UNDERSTANDING CUSOMER EXPECTATIONS OF SERVICE

HARVARD CASE STUDYANALYSIS

Service Marketing

Anshuman Dutta (215111070)Ravi Chouhan (215111061)D0MS NIT TrichyBatch 2011-13

•The case is on discussing the key to provide superior customer service in understanding and responding to customer expectations.• 16 focus groups interviews were conducted with customers in six service sectors, namely-1. Automobile insurance, 2. Commercial property and causality insurance,.3. Business equipment repair, 4. Truck and tractor rental and leasing, 5. Automobile repair 6. Hotels.

The major conclusions were then grouped as:-7. Customers Expect Service basics8. The service process is key to exceeding customer expectations9. Customer service expectation are dual leveled and dynamic.10.Customers want relations.

Managerial Implications.11. Demonstrate fair play.12.Be reliable.13.Manage promises.14.Leverage the process dimensions.15.Build relationships.16.Building a customer franchise through service.

1.Customers Expect Service basics

1.Customers expect service companies to do what they are supposed to do. They expect fundamentals, not fanciness; performance not empty promises.

2.Little evidence of extravagant or extreme expectations.

3.The idea is one should get what they pay.

4. Companies have a significant opportunity to improve their service reputations by delivering a higher percentage of the time the basic service customer think they are buying.

2.The service process is key to exceeding customer Expectations

Customer service expectations can be categorized into five overall dimensions :

1. Reliability,

2. Tangibles,

3. Responsiveness,

4. Assurance,

5. Empathy.

While reliability is largely concerned with service outcome while the other four are concerned with service process.

Reliability is the most important dimension in meeting customer expectations the process dimensions(especially assurance, responsiveness, and empathy) are most important in exceeding customer expectations.

3.Customer Service Expectations are Dual Leveled and Dynamic

Customer service expectations have two levels: Desired, Expected.

The zone of tolerance:

“Its the separation of desired service level from the adequate service level.”

The opportunity for the firms to exceed customer expectations is greater with the process dimension than with the outcome dimensions

Service level expectations

Tolerance Zones for outcome and process Dimensions of Service

4.Customer wants relationship Most of the customers want to be ‘relationship customers’ of

the firm. They want a partner’ someone who knows and cares about

them. Unfortunately the relationship seeking customer are

frequently disappointed. Despite the apparent interest in relationship marketing within numerous service companies.

Customer relationship is central to exceeding customer expectations.

This is because relationship building is process intensive, requiring responsive, assured, empathetic service overtime.

Managerial Implications-

The content of customer expectations is basic but the structure is complex characterized by both desired and acquired service levels that seem to change in response to variety of factors.

Demonstrate fair play Companies need to extend customers‘ zones of tolerance by

making special efforts to demonstrate fair play, such as devoting far more attention to explaining their policies and practices to customers, teaching customers more about the services they are buying, and listening to customers and becoming more sensitive to their expectations and concerns.

Eg. Numerous auto insurance customers.

Service customers are likely to be more tolerant if they believe the company is trying to be fair.

Open , regular two way communications paves the way for trust.

Be Reliable One way for the firm to keep the customer expectation from rising is

the service properly.

Firms when they do not provide the service core that the customers are buying, failed their customers the most direct way.

When service shortfall occurs, customers’ tolerance zone are likely to shrink and their adequate and desired service levels are likely to rise for both the outcome and process dimensions of the recovery service.

Minimizing the needs for recovery service helps firms mange customers’ expectation levels and improve customer service perceptions.

Manage Promises Service companies influence customers expectation level by the

explicit and implicit service promises they make, such firms have a better chance of making customer expectations when their promises reflect the service actually rather than as idealized version of the service.

Deliberately under promising the service to increase the likelihood of exceeding customer expectation is a way advocated by Davidow Uttal to under promise and over deliver.

Though under promising potentially reduces the competitive appeal of the offer and over promising raises customer expectations.

Leverage the process dimension Leveraging the process dimension is critical when service failure occurs.

Many service firms do not capitalize on the opportunity to turn a service failure into a satisfactory experience.

Leveraging a process dimension involves the wide span of actions design to enhance the willingness and ability of human beings to be effective servers.

This includes recruiting the most promising employee provinding them with ongoing training and problem solving skills as well as technical skills.

-Empowering employees to exercise judgment and creativity in responding to customer needs.

-measuring capacity of excellence service.

-the quality of service they actually deliver.

-rewarding the most excellent servers financially and non financially along with career enhancement.

Build relationship Develop genuine customer relationships.

Customer relationship provide companies with goodwill or credibility factor that encourages customer tolerance.

The challenge is to design a relationship service system consistent with the expectation of customers, the characteristic of service and the long term strategy of the firm.

Service provider must be able to efficiently tailor the service to customer specific requirement.

In order to being able to tailor services to customer, service provider must also be able to do so along with new ideas for measuring and rewarding employees’ performance.

Building a customer Franchise through service Firms need to measure two potentially service quality gaps, the gap between

perceived service and adequate service, the gap between received service and desired service.

The adequate service levels reflects the minimum performance level expected by customers after a consider variety of individual and situational factors including the availability of alternate service option.

To develop a true customer franchise, unwavering customer loyalty-firms must exceed not only the adequate service level, but also the desired service levels.

Turing service quality in the powerful competitive weapon requires continuous striving and relentless efforts to continually improve service performance.

CUSTOMER FRUSTRATION TO CUSTOMER PREFERANCE TO INTENSE CUSTOMER LOYELTY.

Thank you.