Contract Entitlement: Everything You Need to Know
Contract entitlement includes the details of customer support/service that will be provided by the business to each customer that enters an agreement with them.4 min read
Contract entitlement is the particulars of the support a customer will be provided when entering into a contract with a business. The entitlement is one component of the record that a company keeps when a transaction occurs, which can also include the name of the company, the type of assets covered by the contract, and the degree of support provided through the entitlement. There are no limit to the number of entitlements that can appear in a contract or in service level agreements (SLAs).
Knowing the extent of entitlement is of particular importance to service representatives of companies when managing the extent of service the customer has been guaranteed through the purchase of goods or services.
Features of Entitlement Management
The support management system for entitlements is especially important for maintaining customer satisfaction and brand loyalty. As such, entitlements are not only used for products, but also applied for managing resources owned by the company, client accounts, and to gauge the effectiveness of terms and provision within a contract. The range of features within an entitlement allows companies to define and monitor customer satisfaction and establish communication protocols for customers seeking remedies from the company.
Features of an effective entitlement management include:
- Entitlements that are clearly defined and efficiently allow customer service representatives to determine what level of support the customer is eligible for.
- The entitlement stages that each service representative must move through to provide customer satisfaction as effectively and smoothly as possible.
- Features such as warranties, maintenance agreements, subscriptions that are a major component of any service contract.
- Administrator access to view, monitor, and report on entitlement processes to improve the company’s customer service response success.
- Reporting so administrator reviews can be shared throughout the entire organization.
The Entitlement Management Process
When a customer contacts a company seeking a remedy to a situation addressed in a contract, the following steps are usually followed:
- A case is opened by a customer service representative and automatically assigned a case number. The customer’s record is then accessed and assessed.
- The entitlement assessment looks at the details inherent in the type of product in question and the parameters of the service contract.
- There are often established steps that the representative will follow depending upon the unique features found in the entitlement; imagine a flow chart with a series of “if/then” arrows and boxes.
- Regardless of the outcome, an account administrator reviews the process, prepares a report, and enters it into the corporate records for result assessments.
Important Entitlement Guidelines
There are several important factors to be mindful of when creating entitlements depending on the type of entitlement:
- Product Entitlements: It is a good idea to place limitations such as expiration dates and warranty terms for product entitlements. Items such as parts are likely at some point to wear out, and it would not be feasible to provide guarantees for replacement parts beyond a reasonable term of use. In addition, it is not uncommon for parts to no longer be manufactured and hard to find if a replacement is needed.
- Asset Entitlements: Access to entitlements can change based on location, management levels, work groups, employment, and other factors. A high priority should be placed on monitoring the changes that can occur within an organization. Preventing an individual’s or even a department’s access to privileged information such as contact information or trade secrets can prevent serious breaches of security. For instance, should an employee retain access to customer data after termination, the result could be the loss of clients should that employee find work with a competitor.
- Contract Entitlements: In practically every case, a contract should include entitlements that are triggered by specific events, whether they are calendar based, such as termination dates, compliance standards, or benchmarks such as sales volumes. Provisions should be included for periodic review of terms and the assessment of goal achievement.
- Service Entitlements: There are two factors that often addressed in the entitlements found in service contracts are either the number of hours a service representative will provide to remedy a situation or the number of visits a representative will make to the client’s premises. For instance, if a contract includes training services, the number of hours devoted to training staff, or the number of days of training that will be provided, that information should be clearly defined. It’s also a good idea to clarify where and when the training will take place.
Entitlements play an important role in creating peace of mind with customers. It lets them know that you will be there when they need you. Learn to use them to your advantage.
To learn more about contract entitlements, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Stripe, and Twilio.