The document discusses customer expectations of service and how to manage those expectations. There are three main types of customer expectations - minimum tolerable, acceptable, and desired/ideal. Acceptable expectations represent an adequate level of service while desired expectations are the customer's wishes. Customer expectations are influenced by personal needs, alternatives, past experiences, and situational factors. A company must understand customer expectations and the "zone of tolerance" around acceptable service levels to consistently meet and hopefully exceed expectations through reliable service and customer relationship management. Exceeding expectations can create loyal customers but also raises expectations over time.

1. CONSUMER EXPECTATIONS OF SERVICE

2. Understanding & Managing Customer Expectations
 https://www.youtube.com/watch?v=ziGut
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3. Customer expectations
Customer expectations are beliefs about service
deliveries.
These are used as standards of judgement about
service quality and performance.
The Service Marketer must understand these
expectations thoroughly in delivering quality
service.

4. Wrong understanding
Implications of wrong understanding:
Losing the business to a more perceptive
competitor who has a better fix on customer
expectations.
Being wrong also means expending money,
time and other resources unproductively.
In the worst case being wrong can mean going out of
business.

5. Meaning and types of expected
service
 Minimum tolerable expectations Adequate level
 Acceptable expectations
 Experience based norms
 Normative “should” expectations
 Ideal expectations or desires Desired level

6.  Take the example of a restaurant

7. Possible levels of expectation
Minimum tolerable expectations
“ I expect terrible service from this restaurant but
come because the price is low”
Acceptable expectations
“I expect this restaurant to serve me in an
adequate manner”

8.  Experience based norms
“ Usually this restaurant is very good, but at
rush hour the service is slow.
Normative “Should” expectation
“ Since this restaurant is so expensive
it ought to have excellent food and service.”

9.  Ideal expectations or desires
“Everyone says this restaurant is terrific .
I shall book a table for my anniversary”.

10.  Customers assess service performance on
the basis of two extremes :
 What they desire and what they deem
acceptable.

11. The Big Questions ?
 Whether customers hold the same or different
levels of expectation for service firms in the
same industry?
 Are desired Service level expectations the same
for all restaurants? Or just for all fast – food
restaurants?
 Do levels of adequate service expectations vary
across restaurants?

12.  Levels of expectations are why two
organizations in the same business can offer far
different levels of service and still keep
customer’s happy.
 Mc Donald’s and The Taj Group of Hotels may
both be considered excellent providers of
service, but Mc Donald’s may be considered
superior to an expensive but not superbly
managed restaurant.

13. Essentially, desired service expectations of
customers are the same for service
providers within the industry categories
that are viewed similar by customers, but
not across the whole industry.

14.  Within the same category or sub – category,
too, adequate service expectation level may
vary.
 Thus, someone used to consistent service from
Mc Donald’s as compared to Burger King may be
disappointed if he finds McDonald’s service level
not as good as usual even if it is still higher than
Burger King’s.

15. The Zone of Tolerance
 This is the extent to which customers recognize and are
willing to accept variation in service.
 Below the adequate or minimum service level customers
will be frustrated and unsatisfied with company’s
performance.
 If service level is above the zone of tolerance desire
level at the higher end ( performance> service)
customers will be pleased and surprised.

17. In the range of tolerance
 Service is not noticed.
 Above or below, the service is noticed in a
positive or negative way.

18. Customer expectations have a
range
 The tolerance zone can expand or contract
for a customer depending on the situation.
One running late will have a low zone
tolerance for the service provided eg for
an aircraft departure.
 One before time will have a larger
tolerance zone.

19. Implication for the Marketer
He/she must understand not just the size
and boundary levels for the Z.O.T but
when and how it fluctuates for a given
customer

20. Different customers / Different
levels of tolerance
Some have narrow zones of tolerance
Others give more latitude and have a
broader range.
Eg for People pressed for time, length of
acceptable wait time for most activities is low.

21. Price of Service has a big impact
 This often has a direct impact on Z.O.T
 With a highly priced service, customers
are less tolerant of poor service; this is
because adequate service level shifts
upwards.

22. Z.O.T vary for Service Dimensions
 The more important the factor, the
narrower the Zone.
 Unreliable service ( broken promises or
service errors) are the worst offenders
rather than other service deficiencies.

23.  Desired service level is usually relatively
idiosyncratic and stable as compared to
adequate service level, since it is formed
out of accumulated experiences.
 Adequate service level moves up and
down situationally (owing to competition
or other factors).

24. Factors influencing Customer
expectations of Service
 The two largest influences on desired
service levels are :
 Personal needs
 Personal service philosophy

25. Personal needs
 Some customers are more demanding than
others. Such customers have greater sensitivity
to, and higher expectations of, service.
 Lasting service intensifiers are individual, stable
factors that lead the customer to a heightened
sensitivity to service. The most important of
these is derived service expectation. Can be
from friends, family, manager, supervisor,
customers

26.  Another lasting service intensifier is
personal service philosophy. Generally
customers who are themselves in service
businesses or have worked for them have
especially strong service philosophies.

27. Adequate Service Expectations
 Factors affecting adequate service levels
are :
 Short – term and fluctuate more than
factors affecting desired levels.

28. A) Temporary service intensifiers :
 Short – term individual factors, such as
emergencies , breakdowns, peak periods.
 System breakdowns will be tolerated less
in these periods.

29. Implications for service
 Performing a service right the first time is of paramount
importance since customers view reliability above all
else.
 In case of a service failure it becomes more critical to fix
it right the second time even more so than it was the
first time eg a gas leak, or a car brake failure.
 Adequate service levels go up and Z.O.T. narrows where
temporary intensifiers are present.

30. B) Perceived service alternatives
These are other providers from which the
customer can obtain service. If customers
have multiple service providers to choose
from , or if they can provide the service for
themselves they will have higher levels of
adequate service than customers who think
they cannot get better service elsewhere.

31. C) Customer’s self – perceived
service role
This is the customer’s perception of the
degree to which he exerts an influence on
the level of service he receives. His
expectations are partly shaped by how well
he believes he is performing his own role in
the service delivery.

32.  Customer’s Z.O.T. expands when they
sense they are not fulfilling their roles.
 However, levels of adequate service are
heightened when they believe they are
doing their part in delivery and ZOT
contracts.

33. D) Situational factors
 When Service performance conditions are
viewed as beyond the control of the
service provider levels of adequate service
level are lower. ( eg in floods,
earthquakes, strike situations)

34. E) Predicted Service
 This is the calculation a customer does in his
own mind of the level of service that he will
receive in an individual transaction with a
company, eg time taken by your bank to make a
D.D
 You may expect it to be ready in 10 minutes.
Therefore Your level of adequate service is
already high and the ZOT narrowed .If the Bank
takes takes 20 minutes you are a dissatisfied
customer as the service is below adequate level

35. Service Encounter expectations vs
Overall service expectations
 Expectations about individual service
encounters are specific and concrete.
such as waiting 10 minutes for a D.D.
 But your overall expectation from the bank
may be polite, speedy service.

36. Sources of both desired and
predicted service expectations
 Explicit service promises - Both personal and
non – personal
 Implicit service promises (anticipated from price
and tangibles)
 Word of mouth
 Past experience

37. What If customers have unrealistic
expectations ?
 Many companies and their personnel fear to ask
customers what their expectation are since they are
afraid they may be unrealistic.
However,
 Research shows that customer’s main expectations of
service are quite simple and basic :
 “Customers expect service companies to do what they
are supposed to do. They expect fundamentals, not
fanciness; performance not empty promises”.

38. Customers want :
 Service to be delivered as promised.
 Planes to take off on time
 Hotel rooms to be clean, food to be hot
 Service providers to turn up when scheduled.

39. Disappointment occurs when:
 Companies do not meet these basic expectations

41.  Asking a customer about his expectations does
not so much raise the levels of expectations
themselves as heightening the belief that the
company will do something concrete with the
information collected.
 The worst thing a company can do is
collect information and do nothing with it.

42. What the company should do :
 Always acknowledge the input received and promise to
consider it. It does not necessarily have to deliver to expressed
expectations.
 It may also tell the customer why the particular service is not
being delivered presently and describe what it is doing to
address his problem.
 Alternatively ,educate the customer on ways to use and
improve the service. Keep the customer in the loop through
updates on improvements and innovations in service.

43. Is deliberate under-promising an
option ?
 This can make it more likely for the Service provider to meet or
exceed service expectations
 BUT…………
 It has the danger of reducing the competitive appeal of the offer.
 It has the danger of lowering customer perceptions about the
service.
Consequence :The sale can be lost to the provider who
inflates his offering.

44. Reality check following sale
Reality check - list to be given by provider
against which promises made by provider to
be checked out. In case of minor
transgressions the buyer may ignore them.
Obviously, in case of major gaps the
provider needs to make good.

45. Should a company try to delight its customers?
 The advice by several Management Gurus is to:
“Delight customers” = create a profound
positive emotional state that results from
expectations being exceeded to a surprising
degree.( Unexpected, random, extraordinary,
and disproportionately positive)
“To hug your customers”
“To create ‘raving fans’ ”
Give them the “WOW” factor

47. There is a cost to this….
 Extra effort and Cost to the firm.
 Cost / Benefit must therefore be weighed.
POINTS TO CONSIDER :
 STAYING POWER
 COMPETITIVE IMPLICATIONS

48. STAYING POWER
 How long will the impact remain ?
If brief, it may not be worth it.
If the customer remembers the delight and
adjusts his level of expectations upwards it will
cost the company more just to satisfy, and the
bar would have been raised for the future

49. Research shows:
 Delighting customers raises expectations
and makes it more difficult to satisfy
customers in future.

50. Competitive implications
 If you choose to delight, do so in areas where
competitors cannot copy
 Otherwise both of you will be hurt, owing to
increased costs and profit erosion
 Only the customer will benefit by playing you
off against each other.

51. How does a company exceed
customer expectations ?
 It is virtually impossible to exceed
customer expectations of the basics.
 Honouring promises is what the company
is supposed to do. Companies are
supposed to be accurate and dependable
and provide the service they promised to
provide.

52. Approaches to exceeding customer
service expectations
 Customer Relationship Management
 Deliberately under-promise the service –
to under- promise and over- deliver.
 To position unusual services as unique
rather than standard.

53. Do Customer expectations
continually spiral?
 Adequate service expectations rise as quickly as
service delivery or promises rise. In highly
competitive industries such as the credit card
industry, these need frequent monitoring.
 Desired service expectations are comparatively
far more stable and high to begin with.

54. How does a Service company stay ahead of the
competition in meeting customer expectations ?
To develop unchanging customer loyalty
 Companies must not only consistently exceed
the adequate service level but also reach the
desired service level.
 Exceptional service can intensify customer
loyalty to a point where customers are totally
resistant to competitive option.