In an effort to improve customer satisfaction and get more feedback, a car maint

Question

In an effort to improve customer satisfaction and get more feedback, a car maintenance shop has decided to implement use of an automated survey (delivered via the Internet) to elicit customer feedback. Previously, customers that spent at least $100 for a given set of repairs were called by a customer service representative within five days of the performed service. Assume that it was your idea to change the process.

A) Consider the net cash flow diagram resulting from this process improvement project. What would constitute the revenues, expenses, and investment costs, if any? Justify your answers.

B) Given your definition of the cash flow diagram, how difficult, in your assessment, would each of these cash flows be to estimate? Explain.

C) Are all the benefits or the costs of this process change tangible? If so, please explain. If not, provide some examples of intangible benefits and/or costs.  

Explanation / Answer

a] Revenues would consist of increased sales due improvements in the customer satisfaction. Costs are of various types, such as software development costs, cost of hiring personnel for the project to manage the processes, hardware costs of servers and computers to run the project and the infrastructure costs involved in creating the offices and arranging utilities such as communication networks.

b] Revenue estimation would be very difficult since the incremental sales due to the project cannot be separated from the sales due to other marketing activities. Costs are all tangible can all be estimated.

c] The costs are all tangible. The revenue is not tangible since it is in the form of a goodwill on the part of the consumer.

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