A story about the power of unconditional service guarantees

Unconditional

My wife and I recently returned from a trip to Havana, Cuba where we spent a few days on holiday. One evening during our trip, we found ourselves wandering around Old Havana looking for a place to go for dinner when we stumbled across a funky looking bar/restaurant called ‘Lamparilla Tapas Y Cerveza’.

Now, we knew nothing about this restaurant and we didn’t have internet access whilst in Cuba so we couldn’t look it up to see what other people had said about it. However, the restaurant did look very interesting so we wandered over to take a closer look at their menu.

While looking, we were greeted by the host and whilst chatting away to her, Hana, my wife, jokingly asked if their food was any good.

The host was a little taken aback by this (obviously) but she confidently replied: ‘If it isn’t any good, then I’ll pay’.

Her reply surprised us as it’s not something that we’ve had said to us before. So, filled with optimism, we went inside and sat down.

Some people at this point might be saying that this was probably just a marketing gimmick to get us to come into the restaurant. In some situations that might be true but it wasn’t in this one. The reason I say that is because at the end of our meal, our host came over to our table again and asked us: “So, am I paying?”

We promptly answered ‘No’ and were delighted to be able to tell her that the food and service had been fantastic.

Back in the UK, I was reflecting on our experience at Lamparilla and it reminded me of a 1988 HBR article by Christopher Hart called The Power of Unconditional Service Guarantees. In the article, Hart discusses the idea and benefits of service guarantees and suggests that a good one should be:

  1. Unconditional;
  2. Easy to understand and communicate;
  3. Meaningful;
  4. Easy (and painless) to invoke; and
  5. Easy and quick to collect on.

I would suggest that our host provided us with an unconditional service guarantee that meets all of Hart’s criteria. In fact, I would go further and say they ‘aced’ criteria number 4, when they followed up with us to see if they had lived up to their guarantee/promise.

Our experience at Lamparilla left me wondering why more service businesses don’t offer unconditional service guarantees, particularly as Hart points out in his article, there are a range of benefits that come from offering guarantees like these. These include things like:

  1. They can force companies to focus on what great service means from their customers perspective;
  2. They can help set performance standards;
  3. They can help identify how, when and why a company fails; and
  4. They can help build customer loyalty and sales.

In a crowded and competitive market, like the one that Lamparilla finds itself in, the level of passion, commitment and belief that it takes to offer and deliver against an unconditional service guarantee is infectious, stands out and gets talked about.

I say again: I wonder why more service businesses don’t offer unconditional service guarantees.

 

 

 

 

This post was originally published on my Forbes.com column here.
Photo Credit: DaveBleasdale via Compfight cc

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