Industrial companies and money-back service guarantees rarely appear in the same sentence. Fears of devious customers, profit erosion due to mistakes, and even bankruptcy are key reasons companies avoid them. In our experience, service guarantees deliver far more benefits than they cost – to both the customer and our company.
Put our money where our mouth is
In 1984, our customer research had revealed a desire for quick delivery. We were confident we could fulfill that need. By 1986, after extensive reengineering of our internal systems, including doubling our warehouse, and feasibility testing, we launched our next-day delivery guarantee throughout New England, backed by the promise of a $50 credit. Not only was it an instant success; it demonstrated our expertise in inventory management and efficient processing of orders the same day received.
We didn’t stop there. Soon after, we added error-free shipping and billing. Later we revised our original guarantee to encompass all of the U.S. We now offer six guarantees that represent diverse aspects of our operation – including the most recent, and aggressive, 100% satisfaction guaranteed. We’ve also increased the promise to $100 in credit – in writing, without conditional fine print. Compared to the hundreds of thousands of transactions that we’ve processed, credits issued are a fraction of the big picture: just over 1,100 in 25 years.
Opportunities for improvement
According to Atlantic Fasteners’ president Tony Peterson, who, as a minority partner at the time, was the primary architect of the company’s program, guarantees to help the company improve. “Acknowledging a mistake, fixing it and making good on a promise builds loyalty and solid working relationships. But guarantees also serve as real-life audits.Enhanced automation and employee training is a result of discovered flaws in our system. They prevent us from getting too comfortable and keep us striving to improve.”
Peter Mals, Atlantic’s 22-year salesman and champion of the streamlined guarantee credit process, reiterates their importance to bringing about necessary changes. “We want to know what went wrong so we can conduct root cause analysis and quickly make improvements. It’s never been about blaming someone or getting a group in trouble. It’s simply a tool that ensures we do right by the customer, and reminds them that we value their relationship and business.”
Don’t expect many credits
As a result of the opportunities to fine-tune our processes and systems, customers shouldn’t expect to receive credits too often. They won’t need them. Our accuracy and reliability rating is a remarkable 99.96%. While guarantees always served as a strong reminder for employees to do a good job, the ante’s been raised since becoming a 100% ESOP in 2005. Our team wants nothing more than to do things right the first time – not just for our reputation and pride, but also for our customers’.
“Due to cutbacks and layoffs, our contacts are juggling multiple job responsibilities,” said Peterson. “They don’t have time to solve an avoidable problem. That’s why we all work hard to make sure there isn’t one.”
And that’s a guarantee.