Case Number: 5-207-250, Year Published: 2007, Revision Date: January 01, 0001
HBS Number: KEL272
Queuing, Pricing Priorities in Queues, Economies of Scale in Service Systems, Call Centers, Marketing/Operations Interface in Service Firms, Pricing, Service Systems, Service Firms
Bruce Alfred Technologies (BAT) has built a successful business selling packaged software. Its marketing has long promised free technical support to all customers, a key point of differentiation from BAT’s competitors. However, the call center providing tech support is now in crisis. Wait times for callers are unacceptably high, leading to low customer satisfaction and negative press. BAT managers are evaluating the Fast Track Proposal, which would create two classes of calls. Fast Track calls would be promised a one-minute wait but pay for service. Standard calls would still be free but be given lower priority and have no wait time guarantee. The case considers both the operational impact of this change as well as the strategic considerations of backing away from free tech support. This case has been used both in an elective course on service operations and a core operations management class. In the former setting, the intention is to emphasize the impact of priorities and alternative ways of managing capacity. It can also be used to discuss different ways of pricing services—i.e., pay-per-transaction vs. subscription. These can still be discussed in a core class, but the case can also serve to demonstrate the basics of the relation between utilization and delay.
Return to Search Results