Common mistakes in designing and implementing service guarantees

Abstract

Purpose

The purpose of this paper is to explore companies' experiences in designing and implementing service guarantees.

Design/methodology/approach

The methodology relied on 22 in‐depth personal interviews across a sample of ten Australian service firms.

Findings

The effectiveness of a service guarantee depends on how well a firm designs and implements it. It was found that service guarantees were generally not well conceived, implemented, or monitored after launch. Through a comparison of theory and practice, this study identifies a number of common mistakes, including inadequate or non‐existent pre‐launch market research; ambiguous definition of the role of the guarantee; inadequate market testing of alternative guarantee promises; a lack of consultation with key functional managers during development; a lack of CEO commitment; ambiguous assignment of responsibility for ongoing management of the guarantee; and an absence of performance evaluation.

Research limitations/implications

The study employs qualitative research techniques and considers only Australian firms.

Practical implications

While the common mistakes offer cautions for managers when planning a service guarantee, some outstanding examples of successfully implemented service guarantees also emerged. A notable example is the customer charter, a more comprehensive conditional guarantee that avoids many of the pitfalls associated with traditional service guarantees.

Originality/value

Previous studies do not address the experiences of a broad sample of companies that have designed and implemented a service guarantee. The findings in this paper extend the understanding of how service guarantees could become more effective and identify directions for future research.

Citation

McColl, R. and Mattsson, J. (2011), "Common mistakes in designing and implementing service guarantees", Journal of Services Marketing, Vol. 25 No. 6, pp. 451-461. https://doi.org/10.1108/08876041111161041