The Value of Excellent Service

What is Excellent Service?

There’s a certain value to service. It’s safe to say that ‘some’ form service is usually expected from any business. You may promise service to your customers and even go so far as to say it’s excellent and/or something that separates you from the competition. If it’s truly excellent, customers will recognize it, likely pay you for it, and it will go towards support business success metrics (more on this later). Excellent service comes at a cost for a business in most cases, so that’s where the value part fits in. Remember, decrease in cost to serve + increase in customer acquisition & loyalty = greater return for your business. Therefore, it can be argued that finding a way to deliver “efficient” excellent service is in your best interest and the best interest of your business, for success. Let’s look at a couple of examples:

No Bite Out of This Apple

My MacBook Pro went down recently and fast. Being an amateur tech trouble-shooter, I was able to detect the problem as a possible faulty battery and/or power chord causing the immediate shut-down and total disruption in my business operation. Like most business professionals, I am as embarrassingly dependent on my machine, as I am with certain appendages. My Mac went down on a Sunday; right before a busy work and travel week – not ideal timing. I remember purchasing AppleCare (Apple’s three-year warranty service) as a pseudo ‘requirement’ with my Mac purchase some 18 months ago, not really knowing what I was purchasing except the fact that it was ~$189 (of course I recall the costs). Anyways, I called Apple, was quickly rerouted to my local retail outlet, set up an appointment online for Monday at 10:45 with the “Genius Bar,” and my need, and accompanying high-anxiety/panic, were immediately queued towards being satisfied/relieved/rectified.

It didn’t stop there. On Monday, I showed up for my appointment. The Apple Genius’ took me in at my scheduled time. They did not ask for receipts or proofs of purchase to verify the warranty (they had it with my serial number and automated record of my account). They took my machine in and in less than three hours replaced the battery and power chord free of charge. The costs, had I not purchased AppleCare would have been $250. My guess is they would have serviced me just as efficiently and friendly with or without AppleCare. Needless to say, I retrieved my Mac with minimal disruption and was back on track with my business. Costs = $0. Time traveling to/from Apple store = ~1 hour. Time and money saved for my business = $Priceless! Meanwhile, the Apple store was buzzing with approximately 30 employees servicing over 100 customers at any given time. This goes on each day with complete efficiency (no cash registers), attention to service and customer turnover, and optimized effectiveness (all Apple employees have a certain, ah ‘proud intelligence.’ Love it or hate it, they are helpful and know their stuff. They can get you what you need. It’s easy to do business with them. And, the customer is quickly on their way while they’re on to the next customer).

How is it that Apple has figured this value-service-secret out and a large big box retailer like Best Buy, has not? Had I purchased a fallen PC from Best Buy I would have likely been sold some limited warranty, waited in a long service line, and been without my machine for who knows how long? I might have been sold a new one and, most of all, my business would have suffered tremendously for it all.

Crash Landing

I am on a Delta plane as I write this. Upon checking in and reserving my $519 flight to California this morning at 6AM, I learned that my seat assignment had changed. In other words, I went from having a seat assignment (from my booking over one month ago) to all of a sudden not having one, pretty much right before I was supposed to board the plane. When I checked in, I was politely given a new seat, a middle one (yuck) and at the back of the plane (not what I had originally booked or expected). The Delta attendant showed, rather confirmed, a full flight of booked seats with no other options than my next to the toilet seat, of course, other than, several “paid seats” for an additional $20 – $50 more. I asked “When does Delta plan to stop nickel-and-diming its customers.” Really. I was pissed. Unlike AppleCare, a $50 upgrade to another coach seat (the one I booked and expected) in an aisle is not an example of good service at a premium. It’s simply wrong and sucky (I rarely use the word ‘sucky’ yet feel it to be appropriate in this context).

Conversely, there’s hardly ever an issue when I JetBlue. The seats are all leather with ample foot space. The TVs, internet connectivity and friendly staff never go unnoticed. Is that worth the $519 + $50 on the front end? You better believe it!

Assessing High-Value Service

Not every business can provide high level, excellent service, efficiently. Yet knowing the difference between excellent service (i.e. AppleCare) and a price upgrade (Delta) can get very blurry. Here are some suggestions to help you assess excellent service:

  • Do you really know your customers? What is important to them? What level of service is expected? What service will customers pay a premium for and see true vale vs. what is perceived as an added cost?
  • Is excellent service quantifiable within your business? What percentage of a sale is service? What’s the cost of that service? What is that cost as a ratio over the sale (revenue) and/or the margin (profit)?
  • Do you provide service efficiently? It really does not make sense if your service efforts cost more than the profits you make. Keep in mind, however, excellent service may cost your business more but could potentially recoup that in other metrics like loyalty, referrals and Lifetime Value of a customer.
  • Is excellent service baked into your existing product/service offering? Is it sold separately?
  • Is excellent service a part of your corporate culture?

Service as a Potential Revenue Stream

Excellent service is worth it to customers – so much that they will pay a premium for it in most cases and be pleased with the outcome. My AppleCare example is testimony to that. Sometimes it’s only until a customer really needs it that they recognize the value in excellent service. Making AppleCare a pseudo requirement with the purchase of my Mac was a good move on Apple’s part. I usually don’t buy warranties as I’ve never been truly satisfied with one. The words “limited” and “basic,” or “parts and labor not included,” spook the heck out of me as a consumer. Really? And, this goes back to the nickel-and-diming (Delta) example. In my mind, most products should work for at least three years flawlessly and service-uninterrupted. And, services should be good especially when you pay $519 for them Had Apple included AppleCare in the cost of the machine, it would have likely driven up the price to an unacceptable level. Offering AppleCare as a value-add has benefits. One incident of using it and I’m sold on that excellent service offering for life.

Not every customer will pay for excellent service. Most expect it for free. Therefore, it’s important to be very clear what a customer will get for your service offering, especially if you choose to charge for it. For example, Briggs & Riley luggage has a lifetime warranty (baked into the cost of every piece), no questions asked. I brought my – now five year old – luggage there twice for repair. It was fixed and returned promptly. No charge. Am I a fan of B&R now? You bet. I bought two more bags and refer every traveler I know to them.

If you decide to charge for tiered service be sure to clarify the delineations of service; what customers get at each level and what is not included. Package it so that they feel important and there’s added value to the service. I did a project for a tech company where we called their premium level service package (included for all customers to start and eventually migrated to a profit center for the company) the “Royal Service Center.” Customers paid for and experienced high quality service. Whether it’s “white glove,” “VIP,” or some other marketing-wrapped acronym, a little marketing can go a long way in adding value to your premium service offering.

Where to Go from Here?

Look around. Be a consumer. Which companies provide service value well? Which ones are horrible and need improvement? Assess and apply this to your own business. Try to quantify the value in terms of costs, sales, lifetime value, etc. Implement. Test. Survey. Try different things. When you lock in the best value service offering for your customers and your business, you will know and the results on business revenues and profitable customer relationships will speak for themselves.

About the Author

Angelo Biasi is General Manager of SMART Marketing Solutions, LLC, a leading full-service integrated marketing company in Florida and New York since 2001. He has helped create and execute marketing plans and integrated marketing solutions for companies such as Playtex, Bic, Rogaine, Tauck, and over 35 colleges and universities, to name a few. Angelo has an MBA in Marketing from the University of Connecticut and teaches Marketing at New York University where he has for over six years. He has been quoted and/or featured in USA Today, Mobile Marketer magazine, Mobile Commerce Daily, Luxury Marketing magazine, BNET TV and Business Currents magazine, to name a few. For more information or to learn more, email him at abiasiatsmartmarketingllcdotcom  (abiasiatsmartmarketingllcdotcom)  , visit, call him at 239.963.9396 and follow him on Twitter @angbiasi.


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