Service Guarantee

A service guarantee is a promise and so it drives the process and outcome. A guarantee helps everyone understand what the organisation delivers in terms of an experience process and outcome, and it also drives continuous operational improvement and the service recovery programme.

Activity: Answer the following questions:

1. What is a service guarantee?
2. Name some excellent service guarantees you are aware of. How do they work to create confidence in the service and increase perception of quality of the service?
3. Consider ‘The Warehouse’ guarantee below. If you make a purchase at the Warehouse how does the guarantee make you behave and feel? What would the challenges be for a manager at the Warehouse to manage their guarantee?
4. What are the four acid tests of a service guarantee? (see below)
5. What are the downsides of guarantees? Design a guarantee for a service of your choice based on the principles outlined in the text (including that it is meaningful; easy to understand; explicit; unconditional; and the payout).

What are the benefits of having a guarantee like this and what could go wrong?

Two examples of guarantees are given below.

Countdown Online Grocery Shopping Guarantees:

The Warehouse returns policy is available here.   Below are their procedures for people who would like to return a product:

Further Reading


Hart, Christopher (1988). ‘The power of unconditional service guarantees’, Harvard Business Review, July-
August, pp. 54-62.

Firnstahl, Timothy (1989). ‘My employees are my service guarantee’, Harvard Business Review, July-August, pp. 4-8.

Fitzsimmons, J., & Fitzsimmons, M. (2006). Service management: Operations, strategy, information technology. (5th ed.). Sydney: McGraw-Hill/Irwin.

Kashyap, Rajiv (2001). ‘The effects of service guarantees on external and internal markets’, Academy of
Marketing Science Review, No. 10.