Calvin & Hobbes

Service Quality Gap Model

(Adapted from Zeithaml et al, 1990; Kettinger & Lee, 1995)

Expected Services
Gap 5: Service Quality Satisfaction Measure Gap Gap 1

Customer Service Provider

Perceived Services
Service Delivery
Gap 3 Gap 4

Communications to ICustomers

Gap 1: Not knowing what the customer expects Gap 2: Not selecting the right service designs and standards Gap 3: Not delivering to the service standards Gap 4: Not matching performance to promises

Service Quality Specifications

Gap 2

Management Perceptions of Customer Expectations

Managing the Service Quality

The role of CUSTOMER expectations
M S Balaji Icfai Business School Class 8

Preamble
A critical reason why services fail is because the service providers has failed to: understand customer expectations accurately capture customer expectations manage changing expectations

deliver a service product that meets customer expectations In short, the reason why services may often fail to meet customer satisfaction, is simple because service provider does not understand expectations.

Introduction
Some companies . . . . more than just competitive advantage in customer service. . . . . they have unwavering customer loyalty. How do they do it? The key to providing superior service is understanding and responding to CUSTOMER EXPECTATIONS. By responding appropriately to the customer expectations, managers/ service providers can be on their way to developing customer franchise

Some questions to ponder up on

What is the nature of customers service expectations? Are there different types of expectations? What factors influence the formation of expectations? How stable are these expectations? Do they change over time? Do they remain same across service industries, service situations and customers? How can companies manage customer expectations so that the perceptions can be enhanced? What do companies do to exceed expectations?

What are Expectations?

An expectation is the subjective probability that a behavior will be followed by a particular outcome.

More broadly, expectations reflect an individuals subjective probabilities about the

current or future existence of a particular state of affairs. Expectations can be predictive or normative.

Predictive expectations - predictions made by customers about what is likely to

happen during an impending transaction or exchange. Normative expectations - represent what customers ideally want . These two perspectives are often used interchangeably in discussions of service quality making it difficult to interpret results.

Expectations
What do customers expect (Dimensions) Reliability, Responsiveness, Assurance/Trust, Empathy, Tangibles
(Zeithaml et al., 1990; Kettinger et al., 1994; Pitt et al., 1995)

Types (Levels) of expectations (Zeithaml et al., 1990; Pitt et al., 1995) Desired, Adequate, Ideal Zone of Tolerance (Desired Adequate)

What influences (informs) customer expectations (Determinants)

(Zeithaml et al., 1993; Pitt et al., 1995; Ryker et al., 1997) .

Consumer expectations . . . .
Ideal Service

Desired Service Predicted Service

Zone of

Tolerance

Adequate Service

Zone of Tolerance

Customers do not notice service production process.

A customers desired service expectation is same for all service providers within a category Adequate service expectation level varies for different firms within a category. Zone of tolerance expands or contracts for a customer from time to time. Zone of tolerance varies for different customers. Zone of tolerance varies for service dimensions. E.g. unreliability will be least tolerated. Zone of tolerance varies for first time & recovery service.

Characteristics & Evaluation Outcomes

(Zeithaml et al., 1991; Oliver 1980)

Outcomes of Performance Evaluations

higher-end, stable

Positive Disconfirmation
(Delight)

Desired
Zone of Tolerance

Confirmation
(Neutral, Indifferent state)

Adjustment

lower-end, temporal

Adequate
Negative Disconfirmation
(Disappointment)

Service Levels/Levels of Expectations

Ideal expectations or desires Normative should expectations Experience-based Norms Acceptable expectations Minimum tolerable expectations
Source: Zeithaml et al., 2004

High

Everyone says they are the best there is Since it costs this much, they ought to deliver excellent service Most times they are good, but when they are busy you have to wait a while

I expect the service will be adequate I expect terrible service but I use them because theyre cheap

Low

Antecedents of consumer expectations

Expectations are often conceptualized as combining both customer wants and customer beliefs about what the service is capable of providing. Individuals form expectations/beliefs on the basis of direct observation or experience with a situation (descriptive beliefs), information provided by others (informational beliefs), or through various inference processes (inferential beliefs). A customer who was treated in a courteous manner last week by a particular airline ticket agent would hold a descriptive belief, an expectation that the same ticket agent would behave in a similar fashion this week.

Contd.
Inferential and informational beliefs are those that go beyond those events that are directly observed. With inferential beliefs, the connection between object and attribute results from an inference drawn from a prior belief. If, for example, on the basis of a courteous ticket agent, a passenger comes to believe (an expectation) that the flight attendant will also be courteous, the result is an inferential belief. Informational beliefs are those in which the connection between an object and attribute is first made by another source.

Contd
The airplane pilot who states that we will arrive on schedule has made the link between an event (arrival) and an attribute (timely) and, by accepting that link as stated, the individual creates an informational belief. Lacking physical referents, the service customer may develop a cognitive script which specifies expectations about the overall service event. This script is a predetermined, stereotyped sequence of actions that defines a well known situation

Cues to influence expectations

On entering any delivery system, the customer is subject to a potentially vast number of cues that may influence his/her assessment of the ongoing process. These cues may be such things as peripheral components of the core service, observations of others experiencing aspects of the service, or initial personal experience of the core service. Some of these cues may be planned, i.e. interventions by the organization

specifically to influence the expectation process, while others are unplanned

resulting from interactions with various aspects of the delivery system.

Strategies to influence expectations

Descriptive Expectations
Informational

Influenced by Cues

Inferential

Strengthen Expectations Weaken Original Expectations Form New Expectations Maintain the old Expectations

Met Customer Satisfaction

Unmet
Perceived Service Delivery

What do Customers Expect?

Dimensions of Service Quality
Reliability: Consistency of performance and dependability Responsiveness: Willingness/readiness of employees to provide service in timely manner

Competence: Possession of required skills to perform service

Access: Approachability and ease of contact Courtesy: Politeness, respect, consideration, friendliness

Communications: Keeping customers informed in language they understand

Credibility: Trustworthiness, believability, honesty Security: Freedom from danger, risk, doubt

Understanding/Knowing the Customer: Making effort to understand customers needs

Tangibles: Physical evidence of service

Service Quality Gap: Determinants of Expected Service

(Zeithaml et al, 1990)

Expected Service
Enduring Service Intensifiers

Personal Needs
Transitory Service Intensifiers Perceived Service Alternatives

Desired Service
Zone of Tolerance

Word of Mouth
Past Experience

Communications

Self-Perceived Service Role

Situational Factors

Adequate Service
Gap 5

Predicted Service

Perceived Service

How to measure customers expectations

These expectations can be based on visible or hidden needs, and as well as on perception about the company. There are some methods organizations can use to identify customer expectations and needs. Surveys - customer insight and what the customers feel about the product or service and the organization. Companies need to use this insight to see the world through the eyes of the customer. Zaltman Metaphor Elicitation Technique (ZMET) Voice of customer (VOC) Technique

Customer satisfaction
Customer Satisfaction = Your Performance Customer expectations

However it is not as simple as it says Customer satisfaction is influenced by a complex interplay of factors, such as past experience, changing priorities, management demands, communication preferences, provider competency, the urgency of the need, and whether the toast got burned this morning. An additional factor revolves around the psychology of dissatisfaction: When customers become dissatisfied with a service attribute thats particularly important

to them, they are likely to also become dissatisfied with aspects of the service that
might otherwise remain below their anger threshold.

Customers expect basic service

Customers expect service companies to do what they are supposed to do. They expect fundamental, not fancies; performance not empty promises.

Insurance companies customers . . . . . Provide expertise and pay up

Hotel customers . . . . Clean and secure room and a smile Repair customers . . . . . Competent technicians

in short, customers want service companies to play fair. When dont play fair
customers show resentment and mistrust.

Companies have a significant opportunity to improve their service reputations simply by delivering a higher percentage of the time the basic service customers think they are buy.

When I'm a Customer, I Want . . .

To be taken seriously Knowledgeable help Honesty To be informed of the options

Competent, efficient service

Friendliness Anticipation of my needs

Feedback
Not to be passed around Professional service

To be kept informed
Explanations in my terms Follow-through Basic courtesies

To be listened to (and heard)

Empathy Dedicated attention Respect

Case Analysis
Scandinavian Airline System
1. To improve profitability, SAS was forced to reduce its workforce by over 1000 employees. How might such reductions affect the ideal, desired and adequate levels of service? Can the company adjust consumers zones of tolerance in order to cope with staff reductions? 2. Identify the antecedent expectations of people intending to book airline flights. What factors play an important role in their decisions? How can SAS improve its firm-related factors in order to attract customers?

THANK YOU