Do you just talk about delivering good service, or do you guarantee it?
The Maryland National Bank offers a Service Guarantee:
“If you ever find an account error, we’ll make it right, right away … refund any fees incurred, and send letters of apology to anyone inconvenienced …. And even pay you $10”
In the 4 months after the introduction of the guarantee, nearly ¼ million customers signed up. Rumour has it that fewer than 150 customers claimed their $10.
The First Hampton Inn offers a Service Guarantee:
“Friendly service, clean rooms and comfortable surroundings every time. If you’re not satisfied, we don’t expect you to pay.”
Their room booking system shows that 2% of their customers stay with them specifically because of their guarantee. On the softer side, they can demonstrate that the service guarantee strengthens customer loyalty and employee retention.
The Mission Oaks Hospital offers a Service Guarantee:
“No waiting. If you have to wait more than 5 minutes for emergency room care, the accounting department will refund 25% of your bill.”
They saw a 25% increase in business in the first year, the refund has been claimed by only 2 customers in every 1,000.
The Big Dilemma
A service guarantee is not easy to meet, it will cause you pain, lots of pain, you will fail and it will be expensive….
Until you get on top of it.
- Managers need to be behind it
- Personnel need to be trained
- Goals need to be clear
- People need to be empowered to do the “right thing”
- Processes need to be slick.
But then, that is what customers are paying for.
Could you guarantee the service you offer? What would have to be true?
Of course you don’t have to put your money where your mouth is, you could just talk about it.
Read another opinion
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Hello James
Great point and I’d argue that any company that is serious is about customer-centricity, quality and operational effectiveness would benefit from offering a demanding service guarantee. Why?
a) It is a public commment and thus the neck is in the noose;
b) The neck being in the noose drives attention to what is so (knowing what it is) and taking action to marshall what is so to be in alignment with the service guarantee;
c) Everytime that the service guarantee is missed then the noose tightens and causes pain – negative publicity and financial cost; and
d) It is evidence to customers and the wider public that the Tops do mean what they say.
For a service guarantee to be effective it must be unambiguous. And it must not work on ‘averages’ – this is ‘deceitful’ way of looking to provide a service guarantee without actually providing it.
Finally, the customer-centric way of establishing the service guarantee is to get customers involved and actually drive the process: what aspects need a guarantee, what that guarantee should be, who should be involved in setting it up and making it work.
What do you think?
Maz
Couldn’t agree more Maz, I saw an ad on the TV this afternoon for direct line insurance.
They “aim to secure your house within 2 hours if you are burgled”
I was bowled over, but not in a good way
James
Hi James,
I love service guarantees
The thing, however, that seems to stop firms from putting them in place is their fear of what could possibly happen and not what probably will happen. Your research examples show us what has probably happened. Very little, in fact.
I think more firms would benefit from putting them in place for two reasons: 1. It’s an incentive to them to get better and 2. It can provide a degree of surety for the customer that you really believe in what you are delivering and are willing share the risk of non-delivery. That’s just honest and straightforward.
I’d like to see more. Up front and centre.
Adrian
My initial reaction to this post was that a service guarantee was a great thing,. What could be more powerful than a company guaranteeing the service it is going to provide the customer. A company confident enough in itself to make a promise to its customers.
But then I actually took the opposite view and thought to myself, actually isn’t it sad and disappointing that a company has to actually state in writing to the customer that they will provide the service that they set out to provide. This should simply be a given, a basic expectation on the part of the customer that the company will and can provide the service it sets out to. By promising to deliver a service it sets out to deliver, who is the company really trying to convince? For whose benefit is the service guarantee actually for?