Unit Number and title
Unit 3 Customer Service
Qualification
Diploma in Hospitality Management
Start Date
5th November 2014
Deadline
19th December 2014
Assessor
19th December 2014
Assignment title
Customer Service
Purpose of this assignment:
The purpose of this assignment is to demonstrate an understanding of customer service polices and the importance of promoting a customer-focused culture and to develop effective customer service skills. In order to complete this assignment you are provided with a case study of Enterprise Rent a Car a global organisation with a fleet of 850,000 vehicles serving the hospitality and business industries.
You will need to provide answer to the below tasks and apply techniques covered during the course of this unit, such as Stakeholder Analysis, Communication Theory and Primary/Secondary Research Techniques (Note these are some of the techniques).
Below is an outline of Enterprise Rent a Car their website address is www.enterprise.co.uk
Most people probably think they know what Enterprise Rent-A-Car does. It is in the car rental business and operates a fleet of more than 850,000 vehicles. However, Enterprise Rent-A-Car has quite a different idea of what its business is all about. In Enterprise’s view, the business it is involved in is customer satisfaction. This is a characteristic that it shares in common with every successful service company, large or small.
A service business is one that meets customer needs by providing them with a value service. As individuals, all of us use services – having our hair cut, going to the cinema, drawing money out of our bank account and many other activities. Businesses also use services such as transport, insurance, and financial services.
Enterprise Rent-A-Car is the number one rental car company in North America and arguably,
the world.
Jack Taylor founded Enterprise in 1957 in the United States. It is a privately-owned business.
Forbes ranks Enterprise as number 16 in the top 100 private companies in the United States.
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Enterprise wins awards for achievements in many areas. These are some of those won in the
UK and Ireland in 2006:
• Best Corporate Car Rental Company 2006 – Institute of Transport Management
• Top 50 ‘Where women want to work’ – The Times with Aurora
• O2 Ability Awards 2006
• Service Provider of the Year 2006 – British Insurance Awards
• Best Graduate Advert and Best Graduate Web Site – Recruitment Advertising awards 2006
The goal of the company is to exceed customer expectations. The management team at
Enterprise Rent-A-Car developed a simple but highly effective way of finding out what keeps customers happy. They created a questionnaire for customers based on two questions:

1. How would you rate your last Enterprise experience?
   This is ranked on a scale from ‘completely satisfied’ to ‘completely dissatisfied’.
2. Would you rent from Enterprise again?
   This is a novel type of customer survey. A major problem with customer surveys is that the response rate is very low because the surveys are long and complicated. The opposite is true in this case.
   The results of the survey form part of the Enterprise Service Quality index (ESQi). This is the basis for measuring performance of the various rental branches of Enterprise.
   The survey was developed through an intensive process over a number of years. The process was focused on refining the survey with the result that it appears simple. The survey finds out what makes loyal customers and who the loyal customers are. It delivers results which allow Enterprise to concentrate on the key driver for the company – making loyal customers. This leads to profitable growth. If someone is loyal to a company they will recommend it to their friends. The survey tells Enterprise which customers will return again and again and recommend Enterprise to their friends. The questionnaire helps Enterprise to find out quickly what customers think of each and every one of its businesses.
   When Jack Taylor founded Enterprise his motto was simple: ‘Take care of your customers and employees first, and profit will take care of itself.’
   However, when a company grows it can become more and more difficult to give customers and employees the same sort of personal attention. As a successful business, Enterprise grew until almost inevitably some cracks in customer service developed. It was at this point that the company realised the importance of developing ways of measuring customer service. One of the oldest sayings in business is ‘You manage what you measure.’ This is when the idea of measuring customer satisfaction was developed. The new way of measuring customer satisfaction was called ESQi – the Enterprise Service Quality index. The first survey was carried out in July 1994 and had a 25% response rate. The results indicated a big difference between the best
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   performing and the weakest regions in which the business was operating. However, the survey results were not meaningful enough. Enterprise decided to cut down the survey to the two questions highlighted earlier. Also the survey method was refined to compare ESQi scores branch by branch, rather than region by region. To keep the information up-to-date it was collected and reported for each quarter of the year. Enterprise targeted customers who were highly satisfied and would rent from the company again. These were customers who filled in the top boxes on the survey. Customers who had filled in the
   survey were called by external telephone researchers. They were asked how many cars they had rented since taking part in the survey and what Enterprise’s share of those rentals had been. Studying the data showed that ‘completely satisfied’ customers were more than three times as likely to become repeat customers as those who said they were only ‘somewhat satisfied’. This piece of information was like a ‘lightning bolt’ for the company. It showed that customer satisfaction has a direct impact on sales and profits. This collection of data on customer opinions is a good example of qualitative data. The collection of data on the numbers of cars rented illustrates quantitative data. Together the analysis of both types of data helped improve Enterprise’s performance.
   In 1996 Enterprise overtook Hertz as the leading car rental company in the United States.
   However, rather than resting on its laurels, the senior managers of Enterprise looked at the
   ESQi scores and saw that some sectors of the business were underperforming in terms of customer service. At a meeting of senior executives, Jack Taylor told the group that if the company was to stay No.1 then it would have to keep customer service as the number one priority. He stated: ‘Customer service is the most important thing we do.’ With this he posed a challenge to the leadership team – ‘What are you going to do about it?’
   A completely new way of looking at the company was developed, beginning with choosing
   the winners of the annual President’s and Chairman’s Awards (the top honours in the company) on the basis of ESQi scores. The next step was to make the ESQi scores the basis for determining promotion. This really got people’s attention because Enterprise only promotes from within the company. 99.9% of top executives in the company started their careers behind the counter as management trainees at an Enterprise branch. Using the new formula a person’s career would only develop with a high ESQi score. There was therefore a clear incentive for ensuring high levels of customer satisfaction. ESQi scores were published alongside profits for every branch. League tables of branches were published.
   Most customers prefer good service to lower prices. Think about all the situations where you are prepared to pay a little extra to get a better or more efficient service. Companies that give these added service benefits are likely to be winners. They have a competitive advantage over rivals. Enterprise Rent-A-Car believes that customer satisfaction is an investment. It is the equivalent to research and development in a manufacturing company. Customer service is an important part of the culture of Enterprise.
   The ESQi results have helped to teach Enterprise what drives customer satisfaction. Three factors have been found to be particularly important. These are:
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   i. the attitude and helpfulness of Enterprise employees
   ii. the speed of the transaction
   iii. the cleanliness of the car.
   Enterprise uses the information from the surveys to make improvements. For example, they have developed a ‘Cycle of Service’ training program. This gives new employees a number of practical tips about how to take care of customers.
   The ESQi system is managed by a team at Enterprise specially set up for this purpose. The team uses an independent telephone survey company to provide the survey results. Whenever a customer communicates any dissatisfaction on the ESQi survey, the phone representative asks the question ‘Would you accept a call?’ More than 90% of these customers agree to be called. Branch managers are given details of the complaint and can ring the customer to find out the root cause of the problem. The branch is expected to work out solutions to resolve the complaint.
   Another way in which Enterprise has improved customer service is through a system of constructive criticism known as ‘The Vote’. Each week members of a branch are asked to rank other members, from best to worst, based on the quality of their customer service in the previous week and to explain why. The results are published for all to see. Awards are given to top-rated employees. This system of positive criticism works well and very quickly branches with low ESQi scores improve in the performance tables.
   In deciding whether to carry out a business action it is helpful to weigh up the costs and benefits. One major element of cost for Enterprise is the time, effort and cost needed to collect the survey information and to publish it. The survey is done by a third-party independent company and is all telephone based. This consists of more than two million customer contacts each year and therefore has significant cost. However, the data is very simple to collect and to analyse and the results add real value to Enterprise. The benefits easily outweigh the costs.
   One outcome of focusing on the ESQi model of customer service to drive the business was the dissatisfaction of some of the older managers. In the 1990s managers were rewarded according to the profits made by their unit. However, their unit might have been profitable simply because it was based in a good location. The profit might have been higher if they had focused on customer satisfaction, which everyone has to do today.
   All of the above lead to higher profitability and growth of the business. The ESQi survey concentrates on those aspects of customer satisfaction which are very positive. Adopting this approach produces great results for Enterprise. ESQi works well because it helps frontline managers to pursue two objectives:
   i. to get more top-box ratings
   ii. to get fewer scores of neutral or worse.
   Enterprise learned that by using this improvement tool it could achieve better service consistency. It also supported the desire of people working in the branches to be entrepreneurial, that is, to have ideas of their own to improve service. Concentrating on customer satisfaction helped Enterprise to achieve healthy growth in international markets in the UK, Ireland, Germany and Canada. It also helped the company to be
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   successful in new business segments including on-airport rentals and, in the USA, in commercial truck rental, car sales and leasing.
   TASK 1 – Customer Service Polices within business and service context and understanding the purpose of promoting a customer focused culture – LO1 1.1 and 1.2 LO2 2.1 and 2.2. M1 M2 M3 D2 D3
   You have been hired as a management consultant by Enterprise Rent a Car. The management feel the ESQi approach to customer service has worked well but it is dated and needs updating. Your task is to justify further investment for advanced customer service training and development. In order to achieve this you need to outline reasons for maintaining a proactive approach to customer service policy and identify benefits, to the organisation and its stakeholders.
   a) Summarise the current customer service policy (ESQi) implemented by Enterprise Rent a Car. Highlight the reasons behind development of the ESQi customer service policy. (1.1)
   b) Identify the stakeholders (also use a power/interest grid) and identify the benefits they have realised due to past ESQi customer service policy at Enterprise Rent a Car ensure you provide a detailed overview of the impact on staff. (1.2)
   c) Outline the process for communication (draw as a diagram and explain each element). Using grid analysis; evaluate each method of communication used by Enterprise Rent a Car, ensure you rank the importance of each method. Which of the methods is most effective and why? (2.1)
   d) How has customer perception of the service provided by Enterprise Rent a Car changed over the past in response to ESQi? Focus on how quality of service has been affected. (2.2)
   (1350 Words)
   Task 2 – Investigate customer service requirements – LO3 3.1 and 3.2. M1 M2 D2 D3
   Having discussed the reasons for maintaining investment in customer service by outlining benefits of the polices in place at Enterprise Rent a Car. You are now tasked with evaluating sources of information and communication methods and their impact on customer service.
   a) To further investigate customer requirements what sources of information could Enterprise Rent a Car gather? How accessible are these sources of information, ensure you categorise the sources of information i.e. primary or secondary. (3.1)
   b) Based on the improvement in satisfaction levels experienced by Enterprise Rent a Car what further improvements could the business make to improve not only customer satisfaction but also internal staff satisfaction? Discuss at least two improvements for internal staff. (3.2)
   (900 Words)
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   Task 3 – Providing customer service to the standard required. – LO4 4.1 and 4.2. M1 M2 M3 D1 D2 D3
   Having investigated customer requirements and sources of information, make recommendations for improvement and outline a plan for future development of Enterprise Rent a Car’s customer service policy.
   a) List recommendations for the further improvement of customer service, describe the recommendations. (4.2)
   b) Develop a plan with realistic timelines that also highlights resources needed to make the improvements you have recommended. (4.1)
   (750 Words)
   Important
    Plagiarism, collusion and non-compliance with assessment regulations are offences under the awarding body regulations and where suspected will be thoroughly investigated under official procedures.
    Penalties may be imposed depending on the severity of the offence, as per the awarding body guidance.
    Appropriate citations of source documents are essential when presenting written/word processed work and it is crucial that you quote the books, journals, websites etc. that you used whilst you carried out desk research.
   Evidence Checklist
   Summary of evidence
   Evidence presented
   Task 1
   Answers to questions given (maximum 1,350 words).
   Task 2
   Answers to questions given (maximum 900words).
   Task 3
   Answers to questions given (maximum 750 words).
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   Achievement Summary
   Qualification
   Pearson BTEC Level 4 HND Business
   Unit Number and title
   Unit 3 Customer Service
   Student Name
   Student No.
   Criteria Reference
   To achieve the criteria the evidence must show that the student is able to:
   Achieved? (tick)
   LO1
   1.1
   discuss reasons for using customer service policies
   1.2
   discuss the purpose of evaluating a customer service
   policy, indicating how this can assist future staff training
   and development
   LO2
   2.1
   evaluate different communication methods and how
   these are used to best effect
   2.2
   analyse how customer perception is influenced by
   customer service provision
   LO3
   3.1
   assess sources of information on customer
   requirements and satisfaction levels
   3.2
   carry out research on customer requirements and
   satisfaction levels for a selected business, suggesting
   potential improvements
   LO4
   4.1
   deliver customer service in a business and service
   environment
   4.2
   review own performance in the delivery of customer
   service and make recommendations for improvement
   Grade Descriptor
   Achieved? (tick)
   Grade descriptor
   Achieved? (tick)
   M1 Indentify and apply strategies to find appropriate solutions
   D1 Use critical reflection to evaluate own work and justify valid conclusions
   M2 Select/Design and apply appropriate methods/techniques
   D2 Take responsibility for managing and organising activities
   M3 Present and communicate appropriate findings
   D3 Demonstrate convergent/lateral and creative thinking
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