MAN351 Team Project, The Detailed Report

Gibbs Car Lock-Out Service

The Detailed Report

INTRODUCTION

Jared Kale, one of our team members, owns a small locksmith business called Gibbs Car Lock-Out Service. Jared bought this business three months ago and since then has been experiencing some problems with revenues. As a group, we decided to figure out a way to increase the total revenues of the company. We found that the company was not only not getting enough business calls, but also many of the calls that were coming in were being missed when the owner could not be there to answer the phone. As a result, in order to increase revenues, we needed to figure out a way to increase the number of calls received and the number of calls answered. The group brainstormed and explored ideas to determine what would be the most effective and efficient actions to take. The plans of action discussed can be put into two groups: increasing existing services and marketing.

INCREASING EXISTING SERVICES

Some customers have to be turned away because the owner's activities (e.g. college) prevent him from answering all the incoming calls. Increasing services also includes more availability to the customers. The idea of having a pager number listed was explored; however, this did not solve the problem of being available to answer all the calls because the owner was still completely unavailable at times. The decision was made to hire a part-time employee to fill in whenever needed. Then the problem of monetary compensation for the prospected employee surfaced. Since the company was experiencing unfavorable revenues, the group decided that Gibbs Car Lock-Out Service could not afford additional employees receiving hourly compensation. We decided that the obvious choice was a commission based salary. Any time the new employee answered a call and followed through with the call, he will receive 50% of the revenues from the call. Commission is also a good choice in that it eliminates administrative costs, as well as taxes related to maintaining a payroll.

MARKETING

Once we had someone available to answer all the calls, we still needed more customers. While we knew that advertising was the logical solution, the question remained as to what form of advertising Gibbs Car Lock-Out Service should use. The company already has a Bell South Yellow Pages ad which is about $100 per month. Therefore, the new form of advertising had to be inexpensive. Many low cost "grass roots" advertising ideas were explored, such as working with a separate business which targeted the same customers in a different market. For example, a wrecker service to share the advertising costs. This was ruled out due to time constraints and other complications. Billboards and radio advertisements were also mentioned, but neither were chosen because of monetary limitations. The group decided that the best way to distribute the business information was through the distribution of paper flyers and use of business cards. Business cards had the benefit of the potential customer keeping the ad on hand (in their wallet or purse), but were not chosen because this could not pass a standard cost/benefit test. In other words, the cost of purchasing business cards outweighs the potential additional customers attracted by the business cards. Flyers were chosen in the end because they are easier to distribute and post. The flyer was designed, copied, and distributed around Athens. Each team member put them on cars in the downtown area and at the mall.

RESULTS

We were able to track the number of calls that came in before and after our "experiment" by use of the company's cellular phone bills. For the two weeks before the flyers and new employee, Gibbs Car Out Lock-Service received 58 calls (see exhibit #1). Of those 58 calls, only 19 were actually answered (see exhibit #3). For two weeks after the advertisements and the hiring of the new employee, 63 calls were received and 30 of those calls were answered (see exhibits #2 and 3). The difference in the number of calls received was small and did not make a substantial difference in revenues. The difference in the number of calls actually answer was what made the biggest difference in the total revenues.

CONCLUSION

In conclusion, the solutions presented by team Warthog to Gibbs Car Lock- Out Service did help to increase revenues. In fact, revenues increased by 57%. Before the ideas were implemented, revenues for the two weeks researched were $570. After our ideas were implemented, the revenues for the two week study reached $900. It turned out that the increased advertising did help some, but the majority of the increase in revenues came from the additional employee that was hired to fill in while the owner was unavailable.

Back to Gibbs Car Lock-Out Service Main Page

Last Updated: July 29, 1997

WebDesign by: jdaniels@athensnet.com