An evaluation of the Customer Service in the Coffee chain in Vietnam

This study provides an evaluation of the customer service provided by the coffee chains in Vietnam concentrates on the top three brands that get the most attention: Highlands Coffee, The Coffee House, and Trung Nguyen ECoffee

National Economics University Business Administration

Research Project Report Topic: An evaluation of the Customer Service in the Coffee chain

in Vietnam

Hanoi, 2022

Table of Contents

Introduction 4

Chapter 1: Theoretical basis of customer service 5

1.1 Concept, role, necessity 5

1.1.1 Definition 5

1.1.2 The role of customer service 7

1.1.3 The necessity of customer service 8

1.2 Customer service components 9

1.3 Factors affecting customer service 9

1.3.1 External factors 9

a Economic development 9

b Cultural/ Social factors 9

c Technological factors 10

d Competitors factors 10

e Characteristics of customers 10

1.3.2 Internal factors 10

a Employees 10

b Facilities 11

c Organization management 11

Chapter 2: Current status of customer service in the coffee chain in Vietnam 12

2.1 Introduction of the coffee chains in Vietnam 12

2.1.1 Highlands Coffee 12

2.1.2 The Coffee House 13

2.1.3 Trung Nguyen E-Coffee 15

2.2 Current status of customer service in the coffee chains in Vietnam 16

2.2.1 Customer service process in Highlands Coffee and The Coffee House 16

2.2.2 Customer service process in Trung Nguyen E-Coffee 20

2.3 Factors affecting the customer service in the coffee chains in Vietnam 21

2.3.1 External factors 21

a Economic development 21

b Cultural/ Social factors 21

c Technological factors 22

d Competitors factors 22

e Characteristics of customers 23

2.3.2 Internal factors 26

a Employees 26

b Facilities 27

c Organization management 28

2.4 General assessment of the customer service in the coffee chains in Vietnam 28

2.4.1 Advantages 28

2.4.2 Limitations and causes of limitation 30

Chapter 3: Some suggestions to improve customer service in the coffee chain in Vietnam 32

3.1 Training and orientation to improve the quality of employees according to the coffee shops standards 32

3.2 Offer more rewards to retain part-time employees 32

Conclusion 34

References 35

People's standard of living is currently getting better, and as a result, customer demand is increasing in accordance with the economy's and society's current development momentum “Di ca phe” has recently been a common activity in Vietnamese society among the numerous rich and varied products and services that are available to suit consumer wants Finding a quiet place in today's culture to talk about business, meet friends, or just relax and enjoy the favorite beverage is becoming more and more popular In order to meet customer demands, coffee chains in Vietnam are constantly being established Occasionally, a coffee shop will take on a varied shape depending on each purpose and each requirement A coffee shop not only need to meet the basic requirement of customers such as products and service quality but also fulfill higher standards in order to earn its high-class reputation These standards include the space, the location of the business, and the staff members' professional service abilities…

Coffee shops must pay attention to and make investments in all areas, from human resources to prices and product quality to customer services, if they wish to grow sustainably in today's volatile market conditions The customer service is essential to the success of the organization With the high density of coffee shop chains, ranging from high-end to common, and speedy data updates from smartphones and social networking sites, customers will go to the closest store with the most programs, the best service, and the best feedbacks to experience Customers love and cherish companies that treat them the way they want to be treated So, how well you communicate and establish a relationship with your customers is the essence of customer service This relationship doesn’t have to take a long time — it can often happen in an instant This study provides an evaluation of the customer service provided by the coffee chains in Vietnam However, given the time and resource constraints, I'll concentrate on the top three brands that get the most attention: Highlands Coffee, The Coffee House, and Trung Nguyen E-Coffee

With the “customer service” topic, this study will focus on the following categories:

1 Theoretical basis of customer service

2 Current status of customer service in the coffee chain in Vietnam

3 Some suggestions to promote/improve customer service in the coffee chain in Vietnam

Chapter 1: Theoretical basis of customer service

1.1 Concept, role, necessity

S T., 2006., p.106) Businesses must satisfy the demands of employees and have policies to foster employee loyalty level At the same time, employees in the enterprise will have the capacity to cooperate with each other, care to meet the needs and please colleagues, then they will have the best working

According to Gibson (2003), customer service is the process of satisfying the customer, relative to a product or service, in whatever way the customer defines his or her need, and having that service delivered with efficiency, compassion and sensitivity Customer service is shaped by the needs and behaviors of both customers and businesses (p.06)

Another definition of customer service is that it is one of the organizational processes that businesses use to increase customer satisfaction and loyalty level, attract entrepreneurial prospects for increased profitability and broader access to the market, and counteract the expanding competition (Jahanshahi, 2011)

Every business's concept of customer service is unique, and each one reflects the relationship between the business and its customers If you solely consider customer service to be simply giving what consumers request, the business owner will undoubtedly have difficulty in pleasing demanding customers The common thing between two above definitions of what customer service means is about creating customer satisfaction and meeting more elusive customers’ needs When customers connect and work with business personnel, they really have specific assessments or are

giving the company's service quality score Building a "customer service" culture within employees will help the business have an advantage over its competitors in providing customer care services

1.1.1.2 Characteristics of customer service

Similar to other types of services, customer service has the following characteristics:

has been performed Customer services are nonexistent goods; thus consumers must consume and experience them in order to form an opinion on them The quality of customer service is determined through customer experience

The instantaneous consumption of goods and the supply of the business both reflect the simultaneous nature of customer service Customers must pay fees and guarantee specific criteria in order to acquire the consumption of services On the contrary, companies must work hard to fully satisfy customers' requirements in order to keep them coming back for more

non-standardization of delivery

than they are in production of goods This is one of the most crucial characteristics

of customer service as customer is the core of the business Customer services covers all facets of interaction with a customer and reflects how a customer perceives an enterprise

1.1.1.3 Customer service standards

Gibson (2003) stated that early in the process of obtaining consumer intelligence, businesses can identify the crucial customer service standards, which then serve as a foundation for monitoring results Once these criteria have been established, businesses must then determine who their consumers are and what they want in order to create a customer service strategy that meets their expectations

Below are some examples of customer service standards:

Type Standards

General

• Make it a goal to exceed the expectations of all customer groups

• Proactively anticipate customer needs

• Be accountable to service commitment

• Be aware of communication style (i.e., audible voice, eye contact); always communicate professionally

External

customers

• Greet customers courteously and professionally

• Listen actively to customers’ requests and take prompt action in response

• Respond to website questions/requests within 24 hours during normal business hours

• Conclude encounters with customers courteously and professionally

Internal

customers

• Interact with colleagues courteously and professionally

• Work to resolve issues with colleagues through direct discussion that results in agreed upon solutions

• Be considerate, cooperative, and helpful to every staff member

• Be unilaterally accountable for addressing inappropriate behavior and comments

1.1.2 The role of customer service

According to Goofin and Price (1996), customer service is crucial since it leads to higher product quality, competitive advantage, profitable opportunities, and ultimately higher sales and money Customers will become less interested in other firms and less concerned with price when they are pleased with the company's customer service Besides, good customer service help firm enhance brand value and reinforce their professionalism Customers are more likely to repurchase from you if they have a positive experience with your customer service Or, at the very least, they'll tell others about their excellent experience, which strengthens your relationship with your customer base and increase the brand awareness

● Role to customers:

loyalty In customer interaction activities, customer service is the factor that affects the psychology of customers through service attitude and the capacity to meet and satisfy

needs The likelihood of boosting the proportion of returning customers increase if the business doing customer service well as well as surprise customers unexpectedly When compared to the cost of attracting new customers and the cost of recapturing lost customers, maintaining current clients is far less expensive Besides, the business will discover how customer perceives the brand and how they feel about the quality of the service thanks to the insightful customer feedback The comments will offer special perspectives that will be useful in modifying customer service and aiming for customer satisfaction

1.1.3 The necessity of customer service

Customer is the judge of quality customer service, based on the expectations

he or she has the service that business provides They trade off various factors in their assessments of service quality and satisfactions Excellent customer service will protect the relationships with customers who experience the service for the first time or a mistake down the road One positive experience could make customer stick to a brand, whereas one negative interaction could send them running to a competitor

The most lucrative form of advertisement comes from satisfied consumers that they will propose word-of-mouth marketing to the business as a form of advertising that goes beyond words With the development of 4.0 technology, social media tools like Facebook, Instagram, TikTok or YouTube allow customers to tell or show potentially thousands of people about pleasure or dissatisfaction with a business immediately following a customer service interaction A customer who is satisfied with the customer service of the business will tell four to five people However, if the customer experience was terrible, they will tell nine to ten people Negative word-of-mouth can affect the business’s image, future purchase, and, in some industries, regulatory relations Every satisfied customer can be a booster for a company and every dissatisfied customer can

be harmful Therefore, businesses had better research more about their target customer and provide the best customer service that meet customers’ expectations and increase customer churn rate According to Newby & McManus (2000), excellent quality of customer services is based upon not just the knowledge and skills of the individual but also upon the way that the organization, from top management downwards, pulls in the same direction and presents a clear, positive message to customers The business ought

to develop an overall strategy that translates customer service into day-to-day reality

1.2 Customer Service Components

LaLonde and Zinszer (1976) suggest that the study of customer service can be examined under three primary headings: (a) pre-transaction elements; (b) transaction

elements; and (c) post-transaction elements

(a) Pre-transaction elements: The business ought to make product planning and

sales which reflect customer needs and expectations Planning of products need

to be safe, easy to fix and good quality, component standardization, quality checking, retention period of spare parts and warranty systems, etc Besides, the organizations can make corporate policies and programs like written statements

of service policies, adequacy of organizational structure and system flexibility

(b) Transaction elements: Complete demonstration of the product at the time of

selling and installation Activities to enhance customers’ knowledge of features

of products, the correct use and maintenance of products, method to install products in a manner that allows them to operate and perform well and steadily, etc

(c) Post-transaction elements: This is the use of product over extended periods by

customer after selling Businesses should engage in some product-supportive activities, such as product warranties, part and repair services, and procedures for handling consumer complaints, among other things

1.3 Factors affecting customer service

1.3.1 External factors

The external environment has an impact on all business operations in general and customer service in particular The following factors of the external environment may be crucial are the economic, sociocultural, and technological environments;

competitors; market competition; and customer characteristics

a Economic development: The dynamic economic circumstances currently on

the market have an impact on all enterprises, domestic and foreign Some of the many economic factors that have an impact on company are interest rates, supply and demand, the recession, inflation, etc The high growth rate of the economy will encourage enterprises to raise their investment and at the same time, the demand of consumer will increase That is both the circumstance and the motivations for firms to push customer service initiatives to keep and draw in customers

b Cultural/Social factors: Aspects of how the cultural environment of society

is formed, such as: beliefs on ethics, aesthetics, lifestyle, profession, the traditions, the concerns and priorities of society, the general education level of society have a great

impact on business activities These elements influence commercial customer service through the way we communicate with customer, forms of service…

c Technological factors: Technology in the workplace has allowed businesses

to better market to their customers and provide faster and more personalized customer service There are countless ways technology may improve your customer experience, such as using data to decide where to place targeted advertisements, participating in social listening to identify your customers' pain points, offering immediate support through live chat bots or automated emails, and much more This can significantly distinguish your brand from competitors, fostering long-term loyalty and increasing revenue New technological developments will make it possible for business to carry out customer service tasks more promptly and in a variety of ways Keeping up-to-date with new technologies that may help firm to maintain superior customer service quality, facilitate improved productivity as well as boost overall customer experience

d Competitive factors: The business's efforts to provide customer service are

significantly impacted by competitive rivalry Businesses will be inspired to provide greater customer service if their competitors have strong customer service practices, since this will help them maintain their position and grow in the market Customer care

is a tool that businesses can utilize to differentiate themselves in intensely competitive industries when many companies offer identically high-quality goods and services

e Characteristics of customers: Customer is the core of the business and the

main factor affecting customer service Both internal and external customers are best served when service revolves around satisfying the needs of any customer, rather than simply going through the motions that most jobs require Today’s customer profile is unlike any the business world has seen before Customers not only know what they want, but they can tell you when and how they want it What customers do not want is

to be “managed” because the social customer consumes information in a different way They learn about new products and brands through social channels such as Facebook, Instagram, TikTok… Businesses need to learn a new way of listening to customers, and this can benefit everyone

1.3.2 Internal factors

a Employees: Employees are internal customers of business The way internal

customers are treated translates into how a company is perceived by its external customers If each company has effective policies in place to motivate its staff, then these staff members will actively and skillfully carry out the customer service With every customer, the active service employees should always maintain the proper attitude

and enthusiasm That calls for them to always "act" in the appropriate manner and prioritize the needs of their clients Every employee should be aware of the "don't blame the customer" principle at all times Employees must be friendly and happy at all times when providing services and show consideration for the queries and worries of the customers

b Facilities: Business had better invest more in modern and automated facilities

that will help employees perform the customer service better Investing in cutting-edge equipment that enables employees to work faster and reduces manual and repetitive tasks, can increase both efficiencies and overall productivity of the company

c Organization Management: A proper distribution of labor will make it possible

for employees to do their duties effectively and fulfill customer demands It can be challenging to maintain quality control over the goods and services offered to customers, conflict with the service process, and limit the performance of employees if not properly organized

Chapter 2: Current status of customer service

2.1 Introduction of the coffee chain in Vietnam

Vietnam's coffee consumption market has changed significantly in recent years, primarily as a result of the coffee chain industry's rapid growth Many people choose to enjoy coffee at reputable stores since they offer a range of safe, high-quality items at affordable pricing High-end chain stores and mid-range chain stores make up the majority of the Vietnamese chain coffee shops These coffee chains have competitive advantage in quickly detecting customers and creating a standardized management system This table illustrates the number of coffee chains outlets in Vietnam from 2019

to 2022 Some of the leading coffee chains in Vietnam are Highlands Coffee, Trung Nguyen E-Coffee, The Coffee House, Phuc Long Tea, Starbucks Coffee…

Source: Statista.com

2.1.1 Highlands Coffee

Highlands Coffee undoubtedly ranks first among the top 10 chain cafe brands

in Vietnam When competing against Starbucks, the top chain cafe brand in the world,

in the Vietnamese market, this is regarded as the most successful chain cafe brand David Thai, a Vietnamese immigrant who established Highlands Coffee under the name Viet Thai International Joint Stock Company in 2002, began by selling instant coffee Highlands Coffee always strives to offer customers a traditional and classic value

"Achieve the champion of coffee taste Vietnam and modern cafe style, with reasonable

prices, ready to serve any time, any place, any customer," is the mission statement of Highlands Coffee They are always working to improve their goods and service so that customers may experience both modern active life and Vietnam's distinctive cultural traditions, which are all reflected in Highlands Coffee’s core values:

honest with everyone, always acting morally

positively and treat customers with care

community by giving and sharing Vietnamese identity, culture and people

Highlands Coffee Commitment 101% represents their absolute best efforts in achieving their objectives to improve customer experience This is regarded as an honorable commitment that each Highlands Coffee employee always takes into account, safeguards, and defends Each employee is responsible for putting the customer first in accordance with the operational goals, plans, and strategies for the year

2.1.2 The Coffee House

Born long after Highlands Coffee, but up to now, The Coffee House is also very successful with its own unique business philosophy and culture The Coffee House has grown to 140 locations since the first one opened in 2014 and has become a popular

destination for the younger generation For Vietnamese people, the Coffee House provides superb accommodations, top-notch coffee, and reasonable pricing Particularly, The Coffee House is always aware that: Our consumers need to find delight and share intimacy with their peers in addition to enjoying the best cup of flavorful, premium coffee The greatest coffee beans chosen to make The Coffee House’s products are the Robusta in Buon Ma Thuot, Vietnam, and the Arabica - Tybica from Espirito Santo, Brazil The majority of coffee connoisseurs will be satisfied by pure coffee beans made by The Coffee House The Coffee House values delivering happiness

as seen in the way its employees’ cares for their customers and the love they bring to local communities through charitable activities

All of Seedcom's member businesses had 2-3-digit revenue growth over the previous nine months in 2022, which saw a 53% growth for the The Coffee House brand As it generates more than 37% of Seedcom's total revenue, The Coffee House remains a significant source of revenue According to a spokensperson of Seedcom, The Coffee House makes an average of almost 2 billion VND per day He/She explained The Coffee House's expansion by stating that this chain has empowered it to constantly develop new product lines that are appropriate for delivery and omni-channel sales These include CloudFee coffee, CloudTea milk tea, and the Hi-Tea collection of healthy teas The Coffee House's own app generates roughly 35% of its revenue, which is a significant portion of the revenue generated by the online platform Additionally, this chain added new points of sale, recovering its pre-epidemic network size of 157

locations throughout 18 provinces and cities After being closed for a year, The Coffee House Signature shop concept will soon reopen

2.1.3 Trung Nguyen E-Coffee

Trung Nguyen Legend is present in the Top 10 leading chain cafe brands in Vietnam In the current issue of August 2022, Forbes Vietnam honored Trung Nguyen Legend as the “Awakening Brand” in the special article about the leading F&B brands

in 2022 As the leading retail coffee brand in Vietnam, having been successful in the form of a franchise, in the end, Trung Nguyen Group of Dang Le Nguyen Vu has officially entered the coffee world retail network with brand name Trung Nguyen E-Coffee, where the spirit of three different coffee civilizations is converged: Ottoman – Roman - Thien (Meditation)

Since its launch, Trung Nguyen E-Coffee has rapidly sparked a strong franchise boom, dominating the preferences of more than 1,000 partners and expanding nationwide Trung Nguyen E-Coffee is regarded as the best option for the business community, starting with coffee, from office workers to grocery store owners - traditional coffee shops, college students, companies in the franchise, culinary, tourism, transportation, and retail sectors all can join the cooperation as our partners Trung Nguyen E-Coffee not only has flexible design for all locations, but it also has a collaboration strategy that maximizes benefits for all partners, from cooperation package policy to training support, consultancy, and operation programs Furthermore, Trung Nguyen E-Coffee creates a miniature coffee world with its unique product system, which includes more than 100 tasty energy coffee products and tools for brewing following three civilizations of coffee - life-changing precious books - nutritious bread This enables coffee lovers to experience a full range of products at home, work, and restaurants

Trung Nguyen is one of the rare Vietnamese businesses that build a brand through many enduring activities, with stories about products and is related to culture, creating a community that believes in the values of the company is aiming for From the early days, Trung Nguyen has been associated with the spirit of entrepreneurship, with events that enhance the image and value of Vietnamese coffee – the second largest Robusta coffee exporter in the world, after Brazil These are 3 main messages that Trung Nguyen spread out to consumers:

● WE GROW OUR OWN – By harvesting coffee bean from our own plantation

in Vietnam’s Buon Ma Thuot Province and packing them in our own factories,

we are able to ensure the consistent quality of our coffee products

● WE ARE GREEN – We invest in sustainable and renewable agriculture This allows us to produce some of the world’s most delicious coffees while caring for the environment

● WE ARE INTERNATIONAL – We established an international office in Singapore to share our coffee with the world

2.2 Current status of customer service in the coffee chains in Vietnam

2.2.1 Customer service process in Highlands Coffee and The Coffee House

Highlands Coffee – the largest coffee chain in Vietnam is the first business model

in Vietnam to apply Pay&Claim service model with the assistance of the self-service paging buzzer system The Pay&Claim service model is a modern and cutting-edge service that helps customer save more waiting time and the customers' trust in the brand

is increased by being able to watch how the product is implemented With a closed and civilized service process, Highlands has successfully built a brand and duplicated the model across the country without any difficulties

The Coffee house has also applied this self-service model to its business Here is the customer service process:

1 Pre-transaction

Highlands Coffee's preparatory work begins with cleaning the entire dining table and chairs, arranging the tables and chairs, then cleaning utensils in terms of quantity, and type needed for the shift, pouring new spices in, checking the cleanliness of the store area, checking the readiness of the ingredients

2 In transactions

a Order process

Clean tableware

Check cleanliness and table setting

Check ingredients status

Assign tasks to staffs

Greet

customers

Ask for customers’

needs

Assign seats for customers

Take customer order and offer some suggestions such as up-sell/ cross-sell

Give the order to the kitchen and assembly areas

Receive payments and give paging buzzer system to customers

Highlands Coffee utilize the “10 – 5” rule and “First – Last” rule at the first step

of welcoming customers:

• Within 10 steps (3 meters), identify customers, make eye contact, and smile

• Greet customers within five steps (1.5 meters)

• When communicating with customers, be the first to start a conversation and the last to finish

Customers visiting Highlands Coffee and The Coffee House will be greeted by friendly employees who will assist them When the store is full, the server will guide customers to their seats based on the number of guests, and the client's requirements for flexible seating, and direct the customer to the most appropriate spot Pull out the seats gently for customers, giving precedence to ladies and the elderly For regular customers, the staff pleasantly welcomes and greets you, gently asking customers, and generating joyful and comfortable psychology for consumers when they visit the store

After the guest has entered the store, the server directs the customer where to place their order and make payment at the counter Then the sales associate takes order

by introducing the menu and offers some suggestions for customers like available promotions or up-sell/cross-sell which means convince them to purchase higher-end products Besides, the sale associate should be able to explain each products’ ingredient

to customers when they order so they can determine whether they have any food allergies or if the dish is a good fit for their tastes If the staff see a baby, ask customers right away if they need their own child seats and provide them recommendations for kid-friendly foods If the customer requests a specific meal, the sales associate will display the menu based on the content requested by the client; otherwise, complete the menu and hand it to the guest in the direction of the customer's view Customers have time to pick, but the sales associate still keeps an eye on them while they peruse the menu and make their selections The sales associate takes careful and detailed note of the customers' unique demands

Finally, the sale associate repeats the order to the customer so as to check and confirm the order After receiving the clients confirm, the sales associate notifies the invoice and aids the customer in paying using various payment options based on the customer's demands such as cash, QR code, digital wallet Following the completion

of the payment phase, the sales associate sends the bill and self-service card to the consumer in order for the products to be delivered