Lifetime Warranty

Lifetime warranties are a common feature of the product world. They essentially say “we guarantee that the object you bought will work as long as you own it. If the product ever fails, we promise to replace it or repair it to your satisfaction.” Lifetime warranties, as opposed to limited warranties, are designed to be bold statements communicating confidence in a product. What would a lifetime warranty look like for a service?

Service warranties (sometimes called service guarantees) promise that if a service provider fails to deliver the outcome promised, customers receive a full refund. It sounds like, “Pizza delivered in thirty minutes or it is free.” Datapro Information Services guarantees “to deliver the report on time, to high quality standards, and to the contents outlined in this proposal or you can deduct any amount from the final payment which is deemed as fair.”

Most service guarantees are anchored around a quantifiable feature—like time or compliance with agreements. Most are around an outcome—like landing on time, error free statements, or answered in three rings. But, the essence of service is an experience, not just an outcome. We recall the great personality of the wait staff long after we have forgotten the fact that the food was as expected. What if service guarantees included the customer’s assessment of the experience–a perceptual event adjudicated solely by the whim of the receiver?

Hampton Inn has built one of the best service guarantees around. “If you’re not 100% satisfied, we don’t expect you to pay. That’s our promise and your guarantee.” Are there a few guardrails? Of course! After a truck driver was not 100% satisfied about fifty times, the company instituted a limitation that essentially said if you register dissatisfaction three times; perhaps another hotel might be better suited to your needs.

So, here is our question. Pretend you did offer a lifetime warranty on the service experience you provided and the evaluation could only be determined by the customer. Assume the refund to the customer was three times the fee, price, or investment made by that customer. What changes would you make to ensure your new service guarantee did not take your organization into bankruptcy?