服務(wù)營銷精要英文pptimCase18-Accellion

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1CASE18

THEACCELLIONSERVICEGUARANTEE

OVERVIEW

AccellionsoughttopositionitselfasaserviceproviderintheDistributedFileStorage,ManagementandDeliverymarketspace.ItsmajortargetedcustomersareGlobal2000enterprisesandInternet-basedprovidersofpremiumcontentwhoneedtosupplytheirorganizationsandclientswithreliableandfastaccesstotheirInternet-linkedservers.Asmoreandmorecompaniesmovetheirapplicationsanddatafromisolateddesktopsandlocalareanetworks(LAN’s)tomoregloballyaccessibleInternet-basedapplications,Accellionpromisestheinstantinfrastructuretoprovidetherequiredavailabilityanddownloadanduploadtimes,improvingtheirrevenuesandreducingtheircosts.

Stillnewtotheindustry,Accelliondevelopeditsserviceguaranteeasapartofitsvaluepropositiontopotentialcustomers.Theguaranteewasdesignedtocrediblypromisehighservicestandardstopotentialclients.

TEACHINGOBJECTIVES

?Tointroducetheserviceguaranteeasasourceofcompetitivedifferentiation.

?Todemonstratethepowerofaserviceguaranteeforthefirm’smarketingeffortstopotentialcustomers.

?Toshowthatserviceguaranteescanbeusedtocommunicateandenforcecustomer-drivenstandardsinternally.

?Toteachthedesignofanefficientserviceguarantee.

?Toshowhowpotentialcheatingbycustomersonaserviceguaranteecanbemanaged.

1?2009byJochenWirtzandJillKlein

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STUDYQUESTIONS

1)Whatisthemarketingimpactofawell-designedserviceguarantee?

2)EvaluatethedesignofAccellion’sguaranteeshowninExhibit1ofthecase.Howeffectivewillitbeincommunicatingserviceexcellencetopotentialandcurrentcustomers?Wouldyourecommendanychangestoitsdesignorimplementation?

3)WilltheguaranteebesuccessfulincreatingacultureforserviceexcellencewithinAccellion?Whatelsemaybeneededforachievingsuchaculture?

4)Doyouthinkcustomersmighttakeadvantageofthisguaranteeand‘stage’servicefailurestoinvoketheguarantee?Ifyes,howcanAccellionminimizepotentialcheatingonitsguarantee?

ANALYSIS

1.Whatisthemarketingimpactofawell-designedserviceguarantee?

Inatimeofincreasingcompetitionandmoredemandingconsumers,superiorservicequalityhasbecomeakeydeterminantofafirm’ssuccess.Serviceguaranteeshavebeenadvocatedbymanyexpertsaspowerfultoolsforkickstartingservicequalityimprovements(e.g.,byforcingtheorganizationtofocusoncustomerneeds,eliminatefailpoints,andformalizeservicerecovery)andforbuildingmarketingmuscle(e.g.,byreducingperceivedrisk,increasingqualityperceptions,andencouragingword-of-mouth).

Tothecustomer,committingtoAccellionpotentiallyentailssomerisk.Thecustomer’sownservicequalitytotheirclientsisatriskshouldAccellionnotdeliveritspromise.Furthermore,potentialcustomersmightfeellockedintoarelationshipwithAccelliononcetheydecidedtosubscribetoitsservices.

ForAccellion’scustomers,aserviceguaranteecanbeamajorsourceofperceivedvalue.Theguaranteeservesasapowerfulsignalofthefirm’scommitmenttoqualityanditscommitmenttomaintainingconsistentqualitylevelsofservicedelivery.Thecustomerwouldreasonthatsincethefirmstandstoincurasignificantlossbynotdeliveringaspromised,itmustbehighlycommittedtolivinguptoitscommitment.Aserviceguaranteeisthereforeaverypowerfultoolforattractingnewcustomersandincreasingthefirm’smarketshare.

Awell-designedserviceguaranteeincorporatesacustomercomplaintandservicerecoverysystem.Ascustomersareconfidentthatrecoverywillhappen,andasinvokingtheguaranteeisdesignedtobeeasy,clientswillreadilygivefeedbacktoAccellionshouldtherebeanylapsesinservicequality.Thetermsoftheguaranteethenspecifytheservicerecoverybydescribinghowaproblemwillberectifiedandhowcompensation

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willbepaid.Thus,awell-designedserviceguaranteeisanexcellenttoolforinstitutionalizingservicerecovery.

Inserviceindustrieswhereservicefailuresaremorecommon,theguaranteewouldalsogeneratepositiveword-of-mouth,whichisprobablythemostpowerfultooltoattractnewcustomers.Customersoftenreadafirm’scommunicationsmaterials,buttheythenactbasedonwhattrustedexpertsoropinionleadersrecommend.

Allthis,however,requiresthattheguaranteebewelldesigned.Awell-designedserviceguaranteecanbeausefulsourceofdifferentiationforafirm.Welookatserviceguaranteedesigninthenextsection.

2.EvaluatethedesignofAccellion’sguaranteeshowninExhibit1.Howeffectivewillitbeincommunicatingserviceexcellencetopotentialandcurrentcustomers?Wouldyourecommendanychangestoitsdesignorimplementation?

Thedesignofaguaranteeprimarilyencompassesthreeaspects:

1)Whatisthepromisedcompensationincasetheguaranteeisinvoked?

2)Whatisthescopeoftheguarantee–i.e.whatattributesoftheservicearebeingguaranteed?Istheguaranteeallencompassing(anoverallguaranteeonfullsatisfaction)?

3)Howeasyisittoinvoketheguarantee?Cancustomerseasilyunderstandtheguarantee?Isita“noquestionsaskedguarantee?”

Intermsofpromisedcompensation,theAccellionguaranteeseemsreasonablygenerousandmeaningful.Accellionguaranteestocredit100percentofthefeesforthemonthaffectedshouldtheclientbedissatisfiedwithAccellion’sservice,orshouldanyofthespecificperformancelevelsguaranteednotbeachieved.Giventhatitscommitmentondownloadtimesanduptimesareratheraggressive,thegenerouslevelofservicerecoveryseemsreasonable.

TheAccellionguaranteeisamixeddesignguaranteecombiningafullsatisfactionguaranteewithguaranteeingspecificattributeperformancelevels.AnoverviewofdifferenttypesofguaranteesisprovidedinFigureTN-1.

Inthepast,fullsatisfactionguaranteeshadbeenadvocatedasbeingthebestdesignforserviceguarantees.However,recentworkhasshownthattheuncertaintyorambiguityoftenassociatedwithsuchguaranteescanleadtodiscountingofitsperceivedvalue(WirtzandKum2001).Whencustomersarepresentedwithafullsatisfactionguarantee,questionssuchas“Whatdoesfullsatisfactionmean?”or“CanIinvokeaguaranteewhenIamdissatisfied,althoughthefaultdoesnotliewiththeservicefirm?”mayberaised.Thisambiguityinfullsatisfactionguaranteescanresultindiscountingoftheexpectedvalueofaguarantee.Attribute-specificguaranteespromisespecificperformancelevels,

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andthereforedonothavethedrawbackofuncertainty,buttheydonotofferthewidescopeoffullsatisfactionguarantees.

Amixedorcombinedguaranteecombinesthewidescopeofthefullsatisfactionguaranteewiththespecificperformancestandardsoftheattribute-specificguarantee.Shouldtheconsumerbedissatisfiedwithanyelementoftheservice,thefullsatisfactioncoverageofthecombinedguaranteeapplies.Specificperformancestandardsareaddedtocommunicateminimumperformancelevelscoveredbytheguarantee,whichreducecustomeruncertaintyabouttheintendedscopeoftheguarantee.

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FigureTN-18-1:DefinitionsofGuaranteeDesigns

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Term

GuaranteeScope

Example

Single-attributespecificguarantee

Onekeyattributeoftheserviceiscoveredbytheguarantee.

DominoPizza’sGuarantee

“Deliverywithin30minutesorthepizzaisfree.”(Hart,1993)

Multi-attributespecificguarantee

Afewimportantattributesoftheservicearecoveredbytheguarantee.

MinneapolisMarriot’sGuarantee“Ourqualitycommitmenttoyouistoprovide:

?Afriendly,efficientcheck-in

?Aclean,comfortableroom,whereeverythingworks

?Afriendly,efficientcheck-out

Ifwe,inyouropinion,donotdeliveronthiscommitment,wewillgiveyou$20incash.Noquestionsasked.Itisyourinterpretation.”(Hart,1993)

Full

satisfaction

guarantee

Allaspectsoftheservicearecoveredbytheguarantee.Therearenoexceptions.

Lands’End’sGuarantee

“Ifyouarenotcompletelysatisfiedwithanyitemyoubuyfromus,atanytimeduringyouruseofit,returnitandwewillrefundyourfullpurchaseprice.Wemeaneverywordofit.Whatever.Whenever.Always.Buttomakesurethisisperfectlyclear,we’vedecidedtosimplifyitfurther.GUARANTEED.Period.”(Lands’Endcatalogue,1999).

Combined

guarantee

Allaspectsoftheservicearecoveredbythefullsatisfactionpromiseoftheguarantee.Explicitminimumperformancestandardsonimportantattributesareincludedintheguaranteetoreduceuncertainty.

Ifyouarenot100%satisfiedwithanyelementofourservice,simplyinformusandwewillprovide:

?Alternativetourarrangementsforyouwithin12hours,and

?20%refundofthetourprice.Forexample,youcaninvokeourguaranteeshouldyounotfind:

?Accommodationincentrallylocatedfirstclasshotelsofinternationalstandard…

?Awidevarietyofdeliciousmeals…

?…

Source:WirtzandKum(2001)

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Inevaluatingserviceguaranteedesigns,wehavetoconsidertheimpactthedesignislikelytohaveon

1)customerperceivedvalue

2)customerperceivedrisk

3)customerexpectationsofservicefailure

Ithasbeenfoundthatamixeddesignoracombinedguaranteeisbetterthanamulti-attributedesignorasingle-attributedesignintermsofcustomerperceivedvalueandcustomerperceivedriskandcustomer’sexpectationsofservicefailure.

Inaddition,wenoteherethattheAccellionguaranteeisa‘noquestionsasked,customer’sdiscretion’guarantee,whichmakesiteasytointerpretandinvoke.Thisdesignalsolendsgreatercredibilitytothefirm’scommitmenttomeetingitsstandards.

Animportantaspectofamixedguaranteedesignisthespecificattributesonwhichstandardsaresetandperformanceaccordingtostandardsisguaranteed.IntheAccellioncase,theattributeslistedare:

1)uploadanddownloadtimewherethestandardissetattwiceacompetitivebenchmark.

2)serviceavailabilityexceptforroutinemaintenanceandwithaforce-majeureclause2

3)customerservice–responsewithintwohoursofreceivingacomplaintandadvancenotification48hoursbeforeservicedisruptionduetoroutinemaintenance.

4)customerprivacy.

AllofthesearesignificantattributesfromthepointofviewofatypicalAccellioncustomer.Ofspecialimportanceistheguaranteeoncustomerservice.ThisislikelytobeveryrelevantforAccellioncustomers,whomayencountertechnicalbugsknowntobecommonwiththetypeofserviceAccellionprovides.TheguaranteeoncustomerserviceresponsetimeisahighnoteintheQoSguaranteeandislikelytoleadtoamajorappreciationofthevalueoftheguaranteetoAccellioncustomers.ThisisevenmoreimportantbecauseAccellionisstillasmallplayerintheindustry,andpotentialcustomersarelikelytobeworriedabouttheservice,problemresolution,andresponsetimesofsuchasmallplayer.

Givenincreasingcustomerconcernsrelatedtomaintainingtheprivacyofinformationimpartedtotheirserviceproviders,Accellionhasdonewellinbuildinginaprivacypolicyaspartofitsserviceguarantee.ThisisallthemoreimportanttoAccellion’smajortargetsegmentasalackofaccesssecuritycanmeanmajorrevenuelossestothesebusinesses.

2Theforce-majeureclauseexcludesservicedisruptionsduetonaturalforces(e.g.,earthquakes),warsandterrorism.

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Inall,weconcludethattheAccellionguaranteemeetsbestpracticedesigncriteria.

3.WilltheguaranteebesuccessfulincreatingacultureforserviceexcellencewithinAccellion?Whatelsemaybeneededforachievingsuchaculture?

Guaranteesalsohaveanoperationalimpactontheserviceorganizationitself.Settingstandardstowhichthefirmmustdeliverorelseincurlosseshastheeffectofkeepingservicestaffontheirfeet.IntheAccellioncase,wetakeparticularnoteoftheguaranteeoncustomerservice.Thiswouldcertainlyhelpleveragecustomer-focusacrossalllevelsofthefirm.Theguaranteeisapowerfulsignaltofrontlinestaffthattheorganizationiscommittedtocustomerserviceatalllevelsandthatefficientcustomerserviceisabsolutelyvitaltothefinancialsuccessofthefirm.

Technicalpersonnelarealsolikelytobeimpactedbytheguaranteeoffastdownloadanduploadtimesandcontinuousserviceavailability.Technicalglitchescanmeansubstantiallossofrevenuetothefirmandappropriatefailsafeswouldhavetobeemployedtopreemptanyservicefailuresonthesecounts.Furthermore,thehighpayoutwhentheguaranteeisinvokedwillalsoleadtoastrongmotivationinthefirmtolearnfromservicefailure,thereforeinstillingacultureofcontinuouslylearningfrommistakesandimprovingprocesses.Inshort,theguaranteeisdesignedtoensurethatcommitmenttoquality,customerserviceandcustomerdrivencontinuouslearningisleveragedacrossthefirm.

AnIntegratedModeloftheServiceGuarantee’sImpactonMarketingandOperations.

InstructorscanusethemodelshowninFigure18-2towrapupthediscussiononthemarketingandoperationsimpactofawell-designedserviceguarantee.Themodelisgeneric,anditcanbeusedtorecapthediscussionaroundAccellion’sQoSGuaranteeandextendthediscussiontotheimpactofserviceguaranteesingeneral.

ThedirectbenefitsofaServiceGuaranteecanbegroupedintotwomaincategories:(1)impactonoperationsandservicequality,and(2)impactonconsumerbehavior.Theimpactonoperationsandqualityareadirectoutcomeofworkrelatedtothedesignandintroductionofaguarantee(e.g.,promptingafirmtounderstandandimproveitsserviceprocesses),andofhavingaguaranteeoperational(e.g.,keepingthefirmonitstoesbymonitoringperformanceagainstguaranteedstandards).Consumerbehaviorisdrivenbothdirectlybytheguarantee(e.g.,reductionofperceivedrisk),aswellasindirectlyviaimprovementsinoperationsandservicequality(e.g.,highercustomerretentionasservicerecoveryproceduresbecomeformalized).

Theimpactonoperationsandqualitycanbegroupedintothefollowingthreesubcategories:(1)servicedesign,includingmatchingtheservicedeliveryprocessagainstcustomerneeds,andencouragingthefirmtofullyunderstandandimproveitsproductionprocesses;(2)servicefailureandrecoverymanagement,suchasforcingthefirmto

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understandandreducefailpoints,aswellastoformalizeservicerecoveryprocedures;and(3)personnelmanagement,forexample,encouragingthefirmtohireandtrainagainstguaranteedstandards.

Theeffectsonconsumerbehaviorcanbegroupedintoimpacton:(1)potentialcustomersduringthedecisionmakingprocess,suchasreducingperceivedrisk;(2)currentcustomers,suchasincreasingbrandloyaltyandpositiveword-of-mouth;and(3)dissatisfiedcustomers,suchasincreasingtheirpropensitytocomplainwhendissatisfiedandtherebycreatingopportunitiesforthefirmtorecovertheservice,tolowerdissatisfactionandswitchingpropensity,andtoreducenegativeword-of-mouth.

Therearetwopotentialamplifiersoftheimpactofguaranteesonconsumerbehavior.Theseareperceivedriskanduniquenessoftheguarantee.Thehighertheriskperceivedbyconsumers,andthehigherthedegreeofuniquenessoftheguarantee(i.e.,betterthancompetitors’guarantees),thehigheristhepotentialimpactofaguarantee.Itisnoteworthythattheseamplifiersareproposedtomediatetheimpactofguaranteesonconsumerbehavioronly,andnotonoperationsandservicequality.Inotherwords,thebeneficialimpactsonoperationsandservicequalitycanbeachievedevenwhenconsumersperceivelittleriskand/orotherfirmsoffersimilarguarantees.

Finally,betteroperationsandservicequality,andapositiveimpactonconsumerbehaviorareproposedtoimprovebusinessperformance.Higherprofitsinturnaresuggestedtoreinforcemanagementcommitmenttotheguarantee.

Ofcourse,thereareanumberofpotentialsecondarylinksbetweenthevariablesinthemodel.Forexample,positiveword-of-mouthcausedbyaserviceguaranteecanreduceperceivedrisk.Tokeepthemodelparsimonious,thesesecondarylinksarenotincluded.

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Figure18-2:ImpactofaWell-DesignedServiceGuarantee(Source:Wirtz1998)

ImplementingandRunninga

Well-designedServiceGuarantee

RequiredFeatures:

unconditional

easytounderstandandeasytoinvokecommunicateeasytocollecton

meaningfultocustomerscredible

Amplifiers

perceivedriskuniquenessofguarantee

Operations&Service

Quality

ServiceDesign

focusesfirmoncustomerneedspromptsfirmtounderstandandimproveserviceprocesses

ServiceFailure&RecoveryMgmt

forcesfirmtounderstandandreducefailpoints

encouragesfirmtoseekcustomerfeedback

encouragesfirmtoformalizeservicerecovery

ConsumerBehavior

PotentialCustomers

reducesperceivedrisk

signalsquality

CurrentCustomers

increasesbrandloyalty

encouragespositiveword-ofmouth

allowspricepremium

DissatisfiedCustomers

encouragesfeedbackwhen

PersonnelManagement

encouragesfirmtohireandtrainagainstguaranteedstandardssetsclearstandardsforemployees

dissatisfied

lowersdissatisfactionatservicefailure

reducesnegativeword-of-mouth

Reinforces

Commitment

BusinessPerformance

IncreaseinSales&MarketShare

designandimplementationoperationsandqualityimprovements

payoutcosts

=IncreaseinProfits

IncreaseinCosts<

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4.Doyouthinkcustomersmighttakeadvantageofthisguaranteeand‘stage’servicefailurestoinvoketheguarantee?Ifyes,howcouldAccellionminimizepotentialcheatingonitsguarantee?

Firmsareoftenconcernedaboutcustomerstakingunfairadvantageofaserviceguarantee.Thisthreatisperceivedasmoresignificantbyservicesfirms,becauseoftheinherentlyintangiblenatureofmostservices.Servicesarehighinexperientialattributes,whichmakesitdifficulttostrictlydefinecustomersatisfaction.Itwouldthereforeappearthatthedoorremainsopenforopportunisticbehaviorbycustomers.WirtzandKum(2004)haveidentifiedthefollowingpersonalityandsituationalvariablesaspotentialdriversofcheatingonserviceguarantees:

1)potentialmaterialgain

2)repeatpurchaseintention

3)levelofsatisfaction

4)easeofinvokingaguarantee

5)variouspersonalityvariablessuchaslevelofmorality,shame,self-monitoring,andMachiavellianism

Though,apriori,onemayexpectthatpeoplearemorelikelytocheatwhenthepotentialmaterialgain(intermsofthemonetarypayoutoftheguarantee)ishigh.Empiricalworkhasshownthatthepotentialmaterialgaindoesnotsignificantlyincreasetheincidencesofcheating.Itwasfoundthatpeoplewhocheatfor$500alsocheatfor$50,andpeoplewhodonotcheatfor$50,alsodonotcheatfor$500.Thisfindingheldwithintypicalamountscoveredbyguarantees.InAccellion’scase,theamountscanbehigher,butclientsarelargecompaniesratherthanindividualhouseholds,andlargecompaniesprobablyareunlikelytoshowopportunisticbehavior.Corporatecustomersarelikelytohavehighlevelsofself-monitoringinsofarasmonitoringpublicimageisaroutinepartofcorporateactivity.Corporationsarecarefulnottobeseenasengagingindishonestandexploitativepractices,andarealsomoresensitivetothelongrunbenefitsofrelationalexchange.Thus,itishighlyunlikelythatAccellion’smajorcustomerbasewouldengageincheatingontheQoS.Therefore,itseemscorrecttoofferafullrefundofamonth’sworthoffees.

Repeatpurchaseintentionswerefoundtobeasignificantinhibitorofcheatingonserviceguarantees.Repeatpurchaserswouldusuallydeveloptrustintheserviceprovider.Also,alongrelationshipmayoftenbeeconomicallyadvantageousinsofarasswitchingserviceprovidersusuallyinvolveshighriskandhighcost,becauseofuncertainfuturequalityandthelossofearlierinvestmentsthathavegoneintotherelationship.Suchcustomersarelikelytotakealongrunviewofthebenefitsfromahealthyprovider-clientrelationshipandarelesslikelytoengageinmyopicopportunisticbehavior.IntheAccellioncase,thenatureoftheservicerequiresalongstaywiththeparticularprovider.Switchingprovidersinthisindustrywouldentailadditionaltechnicalandtimecostsastheclientwouldhavetofamiliarizeitselfwithnewprocessesandtechnologies.Thus,mostcustomersarelikely

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tohavealongrunviewoftheprovider-clientrelationshipandthiswouldactasasignificantinhibitorofcheatingbehavior.

Moretroublesome,however,isthelevelofsatisfaction.Thelevelofsatisfactionwiththeserviceproviderisknowntohaveanegativeassociationwiththepossibilityofcheating.Thissuggeststhatfirmswithanoutstandingrecordfordeliveringqualityneedtobelessworriedaboutcheating.IntheAccellioncase,wehaveanewfirmwitharelativelyuntestedoperationssystem.Thus,Accellionwouldhavetobeonitstoestoensurethatserviceglitchesdonotoccur,andthattheserviceavailabilitystandardsthatithassetareconsistentlymaintained.Serviceavailabilityisknowntobeacommonandrecurringproblemwithfirmsprovidingweb-basedservices.Accellionseemsconfidentthatitsnetworkarchitecturewouldhelptoavoidthisproblemaltogether.AgoodtopicforclassroomdiscussioniswhetherAccellionshouldbethisconfidentintheirnetworkarchitecture,andtheconsequencesforthefirmiftheirsystemsdonotoperateasplanned.

Theeaseofinvokingaguaranteehasbeenfoundtohavenoimpactoncustomercheatinginempiricalstudies.StudiesbyWirtzandKum(2004)didnotfindsupportforanyeffectofeaseofinvokingaguaranteeinthecontextofatourpackageserviceandarestaurant.Wewouldexpecttheresultstocarryovertothepresentcase.Theeaseofinvokingtheguaranteeislikelyinourcasetoserveasanexcellentqualitysignaltocustomersof

Accellion.

Personalityfactorsarenotrelevanttothecaseathandgiventhatthetargetsegmentiscorporate.

Inconclusion,Accellionshouldcarefullymonitorguaranteeinvocationsofitscustomerbasetoidentifypotentialopportunisticbehavior.However,thelikelihoodofsuchbehaviorappearstobesmall.

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CONCLUDINGREMARKSONACCELLION’SQOSGUARANTEEAND

RECENTDEVELOPMENTSINTHEFIRM

WethusconcludethattheAccellionQoSiswelldesignedandislikelytobeamajorcompetitiveedgeforthecompanyinitsmarketingefforts.AccellionshouldworrymoreondeliveringtheratherhighstandardsithassetforitselfthanonthepossibilityofbeingcheatedbyclientsontheQoS.TheGuaranteecombinesanoverallsatisfactionclausewithspecificpromisesonserviceattributes.Itsetsstandardswhicharecompetitiveonattributesthataresalienttoitspotentialcustomersandsignalsthecompany’scommitmenttodeliveringhighquality.

Accellion,whichhadfollowedalowprofilemarketingapproach,beganamoreaggressiveinitiative.InJune2001,Accellionrebrandeditselfanditsservices.ThenameAccellionaimedtocommunicatespeedandaccess.Previously,thefirm’snamewasSpacedisk,anamewhichwasthoughttobetoosimilartoweb-basedstorageproviders,andthereforewasconsiderednoteffectiveincommunicatingAccellion’scorevalueproposition.AccellionhasbeenincorporatedintheUStopavethewayforanIPOthere.However,withtechnologym