Name some advantages of making the decision to use a tiered service approach at Elgin Technology Products

Tiered Service – A New Approach

Richard Lee, President of Elgin Technology Products, recently returned from a Technology Conference in downtown Chicago. As a result of talking with leaders of other companies, he is now considering establishing a tiered service system, an idea he shared with the manager of the Customer Service Department.

Mr. Lee’s basic thought is to reward the customers who give Elgin Technology Products $100,000 worth of business with an end-of-year “thank you payment” that reflects a 5 percent discount on all yearly purchases. In addition, those customers would receive a commitment to next-day turnaround time on the resolution of all customer service problems. Moreover, the customers who purchase $500,000 or more annually would receive a 10 percent discount and a commitment to a four-hour resolution of customer service problems. Mr. Lee has requested that you and three other CSRs share your opinion and concerns regarding this decision.

1. Name some advantages of making the decision to use a tiered service approach at Elgin Technology Products.

2. Name some disadvantages of making the decision to use a tiered service approach at Elgin Technology Products.

3. Based upon your findings, would you endorse the decision to use a tiered service approach or not?

Course: Customer Service