It Takes Courage: Service Guarantees and Fixed Pricing

Exemplar Law Partners, LLC Founder and CEO, and VeraSage Fellow, has two fantastic posts on his blog. The first, “Our Satisfaction Guarantee. Does Your Firm Care Enough To Stand Behind Its Service?

The second is profound in describing what it takes for professionals to fix prices in advance. “Don’t Be A Wet Rag! Tips For Professionals Considering Fixed-Pricing.

Both are necessary reads. Enjoy!

Comments

  1. James E. Mason says:

    Carolyn:

    I can answer that question: “I would be interested in learning whether these guarantees apply, no questions asked or if clients have to jump through hoops and argue with the provider in order to obtain their money back. I think that many clients are deterred from asking for money back because they’re afraid that they will have to fight for it.”

    Let me first explain that this is from a past life, as a consultant, but my position on guarantees is the same.

    First, I should point out that my guarantee while simple, required explanation. The guarantee was this: Guaranteed. Period.

    The explanation was that I had stolen it from Lands’ End (and specifically from Gary Comer, who at the time he gave me permission to “steal” the guarantee, was the President of Lands’ End). I also disclosed the history of that phone call.

    I would say two things. First, I think your “willingness to mark down a bill” is YOUR definition, as is everything you’ve defined about how YOU handle your service issues. Second, I noticed that you frame the idea of service guarantees as a sort of “pie in sky” idea, which I find riveting, at the very least.

    I suppose there ARE people who don’t feel they have a right to expect what they’ve paid for, but I’m not one of them, nor do I know many of them. Perhaps it’s because I go through life armed with the courage of my convictions, and with my guarantee right out in front of me. . .and there’s little else in the world that keeps you as humble, and as prepared, as the knowledge that you’ve promised BEFORE something gets broken that you’ll fix it.

    People don’t fear having to fight for something that’s guaranteed. . .the guarantee sort of insures that they won’t have to fight, doesn’t it?

    Anyway, I’m glad to hear that you’re not averse to having a guarantee. Imagine how excited I’ll be when you actually offer one.

  2. The guarantee I offered my clients was simple and appeared at the bottom of every invoice:

    If you are not 100% satisfied with the services that we provide you, we will refund all or part of the fees based on your discretion.

    No muss, no fuss, no jumping through hoops.

  3. Ron Baker says:

    Carolyn,

    What separates an excellent company from a mediocre one, in my opinion, is how they handle customer complaints. Excellent companies have in place a service recovery program, such as FedEx, Ritz-Carlton, Marriott, Starwood, LL Bean, Lands End, Disney, Nordstrom, among others.

    If you want empirical evidence of all the salutary effects of offering a service guarantee, there is a great book by Christopher Hart, Extraordinary Guarantees. Here is what I wrote about this book in my review (available under Resources on this site):

    Christopher W. Hart. Extraordinary Guarantees: Achieving Breakthrough Gains in Quality and Customer Satisfaction. Examines the economics of offering your customers a 100 percent money back guarantee, especially for service firms. Required reading for any company wanting to utilize this strategy in order to gain a competitive advantage, add more value, and lower customer risk.

    I think the problem with your approach to marking down a bill is twofold: 1) You get to make the decision, not the customer; and 2) The guarantee is retrospective, rather than prospective. When customers engage professionals, there is more risk than in purchasing other types of products. To the exten you can allay those risks prospectively, you are offering more value. Also, offering the guarantee up-front is communicating more value, and assuring your client you don’t just talk about pleasing them, but that your money is where you mouth is.

    If the book doesn’t convince you to offer a simple guarantee, such as Exemplar’s, James’, Dan’s or Ed’s above, I’ll buy it back from you.
    Ron Baker

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