Customer intentions to invoke service guarantees: Do excellence in service recovery, type of guarantee and cultural orientation matter?

Many service providers feel confident about their service quality and thus offer service guarantees to their customers. Yet service failures are inevitable. As guarantees can only be invoked when customers report service failures, firms are given the opportunity to redress the original failure potentially influencing customer outcomes. The purpose of this paper is to provide the first empirical investigation of whether excellence in service recovery affects customers’ intentions to invoke a service guarantee, thereby discriminating between conditional and unconditional guarantees and testing for the impact of customers’ individualistic vs collectivistic cultural orientation.

In total, 171 respondents from four continents (spanning 23 countries) were recruited to participate in a quasi-experimental study in a hotel setting. A three-way analysis of variance was used to test the hypotheses.

All customers are very likely to invoke the service guarantee after an unsatisfactory service recovery. When customers are satisfied with the service recovery, they report lower invoke intentions, except for collectivistic individuals who are still inclined to invoke an unconditional service guarantee after a satisfactory service recovery. The finding supports an in-group/out-group rationale, whereby collectivists tend to behave more opportunistically toward out-groups than individualistic customers.

The study highlights the importance of excellence in service recovery, cultural differences and different types of service guarantees with respect to customers’ intentions to invoke the guarantee. The paper demonstrates how service guarantees should be designed in conjunction with service recovery strategies. Also, the paper shows that an unconditional service guarantee creates the condition in which collectivists might engage in opportunistic behavior; global service providers concerned about opportunistic customer claiming behavior thus might benefit from using conditional service guarantees.