The Royal Vehicle Membership business overview

The Royal Automobile Golf club was founded in 1897 to provide its associates with roadside assistance. It is part of a greatly competitive market where it is involved in a continual tussle with all the AA and Green Flag for market superiority.

There are fundamental problems in RAC's current operations. Customer service is essential facet of the roadside restoration business and this is where RAC are faltering. RAC experienced a increasing in the number of customer complaints in conjunction with poor retention of customers. The RAC has to supply its services and answer quickly to all callouts but encounters difficulty interacting with the deviation popular.

The problems were discussed by Martin Connor, the director of Procedures who claimed the only real big winners seemed to be the contractors who provide capacity during the night and during durations of overloading. That is a time as the RAC's own patrol staff are generating more despite a decrease in efficiency.

The RAC uses private companies during weekends with also at night times, in addition they supplement day patrols if the demand is unexpectedly high. As the companies don't carry the entire RAC branding, customer support was less of important to them. Market research had indicated that customers were less content with the service provided by private companies. The usage of such contractors was also expensive, with the average price being 36 plus.

After working a typical forty hour week, at occupied periods personnel were offered overtime or the choice of being on standby. Overtime was paid at time. 5 and double on Sundays. Personnel had no determination to complete work as quick as it can be as they might be paid however long careers took. Likewise the standby system was fraught with problems, staff were paid a flat payment of 6 per job completed. There was no difference in pay with regard to simple jobs that would require a few minutes and more challenging jobs which could take a long time. Personnel could log off at any point and would frequently achieve this if indeed they were offered frustrating jobs. This might push the RAC into delegating to companies at the much higher cost

The patrol attendance rate actions how many of the careers the RAC undertakes were dealt with by their own personnel. In 1999 the pace was averaging 80%. The importance of a higher PAR is underlined in the expenses which claim that simply a 1% cut down would cost about 1 million per 12 months in contractor's fees.

. The RAC has a reputation for offering high quality service a but at a price. It faced shedding its market show as a number of competitors surfaced. It had been faced with the challenge of increasing its businesses whilst keeping its account costs at a competitive price.

In an independent study the RAC was rated 2nd to the AA in conditions of customer satisfaction. The critical customer service factors are in the call taking and exactly how quickly patrols are on the arena and complete the job. Due to more advanced call taking technology the AA could offer its people better customer service than the RAC.

The importance of a low regular membership costs could not be underestimated as Green Flag, which acquired poor customer support reviews from the survey was becoming a leading competitor because of its low costs. The SWOT examination shows where the RAC need to improve.

SWOT analysis


Strong brand

Large customer base

Good profitability


Old designed image

Capacity easily overloaded.


Innovative technology

New products



Technology of cars improving - decrease in breakdowns

Increased customer expectation

Workforce arranging / Capacity management Literature Review

In service market sectors the matching of capacity and demand is particularly difficult. Capacity management plays an important role in determining how effectively an company uses its resources to create income. (Sunshine Services, 2007)

Capacity management is the ability to balance demand from customers and the ability of the service delivery system to fulfill the demand. (Armistead et al, 1991)

There is either too much demand for the capability, putting a pressure on resources, or inadequate demand, giving surge to unused capacity and a reduction in revenue. This is known as the perishability factor. (Mudie et al, 2006) Both of these are a concern for the RAC due to the numerous factors that influence the demand on the patrols such as the weather.

The way workforce is deployed is a large determinant of the potency of service organisations. Having more staff than is necessary to supply the desired degree of customer service is costly and having fewer staff than is necessary risks poor customer support and the loss of current or future revenue. In an excellent scenario the company has just enough staff available to provide the desired degree of service. Temporal variance in customer demand, even in just a day, compounds the issue of providing the perfect number of personnel. One solution is the utilization of planning intervals of an hour or less, together with overlapping shifts, and then allowing the number of employees scheduled to improve from period to period. The task of providing the right number of employees at the right time is commonly known as workforce arranging. (Thompson et al 2006)

Rotating workforce scheduling is a typical constraint satisfaction problem which appears in a broad selection of work places (Musliu, 2005).

Poor workforce arranging often causes high staff turnover, absenteeism, resentment, poor job performance and unfit mental and physical conditions -- situations that translate to lack of efficiency, quality and even protection (Hung, 1992)

One solution to solve capacity issues is to address the schedules of the personnel, a re-arranged workweek can be considered a great recruitment tool. Many people are enthusiastic about receiving a number of extra off-days weekly and much longer weekends (for the 4-day workweek, there are 52 extra off-days per yr). Additionally, fewer work times means including less time and money on commuting and less expenses on foods and childcare. (Hung, 1992)

Another factor that can affect capacity is desire. This is influenced by switch patterns dictated. Drive can be increased by adapting work times to individual needs which can change over time, better working conditions (such as security and health), creation of an team nature or through professional range of motion. For example, highly skilled staff can become tutors to new employees. (Chan et al, 2006). Part time workers can increase the flexibility of procedures.

A common pattern amongst the literature is to provide discounted prices at times to level off the demand. This is a probability for the RAC who can offer breakdown deals such as 'weekends only' or 'off top' deals at substantially discounted prices.

Competitive Analysis


The basic RAC insurance plan begins at 28. Typically there patrols are able to fix 80% at the roadside. The RAC web-site has an active forum, where associates can talk to one another to provide advice, this creates an network. RAC will be present at the first five callouts created by a member cost-free and offer goal for vulnerable motorists. Having over 2000 patrols and over a century experience are fundamental selling details for the RAC. All labour and fittings costs are contained in membership, so associates only have pay for the part itself. RAC advertise offers worthy of over 500 to try and lure in new associates, they include discount rates on health insurance, roadside restaurants and UK vacations. (RAC, 2010)

Green Flag

The Green Flag slogan is 'powered by performance', Green flag compare themselves to both the RAC along with the AA by advertising its average time is under thirty minutes as opposed to their 40 minute average. The claim is backed up with data from 837, 962 call outs. Its basic plan begins at 20, they fix 86% of customers' autos at the roadside. An integral asset of green flag policies is the availability of the customer to adapt a policy to fit their own circumstances, 'you need not pay the price of other's problems'. Green Flag offer 'no callout' special discounts to members and provide free, endless call-outs when you breakdown. They aim to answer telephone calls within 20 seconds. Green flag operates entirely through outside contractors, that includes a negative influence on it's customer service. (Green Flag, 2010)

The AA

The AA say to fix more breakdowns by the roadside than other people they may have strong customer satisfaction and boast 95% of participants would recommend the firm to friends. On average the AA arrive within around 40 minutes of people' phone calls.

With 3500 patrols the AA gets the largest dedicated breakdown patrol force in the united kingdom, ; they be present at a breakdown normally every 8. 7 seconds and repair around 8 out of 10 breakdowns by the roadside. Only the AA has 'VIxEN', a distinctive on-board computer to help diagnose faults.

At night time, as at other times of the day, the AA assists its members with its own patrols and, much like other break down providers plus some garage agents, when appropriate. (The AA, 2010)

Strategic performance objectives

The Aim of the RAC is to provide a fast and quality service to its users who breakdown at the roadside. To get this done they need to define what the main element performance indications are and what is the expected level.

A key performance indicator is a metric that allows you to judge whether you are get together a certain goal. The five kpi's for break down companies are

Quality : the amount of customer support and efficiency of the restoration Cost - The cost the customer has to pay

Dependability - To always have patrols ready for jobs. Versatility - To adjust to unexpected rises popular. Speed - To answer phone calls quickly, patrol arrive quickly, job completed quickly


1 atlanta divorce attorneys 5 careers completed are being outsourced to contractors costing the RAC plenty of money and risking it's reputation from it's customers who have expressed dissastisfaction by the service they have obtained from such patrols. Obviously changes have to target around ensuring more callouts are attended by RAC patrols.

To do this firstly the RAC need to purchase new calling and dispatch process. Far better call technology can identify the patrol most suitable to attempt each job and can improve customer support relations. Far better utilisation of patrols will alleviate capacity issues.

The overtime payments need to be re-structured so that is no more predicated on a per job basis. The current system is available to abuse by patrols who would avoid difficult jobs by logging off. This an integral reason behind the excessive use of companies.

The pay framework needs to changed, Proposed would be a rating range for the difficulty of careers completed, patrols could then get a monthly bonus based on there performance. altered to offer staff incentives and motivation to ensure customer service is top of the priority. These can include monthly add-ons or share schmes.

In most cases it may be necessary to establish some scale of gradation of jobs based on some objective examination and to connect jobs measured on this level to rates of pay (Crazy, 1991)

The PAR is minimizing by as much as 3% during peak holidays. A 1% drop in PAR costs 1 million per yr in service provider fees. Holidays have to be re-reanged so that they are similarly dispersed around the year. December and January will be the busiest weeks so there must be a limt especially for this time. Monday is the busiest day of the week for the RAC with the weekend the quietist time

Workforce schedules can be adjusted, the existing shift system fails. One option is always to switch workers to a four day week. Staff could then have significantly more social hours and capacity could be increased at peak periods.

Needs to continue it's investment in materials that help motorists fix there own faults, with a specific emphasis on problems caused by winter conditions. This is the most effective measure to overcome capacity problems. Phone operators can try an identify the causes of problems and offer the prospect of the member to fix there own vehicle.

The staff at RAC are getting close retirement and therefore RAC will need to entice new recruits. It is important that the knowledge developed by years of experience by the mature employee's is utilised to enable the training of the new more radiant employers to become more effective.

Staff should be prompted to present any ideas to mature management that they believe would improve operations. With attractive incentives offered for just about any idea's that apply, the job satisfaction and drive of employee's would be more likely to increase.

There is a resistance to change, especially from the patrols who are seeking more social time and a generally easier working plan.

The diagram above shows the way the proposed changes could enhance the operations of the RAC. The primary advantage would be observed in the flexibility of the patrols.

The RAC need to talk better with customers who broke down. Breakdowns can be highly nerve-racking situations and therefore knowing approximately how much time it will take for a patrol to arrive is a reassurance to the member.

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