“For Prof Xavier Only”


Tiered Service

In years past, most thriving companies gave all

their customers special attention, regardless of the

size of their purchase. The thinking then was that a

customer who makes a small purchase today might

make a large purchase tomorrow. Many companies

are asking themselves, “Why invest the same

amount of customer service effort and expense in a

one-time customer as we would in a customer

who has a multimillion-dollar history with our

business?” This approach to serving customers is

referred to as a tiered service system, a concept

that understands customer service to be fundamentally

inter-related with a customer’s actual or potential

value as a consumer. Many companies use a

database of customer transaction records, which

have been stored and analyzed with the help of

computers and customer relationship management

software. The concept and use of CRM software

will be discussed in depth in Chapter 4; however,

the underlying principle of CRM is that every interaction

with a customer is part of a larger relationship.

With CRM, the company should be able to capture,

maximize, and use organized meaningful reports to

help analyze customer loyalty and potentially increase


What does tiered service look like? Whether we

realize it or not, we are already being served by this

concept each time we choose to fly. Airlines typically

place their customers into three tiers of service:

basic, or coach-class; enhanced, or business-class;

and premium, or first-class. For the customer, the

good news with a tiered service system is that there

are a lot more choices on price, convenience, and

comfort. Also, consumers have the option to

upgrade seats and request additional legroom. On

the other hand, companies can invisibly identify

individuals who do not generate profits for them

and may provide them with inferior service.

Although tiered service exists, customers should

never feel that they are getting a certain level of

service because they are buying a certain level of

business. All customers should feel that they are

receiving the same level of customer service when

it comes to assistance with problems or the handling

of complaints.


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