Sara Björlin Lidén and Per Skålén Service Research Center, Karlstad University, Karlstad, Sweden Contact: (Both authors) Karlstad University, Department of Business and Economics, Service Research Center SE-651 88 Karlstad Sweden E-mail Sara Björlin Lidén: [email protected] Per Skålén: [email protected]
The Effect of Service Guarantees on Service Recovery Abstract Service guarantees have been attributed the benefit of improving the overall service of a service provider. However, little research has been carried out within the area. This article focus on one aspect of the service guarantee, the effects that service guarantees may have on service recovery. Critical incident data were collected using the critical incident interview technique with customers of RadissonSAS, a worldwide hotel chain using a service guarantee. One contribution of this article is that the interviews convey that the implicit guarantee may serve as a risk reducer, which contradicts and adds to previous research. Previous research states that only the explicit guarantee has these benefits. In this case, the guarantee does not reduce risk in the purchase or consumption stage, but after the consumption when the service has failed, as the customer finds out about the guarantee in the recovery situation. Another contribution of this article is that service guarantees are found to influence the outcome of service recovery as it affects how employees behave to recover the customer. Keywords: Service guarantee, Service Recovery, RadissonSAS Acknowledgment: The authors would like to thank Professor Bo Edvardsson, Karlstad university, Professor Tore Strandvik, Swedish School of Economics and Business Administration in Helsinki and the two anonymous IJSIM reviewers for their useful comments.
1 Introduction Service guarantees have been claimed to be a key to success in terms of improving the process of service recovery, employee performance, providing data on service failures, developing measures for customer satisfaction and setting performance standards (Hart, 1988; Maher, 1992; Ettorre, 1994). These statements are based on experiences from a few companies, such as Nordstrom, Domino’s Pizza, or Lands End Hotels, which successfully have implemented service guarantees on their offerings (Hart, 1998). However, neither methodological approaches nor theoretical standpoints are presented to authenticate the findings (Hart, 1988; 1995; 1998; Heskett et al. , 1990; Maher, 1992; Ettorre, 1994). Nevertheless, such anecdotes have become the archetype for guarantee design and development. Despite the mentioned shortcomings and academic rigidity in much research on service guarantees, a few recent articles have presented in depth research on the service guarantee as a quality signal (Tucci and Talaga, 1997; Wirtz et al. , 2000) and guarantee design matters (Donath, 1997; McDougall et al. , 1998; Hill et al. , 2000). This research conveys insight into how the guarantee may affect customers prior to purchase, in reducing the risks of an uncertain service.
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