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NOVEMBER 16, 2011

MICHAEL J. ROBERTS

PAUL E. MORRISON

Comfort Class Transport:

Does Customer Service Need an Overhaul?

Dani Syme packed up her laptop, put on her coat, and headed out of her office into the dreary

February evening. Although the weekend was at hand, she was wearing a scowl. She planned to

spend her Saturday figuring out what was behind the call center service quality problems at Boston-

based Comfort Class Transport (CCT). The 2011 prom/graduation/wedding season was rapidly

approaching, and Syme intended to achieve excellent call center ratings in time for the heaviest call

volumes as well as for average business days. For the moment, unfortunately, the call center

seemed to be seriously underperforming the rest of the company.

As the relatively new general manager at CCT, Syme was impressed with the 98% positive

response in the latest customer surveys about the firms fleet of limos, town cars, vans, and other

vehicles. CCT also rated high in customer satisfaction regarding driver professionalism, punctuality,

pricing, and overall responsiveness. The dispatch department consistently scored near the top of its

internal efficiency measures, and the new customer referral program was faring even better than

expected. However, three days earlier Syme had discovered a serious issue with CCTs nine-person

call center. A number of customers had used the contact us feature on the company web site

and/or the general managers published email address to complain about extended phone-wait

times. Others had simply abandoned their calls.

While she was away, Syme herself had called to test the customer service line, and she waited

more than two minutes for an answer. If customers cant get through on the phones, she thought,

then it really doesnt matter how well we manage our fleet, our drivers, or anything else. The call

center is our life lineits the customers first contact point. If we fail on call center service quality,

we simply cant thrive as a company.

Comfort Class Transport

One of Dani Symes business school classmates, Charles Gomez, had started a transport service

some twelve years earlier. When demand proved higher than expected, he decided to establish CCT

________________________________________________________________________________________________________________

HBS Professor Michael J. Roberts and Boston University Professor Paul E. Morrison prepared this case solely as a basis for class discussion and

not as an endorsement, a source of primary data, or an illustration of effective or ineffective management. This case, though based on real events,

is fictionalized, and any resemblance to actual persons or entities is coincidental. There are occasional references to actual companies in the

narration.

Copyright 2011 Harvard Business School Publishing. To order copies or request permission to reproduce materials, call 1-800-545-7685, write

Harvard Business Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored

in a retrieval system, used in a spreadsheet, or transmitted in any form or by any meanselectronic, mechanical, photocopying, recording, or

otherwisewithout the permission of Harvard Business Publishing.

Harvard Business Publishing is an affiliate of Harvard Business School.

4374 | Comfort Class Transport: Does Customer Service Need an Overhaul?

in the downtown Boston area. Despite some economy-related downturns, the company had since

grown to serve greater Boston as well as Rhode Island, southeastern New Hampshire, and nearby

Maine. In December 2010, Symes classmate asked her to return to Boston and build CCTs

management structure while he pursued expansion opportunities in Albany, NY, Hartford-New

Haven, CT, and western Massachusetts.

CCT offered a full array of chauffeured transport services for individual and corporate customers.

When Syme joined as general manager in January 2011, the firm counted 37 full-time drivers along

with 30 part-timers and another 15 to 20 who were available on call when necessary. The fleet

included 10 stretch limos, 38 town cars, 8 utility vans, 7 small buses, and a large rock star motor

home used mostly for visiting actors and musicians who required both privacy and comfort during

their stay.

About two-thirds of company revenues came from contractual arrangements with area

corporations, universities, hospitals, hotels, and entertainment venues. The remaining third

represented individual requests for one-off transfers (most often to or from regional airports), day or

evening round-trip travel, and special occasions such as proms or weddings. Individual customers

paid in advance by credit card; CCT billed approved corporate customers monthly. Syme had seen an

internal marketing report which analyzed previous orders by type of customer to conclude that a

satisfied corporate customer on average placed an additional two orders in the year following his or

her initial order, and half of the satisfied non-corporate customers on average placed an additional

order. In addition, the report indicated that about 30% of customers who abandoned their call did not

call Comfort Class back, but rather were lost to competitors.

Although revenue growth had been slowed by the recession starting in 2008, it had never stopped,

and Gomez was confident that with CCTs popularity and his plans for geographic expansion, CCT

would be able to resume a healthier growth rate of at least 10% per year for the next three years. In

2010 CCT had revenues of $11,427,280 and net profits of $684,345 with a contribution margin of 48%

after variable costs.

CCT was organized by functions, all of which ultimately reported to Syme:

Sales (3 people), which included online marketing, corporate relations, and direct promotions.

These three reported to a sales manager, who in turn reported to Syme.

Dispatch (16 people), which included scheduling all transfers (a "transfer" was a single

customer pickup or drop-off, with or without a return trip) via computerized requests from

the call center. The department operated 24/7, and used state-of-the-art software developed

for taxi dispatch operations.

Fleet and Driver Management (19 people, not including drivers), which included fleet

purchasing and maintenance; driver hiring, training, and discipline; and special customer

requests such as in-transit snacks and drinks.

MIS (4 people), which included the billing function. The MIS director reported to Syme.

Finance and Administration (5 people), which included corporate credit and collections. The

group manager reported to Syme.

Customer Service (call center) (9 people), including one administrative assistant and seven

customer service representatives (CSRs or reps), managed by Alexis Donovan, the

Customer Service Director who reported to Syme.

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Dani Syme

Syme had always believed in the importance of measuring things. Back in junior high school I

told the English teacher she shouldnt just assign a letter grade to a book report; she should evaluate

it like the math and science teachers would, on a scale between 0 and 100 points, with the points

standing for things done correctly. After completing an engineering degree in 1996, she joined a

large manufacturing firm in Cleveland, and later decided to pursue an MBA in operations

management. On graduating in May of 2000, she took a position with a small group of high-end

hotels and spa resorts, where she excelled at creating systems and metrics that ensured the highest

quality experience for customers and employees alike. By late 2009, Syme had advanced to become

executive vice president of service operations.

Nevertheless, when her friend Charles Gomez offered her the general managers position along

with an ownership share in CCT, she decided to accept the challenge. One of her goals was to make

sure that the companys management systems were robust and effective enough to support a much

bigger operation spanning multiple service areas.

In general, Syme was satisfied with the managers who were in place when she arrived. She spent

time within each area, learning about the existing systems and complimenting the managers who

worked well, while making suggestions for improving others. The company founder, who was

widely liked by almost everyone at CCT, was pleased to hear that Syme was steadily earning respect

and loyalty in her own right. Gomez had promoted CSR Alexis Donovan to Customer Service

Director some three months earlier, before Syme had joined CCT. Now, Syme realized, she needed to

take a closer look at Donovan and her operation in search of better performance.

Call Center Operations

CCT maintained a web site describing its services and its regular promotional offers. However,

the web site referred all customers to the call center, since each transfer had to be scheduled

separately, and prices varied according to the vehicle requested, the distance to be traveled, and the

amount of significant waiting time, if any, the driver would incur.. Rates also sometimes varied with

fuel costs, so the company preferred to avoid posting generic prices on line or in other

documentation.

Thus, while many of the companys internal systems were automated, nearly every transfer

(including those for corporate accounts) required at least one incoming phone call to schedule

pickups and routes. Transfers scheduled more than one day in advance required an outgoing

confirmation/reminder call as well. The customer service reps also handled billing queries from

corporate customers and spent considerable time with individual customers exploring the transport

possibilities for weddings and other special occasions.

Call Center Organization

Under Alexis Donovan, formerly a longtime CSR herself, the department was organized as

follows:

Eight CSRs staffed the area from 8 a.m. to 6 p.m. Monday-Friday. The call center was open 5

days a week, 52 weeks a year, since holidays were often the busiest periods. Each one took a

one-hour lunch break (on a staggered schedule to ensure phone coverage), which resulted in a

nine-hour work day. To avoid scheduling anyone for more than 40 hours per week, CCT

scheduled staff members either for half days or for a full day off per week. One of the eight

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served as an administrative assistant and did not take incoming calls. There was space in the

call center room for an additional four cubicles along one wall.

Each CSR linked to the customer database through a desktop PC. For every returning

customer, CSRs could pull up information such as previous transfer requests, customer

preferences, credit card information, and a comments section in which the CSRs could note

any topics they addressed during customer conversations. For corporate customers, the CSRs

could see the type of contract, the individuals who were eligible under the terms of the

contract, and the privileges or limitations available to each individual. Corporate billing and

payment histories were also available.

Calls came in over an ACD (Automated Call Distributor) line that was featured in all of CCTs

marketing and billing materials as the customer service number. The ACD software

distributed the calls to the service reps according to their availability and the amount of time

each had been waiting to take a call. It was designed to distribute the work load as evenly as

possible among the CSRs.

Incoming callers would hear the phone ring only once. If no rep was immediately available,

callers would hear a recording that asked them to hold and then went on to describe various

services and special offers available from CCT.

On average, the call center received almost 500 incoming calls per day. Call volume varied

during the day, with peaks from 10:30 to 11:30 a.m. and 2:00 to 3:30 p.m. and a lull in between.

Volume increased seasonally (particularly for proms and weddings) and during events (such

as the NHL playoff games involving the Boston Bruins). Inclement weather also sometimes

caused spikes in demand, as people who would normally have walked or driven themselves

decided to use the transfer service instead. Finally, daily call volume increased whenever

monthly corporate statements went out (about eight days per month), as payment officers

called to verify the number and type of transfers on their bills. CSRs were authorized to use

their judgment to issue credits for individual customers who claimed they had been charged

inappropriately.

CSRs also placed outbound confirmation/reminder calls the day before each reserved

transfer, and worked on special projects such as spot-checking corporate bills before they

were mailed, investigating credit requests for transfers that had been scheduled and then

canceled, and administering a customer referral rewards program which offered a discount on

future orders for each new customer they referred.

When taking reservations, the call center staff immediately sent to the dispatch department (by

computer) the information about pickup time and location, destination, vehicle type, and special

requests.1 Dispatch then planned and managed the transfer (except for confirmation/reminder calls,

which were the call centers responsibility).

CSR Costs

On average, CSRs earned $39,000 per year, plus incentive pay of about $290 per month. Syme

concluded that the base pay would have to go up by $1,000 to $2,000 per year to reach parity with the

regional market for comparable work. Furthermore, Syme thought that the current incentive plan

could be better designed to encourage optimal performance. (Exhibit 1 shows the calculation method

for CSRs monthly incentive pay, which could reach as much as 15% of a reps compensation if the

1 There were two main reasons CCT did not have a system that booked customers keyboarded orders directly from the

website. First, many customers canceled reservations, and without a confirmation call from CCT they were unlikely to enter

the cancellation. Second, in customer surveys most respondents noted that they would not trust that a limo would actually

arrive on time at the agreed-upon location unless they heard a confirmation from a professional-sounding human voice.

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maximum potential points were earned.) Department furniture and fixtures, hardware and software

costs, telecommunications, and miscellaneous office supplies cost about $5,000 annually per CSR.

The ACD Monitoring System

In addition to routing calls, the ACD recorded an array of information about call center

performance, and produced composite reports every half hour as well as at the end of each day.

(Exhibit 2 lists the specific data monitored by the ACD.) The reps were expected to Log In to the

system whenever they were at work. If they were Not Logged In, their phone would not receive calls

from the ACD. The system also included a Not Ready button, for use when a rep could not

immediately take a call. Each reps log-in and ready status were clearly visible on the screen. When

Syme first joined CCT one CSR told her, We're supposed to log on when we arrive in the morning

and log off when we leave at night. But when you go to a meeting or lunch, or you're working on a

non-phone project, it is pretty unclear what we're supposed to do. Some of us do it one way and

some people do it another.

The screen kept the CSRs aware of caller wait time as well: a light would blink slowly when there

were one or two people waiting in the queue, faster for three or four waiting, and solid when five or

more callers were waiting. Each rep also had a private direct number to use for incoming or

outbound calls. When the direct line was in use, the ACD would not route calls to that rep.

Syme had asked another CSR how the ACD monitoring data was used for evaluating employee

performance and was told, There are some statistics that they look at on a monthly basis that go into

our incentive plan. I forget exactly what the number is, but John [another CSR] keeps track of it, and

when we get our monthly review, they tell us what the number is and how many points it translates

into.

Digging Deeper

Settled in at home, Syme brought up the ACD data and other information she had transferred to

her laptop. By researching industry data for call centers, she had learned that the general

performance standards included 5% call abandonment, 95% TSF (Total Service Factor, or calls

answered in 20 seconds or less), and ASA (Average Speed of Answer) of 10 seconds.

I figured if I dug into demand, I might learn if inbound volume was greater than it should

be. Reasons for that could include an inability to find airport pickup locations, confusing or

incorrect billing information, clarifications on vehicles and excursion packages, and anything

causing unnecessary customer call-backs. So I decided to analyze the reason for each call and

determine whether it was avoidable or not.

Exhibit 3 reports two months of the ACD call center data by half-hour intervals. Exhibit 4A

summarizes total data for a single day, Friday, February 25. Exhibit 4B summarizes totals data for a

single half-hour, 11:00 a.m. - 11:30 a.m., for February 25. Exhibit 4C reports daily total data for

February 25 for each individual CSR by half-hour interval; Exhibit 4D shows this data for the half

hour from 11:00 a.m. to 11:30 a.m. that day.

Syme calculated the following summary information based on a data field in the customer contact

system where reps recorded the reason for each call taken over the two-month period shown in

Exhibit 3. The length of call included any time the customer had been put on hold during the call.

She had already determined that the percentage of daily call volume generated during any particular

half-hour period was similar from day to day and relatively independent of the total daily call

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volume. Thus, once daily call volume was predicted, the number of calls for any half-hour period

could be predicted as well. She also found that the distribution of reasons for calls was almost

uniform across the day.

21% straightforward transfer reservations (averaging 84 seconds)

20% inquiries about available services, vehicles, and packages2 (134 seconds)

18% follow-up reservations based on previous information requests (100 seconds)

20% change of vehicle or transfer package (111 seconds)

3% cancel reservations (34 seconds)

8% question/dispute regarding bill or credit card charge (261 seconds)

2% difficulty finding pickup point or driver (82 seconds)

8% other (70 seconds)

Work Patterns

Syme analyzed the data by looking at percentage availablewhich she defined as either time

on an ACD call or time spent waiting for a callversus time unavailable, which was time Not

Logged In, time on Not Ready, or time on Direct Number (DN) In/Out calls on the CSRs private

number. Syme was not sure how much time the reps actually needed to do the follow-up work that

necessitated going into Not Ready status, or making Direct Number calls. Each rep was supposed to

reserve 1.5 hours per day for such follow-up work. Specifically, no more than five minutes per half-

hour should be spent on Not Ready, Direct Number In/Out, or Not Logged In status.

Thinking back to the time she had spent visiting the call center, Syme recalled some observations

shed made:

At least half the time being recorded as Not Ready was really unscheduled break time. Reps

would get up from their desks to get a cup of coffee, have a drink of water, go to the

bathroom, and so on, and would stop to chat with others at their desks.

Some of the Direct In/Out calls were personal calls.

The time spent on Not Ready and Direct In/Out calls rarely involved urgent work. It could

probably be put off to another time during the day.

Reps followed inconsistent procedures for logging in and out. Some used Not Ready most of

the time, others logged on and off the ACD during the day, and still others seemed to use Not

Ready and Log Off interchangeably.

Special projects such as spot-checking bills, managing the customer referral program, cross-

training other reps, and updating customer profiles took about 40 hours of work per week.

Syme concluded that this work was distributed rather unevenly, as a function of who seemed

to be good at, or liked, specific tasks. Some special project work required reps to leave their

desks, but the majority did not.

On some days, several reps had the day off, while on other days the call center was fully

staffedand this schedule bore no relation to the expected peaks and troughs. For example,

the department seemed unaware of the dates when corporate customers bills were issued and

the calls to question or verify them would come in.

2 A package was an entire service bundle a customer purchased, including the type of vehicle, pick-up and/or drop-off

times, expected waiting, and any other special services or associated products offered by Comfort Care.

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