Service Quality and its Assessment – Service Guarantee

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Girish Ketkar Session 10Services Marketing

FLAME School of Business 2009-11 (Trimester 5)

Service Quality and its Assessment –Service Guarantee

Session 10



Agenda

Service guarantee

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Reading (for sessions 08, 09 and 10)

Services Marketing: Integrating Customer Focus Across The Firm

(Zeithaml, Bitner, Gremler, Pandit)

– Chapter 2: Gaps Model of Service Quality

– Chapter 6: Listening to Customers through Research

– Chapter 8: Service Recovery



Reading (for sessions 08, 09 and 10)

Service Marketing: Concepts, Applications and Cases(Rampal, Gupta)

– Chapter 21: Service Quality

– Chapter 22: Understanding Quality Management

– Chapter 23: Measuring Service Quality

Services Marketing: People, Technology, Strategy(Lovelock, Wirtz, Chatterjee)

– Chapter 13: Customer Feedback and Service Recovery

– Chapter 14: Improving Service Quality and Productivity

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Reading

“The Power of Unconditional Service Guarantees”

– by Christopher W. L. Hart• Harvard Business Review, Jul-Aug’88

“Making the Most of Customer Complaints”

– by Michel, Bowen and Johnston• Wall Street Journal, 22 Sep 08



What is a Service Guarantee?

Bhopal: July 30, 2010This is the first ever law in the country which guarantees delivery of public services to common people in a stipulated time frame. The Bill was passed in the assembly today with a voice vote.

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What is a Service Guarantee?

Promise or assurance about quality of service

Recompense if promise is not kept



What is a Good Service Guarantee?

Unconditional

Easy to understand and communicate

Meaningful

Easy and painless to invoke

Easy and quick to collect on

Source: “The Power of Unconditional Service Guarantees” by Christopher W. L. Hart (HBR, Jul-Aug’88)

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Unconditional

Promise customer satisfaction…

… unconditionally

… without exceptions

No if’s and but’s!

No “conditions apply”!!



Unconditional

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Unconditional



Unconditional

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Unconditional



Unconditional

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Unconditional



Unconditional ???

These folks don’t offer unconditional guarantee, andthey say that nobody else can!!!!

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Unconditional

If you can’t guarantee all elements of the service unconditionally…

… then guarantee those you can control andwhich are of value to customers



Unconditional

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Unconditional

Interesting !!!

– This is what I saw on their website…

On 30 Nov 2010

On 06 Jan 2010



Easy to Understand and Communicate

Simple

To the point

Precise

Prompt delivery

Pest control

Delivery before 10:30am

No pests

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Easy to Understand and Communicate



Easy to Understand and Communicate ???

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Meaningful

Guarantee something that is of importance to the customer

– Commit something that’s worthwhile

Make it financially meaningful

– Significant payout if promises aren’t kept



Meaningful



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Meaningful





Easy and Painless to Invoke

Fill out forms in triplicate

Shuttle between offices

Submit attested proofs of purchase

Meet five different people

Get manager’s signature

Blah, blah, blah…

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Remember:

– The customer is already dissatisfied

– Don’t aggravate his unhappiness

Encourage the customer to invoke the guarantee




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Easy and Painless to Invoke ???

Check this out! Is it really easy and painless??



Easy and Quick to Collect on

Ideally, “on the spot”

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How Does a Guarantee Help?

Brings customer-centricity

– Forces the company to focus on customer’s definition of good service, not management’s perceptions

Sets clear performance standards

– For the company, and for employees

Generates feedback on service deficiencies



How Does a Guarantee Help?

Compels the company to review service delivery processes for potential failures

Increases sales

Builds customer loyalty

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Types of Guarantee

Attribute-specific guarantee

– Single attribute

– Multiple attributes

Full satisfaction guarantee



Won’t Customers Cheat?

What if customers misuse the guarantee?

Source: “The Power of Unconditional Service Guarantees” by Christopher W. L. Hart (HBR, Jul-Aug’88)

Phil Bressler of Domino’s argues that customers cheat only when

they feel cheated: “If we charge $8 for a pizza, our customers

expect $8 worth of product and service. If we started giving

them $7.50 worth of product and service, then they’d start

looking for ways to get back that extra 50 cents. Companies

create the incentive to cheat, in almost all cases, by cutting costs

and not providing value.”

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Before Offering a Service Guarantee…

THINK!!

– How good is your existing service level?

– Whichever attribute(s) you intend to guarantee…• Is it something that customers anyway expect as an integral part of

the service?

• Do customers value the attribute?

• How much control do you have over the attribute?

• Do customers perceive you to be significantly different from your competitors?



Maximizing the Marketing Impact

Service guarantee is most effective when

– Price of the service is high

– Customers’ expertise with the service is low

– Negative consequences of service failure are high

– Industry has a bad image for service quality

– Company depends on frequent customer repurchases

– Company’s business is affected deeply by word of mouth

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What We Covered Today

What is a service guarantee?

Attributes of a good service guarantee

Benefits of offering a service guarantee

Types of guarantee

Potential abuse of guarantee

Prerequisites for offering a guarantee

Maximizing the marketing impact

Service Quality and its Assessment – Service Guarantee

Documents

Transcript of Service Quality and its Assessment – Service Guarantee