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DESIGNING AND MANAGING SERVICES | CHAPTER 13 369

well as returning more complex calls to highly trained domestic cus-
tomer service reps. Homeshoring occurs when a customer service rep
works from home with a broadband line and computer. These at-home
reps often provide higher-quality service at less cost and with lower
Marketin g turnover.
Marketing InsightInsight
Firms have to manage their number of customer service reps
carefully. One study showed that cutting just four reps at a call center
of three dozen sent the number of customers put on hold for four min-
utes or more from zero to eighty. Firms can also try to reasonably get
Improving Company Call Centers more from each rep. USAA cross-trains its call center reps so that
agents who answer investment queries can also respond to insur-
Many firms have learned the hard way that demanding, empowered cus- ance-related calls, reducing the number of transfers between agents
tomers will no longer put up with poor service when contacting companies. and increasing productivity as a result. USAA and other firms such as
After Sprint and Nextel merged, they set out to run their call cen- KeyBank and Ace Hardware have also consolidated call center opera-
ters as cost centers, rather than a means to enhance customer loyalty. tions into fewer locations, allowing them to maintain their number of
Employee rewards were based on keeping customer calls short, and reps in the process.
when management started to monitor even bathroom trips, morale Finally, keeping call center reps happy and motivated is obviously
sank. With customer churn spinning out of control, Sprint Nextel began also a key to their ability to offer excellent customer service. American
a service improvement plan at the end of 2007 to put more emphasis Express lets call center reps choose their own hours and swap shifts
on service over efficiency. Among other changes that accompanied the without a supervisor’s approval.
appointment of the firm’s first chief service officer, call center operators
were rewarded for solving problems on a customer’s first call, rather
Sources: Michael Sanserino and Cari Tuna, “Companies Strive Harder to
than for keeping their calls short. The average customer contacted Please Customers,” Wall Street Journal, July 27, 2009, p. B4; Spencer E. Ante,
customer service four times in 2008, a drop from eight times in 2007. “Sprint’s Wake-Up Call,” BusinessWeek, March 3, 2008, pp. 54–57; Jena
McGregor, “Customer Service Champs,” BusinessWeek, March 5, 2007;
Some firms are getting smarter about the type of calls they send
Jena McGregor, “When Service Means Survival,” BusinessWeek, March 2,
overseas to off-shore call centers.They are investing more in training as 2009, pp. 26–30.

expects is called the primary service package. Vanguard, the second-largest no-load mutual fund
company, has a unique client ownership structure that lowers costs and permits better fund
returns. Strongly differentiated from many competitors, the brand grew through word of mouth,
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PR, and viral marketing.
The provider can add secondary service features to the package. In the hotel industry, various
chains have introduced such secondary service features as merchandise for sale, free breakfast buf-
fets, and loyalty programs.
The major challenge is that most service offerings and innovations are easily copied. Still,
the company that regularly introduces innovations will gain a succession of temporary ad- Long-haul truckload freight carrier
vantages over competitors. Schneider National keeps a step ahead of its competitors by never Schneider National goes to great
standing still. lengths to satisfy its customers and
build its brand.

Schneider National Schneider National
is the world’s largest long-haul truckload freight carrier, with
$3.7 billion in revenues and more than 54,000 bright orange
tractors and trailers on the roads. Although its core benefit is
to move freight from one location to another, Schneider sees
itself in the customer solutions business. Its service guarantees are
backed by monetary incentives for drivers who meet tight schedules;
driver-training programs improve performance. Schneider was the first to
introduce in-cab satellite technology and mobile technology to every driver.
In 2009, it had its biggest award-winning year, garnering 43 awards for
strong customer service, solutions, and commitment to the environment
from shippers, government organizations, and industry media. To actively
recruit the best drivers, Schneider advertises on television shows such as