Question

Given all the service guarantees we see or hear on a daily bases, do these really make you feel better about the services you are paying for at the bank, restaurant, cable company or retail store?

a. Give specific examples of a good guarantees

b. Give specific examples of a bad guarantees

c. Give specific examples of a evoke guarantees

Answer 1

A service guarantee is a said commitment from a service provider or product manufacturer to the buying customer that the product or service is up to desired standards and specifications. Service guarantee may also include a compensation or refund if product or service does not meet expectation. Service guarantees do effect buying choices and make the customer feel better. While in the buying process there are a number of thoughts that go in customer's heads regarding the risks associated with particular product or service:

• Making the wrong choice about product or service
• Losing money on a wasteful product or service
• Whether service or product would meet the expectation

Service guarantees help companies differentiate their offering and help in allaying the above-mentioned customer fears and perceptions. Customer may feel that he/she has a backup option or recover some way in case service or product is not up to the mark.

a) Good guarantees - These are generally unconditional, easy to understand, invoke and collect.

• Pest services - You do not pay until you see your home free from Cockroaches
• Midco - If a Midco technician misses an appointment or is late by 15 minutes or more, you are eligible for a $25 credit in your account

b) Bad Guarantees - Have conditions set in them which make it hard to invoke or collect.

• Lufthansa has a conditional guarantee that customers will make it to their connecting flights all the time except in cases where the delay is due to weather or air-traffic. However, 95% of delays are attributed to these two reasons.
• Bank of America guarantees refunds up to six months of checking-account fees if a customer is not satisfied with Bank's checking-account service. Customers have to go thru the hassle of closing the account if they need to collect just 5-6 dollars.

c) Evoke guarantees

• Dominoes - 30 minutes to deliver food or else the food is free. Many times the delivery was late and we got a refund for payment made.