GMAT Reading Comprehension

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Source: OG11th

Level: 3

Seeking a competitive advantage, some professional service firms (for example, firms providing advertising accounting, or health care services) have considered offering unconditional guarantees of satisfaction. Such guarantees specify what clients can expect and what the firm will do if it fails to fullfill these expectations. Particularly with first-time clients, an unconditional guarantee can be an effective marketing tool if the client is very cautious, the firms fees are high, the negative consequences of bad service are grave, or business is difficult to obtain through referrals and word-of-mouth.

However, an unconditional guarantee can sometimes hinder marketing efforts. With its implication that failure is possible, the guarantee may, paradoxically, cause clients to doubt the service firm's ability to deliver the promised level of service. It may conflict with a firm's desire to appear sophisticated, or may even suggest that a firm is begging for business. In legal and health care services, it may mislead clients by suggesting that lawsuits or medical procedures will have guaranteed outcomes.Indeed, professional service firms with outstanding reputations and performance to match have little to gain from offering unconditional guarantees. And any firm that e commitment to quality of service is merely employing a potentially costly implements an unconditional guarantee without undertaking a commensurate implements an unconditional guarantee without undertaking a commensurate commitment to quality of service is merely employing a potentially costly marketing gimmick.

Question List: 1 2 3 4 5 6

All of the following are mentioned in the passage as circumstances in which professional service firms can benefit from offering an unconditional guarantee EXCEPT：

  • A The firm is having difficulty retaining its clients of long standing.
  • B The firm is having difficulty getting business through client recommendations.
  • C The firm charges substantial fees for its services.
  • D The adverse effects of poor performance by the firm are significant for the client.
  • E The client is reluctant to incur risk.

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