CASE $14$

Do$-$It$-$Yourself Building Centres

Do$-$It$-$ Yourself Building Contres $($DIY$)$ is a major regional home centre retailer with $27$ stores, all

located within two Canadian provinces. It competes with the market leader, Home Depot. Although Home Depot has a larger product range and lower average prices, DIY has carved out a very lucrative niche by serving homeowners who undertake renovation or construction projects.

Each DIY building centre has about $25,000$ different products. A major part of its business is to provide advice to customers undertaking their own renovations and construction projects. The in$-$store sales associates devoted a significant part of their time to providing free advice to customers.

Among other forms of advice, this involved recommending the type of paint to use on the outside of a house compared to what to use on the interior, the type of stone and patterns for an interlocking stone driveway for a suburban home, etc.

The enthusiasm of DIY to provide assistance to customers has been so prevalent that the receptionists of individual stores have been obliged to provide advice or to pass the telephone calls on to the relevant associate on the sales floors.

Although providing advice had been believed to be very successful in developing a loyal customer base and contributing to profitability, the calls were frequently disruptive. Associates were often busy with in$-$store customers at the time of the calls. Often, the calls were put through to inappropriate associ$-$ates: e$.$g$.,$ a paint question was given to the fence and deck associate. In addition, calls that were put on hold were frequently lost as the reception telePhone systems were not designed for call centre

purposes.

To more effectively respond to customer Tequests for information, DIY established a dediCated call centre staffed from $8$ a$.$m$.$ to $8$ p$.$m$.,$ Seven days a week. The call centre is located in a Small town in the southern part of the region.

There own in the stephone number for callers holding a valid DIY credit card to access a variety of information services. The call centre associates are equipped with a telephone and Internet access to search for information on DIY products. These associates also have access to information on the Web pages of many suppliers. All calls are recorded.

As well as getting information on store locations and opening hours, callers are able to gain free advice on products and projects. They are able to ask questions about the tools and materials for projects and to get assistance from experts with solving problems with projects they are undertaking without the need to travel to a store. All call cen$-$tre associates have extensive DIY store experience, with special training in renovations and construction projects. Part of their training includes associates actually undertaking DIY projects them$-$selves. This means they can quickly understand and effectivelv answer customer questions.

You are the controller for DIY. The CEO has called you into her office. She is pleased with the new call centre. The satisfaction surveys have indicated that customers are very satisfied with the call centre services. However, she wants to know if the call centre is contributing to profitability.

Specifically, she is concerned about whether the callers are actually customers, if the call centre service actually contributes to sales, if the benefits exceed call centre costs, and whether call centre costs can be reduced without impairing the service.

At the present time, she wants to know what information is needed to address the above concerns and how to obtain that information. The other part of the project, to be done later, will require the gathering of the information. However, for this part the requirement is merely to determine what information is to be gathered and how.

Required Use the case approach to respond to the CEO.