Retailing December 18, 2008, 5:00PM EST

FedEx Whites-Out the Kinko's Name

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He's experimenting with time-based service commitments, such as in-by-9 a.m., done-by-noon. Store employees must perform quality checks three times on printing jobs.

The company says customer complaints are down 40% since 2006 and now run at fewer than one per every 10,000 orders. Internal metrics, such as the percentage of projects done correctly and on time, have risen from the 70% range to the high-90% range companywide, Philips says.

Meanwhile, Philips is giving store managers more opportunity to promote their businesses locally with coupons and price cuts that help them compete against rivals. Employee turnover—nearly 50% two years ago—fell to 21% for full-time workers, before the overall job market weakened substantially in recent months.

Donald Broughton, a stock analyst who follows FedEx for the investment firm Avondale Partners, says he believes the Kinko's buy will ultimately turn out to be smart. FedEx has made acquisitions in the past—such as overseas cargo line Flying Tiger—that were difficult to integrate initially but ultimately proved valuable, Broughton argues. He adds that FedEx is picking up $1 billion a year in lucrative shipping business through Kinko's sites.

That doesn't mollify Kinko's founder Orfalea. He fumes over the looming disappearance of his company name. "All the things they could have done with that brand," he says, throwing up his arms. "They could be providing online photo processing. They could be the leader in printing books on demand."

Philips says the FedEx Office name will create more opportunities for growth. "Kinko's is known as copies," he says. "Nine-cent, black-and-white copies you got in college. FedEx is a very elastic brand. We do packaging, shipping, digital document storage, direct mail. We're the back office for small businesses, the branch office for mobile professionals. Copies are a small part of our business."

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Fluent in American

FedEx isn't the only big company wrestling with customer service challenges. Dell is trying to mollify frustrated computer buyers by offering a new service for $12.95 a month that guarantees their tech support calls will be handled by a North America-based agent, rather than someone at an offshore call center, The Washington Post reports. The company won't reveal how many have enrolled but says it is pleased with the response.

To read the story, go to http://bx.businessweek.com/customer-service/reference/

Business Exchange related topics:
Co-Branding
Brand Identity
FedEx Corp.
Mergers and Acquisitions

Palmeri is a senior correspondent in BusinessWeek's Los Angeles bureau.