How 11 Factors Influence Customer Service Performance
Customer service performance is a key business objective that boils down to making customers happy. But what makes customers happy? In this article, we will present the scientific research on the factors that influence customer service performance. This will help both HR and managers make better decisions that are proven to increase revenue. We also present a list of key customer service performance metrics at the end of this article.
The scientific literature (Borucki & Burke, 1999; Bowen, Siehl, & Schneider, 1989) shows that when employees (and businesses) deliver high-quality service, their customers are:
- More likely to give higher ratings
- Report higher satisfaction
- Visit a store more often
- And buy more products!
Simply put, a business makes more profit when its customers are happy. So how do we make customers happy? In this article, we will focus on the restaurant service sector to answer this question using some very practical examples.
The factors that influencecustomer service performance can be categorized into two groups. There are individual-level factors, which are the factors that are influenced by individual employees, and organization-level factors, which have more to do with the organizational climate.
Individual factors that influence customer service performance
Let’s first look at the factors that help an individual employee provide better customer service.
Research indicates that restaurant-goers who pay more for their food, perceive it as being tastier. This proofs that perception is everything.
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The fact that people rate the same food differently based on its price means that the customer experience is often more important than the product itself.
Customer experience is formed by the unique interaction between the customer and the employee. Employees try to accommodate a customer’s every wish because they know that when a customer feels like a king, he’ll be happier and spend more money.
According to literature, the employee’s personality is an important factor in providing a better customer experience.
Personality traits like conscientiousness and extraversion impact customer service performance. Conscientiousness individuals are organized, dependable, responsible and hardworking. They’ll usually do what is expected of them.
Extraverted people are sociable, talkative and active. These individuals usually show high-energy when they interact with others (customers) and are better at making people feel at home.
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In other words: with everything being equal, a more conscientious and extroverted employee will provide a better customer service experience to the customer.
Organizational factors that influence customer service performance
There are also factors on an organizational level that influence how customers feel about the service level. This is demonstrated by Ployhart, Iddekinge & Mackenzie (2011).
The easiest way for a company to improve customer service performance is by providing a “climate for service”.
A climate for service is an organizational climate in which good service performance is valued, facilitated, and rewarded. Employees are able to thrive in this climate and thus provide better service.
The aforementioned paper showed that stores with higher service climate had higher customer service performance. In this case, service climate was measured by asking employees to rate their restaurant’s service climate (more about this later).
The second factor was perceived autonomy. The degree to which an employee can influence decisions at work was related to higher customer service performance.
This could be caused by multiple factors. Employees with more autonomy are more likely to feel responsible and thus be more assertive. In addition, autonomy could lead to more decision latitude, which helps these employees to solve problems faster.
Training and performance incentives
Interestingly, in this same study (which focused on restaurants) service training was not associated with a higher service level.
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The fact that an employee attends training does not necessarily mean they will learn or apply new skills to the job.
The reason is unknown. It could be that there is not much to train when working in a restaurant, or that training practices in the sector (238 restaurants were examined), in general, are ineffective.
Performance incentives were also not related to superior service.
Next, the researches looked at the outcome and asked the question: why is customer service performance important?
Customer service performance in a store was related to how happy customers where and how often they would return. In other words: higher customer service performance meant higher customer satisfaction and customer loyalty (Ployhart et al., 2011).
When we combine these models, our full customer service performance model looks like this:
So, individual personality and organizational service climate and the degree of autonomy, lead to a higher service performance for individual employees. This performance leads to a higher customer service level, which, in turn, leads to higher customer satisfaction and loyalty. These two factors lead to higher revenue.
This model shows a direct relationship between selection practices and revenue, through multiple other contingencies.
In the same study, we encounter a few other interesting findings.
The customer’s age and sex are both related to how they rate an employee’s service level. Older customers are milder and give higher ratings. In addition, females are more satisfied with service and are more likely to come back and recommend the restaurant to others (higher satisfaction and loyalty) compared to males.
Customer service performance metrics
In order to evaluate superior customer service, we made a list of the relevant customer service performance metrics mentioned in this article. The following 11 metrics can act as indicators and/or predictors of customer satisfaction.
Extraversion is a big-fivepersonality trait. Extraverted people are sociable, assertive, talkative and active. Extraverts also have a higher desire to excel. Research has shown that extraverts perform better in service and sales jobs. Extraverted individuals have higher (individual) customer service performance compared to introverts.
Conscientiousness is the second big-five personality trait associated with superior customer service performance. Conscientious people are dependable, responsible, work hard, and strive for achievements. Besides being related to superior customer service, conscientiousness is also related to superior job performance in general.
The three other big-five personality traits (openness, agreeableness, and neuroticism) were not associated with superior customer service performance.
3. Cognitive abilities
Another indicator of better customer satisfaction is an employee’s cognitive ability. Employees with a higher cognitive ability (often measured in IQ) tend to provide better customer service (Ployhart et al., 2011).
People with greater cognitive abilities will learn faster, absorb more information and generalize knowledge more effectively. Cognitive ability is, therefore, our third customer service performance metric. A fairly accurate proxy for this metric could be the employee education level.
4. Employee training
Training increases the speed at which employees learn specific knowledge (Hatch & Dyer, 2004). Training is aimed to improve the employee’s skills. More skilled employees tend to provide better service (Ployhart et al., 2011). However, this does not hold true for all jobs. Employees with less complex service jobs (like waiting tables) seem to benefit less from training compared to employees with more complicated service jobs (e.g. working in a high-end restaurant).
5. On the job experience
On the job experience is another customer service performance metric, as more experienced employees are better equipped for their job and thus provide better service (Ployhart et al., 2011). For example, a rookie mistake, such as a waiter who fails to balance his/her tray and spills a drink on a customer, can lower the customer service experience and produce less satisfied customers.
6. Store service climate
The organization’s climate is an important factor that impacts employee behavior. When an organization has a climate of excellent service, employees know that creating a great customer experience is desired, expected, and rewarded. Such a climate helps employees provide better service.
Store service climate has been proven to impact service quality and customer satisfaction. It can be easily measured by asking employees to rate the climate using a short scale. An example item for this scale is: “The restaurant measure and track the quality of work and service”.
7. Local competition
Local competition influences how customers rate a store’s customer service performance.
Local competition can be defined as the number of restaurants within a certain distance. When local competition is higher, customer satisfaction and ratings on service quality where higher, and customers came back more often.
An explanation for this is that when local competition is fierce, establishments push their service level higher to compete effectively.
8. Individual customer service performance
Individual customer service performance is a metric that indicates the level of service performance of an employee. A common way to measure this is by asking “how likely are you to recommend [person]’s service to a friend or colleague?”, or by measuring it through a 360-degree feedback form, in which the client is asked to rate the employee’s service level.
Individual customer service performance is an outcome variable that is influenced by the previously mentioned variables 1 – 7.
9. Team-level customer service performance
Team or store-level customer service performance is a metric influenced by individual customer service performance. A study by Liao & Chang (2014) found that when individual customer service performance (8) was above average, that specific store outperformed the other stores in the sample.
In other words: there is a bottom-up effect of individual customer service performance to team-level customer service performance.
10. Customer satisfaction
Customer satisfaction is one of the most important customer service performance metrics. All previous metrics are antecedents of higher customer satisfaction. Customer satisfaction can be measured in different ways. An increasingly common way to do this is by rating the service with a smiley face or thumbs up/down via a computer.
11. Customer loyalty
Customer loyalty represents the likelihood that a customer will return, and will recommend the establishment to others. Customer loyalty is closely related to a financial outcome as returning customers will spend more than customers who only visit once.
Customer loyalty can easily be measured by keeping a record of customer purchases in a (reservation) system. An additional benefit of these systems is that they can help to provide a better customer service experience. For example, most sun studios record a customer’s previous tanning intensity and session duration to provide better tanning advice based on their history. An alternative could be a (scannable) customer loyalty card.
This article gave an overview of multiple studies all focused on the restaurant sector. Using this research we were able to show which people factors contribute to excellent customer experience and more revenue.
We ended with 11 customer service metrics that influence how your customers perceive your service. You can influence most of these factors through smart business policies, including data-driven recruitment, better measurement of performance, and a better employee performance management process.
To learn more about how to improve business results through smarter, data-driven HR decisions, visit the AIHR Academy!
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What are the factors affecting customer service performance? ›
The three major factors that affect modern customer satisfaction are customer understanding, service, and technology. By tapping into these factors, you can provide positive, consistent customer experiences and create real customer loyalty.What are the factors influencing performance? ›
Clinical, technical, and professional knowledge and skills. Social and communication skills. Problem-solving, critical thinking, teamwork, and leadership skills. Relevant work experience.What are the factors affecting services? ›
- customers. for businesses that to be near its customers. ...
- personal preference of the owners. business owners can influence where to locate the service centre. ...
- technology. ...
- availability of labour. ...
- climate. ...
- near to other businesses. ...
“The single most important factor that affects customer satisfaction is employee satisfaction,” says Howard J. Ross, president of a Maryland-based consulting firm. “Employees who feel satisfied and happy at their jobs naturally tend to be more helpful and considerate toward customers.What are the 4 factors influencing customer satisfaction? ›
- Response Time.
Essentially, the 3 important qualities of customer service center around three “p”s: professionalism, patience, and a “people-first” attitude. Although customer service varies from customer to customer, as long as you're following these guidelines, you're on the right track.What are the 6 factors which influence performance? ›
There are six factors that affect performance alignment: clarity, commitment, competence, cooperation, connections, and circumstances. This article examines those six factors.What are the 7 factors that can influence? ›
- Character – Who They Are. “True leadership always begins with the inner person.” ...
- Relationships – Who They Know. ...
- Knowledge – What They Know. ...
- Intuition – What They Feel. ...
- Experience – Where They've Been. ...
- Past Success – What They've Done. ...
- Ability – What They Can Do.
Cialdini's 6 Principles of Influence are reciprocity, commitment and consistency, consensus or social proof, authority, liking and scarcity.What are the 9 fundamental factors affecting quality? ›
Fundamental Factors Affecting Quality
The nine fundamental factors (9 M's), which are affecting the quality of products and services, are: markets, money, management, men, motivation, materials, machines and mechanization.
What is customer service performance? ›
In simple terms, Customer Service Performance is the evaluation of how well your organization and Customer Service team provides support to the customers throughout their journey with your business.How to increase customer service? ›
- Understand customer needs. ...
- Seek and promote customer feedback. ...
- Set and communicate clear service standards. ...
- Delight your customers by exceeding their expectations. ...
- Capture and share examples of great service. ...
- Create easy and effortless customer service. ...
- Personalise your customer service.
A customer service representative should have excellent communication skills. This means they will have to listen effectively. Listening leads to understanding. Understanding leads to quality decision-making, and helps an agent provide appropriate solutions to problems as they arise.What are the six factors that influencing customer perception? ›
- Price. Price is, of course, key in consumer decision-making but is not as important as you may think. ...
- Quality. ...
- Level of service. ...
- Online Reviews. ...
- Social Media. ...
- Demographics. ...
- Branding. ...
What influences customer perception? Customer perception is influenced by both direct and indirect interactions with your business. Factors such as social media, online reviews, pricing, quality, influencers, and CX all affect consumer perception.What are 5 factors that influence you as a consumer? ›
- Psychological Factors.
- Social Factors.
- Cultural Factors.
- Personal Factors.
- Economic Factors.
The three Cs of customer satisfaction: Consistency, consistency, consistency. It may not seem sexy, but consistency is the secret ingredient to making customers happy. However, it's difficult to get right and requires top-leadership attention.How do the different factors contribute to customer value? ›
The data were gathered through Delphi method and questionnaires. Findings – The results of this study indicate that the factors affecting customer values include costs, relational benefits, brand perceptions, and services quality. These factors influence customer values, respectively.What are the 5 main elements of customer service? ›
- Respond as quickly as possible. One of the biggest factors in good customer service is speed, especially when a client is requesting something that's time sensitive. ...
- Know your customers. ...
- Fix your mistakes. ...
- Listen to your customers. ...
- Think long term – A customer is for life.
What are the 5 factors of performance? ›
- 1) Emotional Commitment.
- 2) Ability to Leverage Strengths.
- 3) A Strong Work Ethic.
- 4) Ability To Build Strong Relationships.
- 5) Advanced Self-Leadership Abilities.
- Energy and personal attitudes. The combination of energy and a person's attitude will play a significant role in determining their productivity in any context, whether work-related or not. ...
- Equipment and resources. ...
- Objectives. ...
- Leadership. ...
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- Ten Factors that. Affect. Your Health Status.
- Quality of the Environment.
- Random Events.
- Health Care.
- Behaviors You Choose.
- Quality of your Relationships.
- Decisions You Make.
- supportive relationships (e.g. friends, family, professionals, improved self esteem, self worth) - adequate financial resources (e.g. social security benefits, free prescriptions, free dinners, pension, mobility allowance) - stimulating work, education and leisure activitiy (e.g. improve mental ability, valued)What are the 4 important sources of influence? ›
- 1.) Personal Motivation. ...
- 2.) Personal Ability. ...
- 3. ) Social Motivation. ...
- 4.) Social Ability. ...
- 5.) Structural Motivation. ...
- 6.Structural Ability. The final source of influence moves away improving personal mastery and social capital and focuses on the environment.
- Heredity : ...
- Environment : ...
- Gender : ...
- Hormones : ...
- Exercise : ...
- Nutrition :
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- Commitment and Understanding from Employees. ...
- Quality Improvement Culture. ...
- Continuous Improvement in Process. ...
- Focus on Customer Requirements. ...
- Effective Control.
What are key performance areas customer service? ›
We've identified 3 key areas where we think KPIs will have the biggest impact on the success of your customer service team. These are Customer Satisfaction, Operational Efficiency, and Business Value KPIs.What are the P's of customer service? ›
Promptness, Politeness, Professionalism and Personalization: these 4 characteristics are the key ingredients to any successful service interaction, and when you think about it, they are the basics you expect to receive as a consumer.Why is customer service performance important? ›
Why Is Customer Service So Important? Customer service is important because it inspires customer loyalty and makes employees' jobs easier. This, in turn, helps businesses grow. By providing great customer service, organizations can recover customer acquisition costs, retain talent, and foster brand loyalty.What are the 10 tips of customer care? ›
- Provide multiple ways for your customers to get in touch with you. ...
- Acknowledge that you've received their request. ...
- Solve customer problems immediately. ...
- Don't be afraid to over-communicate with customers. ...
- Go above and beyond customer expectations.
- Offer new customers discounts and promotions. ...
- Ask for referrals. ...
- Recontact old customers. ...
- Network. ...
- Update your website. ...
- Partner with complementary businesses. ...
- Promote your expertise. ...
- Take advantage of online ratings and review sites.
- Understand customers needs. ...
- Train empathy. ...
- Encourage honest customer feedback. ...
- Set up a framework to measure your team's performance. ...
- Set individual and team goals. ...
- Streamline manual processes. ...
- Set and communicate service standards.
Empathy: The Key to Customer Success
To offer the most successful customer service, you'll need to practice empathy and emotional intelligence. Being empathetic means putting yourself in your customers' shoes and making an effort to understand the emotions they're experiencing.
- Organizational buy-in. ...
- Agree on the scope of the research effort. ...
- Talk to your customers. ...
- Consider Personas. ...
Customer-related, company-related, and competition-related factors have a fundamental influence on customer expectations. Thereby, customer-related factors are made up of aspects such as the personality of the customer and the specific situation. These include needs and wishes, for example.What are the 6 techniques to gain customer insights? ›
- Understand customer wants and needs.
- Better allocate time, money, and energy.
- Prioritize projects with high ROI.
- Design marketing materials that reflect your customers' needs.
- Personalize customer communication.
What is the major factor for the customer? ›
The consumers consider various things like the characteristics of the product, price charged, availability of the product at the required location and much more. The personal factors include age, occupation, lifestyle, social and economic status and the gender of the consumer.What are the 3 critical factors that affect service level? ›
- Call Volume. The number of inbound contacts affects the service level. ...
- Average Handling Time. The Average Handling Time (AHT) of an inbound call, together with related administrative or outbound work, is just as influential on Service Level as the number of calls. ...
- Net Schedule Match. ...
- Net Schedule Adherence.
The five service quality dimensions are tangibility, reliability, responsiveness, assurance, and empathy.What is one factor that affects good customer service answer? ›
According to literature, the employee's personality is an important factor in providing a better customer experience. Personality traits like conscientiousness and extraversion impact customer service performance. Conscientiousness individuals are organized, dependable, responsible and hardworking.What are the 7 factors for a high performance team? ›
- Understanding the Context for High-Performing Teams 1. ...
- Setting Direction for a High-Performing Team. ...
- Gathering and Deploying Resources. ...
- Assembling the Team. ...
- Allocating Work and Prioritizing. ...
- Executing the Plan. ...
- Motivating People and Resolving Conflict. ...
- Developing the Team.
The research framework of this particular study has the five service quality factors (tangible, reliability, responsiveness, assurance, and Empathy) as independent variables that have a direct impact on perceived welfare and indirect impact through satisfaction.What are the 3 C's of service? ›
The three Cs of customer satisfaction: Consistency, consistency, consistency. It may not seem sexy, but consistency is the secret ingredient to making customers happy. However, it's difficult to get right and requires top-leadership attention.What are the 10 determinants of service quality? ›
(1985) identified 10 key determinants of service quality as per- ceived by the service provider and the consumer, namely, reliability, responsiveness, competence, access, courtesy, communication, credibility, security, understanding/ knowing the customer, and tangibility to formulate a service quality framework, ...What increases customer satisfaction? ›
Respond to customer reviews.
Responding to customer feedback increases satisfaction because it shows customers that you listen to what they have to say about your business instead of simply seeing them as a name on a receipt. You take interest in their thoughts about your business, and you interact with them as well.
- Answer challenging customer questions.
- Understanding customer needs.
- Managing and exceeding customer expectations.
- Customer request is outside of your offerings and abilities.
- Handling angry customers.
- Serving several customers at once.
What are the most important factors what affect customers decision? ›
A customer is surrounded by four key factors when considering any purchase: the product, the price, the promotion and the sales channel.