Question

What are the benefits to the company of an effective service guarantee? Should every service organization have one? ( in detail please!)

Answer 1

The benefits to the company of an effective service recovery strategy are:

(1) It forces the company to focus on its customers thus increases customer satisfaction and loyalty;

(2) Information generated through the guarantee can be integrated and tracked for the continuous improvement

(3) Generate relevant and immediate feedback from customers; and

(4) Enhance employee morale because employees don’t like to be faced with repeated failures with no approach to resolve them.

Companies might not need a service organization because of the following reasons:

-- guarantee does not fit the image of the company

-- costs of the guarantee outweigh the gains

-- several uncontrollable external variables

-- fears of abuse or cheating by customers

-- customer perceive little risk and variability in the quality of service among competitors