Introduction
E-commerce is one of the fastest growing industries in the planet. Thanks to the invention and popularization of the internet, companies are now shifting away from the use of brick and mortar and pen and paper-based systems and business models towards more high technology and virtual ones, such as the ones being offered by e-commerce. Business deals and transactions between partners and customers (among other stakeholders) are now being done online. A perfect example of a business that is solidly capitalizing on this trend is Expedia . Fundamentally, it is a travel agency because it generates revenues from its airline, hotel, car rental, cruise, and vacation package and other attraction booking services. Basically, it links people (i.e. its customers) to an expanding array of services. The company is owned and operated by Microsoft Corporation, the brainchild of billionaire software developer Bill Gates. The company was originally created as a website that was aimed at connecting people who travel frequently and the local businesses (in their target destination) that can service their travel needs. Its website was first launched in 2001. Since then, millions of people have started to use their website. This fueled the rapid growth and expansion that the company experienced since the early 21st century and still continues today . It later on grew to a multibillion dollar company (more than just a website); thanks to the valuable partnership it established with some of the biggest names in the electronic commerce and travel industry. Some of its biggest partners include American Airlines, and a host of big time hotels. One of the pillars of strength of this company is customer service. It relies on customer satisfaction to continuously generate leads . As long as majority of its customers are satisfied with the services that the company offers, revenues would continue to come in. However, there is a philosophy in customer service-oriented industries that suggest that no business can please everybody (i.e. pertaining to its customers and business partners). The same is true in the case of Expedia. This is why in this paper; the author has created numerous models that would visualize the negative feedbacks and complaints against the company.
Check Sheet Table
The table above shows the following variables: the ten Expedia complaints, their frequency, cumulative count, and cumulative percentage. As can be seen, the top three complaints that had the highest frequency were: extremely poor customer service, lack of response from Expedia, and false claims. The top complaint alone represents more than a third of all the complaints against the company .
Pareto Diagram
The drawing above is a Pareto chart that shows three things relative to each other: the frequency of each of the ten complaints, the cumulative percentage, and the linear representation of the cumulative percentage. Focusing on the top three complaints, it can be seen that more than a hundred people complained against Expedia because of extremely poor customer service, representing around 40% of the cumulative percentage . The linear cumulative percentage shows the trend line that the cumulative percentage follows. One just has to apply these principles in order to read and understand the rest of the complaints visualized in the chart.
Top 3 Highest Complaints
Fish Bone Diagrams
Extremely Poor Customer Service
No matter how much one may deny it, Expedia is and will always be a customer service-oriented company . In the fishbone diagram above, the root causes of poor customer extremely poor customer service were identified as understaffing, high volume of customers, poor management, disorientation (of the management), lack of facilities, and incompetent staff. Now, the best way to attack this would be to identify the non-modifiable causes. Of the six main causes of poor customer service, the high volume of customers appears to be the only one that the management cannot control. In this case, Expedia should not even consider it as a problem or a cause of problem because the fact that they are encountering a high volume of customers means that their business model or whatever they are doing is working. They actually have to embrace it. Unfortunately, the reality is that the more customers go in and book their trips via Expedia’s services, the more clogged the company’s systems and servers can be . As a result, the entire system goes down and this should not, in any way, be treated as a sign of good corporate governance. A competitive manager should be able to handle all of its customers’ concerns no matter how high volume it may be . In Expedia’s case, however, it appears that they cannot control it. This can be evidenced by the fact that the biggest number of complaints that the author of this paper has gathered fell in this category. Being a customer service-dependent company, it is rather ironic that Expedia got the most disappointing results in the same category. Among the modifiable causes (basically all the rest) of extremely poor customer service as per the customers’ complaints, the only one that seems unacceptable is the problem on understaffing. Expedia’s customer and user base has increased by several thousand folds since it first started operations in 2001. The laws of economics suggest that supply and demand for a specific product and or service should go hand in hand if there is going to be equilibrium. In this case, the demand for Expedia’s services have dramatically increased the moment the number of listings in and users of its website increased . So, in order to manage the workload, the company has to expand its workforce. There really is no reason for the company to be understaffed because all of the additional expenses that would come as a result of the bigger workforce would eventually have already been covered by the additional sales that they would generate from the increase in the number of listings and users in the website. However, the still existing problem on the quality of their customer service suggests that the company has been stringent when it comes to spending for the expansion of its customer service workforce—something which it heavily relies on. Considering that Expedia is one of the companies that revolutionized the customer service and the tourism industry, the outcomes that we are currently seeing are rather disappointing.
Lack of Response from Expedia
There are many possible causes of the lack of available response from Expedia. However, the only most likely cause of this would be the ongoing staffing problem within the company. This is a rather common occurrence among companies that heavily rely on contact services . In an effort to cut spending on wages, companies like Expedia typically underspend on the much needed workforce expansion programs. The additional help that should have been brought by the added people in their roster may have solved their problem. However, because they are under-spending on their human resources requirements, they are suffering the consequences of an overly utilized workforce.
False Claims
False claims reports can be caused by errors. Now, there are two ways how one can categorize such errors; they may either be intentional or unintentional. In cases where false claims are unintentional, they may have been caused by simple human errors—these occur from time to time and can be resolved by coaching . However, intentional errors can be attributed to and even considered as fraud. This is something that would need further investigation by the company as this may potentially damage its reputation as a credible website for travels and bookings. The company’s reputation is an intangible resource that can easily be valued in millions and the managers at Expedia should take care of this highly important asset with vigor because in a virtual environment, there is nothing more important than credibility.
Pareto Diagrams
The table above summarizes the contents of the Pareto Diagram for the top complaint for Expedia. So far, the highest number of extremely poor customer service was obtained last January. This is mainly due to the fact that a lot of people travelled during that month.
The drawing above is a Pareto diagram of the frequency and cumulative percentage (in adjusted form) of the top complaint driver for Expedia. It shows that for the month of January, 54 of such complaints were recorded. This value represented 52% of the cumulative percentage for that category or complaint.
The table above focuses on summarizing the month on month information for the lack of response complaint. A total of 38 complaints were recorded for that category and so far the highest number again was experienced last January, followed by December, and then February. This may be due to the passenger volume differences during those periods.
The drawing above is a pareto diagram representing the frequency and cumulative percentage of the top two complaint against Expedia (from customers) for the past three months. It shows that in January, 19 people filed a complaint under this category which represented 50% of the cumulative value. This is only expected because higher customer volumes would almost always equate to higher complaint rates.
The table above summarizes the frequency, cumulative count, and cumulative percentage for the 3rd highest complaint generator for Expedia in the past three months. It followed the trend set by the first two complaints. January appeared to be the month where the highest number of complaints were obtained, followed by December, and then February.
The pareto diagram above visualizes the information obtained from the summary table that it followed. For January, for example, it shows that 18 people filed a complaint because of false claims which represented 67% of that complaint category’s cumulative value. The same priciple can be used to interpret the chart values for the succeeding two months.
The table above shows the per country distribution of extremely poor customer service-related complaints. The highest number of complaints came from the United States. The least number of commplaints were from the combination of other countries.
The pareto diagram above shows the frequency and cumulative percentage relationship between different counries where the extremely poor customer service complaints originated. The highest frequency was the United States group. This was followed by Japan, the United Kingdom, Singapore, Hong Kong, Germany, France, and Other Countries. This only shows that the customers in the U.S. have a generally higher expectation on the service that they will receive from Expedia.
The table above shows the per country distribution of lack of response-related complaints. The highest number of complaints came from the United States. The least number of commplaints were from the combination of other countries.
The pareto diagram above shows the frequency and cumulative percentage relationship between different counries where the lack of response-related complaints originated. The highest frequency was the United States group. This was also followed by Japan, the United Kingdom, Singapore, Hong Kong, Germany, France, and Other Countries just like in the first pareto diagram. This only shows that the customers in other countries have a generally lower expectation on the service that they will receive from Expedia.
The table above shows the per country distribution of false claims-related complaints. The highest number of complaints came from the United States. The least number of commplaints were from the combination of other countries.
The pareto diagram above shows the frequency and cumulative percentage relationship between different counries where the false claims-related complaints originated. As usual, the highest frequency of complaints was from the United States group. This was followed by Japan, the United Kingdom, Singapore, Hong Kong, Germany, France, and Other Countries. This only confirms two things: that the US customers are harder to please while those from other countries have lower service standards and or expectations.
Conclusions
In conclusion, there were many identified sources of complaints against Expedia (from its customers). The top three so far were the extremely poor customer service, the lack of response from Expedia, and the occurrence of false claims. As one of the biggest companies in the United States, Expedia should address these problems immediately. However, a deeper analysis of each of these top three concerns would show that solving them is much more complex task than anticipated. In the case of the number one problem, for example, it can be classified as a naturally occuring problem because of the fact that Expedia’s business partners (and therefore the listings in its website) and the users that subscribe to its services are increasing at a faster rate than its workforce and infrastructural expansions. This creates a disconnect between the actual capacity of services the company can provide and the capacity that its customers and partners require. Despite this being a normal occurrence, Expedia’s management should find a way how to accommodate both their new and existing customers; otherwise, they might lose them to their competitors. Travelocity is one of Expedia’s fiercest competitors . So far, in terms of rankings, Expedia still has an advantageous lead over other industry players. However, in terms of opportunity losses, it is also the number one; so far, it has already lost more than $770K in claims thanks to the consumer complaints that it has received. The recommendation for Expedia then, based on the data that have been analyzed and presented in this paper, is to focus on solving the root causes of their problem. Among all the causes of their problems, it is the lack of budget (either because there is an inherent lack of it or because the company is insisting on under-spending) and understaffing appear to be the most commonly occuring one. The company’s problems are, in fact, interrelated in that they are caused by almost the same set of factors. For example, understaffing appear more than once in the fish bone diagrams for the top three complaints that the company received. This means that this variable is causing more than just a single problem. In that case, the company should focus more on it. Eventually, the company would be able to resolve everything and ideally, the number of customer complaints (especially the top ones) should dramatically decrease.
Bibliography
Dekker, S. 2014. The field guide to understanding human error. Ashgate Publishing.
Garnett, O., Mandelbaum, A., & Reiman, M. 2002. Designing a call center with impatient customers. Manufacturing and Service Operations Management, 208-227.
Guillet, B., & Law, R. 2013. An examination of the relationship between online travel agents and hotels a case study of choice hotels international and Expedia. com. Cornell Hospitality Quarterly, 95-107.
Pissed Consumer. 2016. Expedia vs Travelocity vs Orbitz. Pissed Consumer, http://www.pissedconsumer.com/compare-companies/expedia-vs-orbitz-vs-travelocity.html?hash_order=expedia-vs-travelocity-vs-orbitz.
