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Background: Customers can rent a product from the company for $12-$17/month. If the product breaks, the company promises to complete the maintenance within a 5-day service level.
Management Problem: Current service levels are missed 25% of the time. Also, the business unit that is responsible for the service is under extreme cost pressure:
– Costs to deliver the service have gone up, especially overtime to meet service levels, and
– Annual budget is about to be cut by 5-10%.Problem Statement: How can we meet customer expectations, keep satisfaction scores stable while saving costs?
Scope of research:
– Competitor Insights: Review service levels of competitors
– Analyze CRM data to understand relationship between customer escalations with regards to service levels and the number of days it took to complete the service
– Analyze internal MR data and operational Key Performance Indicators in order to correlate service levels with satisfaction scores, along with other variables – regression analysisDecision making:
– The insights from the competitor review showed that service levels vary across the country from 5-20 days.– Regression analysis insights: satisfaction is not impacted for service repairs that take up to 9 days. After 10 days satisfaction starts to decline sharply.
This insight informed a business case that modeled costs and satisfaction score impacts for various service levels. A longer service level allows crews to bundle repairs by geographic area and spend less time traveling. This cuts costs for overtime.– CRM Insight: The review of escalations showed that customers complained mostly about the fact that they paid a monthly fee and they complained about having to pay the monthly fee
o Decision: Customers with a missed service level will automatically be notified the day after their service level is missed and informed that they will receive a credit on their bill worth one full month – a courtesy for their patience.
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