value-based marketing. It's not enough to have a great value proposition. You have to market your product and your value proposition. And we talked about how to create value, how to deliver value, how to communicate value. In communication, we talked about how to advertise, how to build brands, how to position your brand. And then we talked about sales channels because a customer has to be able to buy the product. You and I have to be able to buy the product or service from a small store or a Kirana store or from the internet or from social media or from e-commerce sites. So we talked about channels. And then we got into selling, the art and the science of selling. Selling is all about people. So how do you sell whether you're a B2B business, which means your customers are businesses or you're in a B2C business, which means your customers are individual consumers, farmers, students, old people, young people, men, women, students, people who need healthcare and so on. And now the logical extension of what we have talked so far is how do you build customer loyalty through great customer service. So let's get into today's module. So today we'll talk about what is customer service? And what are the goals and the measures for customer service and how can you create great customer service? And then what are some customer service processes and tools? And then if you want to choose a career in customer service, what are the skills that you need? Because all companies need some version of customer service and they're specialized providers of customer service for other brands and manufacturers. So let's get into what is customer service? In essence, customer service is all the support that you provide to your customer and this can be before you have even sold anything. This can be when you are actually selling. This could be after you have sold and it could be also when you are trying to resell something. So how do you engage with your customer and give them great service? And if you give them great service, customers will become loyal to you and your business. And therefore today companies go far beyond the old concept of customer service. Customer service for a good company is all around you. It could be a physical interaction, it could be email, it could be internet, it could be social media and it could be e-commerce site. In summary, if you have wondered why some of you watching this video will go to Amazon and shop and some will go to Flipkart and shop, think about it. It's probably because you've got great customer service and you don't want to move. So the Amazon people may not want to go to Flipkart and Flipkart may not want to go to Amazon. Though you may be checking prices and items. Think about when you go to a neighborhood store, you may have 100 neighborhood stores near your house. And for the same product, same biscuit, same shampoo, same soap, you may be going to one store next to your house and not 10, 20, 30 other stores. And that's because you've got a comfort level with that store that you're going to. Same with the mall, you may have your favorite mall, you may have your favorite restaurant. And that's because you're loyal to that e-commerce site that store that mall, that airline. Some of you may always fly Indigo or Singapore Airlines, but others may choose to fly Air India or Emirates. All of this loyalty, your loyalty, my loyalty, customer loyalty is built on great customer service. And Jeff Bezos, who has built Amazon into a global e-commerce site, what trillions of dollars in market capitalization is one of the most valuable companies in the world. And this is what he says. He doesn't talk about customer service. He talks about customer obsession. Obsessions mean you are really crazy about your customer. And if you do an internet search, you'll find a video of him saying this many times. And as you can see on the screen, he says, we are customer obsessed. We are crazy about your customer. We start with what the customer wants and then we work backwards. And therefore, those of you who have worked with or shopped in Amazon, chances are you'll be very loyal to Amazon because you get good prices. If you have a problem, it gets solved. You get good variety of products. You can trust the service and the delivery, et cetera, et cetera. And then if you look at why, what builds customer loyalty and what drives customer disloyalty? Why is it that you choose one store and you're loyal to that store but you don't go to other stores? Or you go to one restaurant but you hate other restaurants? Or you go to one airline and you don't go to other airlines? Or you watch all your movies in one movie theater? So what drives customer loyalty? First of all, there has to be great value proposition. If you don't have a great value proposition, you can't build customer loyalty. So it has to be something which is better, cheaper, faster, more satisfying than others. You have to have, if you look at the screen, affordable pricing. Pricing which is justified, not something that is too high. The product and the service have to be good quality. Because you don't want to buy a smartphone and then you find out that the smartphone is a used smartphone. And you don't want to buy a very nice dress and when you get it, you find that it's torn. So it has to be quality service and a product. Plus customer service means when you have a problem, someone is there to resolve that problem. For example, if you want to return a product because you don't like it or it's the wrong size, you should be able to do that. Loyalty programs. Many banks have that, many airlines have that, many credit cards have that. So when you have a good credit card, you may have a program which allows you lounge access. And there are points. When you use a credit card, you get points. So you use one bank's credit card, don't probably use other credit cards. Or you prefer one credit card over others. And then continuous engagement because the customer is always being informed in different ways. Emails or SMS offers, promotions, new products, and the company keeps you informed. You have no reason to go to someone else versus what drives disloyalty. It's a weak value proposition. The products are bad. Prices are too high, unjustifiable price. You go to a restaurant, food is not so good, prices are very high. You'll never go back. And then poor customer service. Food is bad, prices are high, and the people who are serving you are not very good. They don't take care of you. It drives disloyalty. So how do you measure customer loyalty? How do you know that customers are loyal to you and that customers like you and they'll keep coming back? So if you look at the screen, you'll see that the first thing is are your customers staying with you or they're going away? They come by once and never come back. Customer retention and then lifetime value. If you go to a restaurant, it's not that you go there once and never go back. You keep going back maybe once a month, maybe once in two months, but you keep going back. So are your customers staying with you and is your lifetime value going up? If your customers don't come back, you don't have loyalty. Second, are your customers satisfied? There are ways you can figure out when the customer is dissatisfied. Physically, if a customer is not happy, you can make out from the body language or the way you speak, because they'll argue with you, they'll tell you things are bad. In social media, you'll get trolled. In e-commerce side, you get a rating which will fall, whether it's a restaurant rating, in medical sciences, a clinic, or a doctor even, or a hospital, airline. In e-commerce sides, your ratings will keep dropping. The flip side of it is, are your customers so happy that they're going and talking about you? And say, oh wow, I went to that restaurant and that restaurant was very good. I flew this airline and that airline had great service. I went to the store in a mall and that store had very good product, affordable pricing. The staff was very good. Ambience was very nice and I felt very good about it. Customer advocacy, when your customers are talking about you to other customers and then others come to you. So you've got ten customers who are very happy, they go and talk to a hundred more, a hundred more come to you, they're very happy, they go and talk to a thousand more, those thousand people come back and suddenly your business is booming. And it will show up on your sales and profitability. Because if ten people come and they are very happy, then hundred come because the ten have talked to the hundred and the hundred are very happy, then the hundred go out and talk to a thousand. What happens? Your sales goes up, your profitability goes up. And then you'll suddenly find that your market share goes up because you may be one cinema hall which is always running full when the others are running empty for the same movie or one airline which is always running full whereas the others have empty seats or your one restaurant or a store which is always running to capacity and therefore your market share, the share of the market is very high. And that's true even for manufacturers. So companies like Proctin Gamble or Unilever, Nike or Adidas, Amazon and Flipkart, Coca-Cola or Pepsi-Cola, they're always measuring market share. So these are some of the measures which you can and companies do keep an eye on to make sure is your customer loyalty strong, is it going up and is it building your business. And if you don't have customer loyalty and ten people come, they will go, if the first, the ten will never come back because you don't have good customer service. And those ten will go and talk to a hundred and say, you know what, that store is very bad, that restaurant is horrible, that airline doesn't have good service, that e-commerce site cheated me and suddenly your business is dead. So that's the power of customer loyalty. Customer advocacy, how do you measure that? Advocacy means people talking good about you. Many of you when you have shopped in a mall or a store or flown in airlines or gone to a cinema hall or a restaurant, you probably got an SMS or a WhatsApp message asking the service to be rated in a score of one to ten or zero to ten. And some of you would have rated if you're very happy, nine, ten, some of you would have rated zero, one, two, three if you're not very happy and some of you are okay, neutral and you have rated five or six or seven or eight. So there is this measure called NPS, net promoter score. Promoter means if you as a customer is promoting that store or the brand or the service. And the way it's calculated is a lot of feedback is got and some people who have rated nine or ten are promoters. Why are they promoters? Because they'll go out and talk to their friends and relatives and say, wow, that's a good place to be in. That's a good brand. That's a good site. So they're promoters. They don't got passives. Who are passives? They don't care. It's neither too bad, not too good. So they'll not talk about it. And they're detractors. Detractors means people who talk badly. Oh, that's horrible. Never go there. They cheat you. Prices are too high. Products are bad. Service is horrible. So what you do is to calculate net promoter score, you look at the promoters and subtract the detractors. Don't worry about the passives. And then your percentage of promoters minus detractors, which means percent of people who are talking well of you, nine or ten, and anybody who's rating zero to six will probably spec badly of you. They'll troll you. They will rate you poorly. And if you subtract promoters minus detractors, you get a net promoter score. And if you think about it, if you've got a lot of promoters, your score can go 60%, 70%, 80%. But if you've got terrible service and everybody's talking badly about you, a bank, a bank branch, call center, everybody's talking badly about you, you may get to minus 20%, minus 40%, minus 60%. And nobody will come to you. And that's a very easy way of managing customer advocacy. So with that background about customer service, we now come to the first reflection point and again, through the course, I encourage you to write down what you have learned, what I encourage you to think about in your course journal. So at the end of the course, you can look at the journal and remember what you have learned and your own thoughts. So think about when you face a problem with a company. The company can be an airline, a bank, or a restaurant. It could be e-commerce site, or it could be a manufacturer, a refrigerator manufacturer, a television manufacturer, a laptop manufacturer, a smartphone manufacturer. So think about when you face a problem. Reflect on, did you know what to do? You have a problem, do you know what to do? Was the company easy to contact? Did the company solve your problem or just ignore you? And how long did it take? And then slowly you learn what's good behavior of a company versus bad behavior. What drives customer loyalty? What drives customer disloyalty? And as you learn in your own business, in your own career, you can practice that. So please reflect and write down.