Chapter 3: Customer expectations of service

Importance of customer expectations

- Customer expectations are beliefs about service delivery that serve as standards, or
reference points, against which performance is judged
- Customers compare their perceptions of performance with these reference points
- What types of expectation standards do customers hold about services?
- What role do these factors play in changing expectations?
- How can a service company meet or exceed customer expectations?

Meaning and types of service expectations

- On the left of the continuum are different types or levels of expectations, ranging from
high (top) to low (bottom)
- At each point we give a name to the type of expectation and illustrate what it might mean
- The eventual assessment depends on the reference point you brought to the experience

Expected service: levels of expectations

- The highest type of expectations can be termed ‘desired service’, it is what the customer
believes ‘can be’ and ‘should be’
- However, customers recognize that this is not always possible; ‘adequate service’ is what
they will accept, the minimum tolerable expectation
- The desired service and adequate service standards are the upper and lower boundaries
which customers use to assess service performance: what they desire and what they deem
acceptable
- Desired service expectations seem to be the same for service providers within industry
categories or subcategories that are viewed as similar e.g. amongst fast-food restaurants,
amongst expensive restaurants
- Adequate service expectation level may vary for different firms within subcategories e.g.
holding a higher expectation for McDonald’s than for Burger King, having experienced
somewhat consistent service at McDonald’s over time and somewhat inconsistent service
at Burger King  possible to be more disappointed with McDonald’s than Burger King
even though the actual level of service at McDonald’s may be higher

The zone of tolerance

- Services are heterogeneous in that performance may vary across providers, across
employees from the same provider, and even with the same service employee
- The extent to which customers recognize and are willing to accept this variation is called
the zone of tolerance
- It is the range within which customers do not particularly notice service performance
- When it falls outside the range (either very low or very high), the service gets the
customer’s attention in either a positive or negative way
- This tolerance zone can expand and contract with each customer e.g. an airline
customer’s zone of tolerance will narrow when he is running late (each minute seems
much longer and his adequate service level increases) vs. when he arrives early and may
have a larger tolerance zone (making the wait time less noticeable)

Different customers possess different zones of tolerance

- Zone of tolerance of an individual customer increases or decreases depending on a
number of factors, including price
- When prices increase, they tend to be less tolerant of poor service  zone of tolerance
decreases because the adequate service level shifts upward

Zone of tolerance vary for service dimensions

- The more important the factor, the narrower the zone of tolerance
- Customers are likely to be less tolerant about unreliable service (broken promises or
service errors) than other types of service deficiency
 - Less willing to relax these expectations on important dimensions, making the zone of
tolerance smaller and desired and adequate service levels higher

- The fluctuation in the customer’s zone of tolerance is more a function of changes in the
adequate service level, which moves readily up and down because of situational
circumstances, than in the desired service level, which tends to move upward
incrementally because of accumulated experiences
- The desired service level is less subject to change than the adequate service level

Factors that influence customer expectations of service

Sources of desired service expectations

- The two largest influences on desired service level are personal needs and philosophies
about service

Personal needs
- Personal needs are states or conditions essential to the physical or psychological well-
being of the customer
- Can fall into many categories, including physical, social, psychological and functional
- E.g. a cinema-goer who regularly goes to see films straight after work hopes and desires
that the food counters at the cinema will have short queues and attentive staff, whereas a
 cinema-goer who regularly has dinner elsewhere has a low or zero level of desired
service from the food counters
- A customer with high social and dependency needs may have relatively high expectations
for a hotel’s ancillary services, hoping that it has a bar with live music and dancing

Lasting service intensifiers

- Lasting service intensifiers are individual, stable factors that lead the customer to a
heightened sensitivity to service
- One of the most important of these factors are derived service expectations, which occur
when customer expectations are driven by another person or group of people e.g. a parent
choosing a vacation for the family
- Such customers’ individual expectations are intensified because they represent and must
answer to other parties who will receive the service
- Business-to-business customers also derive their expectations from their customers and
managers due to pressure to deliver results
- Another lasting service intensifier is personal service philosophy, the customer’s
underlying generic attitude about the meaning of service and the proper conduct of
service providers e.g. customers who have worked in the kitchen may be less tolerant of
lukewarm food or errors in the order
- Customers who have worked in the service business generally seem to have especially
strong service philosophies and hence intensified expectations

Sources of adequate service expectations

- A different set of determinants affects adequate service
- These influences are short term and tend to fluctuate more than the factors that influence
desired service

Temporary service intensifiers

- Temporary service intensifiers consist of short-term, individual factors that make a
customer more aware of the need for service
- Personal emergency situations in which service is urgently needed (such as an accident or
breakdown in equipment in a busy period) raise the level of adequate service expectation,
particularly the level of responsiveness
- Problems with initial service can also lead to heightened expectations; performing the
service right the first time is very important because customers value service reliability
about all other dimensions
- If the service fails in the recovery phase, putting it right the second time is even more
critical than it was the first time e.g. if you send your car to the workshop you expect
them to fix the brakes, but if you experience further problems with the brakes after the
repair, your adequate service level will increase and zone of tolerance will narrow

Perceived service alternatives

- Perceived service alternatives are other providers from whom the customer can obtain
service
- If customers have multiple service providers to choose from or can DIY, their levels of
adequate service are higher than those who believe it is not possible to get better service
elsewhere
- E.g. an airline customer who lives in a small town has a reduced set of options in airline
travel and will be more tolerant of the service performance of the carriers in the town
because few alternatives exist, as compared to someone from a big city who has a myriad
of flights and airlines to choose from
- The perception that alternatives exist raises the level of adequate service and narrow sthe
zone of tolerance

Customer’s self-perceived service role

- We define this as customer perceptions of the degree to which customers exert an
influence on the level of service they receive
- Customers’ expectations are partly shaped by how well they believe they are performing
their roles in service delivery
- One role of the customer is to specify the level of service expected e.g. a customer who is
very explicit with a waiter about how rare he wants his steak cooked will probably be
more dissatisfied if the meat comes to the table overcooked than a customer who does not
articulate the degree of cooking expected
- The customer’s active participation in the service also affects this factor e.g. a customer
who does not get his car serviced regularly is likely to be more lenient on the car
manufacturer when he experiences problems than one who conscientiously follows the
manufacturer’s service schedule
- A final way the customer defines his role is in assuming the responsibility for
complaining when service is poor; a dissatisfied customer who complains will be less
tolerant than one who does not voice his concerns
- Customers’ zones of tolerance expand when they sense they are not fulfilling their roles
- When they believe they are doing their part in delivery, their expectations of adequate
service are heightened and the zone of tolerance contracts

Situational factors
- Situational factors are defined as service performance conditions that customers view as
beyond the control of the service provider
- E.g. where personal emergencies such as serious car accidents would be likely to
intensify customer service expectations of insurance companies (because they are
temporary service intensifiers), catastrophes that affect a large number of people at one
time may lower service expectations because customers recognize that insurers are
inundated with demands for their services
- Customers who recognize that situational factors are not the fault of the service company
may lower their level of adequate service, widening the zone of tolerance

Predicted service
- Predicted service is the level of service that customers believe they are likely to get
- Predictions made by customers about what is likely to happen during an impending
transaction or exchange
- If customers predict good service, their levels of adequate service are likely to be higher
than if they predict poor service
- E.g. travelers may expect poorer service from budget airlines in comparison to full-cost
airlines  higher standards for adequate service will exist in the full-cost airlines
- If they predict poor service (such as during peak periods), levels of adequate service
decrease and zones of tolerance widen

- Whereas desired and adequate service expectations are global assessments comprising
many individual service transactions, predicted service is almost always an estimate of
what will happen in the next service encounter or transaction that the customer
experiences
- For this reason, predicted service is viewed in this model as an influencer or adequate
service
- Because predictions are about individual service encounters, they are likely to be more
concrete and specific than the types of expectation levels customers hold for adequate
service or desired service e.g. your predicted service expectations about the length of
 time you will spend in the waiting room the next time you visit your doctor will likely be
expressed in terms of the number of minutes you have spent on your last visit

Sources of both desired and predicted service expectations

- When consumers are interested in purchasing services, they are likely to seek or take
information from several different sources

Explicit service promises

- Explicit service promises are personal (communicated by employees) and non-personal
(from advertising, brochures, publications) statements about the service made by the
organization to customers
- Explicit service promises influence the levels of both desired service in general and
predicted service in the next service encounter

Implicit service promises

- Implicit service promises are service-related cues other than explicit promises that lead to
inferences about what the service should and will be like
- These quality cues are dominated by price and the tangibles associated with the service
 the higher the price and more impressive the tangibles, the more a customer will
expect from the service e.g. 5-star hotel vs. mid-tier hotel

Online and offline word-of-mouth communication

- Carries particular weight as an information source, because it is perceived as unbiased
- Tends to be very important in services that are difficult to evaluate before purchase and
before direct experience of them
- E.g. TripAdvisor, friends and family, social media platforms
- Positive comments about a restaurant for example may result in customers having
overinflated expectations of the service offering they will receive and ultimately lead to
disappointment
- However, if the comments are neutral or negative, the same restaurant experience may
result in the customers being reasonably satisfied, as they would not have high
expectations for the service

Past experience
- The customer’s previous exposure to service that is relevant to the focal service
- Past experience may incorporate previous experience with the focal brand, typical
performance of a favourite brand, experience with the brand last purchased or the top-
selling brand, and the average performance a customer believes represents a group of
similar brands
- E.g. compare each stay in a particular hotel with all previous stays in that hotel or in other
hotel chains

The management of customer expectations

- Managers need to know the pertinent expectation sources and their relative importance
for a customer population, a customer segment and, perhaps, even a particular customer
- Need to know the relative weight of word of mouth, explicit service promises and
implicit service promises in shaping desired service and predicted service
- Different sources vary in credibility and potential to be influenced by the marketer
Issues involving the management of customer service expectations

What does a service marketer do if customer expectations are ‘unrealistic’?

- This apprehension often stems from the belief that customer expectations will be
extravagant and unrealistic and that, by asking about them, a company will set itself up
for even loftier expectation levels
- However, customers simply want the basics – they expect service to be delivered as
promise e.g. planes to take off on time, hotel rooms to be clean, food to be hot
- A company should acknowledge to customers that it has heard their input and that it will
expend effort trying to address their issues
- Or let them know the reasons that desired service is not being provided at the present
time and describe efforts planned to address them
- Another approach could be a campaign to educate customers about ways to use and
improve the service they currently receive
- Some observers recommend deliberately under-promising the service to increase the
likelihood of meeting or exceeding customer expectations; while under-promising
narrows the gap between expectations and perceptions, it may also reduce the
competitive appeal of the offer
- Under-promising may lower customer perceptions of service, particularly in situations in
which customers have little experience with a service
- In these situations, customer expectations may be self-fulfilling; if the customer goes into
it expecting good service, he will focus on the aspects of service provision that are
positive, but if he expects low service, then he may focus on the negative
- Thus, a salesperson who sells to a customer with a realistic promise may lose the sale to
another who inflates the offering

Should a company try to delight the customer?

- Delight refers to a profoundly positive emotional state that results from having one’s
expectations exceed to a surprising degree
- Consider product and service features in terms of concentric rings
- The inner most bull’s-eye refers to attributes that are central to the basic function of the
product or service, called musts; their provision is not particularly noticeable, but their
absence would be
- Around the musts is a ring called satisfiers: features that have the potential to further
satisfaction beyond the basic function of the product
- At the next and final out level are delights, or product features that are unexpected and
surprisingly enjoyable; these features are things that consumers would not expect to find
and they are therefore highly surprised and sometimes excited when they receive them
- E.g. a student may consider the musts to consist of lecturers, class outlines; satisfiers
might include lecturers who are entertaining or friendly, good audiovisual aids; and a
delight might include a free textbook for the course
- Delighting customers comes with extra effort and cost; the benefits (e.g. staying power,
competitive implications) must be weighed
- Staying power involves the question of how long a company can expect an experience of
delight to maintain the consumer’s attention  delighting customers raises expectations
and makes it more difficult to satisfy them in the future
 - The competitive implication of delight relates to its impact on expectations of other firms
in the same industry  if a competitor in the same industry is unable to copy the delight
strategy, it will be disadvantaged by consumer’s increased expectations
- If companies choose to delight, they should do so in areas that cannot be copied by other
firms

How does a company exceed customer service expectations?

- Exceeding customer expectations of the basics is virtually impossible; honouring
promises – meeting deadline, delivering the core service – is what the company is
supposed to do
- Developing a customer relationship is one approach for exceeding service expectations
e.g. Ritz-Carlton hotels provide highly personalized attention using a special database
storing guests’ preferences, previous difficulties, lifetime usage  staff are able to
understand what is ‘new’ or ‘different’ about an individual customer
- Another strategy is to under-promise and over-deliver; although a firm should weight two
potential problems before using this
- Firstly, customers are likely to notice the under-promising and adjust their expectations
accordingly, negating the desired benefit of delight e.g. a firm promises delivery by 5pm
but constantly exceeds it by delivering by noon  customers come to expect an early
delivery and be disappointed when it does not happen
- Secondly, under-promising in a sales situation potentially reduces the competitive appeal
of an offering and must be tempered by what the competition is offering; when
competitive pressures are high, presenting a cohesive and honest portrayal of the service
explicitly and implicitly may be wiser
- A final way to exceed customer expectations without raising them in the future is to
position unusual service as unique rather than standard e.g. a restaurant may offer
customers a free dessert by claiming that the chef is trying out some new recipes

Do customer service expectations continually escalate?

- In a highly competitive and rapidly changing industry, expectations for adequate service
can rise quickly as companies seek to outdo each other and raise their level of service
- Desired service expectations, on the other hand, are far more stable; because they are
driven by more enduring factors, such as personal needs and lasting service intensifiers,
they tend to be high to begin with and remain high

How does a service company stay ahead of competition in meeting customer

expectations?
- If a company’s level of service is barely above the adequate service level to begin with, a
competitor can quickly erode that advantage  must stay alert to the need for service
increases to meet or beat competition
- To develop a true customer franchise with customer loyalty, companies must not only
consistently exceed the adequate service level but also reach the desired service level
- Exceptional service can intensify customers’ loyalty to a point at which they are
impervious to competitive options