Case Study in Human Resource Management The Customers Revenge

INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH (IMDR), PUNE

PGDM 2012-14 BATCH

Case Study: Management Executive Summary

Human Resource

THE CUSTOMERS REVENGE

Submitted to: Prof. Parikshit Mahankal Prof. V. Govind

Submitted By: Group 2- PGDM 1 (B) Names Madhukar Dev Mohammed Rehan Beg Pallavi Sinha Dhanshree Jaiswal Kanika Bakhai Dinesh Kore Roll No 24 26 65 83 85 87

Executive Summary
The Background Jim McIntire, vice president of customer service at Atida Motor Company, Jim had expended a lot of energy trying to improve customer service at Atida. Lisa Ross is Jims head of customer
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Case Study in Human Resource Management The Customers Revenge

communications. Atida is a 70 year old motor company, producing and selling stylish and innovative cars and they have just launched a new one on the market : the Andromeda XL. The brand has many loyal customers and devoted fans among various clubs and communities. Jim MacIntire and his colleagues from the customer service department have tried to enhance their operations by implementing various methods : For instance, the company offers comprehensive warranties, a special credit card rewarding customers with presents, and a new call center was implemented a year ago in India in order to answer customers phone calls. It is in Bangalore and the company hopes it will raise its reputation for customer service. But it doesn't appear to be doing so yet. Complaints about the Andromeda XL--the hip new model are flooding the call center. Call backlogs are building, and letters of complaint are piling up. One loyal Atida customer is so upset about getting the brush-off that he's not only talking to a lawyer but threatening to go on YouTube and take his case to the court of public opinion. Customers satisfaction seems to fade. In the Internet age, does Atida need a new way to deal with unhappy customers?

The Issues Jim scanned the divisional quarterly report tracking customer feedback, which logged more than 30,000 calls. the report summarized the content and disposition of all calls, e-mails, and letters. Several had been escalated. One of them was a letter from a customer named Jessica Long. with letters complaining about her Andromeda XL, which she had bought shortly after the car came on the market. First the air-conditioning failed, then the CD player jammed, then the catalytic converter went out, and so on. One of the customer Tom Zacharelli also faced severe problems because of his Andromeda, and was very frustrated by the behavior of the customer service people, and he warned them that he will make a nasty film on the situation faced by him and he will put it on youtube will will harm the reputation of the company. First and for most, the company should deeply change the way it handles customers complaints. They are not enemies, they have spent a lot of money on one (or several) expensive car(s), sometimes they are truly devoted to the brand and are huge fans of it; Therefore they are entitled to be treated with consideration, especially when the product keeps breaking down (as in the case of a customer named Jessica Long). Thus, when Lisa explains that She must get a life her attitude towards customers is all wrong. Futhermore, thinking that a call-center (outsourced far away from the heart of the company and employing people that can hardly speak English) will solve all customers complaints, its a delusion. It only fosters disatisfaction. Atida's call center being in Bangalore - surely a move to reduce cost line expenditures - is representative of Atida's approach to customers. Even if we assume that intermediate operational metrics such as first-call resolution rates are satisfactory, cultural and language barriers certainly have an adverse effect on customer loyalty. Corporate training on customer loyalty is likely lacking as well with the call center operating so remotely. How should Atida deal with its unhappy customers?

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Case Study in Human Resource Management The Customers Revenge

A possible resolution to this would be to move the call center back to headquarters and kick up training. To mitigate cost-line risk, I'd propose automating some calls. Decide which type of customer inquiry would be easy to automate and introduce scalable automated systems to route those inquiries. High-tech automation reduces cost-line expense. High-touch customer service representatives will increases customer loyalty. The action plan might look like 1. Categorize call centre inquiries. The general policy of the firm regarding the customer management has definitely showed some improvement with the opening of the call center. It is still however, far from the level of service that is expected from customers. The fact that the call center is operating in Bangalore - halfway around the world, reveals that the firm is still primarily aiming to cut costs, while the main focus should be creating and managing a strong and high-level service platform for customers. In addition, from the complaint letters included in the case, it becomes clear that the staff working in this call center is not trained properly and cannot respond adequately to consumer demands. If the firm wants to keep low level of labor costs, it could consider making use of the technological progress. It will be wise for the company to create a website and include there a digital assistant. This way, the most common and routine questions/complains can be answered automatically, and the number of workers in the call center can be diminished. Consequently, more resources can be allocated to the specialized training of the staff, who will deal only with more serious problems and uncommon questions or complaints. this:

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6. Assign performance metrics and compensation around the new call center model to reinforce business objectives. In summary, this high-tech/high-touch approach maximizes resource allocation and tacit interaction value while mitigating cost-line risk. The problem that Atida faces, might very well be regarded as one of the most serious problems that firms have to deal with since the development of the Internet and the internet-based social platforms. These technological innovations have led to an enormous increase in consumers' knowledge and power. Through the Internet people have access to huge amount of information. They can research and compare companies, products and services, and this raises their
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Case Study in Human Resource Management The Customers Revenge

expectations. In such quickly developing and highly competitive environment Atida's strategy should continuously change towards building strong relationship with customers. The managers of Atida, Jim and Lisa, immediately start thinking of changes in policies and general programs, without making any difference between the two. In fact, they should first focus on what value each brings to the company, and only then decide how to proceed. If the firm wants to achieve this, it should consider creating appropriate customer database, where it can store and process all the relevant information about each individual consumer. Because all customers are different, have different value for the company, and, at least to some extend, should be treated differently. Tom Zacherelli, for example, is extremely loyal client, he is buying Atidas for long time and is owner of preferred-customer credit card. To Atida, Tom and all customers like him, should be at the top priority list when it comes to service. The management have to make sure that those clients are always satisfied. They should definitely compensate Tom for all his out-of-pocket expenses, replace his car and even include some apology gift to smooth his anger. And they should do it not because he threaten to post a youtube video, but because they have to show him how valuable he is for the company. Jessica Long on the other hand, doesn't appear to be such loyal client (at least from the information given in the case), but it looks like she is one of those always-complaining customers that can never be satisfied. The management should compensate her for the troubles she had, but should carefully revise her customer lifetime value, before deciding whether to put more efforts to keep her as a client. Thus, the wiser move for Atida at this point, would be to stop treating customers as equal and stop trying to satisfy all, by using one general customer management policy. Instead the company should start evaluating each individual and the value he adds, and based on this data, it should decide the level of efforts that is worthwhile putting into keeping this individual as customer. Atida isn't even in the ballpark when it comes to world-class customer service. Atida should invest in a CRM system so that it can determine which customers have enough purchasing and referral value to be given the red carpet treatment and which should be gently let go.

Minutes of the Meeting Venue:

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Case Study in Human Resource Management The Customers Revenge

Date: Date: Participants Present Madhukar Dev Mohammed Rehan Baig Pallavi Sinha Dhanshree JaiswalKanika BakhaiDinesh Kore-

Time: Time:

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