Part 3

CONNECT

Chapter 5
Managing
customer expectations
and
perceptions
 Introduction
The main point:
Just as service can be seen from two perspectives, service
provided and service received, service quality can also be
defined from these two perspectives, as operational service
quality and customer perceived quality.

Definitions:

Operational service quality is the operations assessment of how well the

service was delivered to its specification.

Customer perceived quality is the customers judgement of (satisfaction

with) the quality of the service: their experience, the quality of the products and the
perceived benefits, compared to their needs and expectations.
 What is customer satisfaction?
In simple terms: customer satisfaction is the result of
customers overall assessment of their perceptions of the
service (the service process, their experiences and outcomes such as
quality of the products, the benefits obtained and perceived value for
money, compared to their prior expectations).

Assessment

Service
Expectations delivery Perceptions Satisfaction
 What is customer satisfaction? (continued)

The satisfaction continuum

P = perception +5
E = expectation Delighted
P>E

P=E 0 Satisfied

P<E
Dissatisfied
-5
 What is customer satisfaction? (continued)
Perceptions-expectations gap:
The mismatch between Perceptions and expectations is caused by
either a mismatch between expectations and service (Gap 1) and /or a
mismatch between the service and customers perceptions (Gap 2).

Mismatch

Service
Expectations delivery Perceptions Satisfaction

Gap 1 Gap 2
 What is customer satisfaction? (continued)
Perceptions-expectations gap (continued):

Causes of Gap 1: service may have been inappropriately

specified, designed, enacted, lack of resources, customers
may have inappropriate expectations (e.g., due to
promises made by marketing).

Causes of Gap 2: incorrect provision of service or

customers inappropriately perceiving the service.
 What is customer satisfaction? (continued)
Downside of Perceptions-expectations approach
to customer perceived service quality

Service could be perceived to be good when it is bad

Service could be perceived to be bad when it is good

Service that was good last time may be OK this time

Satisfy customers may switch (e.g., another service

provider may offer a superior level of service).
 What is customer satisfaction? (continued)
Customer confidence
Satisfaction is an assessment by the customer following
a service experience. Confidence does not require
previous experience or contact (e.g., social services,
police, fire services).

Confidence: to have belief, trust or faith in an

organization (e.g., feeling of confidence in services
provided by a hospital).

Customer satisfaction cannot be applied to some of the

police services customers such as criminals.
 What is customer satisfaction? (continued)
Customer confidence (continued)
Our Confidence in pre-service (i.e., before we receive any
service) is influenced primarily by three things over which the
organizations may have very limited control or influence:

(1) Personal beliefs (2) media (3) word-of-mouth

And three things over which the organizations have control or

influence:

1) Visibility of the organization, its services and its employees

2) Familiarity with the organizations employees, services or abilities

3) Communication (knowledge of the service and its abilities)

What influences expectations and perceptions?

Perceptions
Our Perceptions are our own personal
impression (through the senses) and
interpretation of the service provided.
A service received is what we each,
individually, perceive it to be. For example: the
experience of a high class restaurant by a
customer who has had a privileged background
may well be quite different to someone from a
more humble background.
 What influences expectations and perceptions?

Expectations: Our expectations of a service will lie

somewhere on a continuum between ideal and intolerable

Range of Expectations
Ideal

Expectations = what we believe to be

likely (what we believe will happen, rather than should
happen)

This range of expectation is called: Zone of Tolerance

(or zone of acceptable outcomes)

Intolerable
 What influences expectations and perceptions?

Some points on the Expectations continuum:

Ideal
Ideal feasible (the level of service that a customer believes should be
provided given the price or industry standard)

Desirable (the standard that the customer wants to receive)

Deserved (the level of performance that the customer ought to receive,
given the perceived costs)

Minimum tolerable (the minimum tolerable standards those that must

be achieved)

Intolerable (the standards the customer should not receive)

 What influences expectations and perceptions?

Range of expectations and the zone of tolerance or acceptable outcomes

The width of the zone of tolerance is inversely proportional to the

customers level of involvement and commitment (e.g., a training course)
 What influences expectations and perceptions?

Fuzzy Expectations:

It refers to situations where the customers

expectations may not be clear, although the
customers may have clear views about what is
unacceptable.

Whether customer expectations are fuzzy or

crystal clear, operations managers have to be
certain about the expectations they are trying to
meet.
What influences expectations and perceptions?

Influencing Expectations

Expectations Key Influences

 How can expectations and perceptions be managed?

Managing Expectations
Managing expectations is primarily the role of marketers,
but operations have two important roles to play:

1) Operations manager must let marketing and strategy

functions within an organization know the capabilities
of the operation, the nature and quality of service it can
deliver and what it cannot deliver

2) Operations has an opportunity to influence and shape

customer expectations during the early stages of a
service process (e.g., a customer entering a restaurant sees the way
that it is set out and will draw conclusions about the level of service
provided).
 Managing expectations and perceptions
Managing Perceptions
Managing customer perceived quality during the service process is a
dynamic activity. The figure below shows the zone of tolerance
extending from expectations through the process/experience to the
level of satisfaction.
 Managing perceptions (continued)
Peak, beginning and end experiences

Overall satisfaction is not the average of the customers

perception of satisfaction with the various stages of the
service process.

Satisfaction is influenced by how the experiences felt

when they were at their peak (best or worst) and how they
felt when they ended (peak-end rule).

Thus, by designing a good end (or start) to an experience

we can manipulate customers overall feeling of
satisfaction.
 Managing perceptions (continued)

An Example: Managing perceptions at a clinic

Considera patient with an appointment to see a doctor for a
routine medical appointment.
Assume there are seven stages (touch points) in this visit:
1) Arrival at the clinic
2) Reception
3) Waiting for the doctor
4) Introduction to the examination by the doctor
5) Examination
6) Discussion of the findings
7) Departure
 Managing perceptions at a clinic
Expectations may have been managed (by the medical practice) through its
code of conduct (e.g., informing the patient they should wait no longer
than 10 minutes to see the doctor, all medical facts will be explained, etc.).
Adequate performance satisfies the customer
Using enhancers to delight the customer
A dissatisfying outcome
Enhancers compensate for failure
Dissatisfaction shifts the zone of tolerance
Delight shifts the zone of tolerance
 How can expectations and perceptions be managed?

Manipulating the width of the zone of tolerance

To simply satisfy customers, it seems sensible to ensure there are

no problems during service process.

To delight customers, a narrower zone of tolerance will increase the

likelihood of delighting (and also risk of dissatisfying) the customer.

Some delighting transactions are needed, ideally early in the

process (but it can also be at the end of the process), to affect the
level and possibly the width of the zone of tolerance.

A strong end-of-process experience results in higher perceived

service quality.
 How can expectations and perceptions be managed?

Making the intangible tangible

One more method to manipulate service
perceptions is to make intangible tangible.
Car rental companies recognize the importance
of clean cars that are not dented and the interior
smells nice.
A management consultants jewelry or well cut
suit/dress and expensive car are tangible
representation of reliability and professionalism.
 How can service quality be operationalized?

Service quality factors

The service quality factors are those attributes of service
about which customers may have expectations and which
need to be delivered at some specified level.

The following slide presents eighteen quality factors.

Although these eighteen factors may not capture every

aspect of service quality for every organization, they can
be used as starting point to help the service manager to
define, deliver and measure service quality.
How can service quality be operationalized?

Eighteen Service Quality Factors

 Eighteen Service Quality Factors

1) ACCESS : The physical approachability of the service

location.

2) AESTHETIC: The extend to which the components of the

service package are agreeable or pleasing to the customer
(e.g., the appearance of the service environment).

3) HELPFULNESS: The extend to which the service

provider help the customer.

4) AVAILABILITY: The availability of service facilities, staff

and goods to the customers.

5) CARE: The concern, consideration, sympathy and patience

shown to customer.
 Eighteen Service Quality Factors

6) CLEANLINESS/TIDINESS : The cleanliness appearance

of the service package and environment.

7) COMFORT: the physical comfort of the service

environment.

8) COMMITMENT: The staff apparent commitment to their work.

9) COMMUNICATION: The ability of the service staff to
communicate with customers in a way they will understand.

10)COMPETENCE: The skill, expertise and professionalism with

which the service is executed.
 Eighteen Service Quality Factors

11.COURTESY : The politeness, respect and propriety shown

by the service.

12.FLEXIBILITY: A willingness on the part of the service

worker to amend or alter the nature of the service.

13.FRIENDLINESS: The warmth and personal approachability

of the service, .

14.FUNCTIONALITY: The serviceability and fitness for purpose

of service.

15.INTEGRITY: The honesty, justice, fairness and trustworthiness

with which customers treated.
 Eighteen Service Quality Factors

16.RELIABILITY : The reliability and consistency of

performance of the service and its staff.

17.RESPONSIVENESS: The speed and timeline of service

delivery.

18.SECURITY: The personal safety of customers and their

possessions.
 How can service quality be operationalized?

Hygiene and enhancing factors

Four Groups of Delighting and Dissatisfying Factors
 How can service quality be operationalized?

Four groups of service quality factors

Hygiene Factors: If these factors are in place they will satisfy, if not,
they will be a source of dissatisfaction. They are not likely to be a
source of delight (e.g., for a bank, security and integrity of transactions are
expected to be acceptable. If they are not acceptable, they will dissatisfy. If these
factors are over-specified, they will not delight).

Enhancing factors: These factors have the potential to delight if they

are present. If not present, they are not likely to dissatisfy the
customer (e.g., customers of a bank may be delighted to be approached by a
warm, caring staff member, however, these things are not necessarily expectedi.e.,
if not provided, their absence may not lead to dissatisfaction).
 How can service quality be operationalized?

Four groups of service quality factors (continued)

Critical Factors: These factors have the potential to both delight and
dissatisfy (e.g., in a bank, responsiveness and competence of the staff must be at
least acceptable so as not to dissatisfy the customers. But if more than acceptable,
they have the potential to delight).

Natural factors: These factors have little effect on satisfaction (e.g., the
comfort or aesthetics of a banking hall may play no part in customer satisfaction or
dissatisfaction).
 How can service quality be operationalized?

Hygiene and enhancing factors: an example

Four types of Factors for a bank
 How can service quality be operationalized?
Delight vs. Dissatisfaction
These four factors do not always neatly fall into one category or another.
Figure below shows the relative frequency of mentions made of the factors in a
study of UK banks.
NOTE: The factors with the tendency to dissatisfy (hygiene and critical) are
systemic and concern the organizations ability to deliver its core services (e.g.,
functionality, reliability, competence). The factors with the tendency to delight
tend to be more interpersonal factors (friendliness, courtesy, attentiveness).