Customer service level is the percentage of occasions on which the order is delivered as promised.

It is a set of rules and strategies put forth to evaluate the performance of a system. We can determine the satisfaction of the customers it deals with, and how much more of an effort it needs to make.

This article discusses all that you know and much more. Read on to find out.

What does it mean?

The more customers a company satisfies or deals with successfully, the more it rises up the ladder. The ladder here is market recognition and value.  The relationship between the customer and the firm is extremely important.

If people don’t buy the idea that a company puts forth, it will never make it to the top. Customers must believe in them and have faith in the finished and marketed products. This is where the importance of customer service standards plays its part.

The percentage of occasions that a company fulfills its promise to the buyer is measured as the Customer Service Level. It depends on how efficiently the customer demands are met before stock out of the on-hand inventory, and how soon it is re-established.

Example

Let us consider an example, a call center must have a target number of callers it deals every month, and it must maintain that. A supplies firm needs to fulfill all its customer’s orders and follow a set of regulations every month.

They must make sure their inventories are well stocked, that will protect their customers from a stockout, and also will clear old orders when restocked. This is a performance level that the firm needs to maintain, which will help them to find recognition among the customers.

Parameters to be maintained

  1. Order Fill Rate: It is the measure of orders that are met from the company stock at any given point. This does not deal with anything related to the manufacturing and generation of products and entirely depends upon the inventory on-hand.
  2. Stockout Rate: A company does lose out on a substantial number of orders during a stockout. These are never regained back. The better designed a company’s service level optimization is, the less it faces stockouts.
  3. Back-order Level:  It is the measure of orders waiting to be filled. A company does best when it has a minimum number of back-order levels to be cleared.
  4. Probability of on-time delivery: This is a very important parameter, and has a directly proportional relationship with the service level, of a company. Developing a good and promising image among the other competitors surely takes a long way forward.

A good Customer Service plan is like the radar and must be drawn out well ahead of the business. Too low a bar would compromise with the ambitions of a company; while too high a bar will ruin the game, and cause a service level drop. The employees working in the chain must be trained properly, and must be prepared to follow the guidelines, come whatever may!

5 customer service standards that must be maintained

  1. Patience must be one of the very first things to be mastered while speaking to the customer.
  2. Use of proper language and revealing a polite and humble manner.
  3. Having a clear idea of what the buyer is looking for.
  4. Having an ability to ‘read’ the customer and suggesting options accordingly.
  5. Lastly, the customer must not feel intimidated by the salesperson. All these points are targets to be fulfilled. But Customer Service Level is not a goal; rather it is the outcome of a properly designed and efficient system.

Get more definitions about Customer service level and other ERP related terms here.

   

Subscribe to our Email Newsletter