FedEx: Personal Touch

By Deborah Gage Print this article Print

FedEx already saves money by steering inquiries to its Web site, so how can it justify spending $326 million a year on call-center reps?

Fifteen days 'til Christmas at the FedEx customer service center in Fullerton, Calif., and the calls never stop for Lynn Steward.

Sitting in front of her computer screen in a cluster of cubicles on the call-center floor, surrounded by tinsel and Christmas lights and the constant murmur of conversation, Steward—headset in hand—scarcely has time to catch her breath before the next customer is on the line.

"My package hasn't arrived," reports one caller, like others to follow. "Can I change my pickup time?" another asks. "FedEx left my package on the ground. I thought I was supposed to sign for it," a third complains.

Steward doesn't lose patience. In fact, she enjoys her job. She has worked for 19 years in FedEx's customer service department, and it is easy to imagine her as the preschool teacher she once was. Her voice is soothing but firm, one that welcomes customers' requests and acknowledges their complaints without indulging them.

"I'm sorry," she says calmly, again and again, her voice resonant with sympathy. Then, quickly, she focuses on getting an answer to a question or resolving a complaint.

Using software that FedEx started installing in its call centers in 2001, she can handle a routine call—such as a request to pick up a package—in 20 seconds. By plugging in a name, which leads to a ZIP code, which in turn leads to a tracking number, she resolves a complicated complaint about a FedEx driver who misunderstood a note the caller had left for him—and thus misdelivered a package—in less than 10 minutes.

Steward is one of Fullerton's most efficient reps, and on this day she handles 10 callers in about 45 minutes. However, most customers didn't need to talk to Steward to get their problems solved. Assuming they had computers that they knew how to use, at least six of them could have used FedEx's Web site, www.fedex.com, which the company launched in 1994.

This is a dilemma for FedEx and every other company trying to save money on customer service by making their customers use the Web. Customers still like to call, especially if they think they have a problem, and they like to talk to a person, ideally a person as pleasant and competent as Lynn Steward.

For every anxious caller that FedEx diverts to its Web site, the company saves as much as $1.87. FedEx says its call centers handle 83,000 fewer calls per day than in 2000—currently 470,000 calls per day—a saving of $57.56 million per year. FedEx also claims that its Web site handles an average of 60 million requests to track packages per month. These requests cost FedEx 3 cents each or $21.6 million per year, but would cost over $1.36 billion per year if all those people called. Still, by allowing its customers to keep calling reps like Steward, FedEx spends nearly $326 million per year.

One reason for this expenditure is that the cost of a customer being frustrated by the company Web site is incalculable, and most customers are easily frustrated given the current state of Web design. People are willing to encounter one or two obstacles in a system, maybe three at most, says Eric Mathews, associate director of the FedEx Institute of Technology. But then, "they totally abandon it."

Meanwhile, the company that amazed its customers by inventing the Overnight Letter and Saturday delivery now risks disappointing them if a package is even 15 minutes late. So customer service must adjust.

This article was originally published on 2005-01-13
Senior Writer
Based in Silicon Valley, Debbie was a founding member of Ziff Davis Media's Sm@rt Partner, where she developed investigative projects and wrote a column on start-ups. She has covered the high-tech industry since 1994 and has also worked for Minnesota Public Radio, covering state politics. She has written freelance op-ed pieces on public education for the San Jose Mercury News, and has also won several national awards for her work co-producing a documentary. She has a B.A. from Minnesota State University.

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