Customer Care Plc

Background

Last year, Customer Care PLC was contracted to look after our company’s after-sales and customer support programme. A fixed rate is paid per support call and per repair call-out. Due to an aggressive marketing campaign our company has been able to attract a lot of new customers. Because of the increased workload, Customer Care has called for a meeting to negotiate the terms of the contract. I have been asked to meet Customer Care’s Clients Relations Manager

Strategy

We decided that the best-case scenario would be if no change would be made in the current contract. The worst case would be to lose Customer Care as a partner. We do not have the staff to do the after-sales work, especially now that sales have increased so dramatically. For this meeting, we had decided to formulate an average-case scenario as well. This would be to renegotiate the package for next year, building in more flexibility in the rates.

Meeting

I met Ms. Ramona Hogerwerf, the Clients Relations Manager of Customer Care.. After a coffee and some small talk we began the negotiations. To my surprise, Ms. Hogerwerf had no intentions to renegotiate the terms of the current contract. It seemed to me that her goal was to change the package for next year. She argued that the company could not sustain the increased workload. She wanted to introduce a so-called ‘Two-level support-charging system’. This system will use different rates for hi-fi enthusiasts and  for customers with no knowledge of the technology. Obviously, assisting customers with no knowledge of the technology takes longer and would cost us more. There would be no change in rates for the hi-fi enthusiasts. The offer was reasonable so I agreed on implementing this system for next year. After a short discussion, we agreed on the exact rates.

Result

For next year, a two-level support-charging system will be implemented. The rates for hi-fi enthusiasts stay the same. For other customers, the fixed rate per support call has been increased from £5 to £7.5 and the rate per repair call-out from £60 to £90.