What Is a Service Guarantee?

Service guarantee is an effective promotion method, which means that the service organization makes some promises about its service quality. With the introduction of service guarantees, the perceived risk of customer purchase decisions is limited to the morally corrupt behavior of service organizations refusing to fulfill their commitments in service guarantees. Because as long as the service organization can seriously fulfill its service guarantee, customers can basically determine the effectiveness of their service consumption guarantee before purchasing. In addition, the customer is no longer afraid of retaliation for worse service due to a complaint, because it means higher compensation for him and more compensation for the company.

Service guarantee

Right!

Chinese name: Service guarantee
Also called: Pledge

OK: Guaranteed utility
No longer afraid: Worse service due to complaint

Service guarantee, also known as service commitment. The initial emergence of service guarantee is an effective promotion method, which is expressed by the service organization to make some commitments on the quality of its own services, such as 24-hour hot water supply in hotels, return and exchange of shops Wait. In order to improve the credibility and perfection of quality commitments, some sensible service organizations have provided an additional compensation commitment for this purpose, that is, when the service quality of the organization does not meet the standards and levels promised, the organization is willing to This compensates the customer. The service guarantee discussed in this article refers to the service guarantee in the modern sense, which has both quality commitment and compensation commitment.

In terms of the significance of service assurance, scholars such as Jochen Wirtz and others have described it in a large amount. Jochen Wirtz and Prem.N. Shamdasani have refined the 19 major contributions and impacts of service assurance on enterprises and their customers. In order to remove tediousness and even streamline, this article summarizes the main meaning of service guarantee into three aspects. 1.Service guarantee can reduce customer perceived risk and improve consumer confidence

Nelson has tried to separate goods into a priori and a posteriori. The a priori products refer to those whose quality can be tested before the purchase decision, and the a posteriori products refer to those whose quality is difficult to judge before the purchase decision. Services are typical posterior goods because services are intangible, concurrent, heterogeneous, and perishable. Entering a service organization, you cannot see and touch the service before you decide whether to accept its service, because it is invisible; you cannot experience its service in advance, because the consumption of the service only exists at the time of output; you cannot determine this time Whether the service is the same as the last service, even if it was provided by the same organization or the same person; you cannot ask the service organization to take out a sample of the service that it has produced to observe in advance, because the service cannot be stored. As a result, most customers are always wary of the quality of their services when making service purchase decisions.

With the introduction of service guarantees, the perceived risk of customer purchase decisions is limited to the morally corrupt behavior of service organizations refusing to fulfill their commitments in service guarantees. Because as long as the service organization can seriously fulfill its service guarantee, customers can basically determine the effectiveness of their service consumption guarantee before purchasing. This warranty is the lower of the two which enjoys quality-guaranteed services or low-quality services plus compensation, that is, the customer's purchase and consumption of services will not be less effective than the lower of the two.

In addition, the courage to make a service guarantee on a certain attribute of the service will increase the customer's consumer confidence, especially when the customer only cares about the reliability of the service and does not care much about compensation. Suppose there are two airlines A and B. A's on-time arrival rate is as high as 95%, and B's on-time arrival rate is only 70%. Then B obviously does not have the motivation and courage to make a service guarantee for the on-time arrival of the flight. Because if B makes this service guarantee, it will either face high compensation or carry the bad reputation of light promise.

2. Service assurance prompts companies to focus on customer needs and quality control

In order to attract customers' attention and encourage them to make purchasing decisions, the service guarantees of service companies mostly revolve around the characteristics of the needs that customers attach great importance to, which urges companies to better grasp customer demand preferences and pay closer attention to the characteristics of customer demand. Variety.

Service assurance is part of the service quality standard, specifically the explicit or externally declared part of the service quality standard. In order to maintain the corporate image and avoid the occurrence of corporate compensation due to the emergence of low-quality services, service companies and their employees generally attach great importance to the quality standards promised in service guarantees, which forces them to carefully identify, master and eradicate (or reduce ) Potential error points in service operations, effectively achieving ex-ante control of service quality.

3.Service guarantee can stimulate customer's enthusiasm for complaining

Scholars such as Janelle Bart launched a book called "Complaining Is Gold" in 2001. The book shows the benefits of customer complaints to the enterprise, and the service guarantee is just inspiring customers to complain effectively.

Regarding the reasons why customers are unwilling to complain and complaints, Bitner and other scholars summarize them into five aspects: one is that customers do not think the company will be responsible; the other is that customers are unwilling to wait and face the person who caused the error; the third is that the customer cannot determine himself Rights and obligations of the company; Fourth, customers are unwilling to spend time complaining; fifth, customers are worried that they will get poor service after complaining.

4. The effective design and implementation of service guarantee can effectively overcome the above factors that hinder customers from complaining

The service guarantee's compensation promise expresses the position of the company's willingness to be responsible for service failure, and provides a measure for customers to judge the complaint or the profit of the complaint.

The quality guarantee of service guarantee provides a basis for customers to judge service failures, enables customers to easily judge and identify the occurrence of service failures, and bravely and reasonably confronts those who cause service failures.

Successful service guarantees are easy-to-start, meaning customers only need to spend a small amount of time and effort to get the compensation they deserve.

In addition, the customer is no longer afraid of retaliation for worse service due to a complaint, because it means higher compensation for him and more compensation for the company.

1. Implementation of corporate reputation and service guarantee

</ strong> Wirtzetal believes that companies with a medium or better reputation in service quality are most likely to benefit from service guarantees, while companies with a notable or poor reputation in service quality will find it difficult to benefit from service guarantees . For companies that have a good reputation in terms of service quality, they have the opportunity to charge customers high prices, and companies generally do not give up this opportunity. Therefore, high service quality and high service prices are the general characteristics of such companies. Customers are willing to pay high prices when purchasing and consuming services from such service companies, and of course they also expect to receive high-quality services that make them fully satisfied. Therefore, if an unconditional service guarantee is implemented, it will appear redundant to a company with a high reputation, because its reputation is the best implicit guarantee; if a specific service guarantee is implemented, there is a lack of confidence in its own quality and a justification for possible service failures. Suspect for reasons. For infamous companies, because they have not established basic credibility in the minds of customers, it is difficult for their service guarantees to win the trust of customers in a short time.

2. Implementation of service characteristics and service guarantees

</ strong> Hart believes that the impact of service guarantees on customer behavior will be magnified when one or more of the following situations occur: when the service price is high, when the service is self-participating, when the customer knows little about the service When the negative impact of service failure on customers is greater, when the industry is in an industry with a higher service failure rate, when word of mouth is an important basis for customers to make purchasing decisions. When the above situation exists, customers want effective service guarantees from the service organization, but the company will also bear greater risks. For example, the implementation of service guarantees by companies in industries with a high service failure rate will directly mean that the company is facing For more refunds and compensation.

3. Implementation of customer characteristics and service guarantee

</ strong> Although most customers only consider compensation commitments as an alternative when quality commitments cannot be fulfilled, that is, they prefer companies to complete their services in accordance with quality commitments, the survey found that there are indeed Some customers focus on initiating service guarantees (ie, the service quality has not reached the guaranteed level and the customer asks the company to compensate). Customers' concerns about compensation promises may entice some customers to make inroads in initiating compensation mechanisms, and companies must take precautions. Therefore, the implementation of a service guarantee also depends on whether the customer characteristics meet this condition.

Although service assurance is so important, quite a few managers in the service industry believe that service cannot be guaranteed. Because the service is difficult to have a quality guarantee or can be returned as a tangible product (for example, an unsuccessful grooming service cannot be returned), or the physical part of the service can be returned, but the intangible part of the faulty service cannot Was returned. According to existing research, an effective service assurance plan includes at least three characteristics.

1. Guarantee of customer satisfaction

Since the purpose of service assurance is to satisfy customers, meaningful service assurance means a commitment to customer satisfaction. For example, Safeway in the United States offers a "three-person trip" promise that when customers check out, they guarantee that if any team has more than three people, it will immediately open a checkout counter. This kind of guarantee may not be difficult to achieve, but it can still be clearly appreciated and satisfied. Another example is that in aviation services, it is difficult for airlines to guarantee 100% punctuality, because it is often delayed due to bad weather. But this does not mean that "customer satisfaction" cannot be guaranteed. When the flight is delayed due to weather, if the airline can arrange the activities of the customer during the waiting time, such as eating, rest, entertainment, etc., customer satisfaction will be there. May not be affected. Therefore, the meaning of service guarantee is not to let the company guarantee all the conditions in the service project (especially those beyond the control of the company), but to promise to keep customer satisfaction from being damaged.

2. Specificity of guarantee clause

Another meaning of a meaningful service guarantee is that the terms of the guarantee should be clear and specific, so that customers can accurately understand the content of the guarantee, and at the same time, the employees providing the service should clearly understand their work goals and responsibilities. In many service companies, the slogans "provide quality service" and "provide fast service" are often seen, but the meaning of this guarantee is actually unclear, because for customers, actually from this guarantee I can't see what kind of service I can get; for employees, I can't figure out how to perform it from this guarantee. On the contrary, if it is not "provide fast service", but "provide service within five minutes", this guarantee is a clear and meaningful guarantee for customers and employees.

3 Compensation for unfulfilled guarantees

The third meaning of meaningful service guarantee is: once the guarantee is not fulfilled, the enterprise should give the customer reasonable compensation, and make the customer's compensation procedure simple and fast. For example, Domino Pizza promises that within a certain range, customers will receive the specified pizza within 30 minutes, otherwise they can pay $ 3 less or eat for free. However, many companies will only apologize verbally when customers are not satisfied, and are unwilling to make any substantial compensation, or will set up many complicated procedures to limit customer requirements when customers request compensation. This often leads customers to find it difficult to seek compensation and give up. However, customers giving up the compensation requirements does not actually benefit the company too much, because it makes it difficult for companies to quickly understand the problems in service quality management and not get opportunities for improvement; on the other hand, they will take their own experiences Telling a lot of people around you has greatly damaged the image of the company.

Once you know what a meaningful guarantee is, you can refine it on that basis. The so-called refinement of service guarantee is the process of concreteizing the characteristics of service quality into a series of corresponding service attributes. Different service industries have different service attributes, resulting in different quality characteristics. However, in summary, the characteristics of service quality can be summarized into the following six aspects:

Functionality: The degree to which the functions and effectiveness of the service meet customer needs.

Economical: Whether the cost for customers to get different levels of service is cost-effective.

Security: the degree of protection of the customer's health, mentality, life and the safety of goods and property during the service.

Timeliness: The degree to which the service meets customer requirements in time, including three aspects: timely, time-saving and punctual.

Comfort: The degree of comfort in the service process, including the application, comfort, and convenience of the facility, the environment is clean, beautiful, and orderly.

Friendlyness: The degree of friendliness in the service process, including the friendly atmosphere, the attitude of service staff, and harmonious interpersonal relationships.

For different enterprises, the importance of the above-mentioned six aspects of quality characteristics varies. Highlighting the quality characteristics of different aspects will help the company to form its own operating characteristics. For example, outstanding economics and outstanding comfort often form two distinct business positions. Therefore, the enterprise should determine the basic service goals and positioning according to its own business strategy, and on this basis, determine the content of the service guarantee and specify it.

The design of service guarantee is the specificization and clarification of the quality commitment and compensation commitment it covers. Specifically, it is to clarify the scope and degree of quality commitment, and to define the form and intensity of compensation commitment.

1.Determine the scope of quality commitment

According to the research results of scholars, the service quality of service organizations can be reflected through the performance of five major aspects: tangibility, reliability, responsiveness, assurance, and empathy, and these five major aspects can be subdivided into ten Several or even dozens of service attributes. Therefore, determining which service attributes to make quality commitments is the first task of service assurance design.

First, the service organization should make clear whether to adopt specific service guarantees or unconditional service guarantees. Specific service guarantees only make commitments to certain attributes of the service, while unconditional service guarantees cover all elements of service performance, that is, the pursuit and commitment of customers' full satisfaction.

Second, if the service organization chooses a specific service guarantee, the service organization should also specify the service attributes of the guarantee. The service organization may follow the principle of conformity and innovation. The so-called conformity refers to the service guarantees widely used by competitors in the industry; the so-called innovation refers to the service companies trying to introduce some unique service guarantees in the industry. The purpose of conformity is to make up for the disadvantages, and the purpose of innovation is to seek advantages.

2.Determine the degree of quality commitment

The so-called quality commitment degree is the level and standard of promised service quality. It can be expressed as a period of time, a result within a certain interval, and a psychological state. The degree of quality commitment made on specific service attributes is the quality standard set by the enterprise for the service attribute, and the degree of quality commitment made on the overall service of the enterprise is the standard set by the enterprise for its overall service . Therefore, determining the degree of quality commitment is the same job as determining the internal quality standards of the enterprise, but it must be more accurate, stricter, clearer and better reflect customer needs.

3. Determine the form of compensation for compensation commitments

The initial service guarantee compensation commitment is more easily seen as a punishment for the company's breach of quality commitments. Therefore, it mostly compensates customers in the form of economic resources, such as compensation for a certain amount of currency, discounts, and free service vouchers Wait. Service consumption is a composite exchange that includes both a practical dimension and a representation dimension. The practical dimension is related to economic resources, such as money, goods, and time, and the representational dimension is related to psychological or social resources, such as state, belief, and sympathy. Therefore, service organizations should also consider the granting of social resources as an effective form of compensation when designing compensation guarantees for service guarantees.

After choosing between economic or social resources, the service organization should also choose specific compensation methods because different compensation methods have different effects.

4. Determine the strength of compensation

The determination of the strength of compensation is more like solving a game theory problem. As for the single game, the customer certainly wants to maximize the compensation without causing the company to default (that is, refuse to pay); and the enterprise wants to minimize the compensation without removing the customer's dissatisfaction. However, as far as multiple games are concerned, both customers and enterprises want to maintain the compensation level at a reasonable and fair level. Therefore, seeking the balance between the interests of customers and enterprises is the key to determining the strength of compensation.

First, a reasonable compensation level should be determined from the perspective of the customer. The entire process of customers receiving low-quality services but receiving compensation from the enterprise can be regarded as a social exchange behavior, that is, customers exchange services that meet quality assurance with low-quality services plus compensation. As far as customers are concerned, the fairness and rationality of the exchange behavior is represented by the equivalent of the effectiveness of enjoying quality-compliant services and the effectiveness of low-quality services plus compensation. Therefore, the determination of reasonable compensation is translated into a judgment of the respective effectiveness of services that meet quality assurance and low-quality services. Since the judgment of the above two utilities is a highly subjective task and differs depending on the customer, service, time, and place, it is recommended to use subjective judgment methods such as Delphi method to make judgments and average values.

Secondly, the enterprise should make a rational calculation of the above-mentioned compensation strength to see if it is acceptable. The cost of the enterprise due to the occurrence of compensation behaviors, the total compensation is determined by the amount of single compensation and the number of compensations; the enterprise obtains benefits such as increased sales due to the performance of compensation behaviors. Therefore, if the result of the calculation shows that the return is greater than the expenditure, it indicates that the company can accept the compensation; if the return is less than the expenditure, it means that the conditions for implementing this service guarantee are not yet met.

Based on the analysis of the existing service image, the enterprise can design or redesign the service quality management system, and form a spiraling cyclic process to provide customers with high-quality services. This mode is shown in Figure 1 below.

In the schematic diagram of this model, dashed lines indicate the boundaries inside and outside the enterprise. It can be seen from the figure that customer satisfaction is independent of the enterprise. The results of the service output provided by the enterprise will affect and determine customer satisfaction, but the enterprise cannot directly control customer satisfaction. Through the analysis of service quality satisfaction, the company can establish that it should reach a meaningful guarantee to the customer, and form internal requirements based on this guarantee. As shown in the model, guarantees are on the boundaries of the company and outside the company. For customers, guarantees are the basis for customers to choose a company, and for employees of a company, guarantees become the behavioral norms for providing services. Therefore, companies need to make guarantees concrete and easy for customers and employees to understand. The specificization of this guarantee can directly become the starting point for the design of a quality management system for an enterprise. Within the enterprise, the meaningful service guarantees and specificizations of the service guarantees made above should be converted to specific requirements within the company based on the analysis of the service image. These requirements should be clear, targeted, and quantifiable. of.

What Is a Service Guarantee?

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