Unit 5: Assignment 1: Monitoring the Performance of your Business
In this assignment, I shall be defining the types and needs of customers for a micro-business, a pop-up stall we hosted for one week. We shall also be producing a customer charter, customer service leaflet and a customer generation engine to ease the understanding of our customer service standards for all; these documents would be displayed on our stall. I shall supply goods and services to satisfy the customer’s needs and expectations, we shall maintain this by maintaining stock control sheets. We will process payments accurately by cashing up daily. We will also produce a customer survey so that we can collate feedback on their opinions and suggest improvements using this feedback. We will maintain records of business transaction using Excel to record sales, revenue, profits and losses, we shall also use a stock sheet to monitor levels of stock. From all of this, we will be able to assess our customer services, maintain records of transactions accurately and justify improvements we could have made to our customer services.
First, we will be defining the different kinds of customers. There are several types of customers from window shoppers to discount buyers but below, we shall explore the most common types of customer, these can be made into the acronym WINDY;
So, for a period of five days, myself and another individual formed a team to host a stall in the reception area of one of our college campuses. We initially planned to host a pick ‘n’ mix confectionary stall but quickly learned the other two teams hosting their own stalls would be providing food themselves, this meant that our competition would dilute our sales and the volume of sales wouldn’t nearly be high enough to filter down evenly between the three stalls so we had to rethink our strategy. We settled in the end for a paper airplane contest and a raffle ticket draw in support of a local homelessness charity. The paper airplane contest made a total of zero sales as a result of student’s having a busy lifestyle and possibly being unable to come to terms with the feeling of awkwardness. It was my idea to do this and I hoped it’d bring back feelings of nostalgia but it failed, however, by the second day I had stopped marketing it so the only people who would have bought entries into the contest would have done so solely by the visual advertising methods we used, hanging posters around the campus on the day of the event; this means our advertising strategy was ineffective as a result of either poor poster design or limited exposure time. My team mate had the idea to host a raffle too, this is where all of our sales came from.
To define our customer service standards, I developed a customer service leaflet that we called the “Customer and Business Generation Engine” which if all four quadrants were met will enhance our reputation, drive more customers via word of mouth, allow us to maintain customer service standards across the board whilst adapting to suit other people’s needs (especially given the high capacity of students with extra needs at the campus we were trading within), minimise refund requests and overall, provide a welcoming environment to customers. Below is a visualisation of our engine;
Another way we determined customer service standards was by implementing our customer service standards as determined by our leaflet below:
Paper Games
Customer Service Standards
How will we monitor and maintain customer service standards?
We monitor our customer service via our customer survey leaflets which are available on the stall. We will use these to improve our customer services where possible and maintain those customer service standards to ensure we provide a clear, easy to understand and fair playing environment.
How will we enhance our business reputation?
By providing a clear, easy to understand and fair playing environment, taking into account other people’s needs and adjusting our approach in how we deal with each individual depending on what needs they have, we will maintain a good reputation, this will then be increased with word of mouth from customers to their peers.
We will further enhance our reputation by ensuring our branding remains clear and all material is easy to read, including who we are supporting and also discussing with customers the benefits of our stall to the local community as a result of the local charity, Leicester YMCA, whom we are supporting.
We will also educate our customers in the issues surrounding homelessness and the issues homeless people face themselves whether they’re rough sleeping or living in temporary accommodation.
How will we ensure processes are correct and costs are controlled?
We will keep accurate accounts to ensure costs are controlled, we shall also keep temporary records of customer details and raffle ticket numbers to ensure full accountability always. We have a clear refund policy and customer service charter that we aim to abide by at all times except where a customer’s needs are perhaps more than that of somebody else’s. We will also monitor opinions through our customer surveys available on the stall.
How will we attract more customers?
We will use the above standards to attract more customers as we hope through the education we provide about national and local homelessness, alongside providing a welcoming, easy to understand, fair and accommodating playing experience, there will be several word of mouth referrals and returning customers. We will also adhere to key performance indicators to improve our customer service standards where necessary and with cash prizes at stake, it will undoubtedly attract more customers who will remain satisfied.
Another way we maintained customer service standards was by creating a customer service charter to accompany our above leaflet, our stall was called Paper Games and below is a copy of our customer charter;
Paper Games
Customer Charter & Refund Policy
At Paper Games, we want to provide a fair, welcoming playing approach. We want to provide an enjoyable experience for all, including ourselves. The only way we can do this is to work together to ensure the best environment possible.
We will provide two games for you to play; a raffle where you can win cash prizes, as well as a range of other prizes and a paper airplane competition where the winners will also receive cash prizes. However, there are some things to bear in mind before playing and by playing, you understand and agree to the following points;
It became quickly apparent that our customer charter was far too dense in terms of writing to be a leaflet so we also put together a more compact version of our charter in the form of another leaflet leaflet;
Now, neither myself nor my team mate are graphic designers so we opted for a plain, straight to the point design that was clear and easy to understand. We arranged these so they were easy to see on our stall alongside our voluntary customer service (of which we received several responses) and our chosen charity’s marketing materials. One improvement we could have made here was to just use the condensed version of our charter as all of those individual leaflets, alongside other promotional materials, had an impact on the aesthetic function of our stall, this had an impact on our customer experience which I believe explains some of the data we will look at later on.
As the week progressed, we found that there was some confusion about our customer service standards so, halfway through the week, I designed a simple customer service leaflet which clearly defines who our target customers are, our costs, our payment terms and other important information a customer may want, including what to do if they have special needs we have to cater for or otherwise assist them to take part in our games. You can view this on the following page;
We did not encounter anybody who was blind or unable to read however, I am unsure how to ask people if they can read without sounding patronising, if it was brought to our attention that anybody struggled to read or were otherwise visually impaired or suffered from conditions such as dyslexia which hindered their ability slightly to that of a person who doesn’t suffer from dyslexia, or otherwise had other needs which meant they’d benefit from us reading our materials to them, we would have been more than happy to do so, alongside this, if anybody failed to understand our materials, we would have taken the time to take them through our material step by step and explain what anything they do not understand in a way which they would understand. This caring approach definitely, in my opinion, would have made people leave our stall feeling equal to all other customers regardless of needs and therefore may have improved customer satisfaction, I believe the fall in sales volume was as a result of a fall in foot traffic but without further research, this cannot be confirmed.
We know our stall was a success because of the amount of money we raised in total compared to our low expenses (£67.95:£16.90) leaving an overall profit of £51.06, one third of this was donated to our selected charity. Another reason our stall was a success is evident from our high rate of customer satisfaction, we know this because 60% of our customer survey respondents rated their overall experience to be a 9 meaning they really enjoyed it but there is still a tiny bit of room for improvement, 100% of our respondents rated their experience above 7 and everybody who responded to our survey said they would also recommend us to a friend. However, we do know that our paper airplanes contest was a failure with zero sales but I did stop marketing this as profoundly as I were the raffle, in other words, I stopped including the paper airplane contest in my sales pitch. Outside of our survey responses, however, there was one complaint which was not upheld as I feel the individual was in bad spirits before I approached her, nonetheless, she was dissatisfied at my opening line and we resolved it by explaining that there was no untoward intent.
Our tallied survey responses are as follows, with the qualitative questions being broken down into appropriate categories that each response fit into:
We had 10 respondents, all of whom were paying customers. We did keep the surveys anonymous and no record of respondents personal details were kept. In hindsight, I think we were perhaps more biased to ask customers to fill out a survey as opposed to just allowing them to take one if they felt like it who had made a purchase with us. I feel this could damage the integrity of our survey data but at the same time, there has also been studies in the past to show that people are less likely to say something bad if a person is standing over them. Perhaps it would have been better to have a more confidential surveying methods.
From these results, we can analyse our customer service and assess whether or not we provided good customer service and where we can improve. So, immediately, I notice we have provided fantastic customer services from the fact that all of our customers felt their experience overall was high on the scale between one and ten. We know this because 100% of our survey respondents told us they were approached by myself or otherwise, they walked in through the door and saw the table and came over to us. I think, as I mentioned earlier, our stall was rather cluttered which effected our overall customer experience and also impacted my ability to provide excellent customer services by slowing me down in being able to retrieve vital materials to answer our customers’ needs, especially those interested in learning about our charity or suffered from the socio-political issues our supported charity could assist them with.
We can also make a range of further improvements, this data tells us, from increasing the amount of posters we place around the campuses and how much social media marketing we do, though admittedly, social media marketing would be unaffected given such a small proportion of individuals we could expose ourselves to on social media effectively as our customer base was only teachers and students. However, some must have seen our promotional material on the stall, evident from the fact some informational material on our stall was taken by interested individuals and the fact that 100% our survey respondents who saw our promotional material felt positively towards it. Another thing we could do to improve our statistics was to provide more customer surveys however, I had an oversight that few people would be willing to fill in our paper based customer survey due to low interaction and students and teachers having busy lifestyles, what we found was people would sometimes take our surveys and return them to us completed after their lesson or lunch break was over. We can see from our customer service questionnaire that our customers believed our stall performed well, this is further evident in our financials which we will discuss next. Our completed customer surveys are kept as hard copies as evidence of customer interaction.
We maintained records of transactions through keeping receipts and a record of sales recorded in a black book, one for raffle ticket sales and the other for paper airplane sales which turned out to be a waste of money as a result of zero sales for the paper airplane contest. These were used to later compile a Microsoft Excel document to make analysis easier and to also keep an electronic record as evidence of customer interaction and accurate accounting and processing of payments. On the following page is a copy of our expenses and sales record, below that is the beginning of our customer record where I’ve removed sensitive information in line with the Data Protection Act 1998;
We processed payments accurately by ensuring we had enough change on us to cover any denomination of British currency including and below a £20 note and when we would receive a bank note (£5, £10 or £20), one of us would immediately seek change from the nearest possible vendor whether that be the student services, garages next door or competition… I mean, fellow stall holders. At the end of each day, I would cash up; this would involve counting our days takings, matching them with the days raffle ticket sales (and if we had any, airplane competition entries) and placing them in a deposit bag with a self-adhesive label attached clearly marking the day in which the takings were took and how much was in the bag, plus how much the daily takings were. As both of us paid out expenses to set up our stall, we saw our investment returned to us on the second day of trading though we’d broken even on the first day which is why there was a disparity between the cash total inside the second day’s deposit bag and the cash intake shown on our records. The hard copy of our sales record shows where we have deducted any expenses which are all documented in the expenses column alongside their corresponding date.
Our miscellaneous costs (referred to in our cash flow) includes the expenses documented in our final expenses account below and not the expenses detailed in the above record of transactions as this does not include prizes and final accounting expenses, the final expenses account is detailed below;
We also kept records of how much money each customer paid, plus donations and how many raffle tickets they purchased alongside the raffle ticket numbers and their details for when we draw a winner). On the next page, is a table to show the average value of each customer and each raffle ticket, amongst other data which is detailed in the below extract from the above record of transaction;
We were certain we would have plenty of stock, given competition contestants would be expected to use our scrap paper which had zero monetary value or they’d be expected to supply their own therefore, stock was in abundance for this and we had one thousand raffle tickets, this meant running out of stock was very unlikely, nonetheless, we did keep a stock control sheet that shows 73 raffle tickets were sold in total to 59 different customers, all of whom met our demographic of being students and college staff, leaving a remaining stock level of 927. Because of the sheer quantity of stock (not as a result of over-buying but instead due to minimum purchase volume), it was inappropriate to keep a daily stock sheet and instead, our stock sheet was on a week by week basis. We knew we would not have to restock or run out of stock on any day of our first week as it was extremely unlikely that we would have £1000 worth of sales in a week. On the following page is our stock control sheet for our first and only week;
We can see a disparity between the total sold, the revenue from raffle ticket sales and the recommended price. This is as a result of offering buy one, get one half price or buy one for each of your friends and get one for free promotions and other discounts to attract customers. We did not document these and this is where we can improve because if we were audited, there would be questions asked as to the whereabouts of potentially £5 in sales revenue is if the assumption was that every single ticket was sold at its recommended price. We maintained more than enough stock for the period we spent trading however, each ticket cost us less than 0.1 pence to buy. We could not buy any smaller quantity.
We used an independent witness to verify our winners were contacted and requested for their winnings to be donated as they expected more and it was not worth them making the journey to collect their winnings, though agreed it was fair as we stipulate prizes would be equal to 10% of daily sales revenue. One winner, Hope, opted to keep her winnings, she did not wish to be photographed.
We also kept in mind how important data protection is and since our trading week ended and our stall ceased trading, all personal information gathered has been kept in line with the Data Protection Act 1998 as much as reasonably can be expected.
To conclude, taking everything discussed in this assignment into account, it would appear our stall was a relative success though there are things which could have been done better, though I believe these are mostly down to promotion and marketing as opposed to customer service. If I could go back, I’d have provided more customer surveys and also asked questions specifically to our level of customer services. On reflection, there was only one individual with a complaint, I asked if she would like to come over and learn about our fantastic charity that we were supporting and she refused, I responded with “Come on, don’t be a spoil sport!” and she felt it was inappropriate for me to comment on whether or not she is a spoil sport given I do not know how many other charities she supports. My argument to this is that she mis-perceived me to be criticising her when in fact, I was not. Instead, I was encouraging her to join in. Her complaint was not upheld as the stall holders couldn’t reasonably be expected to be able to control every single individual person’s ability to correctly understand and perceive the intentions behind another person’s comments outside of their own, with that being said, although this individual did not make a purchase with us or browse our stall, because we interacted it would be unfair for me to discount this individual from our measurement of customer satisfaction, as a result, upon revision, our 100% customer satisfaction is marred by the one complaint we did receive. Although I am not reponsible for the individual’s poor attitude and lack of sense of humour (which is my opinion and may not be shared by others), I could have used more tact in my approach however, my happy, jovial self hadn’t received any complaints up until this point which is another reason as to why the complaint was not upheld, if one person out of one hundred were unhappy with the identical experience they had to their peers, the issue is unlikely to be with whoever is providing the experience and instead, is likely to be with the customer; there are five types of complainers in business but that is for another assignment however, some customers are “Chronic Complainers”, these are individuals who enjoy complaining and will complain for the sake of complaining, for the sake of freebies or other compensation, these kinds of customers are very common; a prevalent example of this can be seen in the United States of America where personal injury claims are prevelent, as they say “Where there’s blame there’s a claim!”, one example that springs to mind is the young boy who was sued by his aunt for giving her a “careless hug” which the circumstances were that the child hugged his aunt, she fell and broke her wrist and proceeded to sue the child for her medical costs; this is an example of a chronic complainer, someone who will complain for the sake of complaining. All in all, with the exception of that non-upheld complaint, our customer service was a success and even with the complainant, we achieved an extremely high level of customer satisfaction. I do think, however, if I were to do this again, I would definitely place more emphasis on ensuring customers understand the prizes as it was evident they expected the prizes to be higher, in fairness however, we did forecast our sales to be slightly higher on a day by day basis than what they actually were.
Below, you will find any other required supporting evidence.
Below: Receipts
As a result of poor post-trading organisation, some receipts have gone missing. This will cause a big problem with HMRC in business if we were to be audited, because of this, I have sought advice from HMRC who explain that, by law, we can offset operational costs of running a business and some other expenses from our tax bill however, evidence of this must be available if we are asked to provide it (this doesn’t have to be a receipt but receipts are the most common form of evidence, it can also be a bank statement but they will consider any kind of evidence provided). Without evidence, we can estimate and it is perfectly legal to offset any costs incurred without keeping the receipts however, if HMRC were to audit us and the evidence was not available to show our expenses, we will be liable to pay the tax that was deducted from our yearly tax bill for our expenses (HMRC will estimate this figure by looking at all of our expenses and seeing which of these there is evidence of and which there is no evidence of) that we were unable to prove, further sanctions may be put in place as a result. Therefore, as I have misplaced some receipts, these costs are now liable for tax. This will increase our tax bill by a small amount (due to low expenses) but will have a negative profit on our profits. It would be prudent to have used a business bank account which, because of bank statements, would allow us to show evidence of these expenses, however, opening a business account for one week of trading would have been excessive and perhaps unnecessary, alongside this, it would be unlikely I would be audited for such a small amount of time trading, however, this isn’t an excuse. If I were to be audited (which is a possibility), the amount of tax I would have to pay if I had zero expenses would be less than £20. As the business was unregistered via the usual channels expected of businesses (companies house, registering with the HMRC, etc), I would be considered a sole-trader or self-employed and as a result, the tax liability would fall with myself and my team mate; I can safely say that I would be happy to pay the tax out of my own pocket on such a small sum which would be 19% of profits for corporation tax or 0% for income tax if I were considered a sole-trader and in which case, nothing would be repayable to the HMRC. To improve our organisation of receipts in future, I would use a box or something else I could secure instead of keeping them loose in a plastic wallet kept in my folder however, as start-up funds were low we were unable to protect ourselves against every risk in business. I have learned that there are risks to any decision in business, including something as small and seemingly benign as storing receipts safely and securely so they do not go missing.
(Above: Our stall).
Above: Customer interaction.
Above: Customer Survey and game advertising posters.
Below: Completed Customer Survey: 
Cashflow forecast:
Cashflow:
Appendix A: Customer Service Leaflet
Paper Games
Customer Service Standards
How will we monitor and maintain customer service standards?
We monitor our customer service via our customer survey leaflets which are available on the stall. We will use these to improve our customer services where possible and maintain those customer service standards to ensure we provide a clear, easy to understand and fair playing environment.
How will we enhance our business reputation?
By providing a clear, easy to understand and fair playing environment, taking into account other people’s needs and adjusting our approach in how we deal with each individual depending on what needs they have, we will maintain a good reputation, this will then be increased with word of mouth from customers to their peers.
We will further enhance our reputation by ensuring our branding remains clear and all material is easy to read, including who we are supporting and also discussing with customers the benefits of our stall to the local community as a result of the local charity, Leicester YMCA, whom we are supporting.
We will also educate our customers in the issues surrounding homelessness and the issues homeless people face themselves whether they’re rough sleeping or living in temporary accommodation.
How will we ensure processes are correct and costs are controlled?
We will keep accurate accounts to ensure costs are controlled, we shall also keep temporary records of customer details and raffle ticket numbers to ensure full accountability always. We have a clear refund policy and customer service charter that we aim to abide by at all times except where a customer’s needs are perhaps more than that of somebody else’s. We will also monitor opinions through our customer surveys available on the stall.
How will we attract more customers?
We will use the above standards to attract more customers as we hope through the education we provide about national and local homelessness, alongside providing a welcoming, easy to understand, fair and accommodating playing experience, there will be several word of mouth referrals and returning customers. We will also adhere to key performance indicators to improve our customer service standards where necessary and with cash prizes at stake, it will undoubtedly attract more customers who will remain satisfied.
Appendix B: Customer Charter and Prize List and customer survey
Paper Games
Customer Charter & Refund Policy
At Paper Games, we want to provide a fair, welcoming playing approach. We want to provide an enjoyable experience for all, including ourselves. The only way we can do this is to work together to ensure the best environment possible.
We will provide two games for you to play; a raffle where you can win cash prizes, as well as a range of other prizes and a paper airplane competition where the winners will also receive cash prizes. However, there are some things to bear in mind before playing and by playing, you understand and agree to the following points;
Paper Games
Prize List:
Raffle:
Paper Plane Contest:
Longest Distance Flown:
10% of Paper Plane Contest sales revenue.
Paper Games
Customer Survey:
Appendix C: Stock Control Sheet
Stock Control Sheet
|
Item Number |
Item Name |
Quantity |
Cost of Sale Per Unit |
Price |
|
1 |
Raffle Tickets |
1000 |
£0.72 |
£1 |
|
2 |
Paper Plane Contest |
Unlimited |
(705/Quantity)*100 |
£1 |
Cost of sale = (Total expenses in pence/Quantity)*100 ; Multiply by one hundred to give figure in pounds and pence.
Raffle Ticket Sales:
Total Revenue from Raffle Ticket Sales:
Paper Plane Contest Sales:
Total revenue from Raffle Ticket Sales:
Appendix D: Trading week what went well
Trading week.
what went well.
In this report, I am going to write what went well during the week that we traded.
Monday 6th march 2017.
On Monday, we had just started trading so it was quite a slow start. But when we got going we were trading very well. The main things that went well on the day was the sales and set up. We got some people to do questionnaires and they gave back good feedback. On Monday, we made about £20.50. which meant that just on Monday we broke even. On this day the winner won £2.05.
Tuesday 7th march 2017.
On Tuesday, we had our best day as we earned £28. We had a lot of good feedback for the customer service with most people rating it as excellent. On Tuesday, we made enough money to take back our expense money which left us with £15.70. Therefore, the winner of the raffle won £1.57.
Wednesday 8th march 2017.
On Wednesday, we had an average day. We had good feedback on our customer service again. We also had good feedback on our promotional material which is what bought some customers to our stall. The sales on Wednesday were ok. We made a total of £14.50 on that day which meant that the winner of the raffle on that day won £1.45. Another good thing that happened on Wednesday was that we had someone who had been at the charity that we were supporting which is the YMCA.
Thursday 9th march 2017.
On Thursday, the day was quite quiet however we made a quite good day where it comes to feedback. People said they found our promotional materials interesting and said it was eye catching. We had some interest in the paper airplane contest however they did not compete. We also had some people that were interested in the YMCA. We made a total of £14.75 which meant that the winner of the raffle won £1.47.
Friday 10th march 2017
Friday, was not a very good day as we only made £4 which meant that the winner of the raffle only got 40p. we had some good feedback about our customer service and promotional materials.
Appendix E: Customer service feedback
