The paper builds upon established micro-level behavioral theory to develop the “Service Guarantee Strength Framework”. This framework posits that high Service Guarantee Strength leads to improved service quality, customer satisfaction, and loyalty through three intervening variables—marketing communications impact, employee motivation and vision, and learning through service failure.
An empirical investigation was conducted to test the SGS Framework using both employee and customer data from three pairs of firms, with each pair in a different industry. None of these firms had an explicit service guarantee. Unlike many behavioral research studies, this study measured both employee and customer perceptual data and compared the two. The research finds that Service Guarantee Strength is positively related to customer perceptions of service quality, customer satisfaction, and loyalty.