Managing Customer Expectations and
Why?
By
K Sudhakar Goud
Ex Librarian British Library Hyderabad and currently with Unicef as a
Consultant
Why CS /CE are important?
With out customers no company or business exists.
On an avg companies lose 10-30 customers every year.
Study / profiling customers is an integral part of
business plan and marketing plan.
Profit / loss depends on how you manage customers
and their satisfaction
levels
What is a Marketing Plan ?
“Management of process for identifying, anticipating and
satisfying customers requirement profitably” CIM UK
7Ps of Marketing mix : Product, Price, Place /distribution,
promotion, People, Physical evidence and Process
management.
Roles of strategic planning and Marketing Plan
Components of a Marketing Plan
Back ground to the plan
Vision for the organization
Market overview/ situational analysis
Internal /External analysis and audit (SWOT/ TOWS/PEST analysis)
Target market and its characteristics (all customer related)
Management of seven Ps of marketing mix
Development of the brand
Budgets
Action plan and implementation and control
CE Gaps model (Zeithaml, Parasuraman & Berry 1990)
Stages in Consumer Decision Making and
Evaluation of Services
Frequently Asked Questions
About Customer Expectations
Should a company aim to ‘delight’ the customer?
How does a company exceed customer service expectations?
Do customer service expectations continually escalate?
Is it a better strategy to under-promise and over-deliver?
How does a service company stay ahead of competition in meeting
customer expectations?
Customer expectations of service
Types of expectations customers hold for
service performance
Sources of customer expectations
Possible Levels of Customer Expectations
Zones of Tolerance for Different
Service Dimensions
Desired Service
Level
of
Expectation
Zone
of
Tolerance
Desired Service
Adequate Service
Zone
of
Tolerance
Adequate Service
Reliability
Tangibles
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).
Factors That Influence Desired
and Predicted Service
Explicit Service
Promises
Implicit Service
Promises
Word-of-Mouth
Desired Service
Zone
of
Tolerance
Adequate Service
Past Experience
Predicted
Service
Customer perceptions
Factors which influence consumers’
perceptions
Factors which influence satisfaction
Dimensions of service quality
Service encounters
Customer Perceptions of Quality and
Customer Satisfaction
Factors Influencing
Customer Satisfaction
Product/service
quality
Specific product or service features
Consumer emotions
Attributions for service success or failure
Factors Influencing
Customer Satisfaction
Perceptions of equity or fairness
Other consumers, family members, and
coworkers
Price
Personal factors
the customer’s mood or emotional state
situational factors
Outcomes of
Customer Satisfaction
Increased
customer retention
Positive word-of-mouth communications
Increased revenues
Relationship between Customer Satisfaction
and Loyalty in Competitive Industries
Source: James L. Heskett, W. Earl Sasser, Jr., and Leonard A. Schlesinger, The Service Profit Chain, (New York, NY: The Free Press, 1997), p. 83.
Service Quality
The
customer’s judgment of overall excellence
of the service provided in relation to the quality
that was expected.
Service quality assessments are formed on
judgments of:
outcome quality
interaction quality
physical environment quality
The SERVQUAL dimensions
– Perceived Service Quality
(Parasuraman, Zeithaml & Berry 1988)
Reliability (dependability, accurate performance)
Assurance (competence, courtesy, credibility & security)
Tangibles (appearance of physical elements)
Empathy (easy access, good communications & customer
understanding)
Responsiveness (promptness & helpfulness)
The Five Dimensions of
Service Quality
Reliability
Ability to perform the promised service
dependably and accurately.
Assurance
Knowledge and courtesy of employees
and their ability to inspire trust and
confidence.
Tangibles
Physical facilities, equipment, and
appearance of personnel.
Empathy
Caring, individualized attention the firm
provides its customers.
Responsiveness
Willingness to help customers and
provide prompt service.
RELIABILITY
SERVQUAL Attributes
Providing service as promised
Dependability in handling customers’
service problems
Performing services right the first time
Providing services at the promised time
Maintaining error-free records
EMPATHY
RESPONSIVENESS
Keeping customers informed as to
when services will be performed
Prompt service to customers
Willingness to help customers
Readiness to respond to customers’
requests
ASSURANCE
Employees who instill confidence in
customers
Making customers feel safe in their
transactions
Employees who are consistently courteous
Employees who have the knowledge to
answer customer questions
Giving customers individual attention
Employees who deal with customers in a
caring fashion
Having the customer’s best interest at heart
Employees who understand the needs of
their customers
Convenient business hours
TANGIBLES
Modern equipment
Visually appealing facilities
Employees who have a neat,
professional appearance
Visually appealing materials associated
with the service
The Service Encounter
is
the “moment of truth”
occurs any time the customer interacts with
the firm
can potentially be critical in determining
customer satisfaction and loyalty
types of encounters:
is
remote encounters, phone encounters, face-to-face encounters
an opportunity to:
build trust
reinforce quality
build brand identity
increase loyalty
Evidence of Service from the
Customer’s Point of View
Operational flow of
activities
People
Contact employees
Customer him/herself
Other customers
Steps in process
Flexibility vs.
standard
Technology vs.
human
Process
Physical
Evidence
Tangible
communication
Servicescape
Guarantees
Technology
Source: From “Managing the Evidence of Service” by M. J. Bitner from The Service Quality Handbook,
eds. E. E. Scheuing and W. F. Christopher (1993), pp. 358-70.
Website
UNDERSTANDING
CUSTOMER
REQUIREMENTS
Listening to customers through market
research
Using Marketing Research to Understand
Customer Expectations
Elements in an Effective Services Marketing
Research Program
Analyzing and Interpreting Marketing Research
Findings
Model Services Marketing Research Programs
Using Marketing Research Information
Upward Communication
Listening to Customers through Research
Present the types of and guidelines for marketing research in
services.
Show how marketing research information can and should be used
for services.
Describe the strategies by which companies can facilitate interaction
and communication between management and customers.
Present ways that companies can and do facilitate interaction
between contact people and management.
Common Research Objectives
for Services
To discover customer requirements or expectations for service.
To monitor and track service performance.
To assess overall company performance compared with that of
competition.
To assess gaps between customer expectations and perceptions.
To identify dissatisfied customers, so that service recovery can be
attempted.
To gauge effectiveness of changes in service delivery.
To appraise the service performance of individuals and teams for
evaluation, recognition, and rewards.
To determine customer expectations for a new service.
To monitor changing customer expectations in an industry.
To forecast future expectations of customers.
Criteria for an Effective
Service Research Program
Includes
both qualitative and quantitative research
Includes both expectations and perceptions of customers
Balances the cost of the research and the value of the
information
Includes statistical validity when necessary
Measures priorities or importance of attributes
Occurs with appropriate frequency
Includes measures of loyalty, behavioral intentions, or
actual behavior
Thank you
Any questions please?