"A comfortable stay at a comfortable rate" . . . that's one of the promises of LaQuinta Inns, Inc. The hotel chain that was a pioneer in designing and building mid-priced hotels to accommodate business travelers throughout the US, also assures its guests of "quality, value, consistency and excellence in service at every La Quinta, every time." The excellent service starts when a traveler calls to make hotel reservations. At LaQuinta, the inbound call center has been an outsourced function since 1996. Jackie Burke, Vice President of Reservation Services for LaQuinta, says the company has no "reservations" - that is, no doubts or misgivings - about its choice of outsourcing supplier for this extremely important function.
The company determined in the mid 1990s that it was not as redundant as it needed to be for disaster recovery. A decision was made to keep the existing San Antonio, Texas operations but to fairly quickly open a second reservations center in Goliad to accommodate disaster recovery. Burke says the timeframe was too quick to be able to find a site and get it up and operational in time, so the company sought a turnkey solution. They selected Spherion as the supplier because it had an existing bricks-and-mortar facility that would be turnkey. "The other thing we wanted," Burke recalls, "was that the call center would be totally devoted to LaQuinta and that all of the employees in the center would be handling LaQuinta business only."
LaQuinta has added 70 Inn & Suites to its chain in the last three years, for a total of 300 properties in 28 states in the US. That growth has meant growing pains for the relationship with Spherion as call volume went up. "But we lived through it," Burke says. "We worked very closely together to get the challenges worked out. Our Spherion account manager has changed three times. But sometimes a fresh look and new perspective is very healthy." The call center in Goliad began with 45 workstations and now has 67. Its hours were originally 8:00 A.M. to 8:00 P.M., Monday through Saturday, but were recently expanded to 6:00 A.M. to 3:00 A.M, 7 days a week.
Managing an ever-growing environment and relationship can be challenging, and both companies have put forth a team spirit in doing so. Both management staffs monitor how calls are being handled at both the San Antonio and the Goliad centers, and they meet once a month to share ideas for improvement. Burke also visits the Goliad center each month. "I like to make sure the Spherion employees are thanked for the job they do for LaQuinta," she says. "The Goliad call center manager and his boss, and his boss's boss, are usually there to meet with me when I go there." They work together in the budgeting and scheduling processes for how many people are needed in Goliad.
Through the transition period, LaQuinta put its own management staff in the Goliad center to teach the LaQuinta corporate culture to the Spherion employees. "We wanted them to live the LaQuinta product," says Burke. That effort to mesh the two cultures paid off. Burke says that Spherion call center employees now assist with new ideas to cut costs and system time.
Success Doesn't Happens Overnight
LaQuinta's strategy in accomplishing its objectives of a turnkey solution has worked very well. Burke says she is now able to concentrate on productivity because the self-sufficiency of the Spherion team has relieved her of recruiting, training and turnover problems. "They have been able to recruit people that I don't think we can recruit in San Antonio," she adds. "And their turnover and absenteeism are slightly lower than ours. And that's added value.
Nonetheless, there have been snags in the day-to-operations. LaQuinta found that some of the things they had planned from their initial contract negotiations ended up not being possible. "We can't measure some things we had planned to because of the way the phone system and calls are routed. There were some surprises in that," Burke admits. "The way our phone switch works is that if a call goes into Goliad and a Goliad agent is not available, the call automatically waits in queue for the first agent, no matter whether that agent is in San Antonio or Goliad. So it's very difficult to measure the Goliad calls compared to the San Antonio calls because our systems are sending calls up and down to be more efficient for the whole enterprise rather than just one call center."
There are other snags, including some inconsistencies between the two call centers in converting calls to reservations. But their relationship is working well in that they operate as a team. "We look at challenges together to try to find out why they occur," says Burke. LaQuinta, which is looking to franchise its operations in the near future, is gearing up for even more growth and expansion of properties. The company anticipates a huge growth in its call center environment, and Burke says, "we don't even know yet how big we need to be." One thing is certain: they'll depend on Spherion to help through the growth and are currently extending their contract for a year.
Lessons from the Outsourcing Primer
- If the buyer is in a growth industry, it must select a supplier that is able to grow as the buyer's business expands.
- A supplier's turnkey operation can be a very cost-effective strategy, rather than a buyer building and bringing up operation of its own call center.
- Outsourcing works best when both parties have a team spirit and look at challenges together to find out how they occur.