Relationship Marketing – Parcel Force

Unit 11: Relationship Marketing P4: Use different techniques to identify perceived quality gaps for selected service/product. Parcelforce Worldwide was established in 1985, stand alone Business Unit in 1992. For over 14 years Parcelforce Worldwide has provided a vital link for British businesses needing to send express shipments internationally and in UK. It is part of Royal Mail Group Plc. Parcelforce Worldwide has 4.3% of market, Post Office Ltd 9%, GLS 15.9%, others 0.7% and finally Royal Mail Letters 70.2% of market. In a year 2000 Parcelforce reached the peak loses in profit of A£193m which half of A£1m the Royal Mail Group was losing a day. Ten years later these guys do a miracle and have profit on A£20m, some people say that was impossible for them to do it but they did it. It wasn’t easiest road to victory but after hitting the bottom line they got up. Parcelforce saw revenues rise by 5% to A£420m, volumes in the highly competitive business to business markets grew by 15% and Parcelforce Worldwide overall growth have shocked and surprised their key rivals. (1) It is amazing on how they have change throughout 10 year time and gain profit. One thing they have done is the strategy change on how they are operating the business. In 2001 the business cost were jet high which meant money goes out of business and business is struggling whereas after 10 years the costs has been reduced to competitive costs. In 2001 the customer service were poor, meaning that people were not satisfied on how company delivered their packages. They have changed that and has become customer friendly business with next day delivery improved to 97.7%. The prices for parcel were low but the volume was high, the changed that other way around the prices per parcel is higher with fewer parcels to send. Also instead of having more than 10 thousands employees they have reduced to 4 and half thousand which saves business money. Which after all these improvements have increased their market share to 16% from 14%. (2) These are the key factors throughout which they have improved their business there are three main quality techniques through which Parcelforce also have improved business: Benchmarking, Gap Analysis and Quality Circles. Benchmarking- It is a technique through which business is comparing their business to key competitors. This is to discover where they should be/how to improve the performance. There are currently about 20 national companies and 10 international companies who are operating express delivery services in the UK. However, there are over 4,000 local companies. 50% of the UK market accounts 10 operators. Over half of the market belongs to around a thousand small companies, which none of them even have 1% market share. This over-capacity in the parcel market, combined with the low switching cost to customer, has resulted in fierce competition. Parcel force is named the UK’s largest parcel firm, but it only has 16% of the market compared to its nearest rival Securicor of 9%. If we are looking at the international base the four biggest firms are: DHL, FedEx, TNT and UPS. Parcelforce has just 9% of the UK international parcels market compared to key four rivals, DHL (17%) and UPS (11%). Parcelforce has reported a strong revenue growth and record profit of the 2010-11 financial year (revenue rose by 5% to A£420m). (3) Throughout the years and good business strategy Parcelforce has received couple awards. In 2012 they receive award for being ranked 2nd based on market share (Experian Hitwise Winner) and best international parcel carrier of 2012. (4) Gap Analysis – It’s a technique which analyse on what can be done to close the gap in this case in customer service. To improve their customer service, Parcelforce Worldwide has undertaken gap analysis. This is detailed exercise that assesses:

• To see where the business is at the particular moment?
• To look in the future and see where their want to be?
• To see what needs to be done and what type of targets needs to be set to achieve the future view.

Parcelforce is using these analysis to identify the key service so called touchpoints for customer service. Customer has an impact in six main areas of the business:

1. Deliveries to their customers – providing on time deliveries, response to queries and clear documentation.
2. Re-deliveries – ensuring that right procedures are in order.
3. Collections from customers – providing timely service with documentation.
4. End-to-end parcel location tracking – online service which provides their customer all needed updates on their parcels shipping and deliveries.
5. Customer contact – improved the communication with customers either by phone or online.
6. Making claims – make it easy for people make claims that something is not right.

Each of these six areas Parcelforce has identified the best practice in the industry. It compares their performance by benchmarking itself to their competitors. It then assesses on how to improve its processes to achieve best practice. Parcelforce is determine to achieve each of these process right to achieve customer service to excellent level. (5) If we are looking back at 2004 their contact volumes and performance by channel was bad and reason for gap analysis. Phone calls to call centre volume per week was 59,000 only 89% of them was answered or successful, rest of the 11% lost. Phone calls to depots have not even recorded so there is no information on how much calls they received and what % of them have been answered. Company had received around 2,000 emails per week and there were no data on how many have been answered. Voice recognition tracking volume is around 12,500 week 32% of the voice recognition was successful rest of them is just lost. There were around 60,000 web research which none of them were tracked or responded. Which in the end means that Parcelforce had no targets for email turn-round, no review of web search successes, dreadful voice recognition test and no idea of what was happening in their depots. Looking at these facts means that business had no idea on what is really happening with their business. When the person is trying to call to business was dreadful and ended up with customer being more frustrated than before making a call. Firstly when the customer is calling the centre they get automatic answer where customer selects collections option. Then they proceed and waits within the queue when it is been answered. Then when its get through finally to an agent they asking for tracking number and result they are answering that it is been wrong option and needs to call again and select right option. When customer calls and select right option they get voice recognition portal which 66% of customers try to use it but been unsuccessfully. The after voice recognition they been queued for an agent if they are successful which by the end customer is so angry they taking all anger on the poor agent on the other end of phone line. All this not only cost customer money but also business and its sure not effective. The fact is that customers have been charged for 2 calls instead of one. Plus the process was increasing average holding time which then cost business a lot. In the end after all this experience making customers very unhappy. (3) Quality Circle – Is method on which groups of employees have regular base meetings to consider a solution to any problems that is arising and improving production within the organisation. The key facts about quality circle is that it have proved to be effective way of improving productivity continuously. It was first devised by Dr Kaoru Ishikawa to help Japanese foremen control quality, now they are used to improve any area. Most employees will want to take a part in solving their work problems and making their jobs more interesting and less frustrating. If we talking about customer service than looking at Royal Mail they are investing a lot of money within customer service. As a result Royal mail operate the largest call centre networks in the UK. Calculating the total amount company deals with over 14.7 million customer enquiries over a year. Including average of 568,000 call and 28,000 emails every month and 62,000 post letters a year. Their website has been biggest hit so far according to customers as they have visited website more than 116 million times between 2010 and 2011. The best part about is that 1.23 million from 14.7 million were customer complaints is still big number but is less than year before. Over 99% of complaints were resolved at the first line customer service. Reducing the numbers of complaints is the number one thing for Royal Mail and is supported by quality circles. During 2010/2011 Royal Mail worked hard to improve the experience for Parcelforce and Royal Mail customers. For instance, their quality circle helped to introduce a new range communication channels including and even online advisor chat service and even a Twitter account. Royal Mail have put big effort into simplifying their customer complaints process in order to make it easier for customer to contact the business. Royal Mail is all about customer’s satisfaction and they are trying all they can to resolve any problems their customers might have. (6) “The role of quality circle within the Royal Mail industry is firstly to continue the improvements to the core customer service proposition and focused action to tackle the causes of recent complaints. Secondly greater openness with Parcelforce customers, providing with better time information, clear statement on intent and enhanced transparency reporting.” (6) Their employees 77% of them have said that are happy to work within Parcelforce and they feel that they have influence of change the way the business is operating and things are done. (7) References:

1. Overview and Key facts, Parcelforce Worldwide, accessed at: https://www.parcelforce.com/help-information/about-us/overview-and-key-facts On: 17/05/14
2. Our Partners, Parcelforce Worldwide, accessed at: https://www.parcelforce.com/help-information/about-us/our-partners On: 17/05/14
3. Referred to class notes
4. Awards, Parcelforce worldwide, accessed at: https://www.parcelforce.com/help-information/about-us/awards# On: 17/05/14
5. The implementation of customer service, Business case study, accessed at: https://businesscasestudies.co.uk/parcelforce-worldwide/customer-service-as-a-strategy/the-implementation-of-customer-service.html#axzz329LOxAAI On: 17/05/14
6. Royal Mail Group Corporate responsibility Report 2010/2011, Royal Mail, accessed at: https://www.royalmailgroup.com/sites/default/files/CSR_Report_2010-11.pdf On: 17/05/14
7. Parcelforce story so far, Telegraph 29 September 2005, accessed at: https://www.telegraph.co.uk/finance/2922997/Parcelforce-the-story-so-far.html On: 17/05/14

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