Service Guarantees: A Review and Explanation of Their Continued Rarity

By McCollough, Michael A. | Academy of Marketing Studies Journal, July 2010 | Go to article overview

Service Guarantees: A Review and Explanation of Their Continued Rarity


McCollough, Michael A., Academy of Marketing Studies Journal


INTRODUCTION

Few if any consumers would buy a new car or even a television without a written guarantee. Indeed, for some the strength of the offered guarantee relative becomes the key deciding factor in deciding which product to purchase. However these same consumers frequently buy service products, including relatively expensive products such as crusies and tour packages without a service guarantee. While many service managers and researchers advocate service guarantees, they remain rare. The fundamental question addressed in this research is why this is so.

First, service guarantees are presented as a unifying framework for the related but distinct literatures of service quality, complaining, service failure and recovery, and the relationship marketing/loyalty literature. Next, the guarantee literature is reviewed. Examples of successful service guarantees are highlighted. Next, problems with both the literature and practice of service guarantees are presented as a reason why service guarantnees remain relatively rare. Finally, specific recommendations are provided to advance the literature on both service guarantees and practice.

SERVICE GUARANTEES AS A UNIFYING FRAMEWORK

Service failure and recovery is an area of intense interest to researchers and practitioners alike. The allied areas of service quality, complaining, satisfaction and dissatisfaction, and loyalty also attract considerable interest. Indeed, the research in these related yet distinct areas has become so developed and detailed that some scholars today focus on a specific subfield such as the role of failure attributions on satisfaction or the impact of justice on recovery efforts. Arguably in the quest to understand the phenomenon of failure and recovery scholars and managers risk "losing the forest for the trees." One possible framework to unify these research areas are service guarantees (Kandampully and Duddy 2001).

First, guarantees address a key issue in the complaining literature. Why do many if not most dissatisfied consumers choose not to complain? Among the many reasons advanced for the failure of disgruntled consumers to complain is ambiguity over just what the consumer can expect in the way of recovery and compensation, confusion as to what constituents a failure, and uncertainty over who is to blame for the service failure. Potentially service guarantees can address these problems. A well crafted service guarantee makes it clear to the consumer what constitutes a failure, how to seek redress, and what the outcome of complaining will be (Halstead, Droge, and Cooper 1993). Service guarantees therefore make the recovery process and outcome clear to both the consumer and the front line service provider. Consumers by virtue of the guarantee know what to expect and the internal training and systems necessary to support the guarantee guide the service provider in providing redress. In short, a well supported service guarantee enables the formal recovery guidelines necessary for successful recovery, empower associates to act, and fosters the culture of customer satisfaction critical to successful service failure recovery.

A guarantee provides the formal vehicle by which loyalty following service failure and recovery can be assured. A guarantee should provide assurance that failure is rare and that in the event of failure adequate recovery will be provided. Armed with such confidence consumers should return following failure and recovery to give the service provider another chance.

Finally, organizations are advised in the service failure and recovery literature to not just respond to service failures but to identify and eliminate the cause of failure. A service guarantee can "close the loop" between responding to service failures and taking the measures necessary to keep problems from occurring in the first place. Firms that offer service guarantees should track the causes of failure (much like a manufacturer would track recalls and warranty claims) and should use this information to eliminate the causes of the service failure. …

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