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Case Study Topic 3 - 1 - Florida Power and Light

FPL conducted research to understand customer expectations and satisfaction regarding wait times when calling their customer service centers. They found that providing an estimated wait time increased how long customers were willing to wait from 94 to 199 seconds on average. A significant decrease in satisfaction occurred at two minutes. FPL also discovered that wait times negatively impacted customer ratings of representatives by 10-17% and that expectations varied by call type. Based on these findings, FPL developed a system called Smartqueue to provide estimated wait times and reduce customer frustration when waiting.

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116 views3 pages

Case Study Topic 3 - 1 - Florida Power and Light

FPL conducted research to understand customer expectations and satisfaction regarding wait times when calling their customer service centers. They found that providing an estimated wait time increased how long customers were willing to wait from 94 to 199 seconds on average. A significant decrease in satisfaction occurred at two minutes. FPL also discovered that wait times negatively impacted customer ratings of representatives by 10-17% and that expectations varied by call type. Based on these findings, FPL developed a system called Smartqueue to provide estimated wait times and reduce customer frustration when waiting.

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Iman Afiqa
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Topic 3:

Quality in Practice: Waiting Time and Customer Satisfaction at


Florida Power and Lighti

Florida Power and Light (FPL) is the third-largest investor-owned utility in the
United States, with about 3.4 million customer accounts (see the Quality in Practice in
Chapter 3). Its customer service centers (call centers) are divided into four major
business segments; each segment handles a logical bundle of call types. Depending on
their experience, customer service representatives within each segment specialize in
certain types of calls (see Figure 4.17). In the fall of 1991 the Service Assurance
Systems group, which is responsible for improving the quality and customer
satisfaction levels of FPL’s phone operations, decided to find out what customers
expect when they call to conduct business. Using focus groups and survey
instruments, FPL discovered that its customers desired a pleasant experience while on
hold, order taking conducted in a timely manner, and treatment typically accorded to
valued customers. FPL wanted to keep costs down without increasing staff size. A
cross-functional team suggested that providing customers with an estimate of the time
they could expect to wait before being connected to a representative would help meet
FPL’s needs and increase customer satisfaction. To determine whether this idea had
merit, FPL needed quantitative answers to the following questions:
1. How long do customers expect to wait?
2. What is the impact of a wait time announcement on customers’ tolerance for
waiting?
3. At what point does the wait time result in a significant decrease in customer
satisfaction?
4. What is the relationship between wait time and the customer’s satisfaction with
the call itself?
5. Does wait time vary by type of call?
6. Are customers’ stated wait time expectations congruent with the time they are
actually willing to wait?
On a busy Monday, a random sample of 150 customers was taken. Wait time
announcements were made manually from a control center and actual wait times were
monitored. The customers were interviewed that evening to assess their reactions to
the proposed service. The surveys showed that the average time customers expected
to wait, without knowing the length of wait, was 94 seconds. But when the customers
knew the length of wait, they were willing to wait an average of 105 seconds longer (a
total of 199 seconds). Over 90 percent of customers in the sample indicated that the
announcement was helpful. Customers were also asked to rate their level of
satisfaction with their wait times (without advance knowledge). The results showed
that a significant decrease in satisfaction occurred at two minutes. These results
implied that FPL could buy more time without decreasing satisfaction by offering
customers the choice of waiting for a predicted period or calling back later.
FPL knew that customer satisfaction relates directly to how callers perceive the
quality of the phone representatives and wondered if this perception might be
negatively biased after a long wait. The survey revealed a 10 to 17 percent bias in
customers’ ratings of phone representatives caused by excessive waiting time. If this
bias could be eliminated, FPL could more accurately measure customers’ satisfaction
with the phone contact experience.
FPL segmented calls into three broad categories:
1. Routine calls for connecting or disconnecting service
2. Nonroutine and more complex calls regarding high bills and power outages
3. Calls regarding account-related financial arrangements, such as payment
extension requests
After asking customers how long they would expect to wait for each type of call,
FPL found that customers expected to wait significantly longer for the third category
than for the others. FPL now had evidence that customers calling for different services
had different wait time requirements. Finally, FPL discovered that customers thought
they waited longer than they actually did.
From this research, FPL developed a system called “Smartqueue,” which
continuously updates the number of callers waiting and indicates the longest time a
caller has been waiting for each department. The system then stores the information
and compares it with earlier updates. This adjusted time is increased by a multiplier to
account for customers’ perceptions of the length of the wait. When a caller is
transferred to the appropriate business segment, the unit tells the caller an
approximate wait time and how many callers are waiting ahead of him or her. A pilot
test of the system in Miami found that customers overwhelmingly perceived
Smartqueue to be reasonably accurate in predicting waiting time; virtually all
customers thought it was helpful and took the frustration out of waiting.

Key Issues for Discussion


1. Have one of your friends time you while you wait for varying amounts of time
between 30 seconds and 3 minutes. Try not to count the seconds! Estimate the amount
of time you waited. Did you find that your actual waiting times were longer or shorter
than your estimates? What does this experiment mean for organizations that are trying
to set service standards?
2. What key lessons can be learned by other organizations from FPL’s
experience?
iAdapted from Bob Graessel and Pete Zeidler, “Using Quality Function Deployment to
Improve Customer Service,” Quality Progress 26, no. 11 (November 1993), 59-63.

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