Customer service strategies at C.H. Robinson Worldwide, Inc.

Customer Service in C.H. Robinson Worldwide, Inc.

C.H. Robinson Worldwide, Inc. is a leading provider of third party logistics services; a 3PL, or a TPL, is generically understood as an organization offering logistics services, through which the product moves from manufacturer to final consumer. The growing popularity of 3PL is due to the increasing complexity of both organizational operations as well as logistics operations, meaning then that numerous manufacturers prefer to outsource logistics tasks to 3 PLs (Kotler, Armstrong, Wong and Saunders, 2008).

The company was founded in 1905 and its more than century old existence translates into increased skills and abilities, combined with great expertise. In 2008, C.H. Robinson Worldwide employed an estimated 7,500 individuals, and registered revenues in the total amount of $8.6 billion. With the aid of their 230 offices in North and South America, Europe, Asia, Australia and the Middle East, they serve more than 32,000 global customers. The services offered can generically be divided into four categories -- freight transportation and logistics, outsource solutions, produce solutions and information services (C.H. Robinson Worldwide Website, 2009).

Given this highly successful status, a question is being posed relative to the future actions C.H. Robinson could implement in order to further improve its customer services. The answer to this question will take a gradual form and will look at issues such as the concept of customer service, the customer service strategies implemented by non-logistics companies, as well as competitors, the customer service methods implemented by C.H. Robinson and finally, recommendations for improvement and implementation suggestions.

2. Customer Service Overview

As the forces of globalization and market liberalization intensified, more and more economic agents were able to transcend boundaries and address more consumer markets. This feature, combined with the reality of the limited customer markets, translated into the ability of clients to be more pretentious. Competition among product and service providers then significantly increased. Customer service emerged as a modern business model, by which organizations strived to increase the levels of customer satisfaction in order to sustain sales and revenues.

The specialized literature offers a multitude of definitions of the concept of customer service, but despite the differences in formulation, fact remains that the foundation of most explanations is the same. Paul Goldner (2006, p.27) simply defines customer service as "any activity that we engage in that relates to servicing an existing customer." These activities can occur in the period before a purchase in made, during the purchase or after the purchase has been closed and can include traditional approaches, such as resolving the complaint of a client, or more modern approaches, such as creating an online forum for consumers to exchange opinions and gather information. Its ultimate aim is however that of convincing the customer to return for a new purchase.

3. Best Practices of Non-Logistics Firms

The contemporaneous business community places an incremental emphasis on the full satisfaction of the customers' needs and wants. This basically means that the applications of customer service are extremely numerous. A first example comes from within the automotive industry, represented at this stage by American manufacturer Ford Motors or German automobile maker Volkswagen. Both these producers understood the need of customers to gain quick and efficient access to financial resources that would sustain their vehicle purchases. The manufacturing organizations as such opened financial subsidiaries that lent money to buyers at rates better than those promoted by banks and other financial institutions. In both cases, the financial services generated fairly limited incomes for the overall group, but revealed increased abilities to sustain sales in these times of financial hardship (Ford Motor 2008 Annual Report; Volkswagen 2008 Annual Report).

Another best practice to increase customer satisfaction is offered by Amazon. The company realized the growing popularity of electronic books in the detriment of printed books and developed an electronic reader, called Kindle. Despite the existence of other e-readers, Kindle is the most popular one. Some means by which the manufacturers implemented customer service refer to an extensive coverage in the meaning that the Kindle can access the internet through wireless connections from over 100 countries. Another successful implementation of customer service is that of allowing Kindle owners to read for free the first chapters of given books and only purchase them when they decide they like the book and want to read all of it (Amazon Website, 2009).

6. Recommendations for Improvement

The information so far retrieved points out to the fact that C.H. Robinson Worldwide has managed to safeguard its position as a competitive international player due to its ability to play by the rules and employ strategies similar to those implemented by the competitive logistics organizations. Yet, in order to maximize its success and win the competitive battle, it is necessary for the managerial team at C.H. Robinson to develop and implement customer service strategies that not only align it to the industry leaders, but which differentiate it from CEVA Logistics, DHL or UPS Supply Chain Solutions. The following lines reveal some strategic approaches that could generate the desired outcome:

(1) Sustained investments in the human resource; since the company does not offer a material product, but a service, the interaction between the organizational employee and the client, as well as the quality of the service delivered, are pivotal for customer satisfaction and organizational success

(2) Given the internationalized economic crisis, the demand for logistics services has declined; C.H. Robinson could counteract this trend by reducing the retail price of its services and as such better adjusting to the changing needs of organizational customers

(3) Finally, it is also advisable for C.H. Robinson to invest more in their global market perception as a means of improving the company's reputation and as such generating an increased demand for their services

7. Implementation of Recommendations

The suggestion relative to the investments in the human resource is pegged to the fact that the employees are directly responsible for the quality of the services delivered and for the levels of customer satisfaction. In order for their performances to be sustainable it is required that the employees are motivated and content on the job. This could be achieved through the offering of several financial and non-financial incentives, such as employee empowerment, promotions and rewards based not only on results, but also on efforts, flexible working schedules, or medical coverage for the employee and their spouse and children. Training programs are also another useful means of creating employee satisfaction as they give the sense of support in the professional formation of the individual.

The implementation of the reduced retail prices is only possible through processes of internal cost reduction. The first step is that of lowering the profit margin in the meaning of accepting reduced profits. Then, the organizational leaders could engage in conversations with the purveyors in order to negotiate the retail prices of various commodities or services. Premiums, bonuses or dividend payments could also be withheld for the duration of the economic crisis. Savings should be made relative to utility bills and invoices being deducted.

Finally, in terms of an improved organizational perception and reputation at a global level, it is advisable for C.H. Robinson to invest in a marketing campaign that promotes the company and the values to which it stands true. It would also be advisable for the firm to become involved in more projects of social responsibility, such as reducing gas emissions, lowering its levels of pollution or even offering sponsorships and grants, as a means of supporting the development of the communities in which it operates.

8. Concluding Remarks

C.H. Robinson Worldwide is a leading three party logistics organization, registering impressive results at a global level. The company has created and enforced a strong culture of success, in which the satisfaction of the customer represents the central element. The four main points of customer service refer to continuous communications with the customer base, a global expansion in order to reach as many customers as possible, the diversification of the service offering and, as mentioned, the internal culture. Basically, the company implements all strategies required for it to align to the other leaders of the global logistics industry -- CEVA Logistics, DHL and UPS Supply Chain Solutions. Yet, in order for the company to gain the title of undisputable leader, it has to identify means by which to differentiate itself from the competition. Three strategic actions that could be implemented to achieve this desiderate refer to sustained investments in the human resource, the reduction of the retail price to better answer to the needs of customers facing the economic crisis or the sustained investments in improving the company's reputation.

References:

Goldner, P.S., Red-Hot Cold Call Selling: Prospecting Techniques that Really Pay off, 2nd Edition, AMACOM Div American Mgmt Assn, 2006, http://books.google.com/books?id=dprsSq0pRr0C&pg=PA27&dq=customer+service+definition&as_brr=3#v=onepage&q=customer%20service%20definition&f=false last accessed on November 18, 2009

Kotler, P., Armstrong, G., Wong, V., Saunders, J., Principles of Marketing, 5th Edition, Pearson Education, 2008, http://books.google.com/books?id=6T2R0_ESU5AC&pg=PA920&dq=third+party+logistics&as_brr=3#v=onepage&q=third%20party%20logistics&f=false last accessed on November 18, 2009

About Us, C.H. Robinson Worldwide, Inc. Website, http://www.chrobinson.com/AboutUs/OurCompany / last accessed on November 18, 2009

Ford Motor Company 2008 Annual Report, http://www.ford.com/about-ford/investor-relations/company-reports/annual-reports last accessed on November 18, 2009

Kindle Wireless Reading Device, Amazon Website, 2009, http://www.amazon.com/Kindle-Wireless-Reading-Display-Generation/dp/B0015T963C/ref=amb_link_85978271_2?pf_rd_m=ATVPDKIKX0DER&pf_rd_s=center-1&pf_rd_r=1QBK1V27SM3E01KC2GP1&pf_rd_t=101&pf_rd_p=500168551&pf_rd_i=507846 last accessed on November 18, 2009

Volkswagen Group 2008 Annual Report, http://www.volkswagenag.com/vwag/vwcorp/info_center/en/publications/2009/03/GB_2008.-bin.acq/qual-BinaryStorageItem.Single.File/Y_2008_e.pdf last accessed on November 18, 2009

CEVA Logistics Website, 2009, http://www.cevalogistics.com last accessed on November 18, 2009

DHL Website, 2009, http://www.dhl-usa.com last accessed on November 18, 2009

UPS Supply Chain Solutions Website, 2009, http://www.ups-scs.com last accessed on November 18, 2009