Service Guarantees: The Impact of Playing ‘Hard to Get’ on Perceptions of Firm Credibility and Repurchase Intent

Within a competitive economy, achieving high standards of customer service is important to the survival of any business. For service-based businesses in particular, recovering from inevitable service failures is essential to ensuring this success, which is based on keeping the promises that are made. Effectively using tools such as service guarantees as a part of a firm’s service recovery strategy is one way firms can ensure delivery of these promises. Data from a vignette study (N=318) supported the research hypotheses that customers perceive higher levels of fairness (when presented with a no-questions-asked service guarantee) leading to higher levels of customer satisfaction, perceptions of firm credibility and repurchase intent. Partial support was found for the proposition that firm credibility mediates the relationship between higher levels of service recovery satisfaction and repurchase intentions. Study results suggest that service companies should consider the implementation of a hasslefree service guarantee as it is important for achieving positive organizational outcomes.