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SMSM

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Chapter 3

CUSTOMER EXPECTATIONS OF SERVICES

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SMCustomer Expectations of Customer Expectations of

ServiceService

• Customer expectations are standards or reference points of performance against which service experiences are compared.

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SMObjectives for Chapter 3:Objectives for Chapter 3:Customer Expectations of Customer Expectations of

ServiceService

• Recognize that customers hold different types of expectations for service performance

• Discuss controllable and uncontrollable sources of customer expectations

• Distinguish between customers’ global expectations of their relationships and their expectations of the service encounter

• Acknowledge that expectations are similar for many different types of customers

• Delineate the most important current issues surrounding customer expectations

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SMPossible Levels of Customer Possible Levels of Customer

ExpectationsExpectations

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SM Types of ExpectationsTypes of Expectations

• Customers have different expectations of services

• Desired service – the level of service the customer hopes to receive

• Adequate service – the level of service the customer will accept

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SM QUESTION?QUESTION?

• Q. Whether customers hold the same or different expectation levels for service firms in the same industry?

• For eg: are desired service expectations same for all firms in the same category?

• Similarly are adequate service expectations same for all firms in the same category?

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SMFigure 3-1Figure 3-1

Dual Customer Dual Customer Expectation LevelsExpectation Levels

(Two levels of expectations)(Two levels of expectations)

Adequate Service

Desired Service

Zone ofTolerance

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SM Zone of ToleranceZone of Tolerance

• The Zone of ToleranceThe Zone of Tolerance---The extent to which customers recognize and are willing to accept variation in service performance

• Range or window in which customers do not notice service performance.

• When service falls outside the range (either very high or very low), the service gets the customer’s attention in either a positive or negative way.

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SMFigure 3-2Figure 3-2

The Zone of ToleranceThe Zone of Tolerance

Adequate Service

Desired Service

Zone ofTolerance

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SM Zone of ToleranceZone of Tolerance

• Zone of tolerance fluctuates with the customer

• Different customers possess different zones of tolerance

• It may depend on factors such as price. When price increases zone of tolerance becomes narrow.

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SM5 Dimensions of Service 5 Dimensions of Service

QualityQuality

• Reliability. The ability to perform the promised service dependably and accurately.

• Tangibles. The appearance of physical facilities, equipment, personnel, and communication materials.

• Responsiveness. The willingness to help customers and provide prompt service.

• Assurance. The knowledge and courtesy of employees and their ability to convey trust and confidence.

• Empathy. The caring, individualized attention provided customers.

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SM

Reliability Tangibles

Level of

Expectation

Source: L. L. Berry, A. Parasuraman, and V. A. Zeithaml, “Ten Lessons for Improving Service Quality,” Marketing Science Institute, Report No. 93-104 (May 1993).

Adequate ServiceAdequate Service

Desired ServiceDesired Service

Desired Service

Adequate Service

Figure 4.5Figure 4.5

Zones of Tolerance for Zones of Tolerance for DifferentDifferent

Service DimensionsService Dimensions

Zone of

Tolerance

Zoneof

Tolerance

“The ability to perform the service dependably & accurately.”

“The appearance of physical facilities, personnel, etc.”

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SMZone of Tolerance and Zone of Tolerance and Importance of Service Importance of Service

DimensionsDimensions

• as a service dimension becomes more important zone of tolerance will narrow and desired and adequate levels will increase

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SM

Figure 3-5Figure 3-5

Factors that InfluenceFactors that InfluenceDesired ServiceDesired Service

DesiredService

AdequateService

Zone of

Tolerance

Enduring ServiceIntensifiers

Personal Needs

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• Personal needs include physical, social, psychological categories

• Enduring service intensifiers are individual, stable factors that lead to heightened sensitivity to service

This can be further divided into Derived Service Expectations and Personal service Philosophies

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– Derived service expectations. Expectations driven by another group of people.

– Personal service philosophy. The customer’s underlying, generic attitude about the meaning of service and the conduct of employees.

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SMFigure 3-6Figure 3-6

Factors that InfluenceFactors that InfluenceAdequate ServiceAdequate Service

DesiredService

AdequateService

Zone of

ToleranceSelf-PerceivedService Role

Situational Factors

Perceived ServiceAlternatives

Transitory ServiceIntensifiers

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SM

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SMFactors That Influence Factors That Influence

Adequate Service Adequate Service ExpectationsExpectations

• Are short-term in nature and fluctuate more than the factors that influence desired expectations.

• There are 5 types of factors

• Temporary service intensifiers.

• Perceived Service Alternatives.

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SMFactors That Influence Factors That Influence

Adequate Service Adequate Service ExpectationsExpectations

• Customer’s Self Perceived service role

• Situational factors

• Predicted Service

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SMFactors That Influence Factors That Influence

Adequate Service Adequate Service ExpectationsExpectations

• Transitory/Temporary service intensifiers --- short-term, individual factors that make a consumer more aware of the need of the service eg: a personal emergency

• Transitory service intensifiers – temporary – a computer breakdown will be less tolerated at financial year-ends

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SMFactors That Influence Factors That Influence

Adequate Service Adequate Service ExpectationsExpectations

• Perceived Service Alternatives----

• Perceived Service Alternatives. Other providers from whom the customer can obtain the service.

• As the number of alternatives increases, the level of adequate service increases and the zone of tolerance narrows

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SMSources of Adequate Service Sources of Adequate Service

Expectations (cont’d)Expectations (cont’d)

• Self-perceived service role. Customer perceptions of the degree to which customers control the level of service they receive.

• Situational factors. Service performance conditions that customers view as beyond control of the provider.

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SM Situational FactorsSituational Factors

• Natural Disasters

• Time constraints

• Emergency

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SM Predicted ServicePredicted Service

• Predicted service. The level of service customers predict they are likely to get.

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SM Predicted ServicePredicted Service

• The level of service customers believe they will get. It is an estimate or calculation of the service a customer will receive in an individual transaction rather than in the overall relationship with a service provider.

• Eg patient in the doctor’s waiting room.

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SM Predicted ServicePredicted Service

• If customer predict good service their levels of adequate service are likely to be higher than if they predict poor service.

• Whereas desired and adequate service expectations are global assessments comprising many individual transactions, predicted service is always an estimate of what will happen in the next service encounter or transaction.

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SM

Figure 3-7Figure 3-7

Factors that InfluenceFactors that InfluenceDesired and Predicted ServiceDesired and Predicted Service

DesiredService

AdequateService

Zone of

Tolerance

Predicted Service

Explicit ServicePromises

Implicit ServicePromises

Word-of-Mouth

Past Experience

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SMFactors That Influence DesiredFactors That Influence Desired

and Predicted Service and Predicted Service

• Explicit service promises. Personal & nonpersonal statements about the service made to customers.– Q: Are these within control of the service provider?– Q: How are these “promises” made?

• Implicit service promises. Service-related cues other than explicit promises that lead to inferences about what the service should and will be like. – Q: How are these cues made?

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SMFactors that InfluenceFactors that InfluenceDesired and Predicted Desired and Predicted

ServiceService• Explicit --- personal and nonpersonal statements

from the organization---Advertising, personal selling, contracts, other communications --- usually increases desired level and narrows zone

• Implicit--- ---service related cues-Tangibles --– Price -- price directly related to predicted service and

inversely related to width of zone.– Distribution - multiple outlets

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SMFactors That Influence DesiredFactors That Influence Desired

and Predicted Service and Predicted Service

• Word-of-mouth communication. Statements made by parties other than the organization about the service.– W of M is most important with services that are

difficult to evaluate before purchase or direct experience (e.g., medical care, auto repair, restaurants).

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– The most likely carriers of favorable W of M communications are customers well-pleased with a company’s service. The more outstanding and unique the service, the greater the likelihood of word-of-mouth messages. The opposite effect also is true the more horrible the service, the greater the likelihood of unfavorable word-of-mouth.

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SMIssues involving Issues involving

Customer Service Customer Service ExpectationsExpectations

• Q1. what does a service marketer do if service expectations are unrealistic?

• Q2. Should a company try to “delight” the customer

• Q3. How does a company exceed service expectations?

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SMIssues involving Issues involving

Customer Service Customer Service ExpectationsExpectations

• Q4. Do customer service expectations continually escalate?

• Q5. How does a service company stay ahead of competition in meeting customer expectations?