Service Contract Anyone?

The other day I was in my local electronics store and during the transaction the salesperson asked me if I wanted to purchase a service contract. I politely declined.

Have you noticed the many companies selling service contracts for their products or service? Some of the companies using service contracts are automobile dealerships, appliance stores, heating and cooling contractors. These are just a few of the companies that offer service contracts. There are many more.

There are two schools of thought on service contracts. The first is that it gives the customer the opportunity to buy added protection against potential defects in the product or service that the company is selling.

The second school of thought is that service contracts are not necessary. They are simply an excuse for sloppy workmanship, and at the same time very profitable for the company selling them. The one who loses is the customer.

The late Ron Zemke, one of the most respected individuals in the field of customer service training and development, believed that the future will bring a trend for people to buy only products which are unconditionally guaranteed. Consumers will be unwilling to tolerate the service contract mentality.

It’s my opinion that companies should unconditionally stand behind the products and services that they sell. They should not try to charge the customer more for a so-called ‘service contract.” Yes, from time to time a product will fail or service will not be up to the proper standards. However, rather than charging the customer more money with a service contract, why not just give them what they paid for in the first place? The companies and organizations that will be most successful will be the ones that set the pace in this area. People want quality and service that they can depend on--without having to pay for a service contract.

Can you imagine a scenario of medical doctors selling service contracts? Think about it. Let’s say they were going to do a heart transplant. For an additional $5000, they would guarantee the heart for two full years! Apply this strategy to restaurants. For an extra $5 they would guarantee clean tableware, fish grilled to perfection, and, of course, a very courteous waitress or waiter. Switch now to hair stylists. For an extra $20, they would guarantee a punctual appointment with a cut and style done the way you like it. Who knows, for an extra $5 they might not even smoke cigarettes just before your appointment with them, and might even display some current magazines in the waiting area.

Yes, I know I’m stretching things a bit with the suggestion of service contracts for doctors, waitresses, and hair stylists. It wouldn’t be practical. Why? Because we expect that they are providing the best service possible to begin with, although many of them don’t and we simply put up with it or take our business elsewhere. The point I’d like to make is that most businesses (including new car dealers) should guarantee great service and full satisfaction without customers having to buy a service contract.

Service contracts simply don’t make sense for the consumer. The company that implements a strategy guaranteeing uncondi¬tional quality and service at no extra charge will demonstrate to its competitors that this approach can be a key factor in keeping customers loyal indefinitely and the operation profitable and successful.

How to Take Care of Your Money Worries

The interesting thing about living in this world is that everyone worries, especially when going through a job transition. Some of us worry more than others. Three of the common things most of us worry about are our concerns with:
Money
Family
Career

In this article let’s talk about money. When it comes to money, if we have too little, we worry about how much we need and how we are going to get more of it. For many people this can consume a great deal of their time. They worry about how they are going to pay their monthly bills, credit card payments or how they are going to pay for their children’s college education. This vicious cycle continues and they are unable to come up with a solution because they are spending all of their time worrying about the problem.

One thing is for sure, worrying about something never solved the situation! The key to taking charge of your money worries, is to start thinking about the solutions that are possible. One exercise is to try to imagine in your mind that you are asking a money consultant for some advice about your particular financial situation. He listens to you then he replies with an answer. What might he say? Very likely the answer you imagine will be the very answer you need to hear.

For example, your question might be: how do I pay the bill I just received in the mail from my credit card company? As you ask yourself the question, an answer pops into your head. You could use the extra money you were saving for an emergency. Then another answer comes to you and it suggests you not purchase the new couch you and your spouse were thinking about buying. By delaying this purchase and by using some reserve money to pay the current credit card bill, you have solved the problem.

The concept here is that you ask your inner guide for a solution. By listening and taking action on the problem you are dealing with, you can solve the financial concern.

So in summary, stop worrying, and start thinking about a solution and then take action. The benefit you receive is you will be able to take charge of your money worries one problem at a time.

Do the Unexpected

One summer, Elizabeth, my wife and I took a vacation through Northern Michigan. On a particular day we had several places we wanted to visit so we started out very early from the town of St. Ignace. To save time, we decided we would stop for breakfast a few hours later. However, my wife just had to have a cup of gourmet coffee before we got on the road. Problem, all the gourmet coffee shops were not open yet. We searched around and finally spotted a place that served gourmet coffee called the Colonial Lodging Bed and Breakfast. It didn’t look open yet, however, Elizabeth decided she would take a chance and find out if they would serve her.

Upon entering the bed and breakfast she discovered a most delightful man, who just happened to be the owner. He explained to her that they were not quite open yet, but he had just finished brewing up some of their special gourmet coffee and poured her a cup. Elizabeth asked him how much she owed him and he replied “no charge, have a great day!”

What the owner of the Colonial Lodging Bed and Breakfast did that day for my wife was unexpected. He left an extremely positive feeling with her. He did something that can only build good will and in the long term, his business.

Are there a lot of bed and breakfast establishment out there? Yes, and as we all know it can be very competitive in that market just like it is in your market place. So why not do something positive for your potential as well as your existing customers; do the unexpected and surprise them in a positive way.

Some of the things to consider doing for your potential and present customers that fall under this category included:
• Opening and closing your store a few minutes earlier than the posted sign indicates.
• Providing the extra few cents for a customer’s purchase so he or she doesn’t have to break a dollar.
• Acknowledge them as soon as they walk in the door with a cheery hello and “we will be right with you”.
• Make them feel truly welcome. Let them know you really care about meeting their needs and wants.
• If they couldn’t find what they wanted in your store recommend them to another place where they can find it.
• Ask them was everything alright with their purchase and mean it. If something was not, do your best to make it right.

By doing the unexpected for your potential, and present customers you will exceed their expectations and build your business.


Tom Borg is a consultant, trainer and coach. He is president of Tom Borg Consulting LLC. He works with the managers and employees of businesses and non-profits in the area of professional development and customer service training. He is the author of the book/cd “Making Service Count”. He earned his bachelors degree in administration and his masters degree in Educational Leadership at Eastern Michigan University. You can contact him at: 734-812-0526, email: tomborg@tomborgconsultingor visit his website at www.tomborgconsulting.com