Customer service can be considered the lifeblood of any business organization, especially one that belongs to the service sector. Simply defined, customer service can be the ability of an organization to supply its customers’ wants, needs and even expectations. Moreover, it is the process which seeks to maintain customers’ satisfaction and loyalty. Having said that, customer satisfaction as defined by Gerson (1993) is the customer’s perception that his or her expectations have been met or even surpassed. Generally, great customer service involves making customers happy in order that they return and would further refer and recommend the organization to potential customers.
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REPUBLIC BANK LIMITED
History
Originating from Colonial Bank since 1837 then to Barclays Bank is what is known today as Republic Bank Limited; which now signifies the bank’s status as a truly national bank. Over one hundred years, Colonial Bank became associated with Barclays Bank Limited of the United Kingdom. This association provided Colonial with access to Barclays’s extensive branch network. Eventually, Colonial Bank became part of Barclays Bank and in the 1970’s Barclays Bank of Trinidad and Tobago Limited was formed. A numerous eleven years later, the bank’s name changed yet again to Republic Bank Limited.
Several years later, Republic Bank had a strategy so as to expand by acquisition and as such Republic expanded its operations beyond its home base as many establishments across the Caribbean followed as planned.
To date, with a well established structure and branch network, not to mention the reputation as the premier bank in Trinidad and Tobago, Republic Bank Limited is one of the largest and most successful, indigenous banks with forty branches and one hundred and twelve Automatic Banking Machines (ABM’S) in Trinidad and Tobago.
Vision and Mission
‘Republic Bank, the financial institution of choice in the Caribbean for customers, staff and shareholders’ reads the vision of Republic Bank Limited. Its vision also includes setting the standard of excellence in customer satisfaction, employee satisfaction and shareholder value.
The bank’s mission is to provide personalised, efficient and competitively priced financial services and to implement sound policies which will rebound to the benefit of its customers, staff and shareholders.
Organisational Structure
The structure of Republic Bank Limited is not at all a complex one but it comprises of several subsidiaries which can be seen in figure 1.1 and it also has associate companies; namely, Infolink Services Limited and G4S Security Services Limited.
Behind the bank’s vision, mission and its objectives are the persons of course who make the organisation what it is by putting such things in place: the executives and this is illustrated in figure 1.2.
Figure 1.: Subsidiaries Organisational Chart
Source : Republic Bank Limited, 2010 [1]
Service Foundation & Environment
Republic Bank knows the importance of customer service as it relates to any financial institution and as such, the bank strongly believes that the highest quality of service to its customers, shareholders and communities would be the result of its strong foundation. This foundation is made up of the bank’s customer care creed and its values held as outlined in table 1.1.
Figure 1.: Executive Organisational Chart
Source : Republic Bank Limited, 2010 [2]
Table 1.: Republic Bank Creed & Values
C
R
E
E
D
CONFIDENTIALITY
Customers are assured that their affairs are managed in trust and with privacy always
RESPONSIBILITY
Responses to customers are prompt and resolutions to concerns are done in a timely manner
EMPATHY
Customers are greeted by name because they are known and cared for
EXPERIENCE
The customer is given a professional experience from the first seven seconds of meeting
DEPENDABILITY
Promises are delivered in a dependable and accurate manner without problems or hassles
V
A
L
U
E
S
CUSTOMER FOCUS
The achievement of complete customer satisfaction through service excellence is the key to the bank’s success
The customer is considered first in all decision-making
INTEGITY
Personal integrity is consistently demonstrated through honesty, trustworthiness, fairness, confidentiality and openness in all that is done
Accurate, reliable and customer-friendly products and services are delivered
RESPECT FOR THE INDIVIDUAL
There is active listening and appropriate, timely and professional responses
Contributions are recognised, valued and rewarded
PROFESSIONALISM
The foundation of the superior individual corporate performance of the bank
All business transactions are done with positivity, confidence and objectivity
RESULTS ORIENTATION
There is continuous improvement on what is done to serve customers
There is focus on achieving results that add the best possible value for all stakeholders
Source : Author, 2011
The banking industry is indeed a competitive one with many other commercial banks in operation and other financial institutions that can be easily substituted. For instance, banks such as RBTT Bank Limited, First Citizens, Intercommercial Bank Limited to name a few and the Unit Trust Corporation and Credit Unions as substitutes; this is the environment in which Republic Bank operates. Porter’s 5 Forces looks at the micro environment and according to Porter (1980), the model looks at those forces close to a company that affect its ability to serve its customers and make a profit. This can be seen below in figure 1.3 as it relates to the environment of Republic Bank.
Figure 1.: Porter’s 5 Forces
Source: The Free Press, 1998 cited in Johnson, G. Schools, K. Whittington, R., 2008, p.60
RATIONALE
The writer felt highly awakened and driven to examine the customer service principles at Republic Bank Limited as she can discover and make recommendations wherever necessary, bearing in mind that Republic Bank is always looking for new ways to improve its customer service. As mentioned before, Republic bank operates in a highly competitive environment and therefore needs to have the competitive edge over its competition so that customers would feel compelled to be served by such a bank. The writer believes that customer service, rather, excellent customer service apart from the products themselves would create this ‘edge’.
Also, noted previously, were Republic’s values and its creed all geared toward its customers which were together referred to as its foundation. There, it was seen that the customers are important to the bank and more so customer service by extension. Therefore, it can be concluded that the bank has policies in place so as to achieve excellence in service while one may think otherwise. This may be due to failure of the bank’s representatives to adhere to such polices should these policies really exist and as a result portraying bad customer service.
So then, what are the customer service practices of Republic Bank Limited and is the workforce aware? How effective are these service practices? What are some of the best practices used to achieve service excellence, globally and how can they be used by Republic Bank effectively? These are some of the questions and issues that led to the writer’s research. Additionally, this interest may have also stemmed through daily interactions with her customers and from hearing irate customers across the banking halls to observing bright smiles on others’ faces while being served.
She expects the research to put an end to her dilemma as to whether or not customers are actually pleased with the service provided and how loyal they may be to Republic Bank Limited and are generally satisfied. Also, to discover if there may or may not be a gap in the customer service practices of Republic Bank and make improvements if necessary. She plans to do this by carrying out surveys and even interviews focusing mainly on the Woodbrook branch of Republic bank.
She strongly believes that research in this area would indeed and truly be worth the effort as it would also develop her own service attributes, being a service provider herself and an employee at the bank, not to mention, her personal belief in solidarity; customer service is at her heart.
RESEARCH STATEMENT
To determine the effectiveness of the Customer Service practices at Republic Bank Limited, Woodbrook branch.
AIMS AND OBJECTIVES
To examine customer service practices at Republic Bank Limited, Woodbrook branch.
To critically compare and contrast industry best practices with that of Republic Bank Limited’s practices.
To make recommendations for the improvement of customer service at Republic Bank Limited, Woodbrook branch.
LEGAL FRAMEWORK
The bank has in place a Code of Banking Practice which seeks to foster good relations between banks and their customers and to promote good banking practice by formalising standards of disclosure and conduct which banks that adopt the Code agree to observe when dealing with their customers. This Code consists of three parts namely: disclosures, principles of conduct and resolution of conflicts.
The objectives of the code are to describe standards of good practice and service, promote disclosure of information relevant and useful to customers, promote informed and effective relationships between bank and customer and finally, it requires banks to have procedures for resolution of disputes between banks and customer. The extensive and official Code can be seen in appendix A.
Republic Bank Limited is a huge company belonging to a highly competitive industry within the service sector. As such, customer service is its lifeblood; if practiced effectively, it would add value to the company and if practiced poorly, would definitely withdraw from it on the other hand. This research seeks to add value to the company by assessing its customer service practice effectiveness.
LITERATURE REVIEW
This chapter serves to present a review of literature with principles and models that are related to the research problem area presented in the previous chapter. This is deemed very necessary as it provides the foundation on which the research is built. It enhances ones subject knowledge, developing a good understanding and giving insight into relevant previous research and trends that have emerged (Saunders, Lewis and Thornhill, 2009). The chapter will introduce concepts of service quality, customer satisfaction, loyalty and will explore various methods of effective service delivery as suggested by renowned persons in the customer service field.
CUSTOMER SERVICE
What really, is customer service? Customer service is a principle, it can be doing ordinary things, extraordinarily and it can also be whatever a customer thinks it is; this has been supported by Kelshall (2009), in her book, Embracing Success Through Customer Service in which she gave several other definitions for customer service. This confirms that due to its diversity, customer service could be a bit difficult to define. Dilley (2008, p243) states that ‘customer service is defined in many ways. Still, a satisfied customer is always the result of successful customer service’. Cook (2004) and Berry, Bennett and Brown (1989) both defined customer service as being intangible and perishable. For Cook, customer service is a personal experience which involves the customers’ perception and this experience can only occur one time. For Berry and his team, customer service is firstly, a process which not only holds the characteristics of intangibility and perishability but also heterogeneity and the inseparability of production and consumption. What this simply means is that it varies because they are usually performed by human beings and it is generally consumed while being performed. Tschohl (2001) holds yet another view of what customer service is by referring to it as a skill that has to be developed which involves the employees who provide such services.
SERVICE QUALITY
It is expected that financial institutions strive for high quality standards of customer service and excellence as this is one sure way they can distinguish themselves from others. Simply put, service quality is that level which meets a customer’s requirements and in most instances, is measured by customer satisfaction. According to Berry, Bennett and Brown (1989), the customers are the only ones that can assess the quality of service, for quality, like beauty, is only in the eyes of the beholder. When financial institutions meet or exceed customers’ service desires, they achieve strong quality reputations. This is to say that if customers are satisfied they may say that the quality of service is great and similarly, if they are not satisfied, they may rate the service quality as being poor.
Though quality may be seen from the customers view, it is of course created by the service providers; satisfied, loyal and productive employees that is. This referred to satisfaction and devotion results primarily from high quality support services and policies that enable employees to deliver results to customers. Heskett, et al. (2011) supported this view in their ‘Service-Profit Chain’ which would be explained later in this chapter. The chain shows a clear link between that which happens inside the organization and the quality of service provided to external customers. Quality service underpins value creation, it is the necessary foundation for all else that the service strategy might entail (Berry, 1995). Heskett, et al. (2011) found that value is relative because it is based on both perceptions of the way a service is delivered and on initial customer expectations.
ServQual
ServQual is a multiple-item scale for measuring consumer perception of service quality, (Parasuraman, et al. 1985 cited in Dabade and Wankhade, 2009, p. 29). This confirmation was derived by Berry, Bennett and Brown (1989, p.110) in their book Service Quality: A profit strategy for Financial Institutions as they state that ‘SERVQUAL is a quantitative yardstick that measures customers’ perceptions of service performance against the backdrop of their expectations (or desires) for the service’.
Parasuraman, et al. (1985) as cited in Dabade and Wankhade (2009) suggests that tangibles, reliability, responsiveness, communication, credibility, security, competence, courtesy, understanding and access are ten potentially overlapping dimensions used by consumers in assessing service quality. Overlapping was reduced and five dimensions: reliability, assurance, tangibles, empathy and responsiveness were finalized through the scale purification approach (Dabade and Wankhade, 2009).
Expectations and Perceptions
It is important to briefly examine what the customers’ expectations and perceptions are since this is what quality service entails. MacNeill (1994) holds the view that proper management of customers’ expectations will lead any organization down the path to service excellence. To Dilley (2008), expectation is simply the service level that a customer anticipates before the service is delivered while to Berry, Bennett and Brown (1989), it is considered as a tricky word for it can mean what customers think will happen as well as what customers desire in given service situations. One thing is for sure, and that is everyone has expectations of what should happen or might happen in any case, as this is human nature. As considered by the writer and supported by Finch (1994), customers do not expect everything to go smoothly all the time as they are realistic and know that there will be occasional delays and other problems at times. They tend to tolerate a few problems occasionally, but what they expect is consistency as far as good service goes based on their perceptions.
As it pertains to perception, this is the key to service quality as perception is everything (MacNeill, 1994). ‘A philosopher once said, “What concerns me is not the way things are, but the way people think things are”. If what you do is not perceived as value to the customer, then it is not valuable’ is what MacNeill (1994, p.6) states.
SATISFACTION AND LOYALTY
Satisfaction is largely influenced by the value of services provided to customers (Heskett, et al., 2011). Customers expect to be satisfied in some way or another after or even while conducting business with any company. This fact is very important to companies as they need customers to survive. Tschohl (2001) puts it this way ‘a business that fails to satisfy its customers is worth nothing because satisfied customers by more and they buy more often’. While one may quickly agree with this view, ‘the reality is that satisfied customers simply aren’t enough anymore to make a prosperous business’ (Mitchell, 2003). He believes that satisfied customers are not really loyal and they will therefore defect at the slightest prompt. What Smith (2002) suggests is that the key to success is to make customers feel so satisfied that they would want to remain loyal forever. Just because customers are satisfied with a company’s service, does not mean that they will indeed be loyal is what Cook (2004) implies. Her view is supported and confirmed by Bell, Zemke and Zielinski (2007) who made reference to a Robert A. “Bob” Peterson, someone whom, based on his own research found that satisfied customers still showed a willingness to wander away to other providers if the mood, price or advertisement were right.
Loyalty is a direct result of customer satisfaction (Heskett, et al., 2011) and as implied before by Smith (2002), customers would want to remain loyal forever because they are so satisfied; ‘only extremely satisfied customers are genuinely loyal’ (Mitchell, 2003). It arises from companies that make service an integral part of their operating philosophy (Timm, 1998) and is described by Barlow and Stewart (2006) as behavior that grows out of ongoing relationships which can be fueled by reinforcing service experiences. In like terms, Timm (1998) believes that customers’ problems should be viewed as loyalty-building opportunities. Loyal customers are the best to have as they often act as word-of-mouth marketers for companies (Reinartz and Kumar, 2011). According to Cook (2004), customer loyalty would be a better measurement in terms of assessing effective customer service to see if customers remain and spend more with you as a company and also recommendations to their friends. Well defined by Dixon, Freeman and Toman (2011), loyalty is the customers’ intentions to continue doing business with a company, to increase their spending and refrain from saying bad things about it.
As competition intensifies, the ability to retain customers is the most important way of gaining the competitive edge (Smith, 2002); most, if not all financial institutions strive to obtain this edge and should therefore focus on customer loyalty as opposed to mere customer satisfaction.
SERVICE DELIVERY
Every point where the customer comes into contact with a company is a point of service delivery in which the customer gains one more impression and forms one more judgment about the company or its products (Liswood, 1990). For a perfect understanding, ‘the customer’ being referred to is that person who is next in line to receive ones output in the form of a product or a service whether they are outside or within the company (Bacal, 2004).
Importance (What customers want)
The ServQual components in essence, tell of what is important to customers. Of the five service dimensions of previously mentioned, which is also referred to as ‘RATER’, reliability ranked the highest as being the most important to customers (Barry, Bennett and Brown, 1989). Liswood (1990) made a very valid point in that people’s perceptions and expectations are constantly changing as customers move from one buying experience to another and as a result are exposed to different types and levels of services. Therefore, it is important to keep abreast as to what customers want in terms of effective customer service.
Specific to banking, while bearing in mind the prior ten overlapping dimensions, customers generally want the process to be quick, safe, more caring and courteous. They believe that their banks would be better if they shortened waiting time, made fewer mistakes and cashed cheques with no hassles (Berry, Bennett and Brown, 1989). Altogether, speed, courtesy, care and consideration, accuracy, professionalism, knowledge and follow-up are important to the customers and they rely on companies to deliver such.
Turnoffs (What customers do not want)
In some cases, management understand customer expectations and set appropriate specifications and still, the service delivered by the organization falls short. The difference between service specifications and the actual service is the service-performance gap (Zemke and Bell, 1990).
Customers do not appreciate rude and incompetent staff members, high service charges and complicated procedures which make the process a long one. They show frustration about mistakes made on several payments and sigh when forced to wait in the line before being served.
Timm (1998) collected a number of responses about specific things that irritate customers and classed them into three categories namely: value turnoffs, systems turnoffs and people turnoffs; table 2.1 simplifies this.
2.: Customer Turnoffs
VALUE TURNOFFS
SYSTEMS TURNOFFS
PEOPLE TURNOFFS
This is the feeling that customers receive poor value in a product or service received.
Any process, procedure or policy that is used to deliver the product or service to the customer that may fail to please them.
Employees who usually fail to communicate appropriately, both verbally and nonverbally can quickly irritate a customer.
Sloppy work
professional service that fails to meet ones needs will create a value turnoff
improper parking facilities
busy or unanswered phone lines
employee staffing
clearing and cashing of cheques
failure to greet or even smile at a customer
lack of knowledge
rude
inappropriate, dirty or sloppy appearance
It is of course important to note customers’ turnoffs as this can bring one customer from the point of being satisfied to a point of total dissatisfaction as well as from the latter to become a very loyal customer.
When one considers that quality and service are whatever the customer says they are and that satisfaction is the customer’s perception that his or her expectations have been met, it should be quite obvious that there is a distinct relationship among them all: quality, customer service and satisfaction. Therefore, if the first two are provided according to the customer definitions, the third will follow (Gerson, Ph. D, 1993).
BEST PRACTICES
Regardless of whether the aim is to satisfy customers or to create loyalty which in the writer’s opinion is what the aim should ultimately be, there are many and well thought out best practices, principles, methods, techniques, strategies and processes that had been well and successfully executed in the past.
Reliable C.A.R.E
Taking reliable care of your customers is what keeps them coming back according to Le Boeuf, Ph. D. he believes that customers want service they can depend on more than anything else, hence the word “reliable”. C.A.R.E simply represents other factors valued by customers; they are: credibility, attractiveness, responsiveness and empathy. This principle is elaborated in table 2.2: Reliable C.A.R.E.
2.: Reliable C.A.R.E
BE RELIABLE
BE CREDIBLE
BE ATTRACTIVE
BE RESPONSIVE
BE EMPATHATIC
Do what you say you will do
Do it when you say you’re going to do it
Do it right the first time
Get it done on time
Provide security
Show integrity
keep assurances when things go wrong
no hidden agenda with fine prints and unmentioned service charges
Put forth a first-class image for everything the customer
sees
touches
hears
smells
feels
be accessible
available
willing to help customers
keep them informed
provide service as soon as possible
being in the customers’ shoes
feeling what the customers feels
listening intently and attentively
This is similar to RATER which was mentioned before and it can also be closely linked with keeping focus on the “Big Four” established by MacNeill (1994) see table 2.3.
2.: Big Four
PHYSICAL PLANT
Is it clean, bright, well-organised and in a convenient and safe location?
EMPLOYEES
Are they neatly and professionally dressed, well-groomed and helpful?
PRODUCT OR SERVICE
Is it reliable, priced faily and well-stocked?
ATMOSPHERE
Are customers treated with respect? Is service friendly and efficient? Is the company’s reputation favourable?
V.I.S.P.A.C
VISPAC is an acronym of six areas where expectations could be exceeded. It was developed by Timm (1998) and represents value, information, speed, personality, add-ons and convenience. According to Timm (1998), when a customer feels that he or she is getting more than expected in any or all of these six areas, the likelihood of customer loyalty increases dramatically.
VISPAC encourages companies to consider as to how they could exceed customers’ expectations by:
Value: assessing the valuable-ness of products sold
Information: providing more, better and clearer information for customers’ uses
Speed: reducing customers’ wait time
Personality: assessing the personalities of the frontline staff
Add-ons: selling or giving customers something else that they would need or appreciate
Convenience: making the products and services more convenient
Systems and Techniques
Sewell and Brown (2002) believe that being pleasant is only a small part of providing good service. Their phrase, “systems, not smiles” relates to the fact that they believe the important part of providing good service is to design systems that allows one to do the job right the first time and also, to have plans in place to deal with things when they do go wrong. Gerson, Ph. D. (1993) provided a seven-step approach to developing a successful customer service system which is outlined below.
STEP 1: Total Management Commitment
STEP 2: Know Your Customers (Intimately)
STEP 3: Develop Standards of Service Quality Performance
STEP 4: Hire, train and Compensate Good Staff
STEP 5: Reward Service Quality Accomplishments
STEP 6: Stay Close To Your Customers
STEP 7: Work Toward Continuous Improvement
Gerson, Ph. D. (1993) also provided five techniques that he believed would implement superior service quality which is also outlined as followed:
Add Value
Train Your Staff in Internal Quality Measurement Techniques
Constant Contact
Reward Programs
Strategic Alliances and Partnerships
Another five techniques were supplied by Finch (1994) in his book titled ‘Twenty Ways to Improve Customer Service’. These five techniques are as followed:
Managing The Angry Customer
Provide Basic Courtesy
Meeting Commitments
Avoid Complacency
Listening to the Customer
Strategies
Many service experts mention the implementation of service strategies. Here, a framework for great service developed by Berry (1995) will be looked at, as well as the TQS Model for Total Quality Service by Karl Albrecht cited in Timm (1998). Figure 2.1 entails service strategies to be created, which, according to Berry (1995), is a company’s reason for being that provides the focus and inspiration that is characteristic of all great service companies.
2.: Framework for Great Service
Nurture Service Leadership
Implement the Service Strategy through Technology
Build a Service Quality Information System
Create a Service Strategy
Service Reliability
Service Surprise
Service Recovery
Service Fairness
Implement the Service Strategy through People
Compete for Talent
Develop Skills and Knowledge
Empower Servers to Serve
Work at Teamwork
Measure Performance, Reward Excellence
Implement the Service Strategy through Structure
Source: Berry, 1995
Figure 2.2 shows strategy formulation as the second step which is followed by Education, Training and Commitment. It is believed that all the steps, being followed would result in total quality service.
2.: TQS Model for Total Quality ServiceMarket and Customer Research
Education Training and Communication
Process
Improvement
Assessment, Measurement and Feedback
Strategy
Formulation
TOTAL QUALITY SERVICE
Source: Karl Albrecht cited in Timm, 1998.
Employees
This is an essential element of customer service as these are the ones who make up the organization and therefore deliver most of the services provided.
Berry, Bennette and Brown (1989), refer to a story in Time Magazine which addresses bank tellers and other service workers; being too scarce, too busy, underpaid and unmotivated for their jobs. Zemke and Bell (1990) strongly believe in service wisdom at the front line. To them, it is having front line people who are bright, well-trained and capable of getting things done for the customer. They state “Front-line Service Wisdom is knowing where, when and how to be flexible and creative to take a little risk on behalf of a customer and knowing how to solve problems for customers and solving tem so well that customers marvel at the skill”.
An extensive list of practical ways to keep customers was provided by Liswood (1990) of which the following is pertinent to employees:
Select customer-contact employees carefully
Employee training is the company’s job
Help employees feel as if they really belong
Train, retrain and then train some more
Inform employees about other parts of the company
Give frontline employees enough authority
Respect and use your employees ideas
Training
‘Too many executives think employees are born with good customer skills. They fail to realize that employees must be trained continuously in the basics of customer service’ (Tschohl, 2005). He emphasizes that employees must be trained to be knowledgeable about
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