Hampton Inns Essay

1217 Words Jul 15th, 2010 5 Pages
A subcommittee of the board of directors of Hampton Inns has made a bold proposal that customers be given a guarantee of “complete satisfaction or your night’s stay is free”. Employees will be permitted to make good on this guarantee without the approval of managers. But although the proposed guarantee would show great confidence in the hotels’ quality and would give Hampton Inns a competitive advantage, most of the hotel’s managers oppose the plan. Why would they not want to guarantee customer satisfaction? What are the possible customer reactions to such a guarantee? What controls can be introduced to reduce customer abuse?
A service guarantee (i.e. complete satisfaction or your night’s stay is free) makes the customer a meaningful
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Although it may appear that offering a guarantee will invite abuse, the reality is that only around 1% or 2% of the total market are truly unreasonable or will try to cheat a business. It is far better to develop a really strong guarantee which is attractive to the 98% of customers who are honest and develop other ways to protect the business against the shady 2%.( Keeffe, 2010) 1. The terms and conditions of the service guarantee should be easy to understand and communicate (Hill, Sum, Lee & Hays, 2002). This ensures the customer understands under what circumstances they should invoke the service guarantee. 2. Be specific about what the guarantee covers e.g. make sure that guests understand that the guarantee may be limited by things which are beyond your control. 3. Time constraints- it could be a stipulation that any claims by customers should be made within a specific time frame. 4. Testing the guarantee in a small population – By using a pilot phase it is possible to assess the actual abuse to the service being guaranteed. For instance, an implicit guarantee may be used initially in the testing phase or an explicit guarantee on a limited scale. An implicit guarantee is defined as a guarantee that is not communicated with the customer, while an explicit guarantee is one that is communicated clearly to the customer (Van Looy, Gemmel & Dierdonck, 2003). 5. An implicit guarantee can be used by the institution exclusively. If the

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