Increasing the persuasiveness of a service guarantee: the role of service process evidence

After investing in service quality improvement programs, firms may realize that they still face a daunting challenge: How should they persuade consumers that service has actually improved? One way of attempting to persuade consumers is to offer a service guarantee. But are guarantees credible? Are they really effective? Can they overcome consumers’ prior negative experience? Surprisingly, the topic has received very little attention. This paper provides a conceptual and an empirical examination of the persuasive power of service guarantees. Specifically, the effects of service process evidence, compensation and prior beliefs about the service provider, are examined. The experimental data indicate that the inclusion of service process evidence significantly increases consumers’ willingness to try the provider. The findings also suggest that compensation is more persuasive when service process evidence is specified in the guarantee. The synergy of presenting service process evidence and high compensation, is able to overcome consumers’ prior (negative) exposure. Overall, the study supports the conclusion that consumers are primarily interested in service reliability and only secondarily in compensation for service failures. Managerial implications of the findings are discussed.