Designing service guarantees – is full satisfaction the best you can guarantee?

Abstract

Introduces a new guarantee type termed “combined guarantee”, which combines the wide scope of the full satisfaction guarantee with the specific performance standards of the attribute‐specific guarantee. Should the consumer be dissatisfied with any element of the service, the full satisfaction coverage of the combined guarantee applies. Specific performance standards are added to communicate minimum performance levels covered by the guarantee, which reduce customer uncertainty about the intended scope of the guarantee. Proposes that such combined guarantees would be superior to the pure designs, as they combine the wide scope of full satisfaction guarantees with the low uncertainty of attribute‐specific guarantees. Two experimental studies were conducted to examine consumers’ perceptions of the alternative guarantee designs. The findings show that the combined guarantee outperformed all other designs and, therefore, demonstrate that firms can design better guarantees than merely promising full satisfaction.

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