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Customer expectations

Customer expectations [Shortread]

Tom Urbaschek
Tom Urbaschek is currently studying for his Economics and Business economics bachelor’s degree (BSc). Writing for Asset | Economics' Blog Committee is one of his extra activities alongside his study. Subjects of his interest are the fields of behavioural economics, marketing and macroeconomics.

Marketing – In an ever increasing globalizing world marketing, both online as well as offline, is vital for the performance of the modern firm. An immense growth of the service industry, including increased competition  between service organizations, has led to an increased focus on customer expectations and perceptions.  In this article mainly the concept of customer expectations will be addressed. Furthermore, customer expectations will be put into perspective regarding customer perceptions and satisfaction, making a clear distinction between the two.

First and foremost, customer expectations are specific beliefs of service delivery that serve as standards, or reference points, against which service performance is judged for and by the customer. Firstly, these expectations include norms. These norms concern benchmarks along which services are measured. They include the desired highest achievable level and the adequate minimum tolerable level. Secondly, estimates of the customers are vital, that individually predict the qualitative outcome level of the service.

However, the issue with customer expectations concerns the managerial implications. Since often based on feelings, and therefore being subjective, these expectations might prove to be unrealistic, more importantly difficult to measure. Moreover, expectations are dependent on situational factors. Hence, to overcome this issue a firm’s aim might be to create customer delight. This is achieved “from having one’s expectations exceeded to a surprising degree” (Rust & Oliver, 2000). The pending question how a firm is able to continually do so, and whether expectations constantly escalate, is preoccupying small, medium and large firms daily.

Also, one needs to distinguish Perceived Service Quality (PSQ) from customer satisfaction.  PSQ is a cognitive construct, whereas satisfaction is subjective in nature, hence regarding attitudes and emotions. Additionally, for customer satisfaction experience of the specific service is needed, thus the customer plays a central role.  PSQ rather refers to the objective quality of the service. According to the constructed model by Zeithaml , Berry and Parasuraman (1988), the infamous five SERVQUAL dimensions of reliability, responsiveness, assurance, empathy and tangibles are the inputs for ‘perceived service’ and ‘expected service’, which jointly determine PSQ.

Thus, the dimension of reliability describes the ability to actually perform the promised service accurately and dependably. Assurance concerns the knowledge and courteousness of the employees, plus their ability to encourage confidence and trust within the customer. Further, tangibles are the physical facilities, also covering appearance of personnel. Moreover, empathy is often regarded as  individualized attention the firm provides to its customer. This practically means that the care for customers should be equal to the amount of care for the service itself. Lastly, responsiveness defines the degree of willingness to help customers out and provide swift service.

All in all, it is worth studying the behavior of specific customers  and markets regarding services, and the relation between them. Although customers are often acting in an irrational manner, making use of empirical data – and frameworks –  can lead to accurate predictions of customer expectations, perceptions and ultimately concrete behavior.

Reference list

Rust, R. T., & Oliver, R. L. (2000). Should we delight the customer?. Journal of the Academy of Marketing Science, 28(1), 86.

Zeithaml, V. A., Berry, L. L., & Parasuraman, A. (1988). Communication and control processes in the delivery of service quality. The Journal of Marketing, 35-48.

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