While the company was focused on improving production capabilities to produce at higher quality and volumes, customers were canceling orders and taking business elsewhere. Company leaders showcased the robots being tested for integration into assembly lines. Already focused on research for artificial intelligence, we believed we were progressive. Yet, our customers were unhappy about missed deadlines and waiting too long for answers.
Problem
Average RFQ response time was 8-10 days, and customers rated our service at 2 on a 5 point rating scale, 5 being the highest. Customers wanted quotes within 3 days and we needed to increase customer service rating by 2 points.
Situation
Two teams were responsible for writing custom quotes – Inside Sales (2 people) and Product Engineering (4 people). Engineering designs and documents the product solution and estimates the costs. Inside Sales determines the selling price and order lead time.
- Sales was the only customer point of contact. Sometimes cost information from Engineering sat in the Sales email for more than a day. At times customers sent follow up technical questions or new information to Sales that did not get factored into the final quote. Other times, it took more than six emails between the two departments to get to a final answer for a customer.
- Customers sent quote requests in various formats and many times submitted incomplete information. We realized that the departments and customer sometimes exchanged emails for days just to get the initial requirements to start a quote.
- Custom orders usually required special order parts from outside vendors who typically responded in two to three days to Engineering’s inquiries for cost. The entire cost estimate was on hold in Engineering until a vendor responded and so was the customer’s quote. We noticed multiple requests for the same special parts more than 40% of the time.
- We did not measure performance. Evidence of poor performance were the complaints escalated to the GM, stern emails from upset customers and the email history of quote requests. We met with customers to discuss the problem and to understand their frustrations and expectations. They were mostly dissatisfied of chasing us for technical answers and to know the status of their requests.
- Inside Sales and Engineering used at least four applications to gather information and prepare a quote. Team members copied and pasted a lot of the same information over and over to move the work from one department to another.
Key Actions to Solve the Problem
- First, we created a Kanban board and measured performance for two weeks to observe and set a baseline before implementing changes.
- Implemented an online form for customers to submit RFQs to Sales and Engineering.
- Agreed that Sales to acknowledge RFQ receipt to customer and alert which Engineer is assigned. Customers directed technical questions to the Engineer and Sales answered questions related to lead time and sales price.
- Teams agreed to address any customer inquiries or incomplete requests within 1 business day with a phone call.
- Trained every Sales team member to prepare custom quotes.
- Identified and maintained a standard price list and lead time for custom parts that were quoted multiple times in the last 6 months.
- Maintained the Kanban board to monitor performance and report weekly.
- Because of a new ERP installation in 12 months, IT Management denied any application changes or upgrades to centralize quote information. A Lean Engineer created a Share Point site based on our design requirements to manage and share quote information with clients.
Results
“Good customer service costs less than bad customer service.”
Sally Gronow