`We guarantee it!' And they really do
One-hundred-percent satisfaction guaranteed - or your money back. How many times have you read or heard that and thought ``Now what's the catch?'' A lot of people scoff at such promises, many of which are designed merely to make consumers ``feel good'' about a purchase. Yet, a growing number of companies are not only offering unconditional guarantees - they are following through. Try not to be surprised, for instance, if a teller at National Westminster Bank in New York City treats you like a human being instead of a piece of office furniture. That's because the bank guarantees courteous service. If any employee at the bank acts grumpy or fractious, tell a manager about it and collect $5 cash on the spot - no argument, no hassle.
Then there's Miami-based ``Bugs'' Berger Bug Killers (BBBK). When you hire this company to come to your home, hotel, or restaurant, it guarantees to eliminate the cockroaches, mice, rats, and other pests. Although other companies frequently guarantee only to reduce pests to manageable levels, BBBK will write a letter of apology to any customer who even sees a bug - and will treat the hotel or restaurant customer to a free meal or a stay at the hotel.
`We wouldn't cash their check'
``It makes you different from everybody else,'' says Al Berger, who founded the company in 1961, and in 1986 sold it to S.C. Johnson & Co., which continues the ironclad guarantee. ``We were adamant that if the problem could not be solved within the guidelines of the guarantee, we wouldn't cash their check - we'd tear it up and send it back.''
The old-fashioned idea that the ``customer is always right,'' some business experts say, is staging a comeback. A handful of companies have gone beyond paying lip service to this ideal, and have adopted it as a pragmatic business philosophy, says Christopher Hart, an associate professor at the Harvard Business School.
``I've worked with 14 companies in the last eight months, and not one of them has dropped the ball on this idea of an unconditional guarantee,'' Mr. Hart says. ``The guarantee idea seems to be one that galvanizes top management's thinking and shows them a way to make quality more than a company slogan.''
In a world teeming with options for every service and product, some companies find that an absolute guarantee gives them a competitive edge by building customer trust.
Mr. Berger says the guarantee has paid off with great word-of-mouth referrals. The flip side is that a guarantee like that ``really puts the pressure and fear of loss on you,'' Berger says. ``Man, if you don't perform, you're out of business.''
Detroit auto manufacturers are currently waging a ``war of warranties.'' A few weeks ago, General Motors offered a ``bumper-to-bumper'' warranty for 36 months or 50,000 miles. Ford and Chrysler have matched GM. But even though those guarantees may be the best available in the industry, they are far from being full-fledged efforts to really satisfy customers, Hart believes.
``When you take your car in for a warranty repair, did they really cover your cost of time, expense of driving it there, and aggravation?'' Hart asks. ``Imagine for a minute an auto company that promises, `Anytime you bring your car in for warranty, we're going to pay you $100.' Now that's a guarantee.''
One company that knows how to satisfy customers and build a reputation is L.L. Bean, the outdoor clothing and equipment company based in Freeport, Maine. It all started with the original Mr. Bean, who, when he sold his first 100 pairs of Maine hunting boots, offered customers an unconditional guarantee.
Fully 90 pairs of broken-down boots promptly came flying back in his face. Fortunately, the fiasco didn't deter Bean, who returned his customers' money, but built his boots better the next time.
``Mr. Bean would do anything he could to make the customer happy,'' says Katherine Hartnet, a Bean company spokeswoman. ``We never question anybody. If somebody bought a hunting coat they feel should last 25 years, and it hasn't lasted that long, we'll be glad to make good on it for them.''
Founder's golden rule
A common characteristic of companies with a tradition of unconditional guarantees is that a founder usually strongly believed in the golden rule, both toward customers and employees. Domino's Pizza founder Thomas Monaghan based his company on the golden rule and a guarantee of pizza delivered hot in 30 minutes. A Domino's driver is trained automatically to tell a customer if he is late, and give the customer $3 off. The customer doesn't have to confront the driver.
Mr. Monaghan first tried giving customers a free pizza for late delivery. But he learned customers felt guilty taking a free pizza if a driver was a minute or two late, so the guarantee became $3.
Chemlawn, a national lawn care company founded by Richard Duke in 1969 and based in Columbus, Ohio, is another example of a company whose business rests largely on its guarantee. Mr. Duke, it seems, began cultivating customer and employee loyalty from the start - paying employees better than standard wages, and hiring them full time in an industry that typically hires temporary help, a company spokesman explains.
John Kerr, national service line manager of Chemlawn, says it would probably be impossible for the company to offer an unconditional guarantee without careful training and employee loyalty.
Chemlawn's employees are encouraged to provide ``legendary service'' and frequently go to incredible lengths to make troubled customers happy, even when the company isn't at fault. When recent harsh winter weather damaged lawns in Florida, including several serviced by Chemlawn, some customers blamed the company's fertilizer. The company didn't argue, but reseeded and plugged the lawns.
``It's the kind of service that shocks people,'' Mr. Kerr says. ``They can't believe it is happening in today's world.''
Guarantee's use as a management tool
Management experts, however, believe an unconditional guarantee has value far beyond its ability to breed customer loyalty. It also helps motivate employees and to keep managers toeing their end of the line.
``An unconditional guarantee is a way of expressing an impulse from management,'' says Sidney Levy, a professor of marketing at Northwestern's Kellogg School of Management. ``It moves through an organization, and it's a big statement to make. It is not like some little thing that you do, because in modern times it is important to counteract the skepticism about the quality of modern products and services.''
At National Westminster Bank in New York, a variety of service guarantees that have been in place since March are only the outward evidence of a four-year quality improvement program, says Howard Deutsch, director of quality improvement at the bank.
``There's been so much in the press about lack of quality,'' Mr. Deutsch says. ``Customers are no longer willing to accept poor service. We want to be one of the banks that are paying attention to it. ... If someone walks out the door mad at us, we lose.''
Harvard's Professor Hart says it is a popular myth that service companies can't do much beyond training employees to gauge or control the quality of their service. Unconditional guarantees on service would reduce errors and have as big an impact as just-in-time inventory systems have had on manufacturing, he says.
``The logic is hard to disagree with,'' Hart says. ``A company has a moral obligation to give customers what they paid for. If they don't, they should pay for it, not the customer.''