Today, on-time delivery is just the beginning.



Philip Aiello is a big believer in customer service. As district automotive manager-Metro New York for United Parcel Service (UPS), Aiello and his team of mechanics, fleet managers and supervisors are responsible for keeping over 1,000 trucks and trailers up and running. Aiello knows that if one of those vehicles breaks down, he has a customer service problem: If packages aren't delivered on time, the customers who paid for them are very unhappy.

To keep customer service on his mind at all times, Aiello has a photograph of a rusted Railway Express Agency (REA) truck on the corner of his desk. Handed down from one UPS automotive manager to the next, the picture is a stark reminder of what can happen to a company if it forgets about customer service.

“REA used to be it — the biggest and best package delivery firm in the world,” says Aiello. REA's ubiquitous green trucks, with the company's distinctive red-diamond logo, dominated the parcel delivery world from 1850 until the 1960s. Yet by 1975, REA had closed its doors, leaving FedEx and UPS as the dominant players.

Aiello says the photograph is a “vivid daily reminder” of what can happen if he doesn't think of his maintenance operation in terms of how it serves customers, both inside and outside the company.

“The customer doesn't want to hear, ‘I'm sorry your package didn't get there — the trailer blew a tire,’” says Aiello. “Our job at UPS is to make sure we service that package. I told you the package was going to be there before 10:30 a.m. — so it will be. We don't sell a product, we don't sell truck maintenance; we sell service. I have to be quicker and better than the other guy or the customer will go somewhere else.”

KEEPING CUSTOMERS

The company that wins customers and keeps them is the one that will succeed. “Customers have more options than ever before and feel less loyalty. They want products and services fast and cheap — from whoever will provide them,” says business communications expert Dianna Booher, president of Dallas-based Booher Consultants. “The competitive advantage lies in your ability to keep customers and build repeat business.”

Booher adds that in today's business world, “good” customer service is no longer enough. “It has to be superior, wow, unexpected service.”

At UPS's Metro New York headquarters, they've taken that mantra to heart. Over the last three years, Aiello's group has made Metro New York's maintenance operation one of the best in the UPS global network. In the first quarter of this year, Aiello's group ranked number one in the nation and number two in the world in terms of “car days,” a statistic the company uses to track vehicle breakdowns.

A vehicle generates a “car day” for each day it is dispatched. When a vehicle breaks down, the number of car days a mechanic can accumulate is reduced. More car days means fewer breakdowns; fewer car days means more breakdowns, increasing the chance of late or missed deliveries.

The UPS goal is to exceed a 500-car-day level across the company's global network. Aiello's group averaged 579 car days per “call,” or workday, in the first quarter of 2001, making it number one in the U.S. and number two worldwide, behind an automotive district in The Netherlands.

But what does that have to do with customer service? “By preventing breakdowns we make drivers' jobs easier,” says Aiello. “Now they can concentrate on delivering packages. Our job is to make the cars safe, reliable pieces of equipment so drivers can deliver packages on time. That makes the customer happy and keeps them coming back to UPS.”

FORWARD THINKING

It's important to remember that what's considered great customer service today may become just part of the basic package of expectations tomorrow. Nowhere is that more true than in trucking and the larger world of logistics.

“When you talk about dedicated contract carriage and other forms of logistics, you're talking about maintaining a high level of service all the time,” says John Roberts, president of truckload giant J.B. Hunt's Dedicated Contract Service (DCS) division. “We've got to be on-time 99% of the time — that's just a basic expectation. In our business, customer service means on-time, consistent delivery, with the flexibility to adapt to any changes in a customer's business environment.”

Drivers and supervisors participate in weekly business meetings with their shipper clients so they can stay abreast of peaks and valleys in demand.

Looking at on-time delivery rates — J.B. Hunt's DCS group averages 99.8% — is not enough. “The customer service perspective of our customer's customer changes, so we need to provide more than on-time delivery,” he explains. “Two years ago 99.8% was exceptional; today, it's just part of the plan. Now we need to look at services like freight ‘visibility’ with loads in transit.”

Roberts calls it going beyond customer service to focus on customer value delivery. “We have to think several steps ahead of the customer. We can't wait until they come to us with a problem. We have to anticipate it and be ready to handle it before it's an issue. That's where customer service as a concept is going in this industry.”

Jim Monkmeyer, group director of transportation management for Ryder Systems, adds a caveat. While good customer service is a requirement to stay in business, the perception of that service is even more important.

“If we deliver a service we think is right on the money, yet our customer says it isn't, something's wrong with our perception of the service we provide,” he explains. “That's why we put the expectations of both parties in writing at the very start of a contract.”

Monkmeyer believes that customer service can mean the difference between succeeding or failing in the logistics business. “There are so many choices when it comes to providers, with almost all of them competitive on price, that customer service tends to be the deciding factor in winning or losing business.”

Customer service has always been important. What's different today is that transportation customers have far more information available to them to measure whether they get good service or not, says Monkmeyer. “The visibility of information is the huge change,” he explains. “If a delivery is late, customers can now trace it back up the supply chain in real time and find out where the problem was.”

That's why customer service is more important than ever — and more of a challenge, he says. “I expect my employees to respond to a customer — no matter what the situation — and take care of the problem,” says Monkmeyer. “The customer wants to know it won't happen again. But we can't promise that unless we get to the root of the problem. That's what good customer service means today.”

THE WEB

The Internet is also changing the face of customer service. “The primary difference [with the Internet] is that you have difficulty in building rapport with customers because there are fewer occasions of real-time interaction,” says Booher. “A second difference is that customers seem to be more fickle and hostile because they can choose to remain anonymous. They're in, they're out; they move on without a second thought. First impressions about how user-friendly your site is, for example, get translated to how user-friendly your products and services are in general.”

In the trucking industry, many players are finding that the key to establishing good customer service — and hence staying in business — depends on breaking down the anonymity of the Internet and building up person-to-person relationships with customers.

“Because we're completely Internet-based, customer service is our key to success,” says Bob Vance, director of marketing for Hookup.com, an online auction and services site. Research he's looked at indicates that although 80% of the trucking industry — from drivers to executives — have access to the Internet, only 30% of them actually use it. For many, Hookup.com believes, a lack of human interaction is keeping them off the web.

“The real problem [with the Internet] is a lack of personal relationships,” said Doug Williams, Hookup.com's customer service manager. “Many feel they're just interacting with a machine. To counteract that, we're building up the human relations side. We're trying to put that personal touch in there as frequently as we can.”

For example, Williams' staff monitors the site constantly for error messages — a situation where a user is having trouble using the site, placing a bid, etc. “We will actually call them, before they think of calling us, and say, ‘Hey, we noticed you are having a problem. Can we help?’ That ‘personal touch’ has won a lot of people over.”

Hookup.com has also found that 90% of what its sales and customer service staff does isn't really marketing-related at all; it's more educational than anything else. “We're teaching people how to use the Internet and make use of the services on our site,” Williams explains. “They're learning from us how to work online. That teaching component is an important part of customer service for us.”

Hookup.com also worked to make its site more user-friendly. In the beginning, bids could only be placed for its three-day online auctions between 8 a.m. and 5 p.m. Within three months, the number of bids dropped from 400 to 60 a month. Then Hookup.com went to a 24/7 bid model last September. End result? Bids jumped to 600 a month by October of last year and have climbed past 5,700 as of January.

“Now we're seeing a lot of activity at night and on weekends,” says Vance. “That makes sense for drivers, who are typically off the road during those hours and so have time to go online.”

Williams has also found that many people who call his customer service line now ask to be transferred to a particular agent — and they have no problems waiting on hold until that person is available.

“For me, that is the ultimate in customer service and a real compliment for our team,” he says. “Having a client call and request one of our staffers by name is a reflection of good customer service. It shows we're doing something right.”

One of the most difficult jobs in terms of customer service in trucking today is to take over a firm or division with a poor customer service image and then improve it. The key to making that transition a success, however, according to Booher, is to make the changes first — without any fanfare — and then tout them once they have been in place for a while.

UPS's Aiello knows this first hand. Aiello was recruited by UPS right out of Indiana State University, where he earned a double degree in automotive engineering and business. He went to work for UPS as a mechanic on the shop floor, up to his armpits in engines, transmissions and grease, before moving into management.

There's more flexibility in his operation today because UPS Automotive looked at its business and said, “Hey, things are changing; we need to change, too.”

Aiello says one reason his district has excelled in terms of customer service is that his mechanics are given a lot of responsibility with authority to make decisions. They're typically responsible for 40 vehicles based out of one operational center. Within a year, a mechanic knows those 40 units like the back of his hand. Having such intimacy with the equipment over a period of years allows them to spot problems faster, anticipate component failures, and note shifts in patterns of component wear. All of that translates into more vehicle uptime.

“I tell my mechanics to make the decisions — right or wrong,” says Aiello. “These guys know the job better than me and are in a better position to make a repair call. By taking care of the equipment, they take care of the drivers. By taking care of the drivers, they take care of the customer. And that's what we're here to do.”

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