Reference no: EM132870344

CUSTOMER SERVICE AT KASTON PYRAL

'One of the trends in our business has been the increasing internationalisation of call centres. Companies have realised that they do not necessarily have to be physically represented in the country whose market they are serving. Decreasing telecommunications costs have made us all aware that we can get unheard of economies of scale by focusing on large and sophisticated call centres that can serve a whole continent, or even the whole world'. (Lisa Jackson, Customer Service Vice President, Kaston Pyral, US).

Kaston Pyral Group (KPG) is an international manufacturer and installer of heating, air conditioning, environmental control and condition monitoring systems. While the company's products still included electro mechanical devices and (mainly) gas burning heating devices, heat exchangers, etc., increasingly they provided the sophisticated software that controlled and monitored both their own and their competitors' systems. These control systems could be updated independent of the hardware. They could also be integrated with other building and environmental management systems to provide 'total monitoring and maintenance' control. This could include remote diagnostics capabilities that allowed KPG's engineers to spot potential problems even before the customer had noticed. The customer service division of KPG provided customers with a range of services including spare parts supply, maintenance and technical support. Technical support was becoming particularly important because the integration of new KPG systems with 'legacy' control systems could cause unforeseen problems. In most markets around the world the division had their own service centres, but also used contract service engineers. Until recently the division also operated call centres in each country in which it operated. The call centres would take orders for spare parts and arrange delivery, investigate billing queries, arrange for regular or emergency repair and maintenance visits and provide technical support for installed hardware and control software. Merging the call centres The customer service division had recently decided to merge its individual country-based call centres into three regional call centres that would cover its three regional markets worldwide. Last year, the call centre in Antwerp, Belgium, had expanded its capacity by five times and had taken over responsibility for all European customer service. A single centre in Kuala Lumpur, Malaysia, was planned to serve the Asian market. Lisa Jackson's responsibility was to oversee the merger of the North American call centres (previously in New Jersey, Montreal and Mexico City) into a new centre located in Atlanta, Georgia. The changeover to the new centre was planned to be phased over 20 weeks. Lisa was 10 weeks into the changeover.

Things were going well, as Lisa explained. 'Our current concerns are centered around managing the changeover smoothly. Atlanta is a Greenfield site and most of our staff are relatively inexperienced, but we have put a lot of effort into training and we have managed so far without any real disaster, although it's been a steep learning curve for all of us. We have been working totally in the dark. None of us had any experience of what it means to bring together the responsibilities of three different centres with different traditions, cultures and, to some extent, systems. I am just happy that we have managed well so far. We are currently operating at 75 per cent of our planned final volume and can already see how concentrating all activities on one site will allow us to achieve economies of scale compared to having separate country-based centres. We have invested in the latest telecommunications technology and call handling systems that allow us to route calls to associates (call centres operators) with the appropriate technical and language skills. The larger scale also allows us to cope with the "natural" uncertainty in the volume and type of calls that come in. Around 40 per cent of our staff are bi-lingual and 5 per cent tri-lingual, which gives us the flexibility to cope with fluctuating demand between English, Spanish and French speaking customers. In fact, because all our customers are businesses, most of them can speak English, however we always try to use the appropriate language. It is a matter of courtesy and it also helps to build relationships with our customers'. The customer survey Prior to the changeover period, the New Jersey centre had carried out an extensive survey of its US customers. The summary results are shown in Figure 1. Lisa was pleased to have this data. 'The New Jersey centre's survey provides us with a good benchmark. In the short term we have to make sure that we at least match this level of performance and in the long term we must improve on it. Certainly the overall level of satisfaction score is not good enough. Our challenge is to achieve excellence in all aspects of service. But customer service is not the only thing we have to monitor. It is vital that we get some financial payback for the investment in the new centre. I have been tasked with making this centre the ultimate in leading edge process management to ensure "world class" levels of efficiency. That is why we also intend to monitor productivity-based measures closely. In fact, since the new centre started we have been recording our progress closely on four key measures (Table 1 shows these measures for the first 10 weeks of the centre's operation). These are the measures that we have decided will be the key performance indicators for the centre. "Calls per associate hour" is the best measure we have of our associates' productivity and the "average call time" is a related measure that indicates how efficient the associates are at dealing with customer queries. As we get better at routing calls to the right associate quickly and efficiently and as our associates get to know the business better, the average call time should shrink to below eight minutes. "Average wait time" and the "percentage of abandoned calls" gives us an indication of how well we are matching our capacity to demand throughout the day. We have already started to experiment with using control charting procedures to monitor some of these performance measures, specifically, average call time, average wait time and the percentage of abandoned calls. It is by using this type of technique that we aim to develop one of the most efficient call centres of its type'. The future The progress of the call centre reorganisation in the customer service division was being watched closely by Kaston Pyral's group management. The European reorganisation had gone reasonably well and the US centre seemed to be on track. Eddie Karowski, KPG's CEO, was keeping a close watch on the new call centre strategy because he believed that customer service would become the way the company could differentiate itself. Figure 1 Results of the customer survey carried out by the US call centre prior to the merger of the North American centres 'Our business is getting more competitive every year. We already have a range of products which are (we believe) the best in the world. Surveys show that the functionality and reliability of our equipment is outstanding compared to our competitors. But they are catching up fast. To stay ahead we need to do three things really well. First, we must be more innovative in the new products and services we introduce, especially now that new technology such as the control and diagnostics power of new software can be integrated into our systems. In effect we could offer "remote management" of customers' systems, monitoring their equipment, automatically dispatching our engineers, providing customers with management reports, advising on their energy strategy and so on. The potential for exciting new offerings is vast. However, as yet, no one really knows what customers want in this area, I suspect they all want slightly different things from the hardware, control software and the services we offer, but whatever emerges we must be in a position to supply it. This will mean that we really need to understand customers' actual requirements at a deep level. Then we must act fast to get those services to them. Second, whatever we finish up doing, we have to give impeccable service. Excellent customer service builds relationships and is the best way of establishing customer loyalty. Again, this means really understanding their needs. Third, we have to make sure that we are always in a position to keep the customers updated with the new product and service offerings that could benefit them in order to make the best of sales opportunities.

This is an ongoing education process. The better customers know what we can do, the more useful they will be in articulating their own needs and so stimulating our service development processes. Our call centre operations have the potential to help us in all of these areas.

1) The question that we have to answer is how best to make sure that the three new consolidated call centers become the power house for keeping us ahead of the competition.

2) Does the company's strategy of centralizing on three call centers seem sensible?

3) How should the company judge its own improvement when implementing this strategy?

4) Does the company seem to be on track in the progress of its operations performance?