s energy utilities deregulate and prepare for competition, many are beginning to adopt some version of a service guarantee. Typically these guarantees take the form of a cash or credit payment to customers when specified levels of service are not met by the company. For example, if service is not restored within a certain time or a scheduled appointment is not kept, customers get a cash payment or a credit on their bills.
Whether an energy utility is seeking to position itself in competitive marketplaces or to earn performance-based rates as a monopoly provider of access and delivery services, there are at least three reasons to consider service guarantees:
β’ As a potential point of differ- entiation where few others offer such a guarantee β’ As a point of parity where most others offer such a guarantee β’ As part of an effort to recover from customer-perceived past service failures Some utilities have also adopted service guarantees in part to motivate employees to be more "customer-focused." Unfortunately, our experience suggests that many utilities decide whether or not to adopt service guarantees using a model of customer satisfaction or loyalty that ignores a key aspect of service delivery and recovery from service failure.
Customer satisfaction and loyalty research typically focuses on