Understanding customer expectations and perceptions

Presentation

By

Ben Mugerwa

introduction

• Despite a genuine interest in meeting customer expectations, many companies miss the mark by thinking inside out- they believe they know what customers should want and deliver that, rather than finding out what do want

• Many companies provide services that do not match customer expectations

• Important features are left out and the levels of performance on features that are provided are inadequate

• a far better approach involves thinking outside in-determining customer expectations and then delivering to them

• Thinking outside in involves using marketing research to understand customers and their requirements fully

• Marketing research consists of a portfolio of listening strategies that allow the company to deliver to exxpectations

Using marketing research to understand customer expectations

• Finding out what customers expect is essential to providing service quality

• Marketing research is a key vehicle for understanding customer expectations and perceptions of services

• If a firm in service does not carry out marketing research ,it will not understand its customers

• a firm that does marketing research but not on the topic of customer expectations, may fail to know what is needed to stay in tune with changing customer requirements

• Marketing research should focus on service issues such as what features are most important to customers, what levels of these features customers expect

• What customers think the company can and should do when problems occur in service delivery

• Even when a service firm is small and has limited resources to conduct research, avenues are open to explore what the customers expects

Research objectives for service

• The first step in designing services marketing research is critical:

• Defining the problem and research objectives: this is where the services marketer poses the questions to be answered or problems to be solved by the research

• Does the company want to know how customers view the services provided by the company,what customer requirements are, how customers will respond to a new service introduction or what customers will want from the company five years from now?

• It is essential to devote time and resources to define the problem thoroughly and accurately

• Many marketing research studies are initiated without adequate attention to objectives

• Research objectives translate into action questions

Common research objectives in service

• To identify dissatisfied customers, so that service recovery can be attempted

• 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 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 expectations of customers

• These research objectives are similar in many ways to the research conducted for physical products

• Service research, however, incorporates additional elements that require specific attention

• Service research should continually monitor and track service performance because performance is subject to human variability and heterogeneity

• A major focus of services research involves capturing human performance-at the level of the individual employee, the team, the branch, the organisation as a whole and the competition

• another focus of services research is documenting the process by which service is performed

• Even when service employees are performing well, a service provider must continue to track performance because the potential for variation in service delivery is always present

• a second distinction in services research is the need to consider and monitor the gap between expectations and perceptions

• This gap is dynamic because both perceptions and expectations can fluctuate

• Eg does the gap exist because performance is declining, because performance varies with demand and supply level or because expectations are escalating?

Criteria for an effective services research programme

• a services research program can be defined as the composite of separate research studies and types needed to address research objectives and execute an overall measurement strategy

• Many types of research could be considered in a research program

• Understanding the criteria for an effective services research program will help a company evaluate different types of research and choose the one most appropriate for its research objectives

• Qualitative and quantitative research: marketing research is not limited to surveys and statistics

• Some forms of research are exploratory and preliminary called qualitative research are conducted to clarify problem definition and prepare for more formal empirical research

• Quantitative research in marketing, on the other hand is designed to describe the nature, attitudes or behaviors of customers empirically and to test specific hypotheses that a service marketer wants to examine

• Both types of research are important and need to be included in services marketing research programmes

• Insights gained through qualitative methods such as customer focus groups, informal conversations with individual customers, critical incidents research and observation of services transactions

• Show the marketer the right questions to ask of consumers

• Qualitative research also gives managers the perspective and sensitivity that are critical in interpreting the data and initiating improvement efforts

• Quantitative research clearly is important in assessing and improving service delivery and design.

• Quantitative research gives managers data from which they can broad inferences about customer groups

• These studies are essential for quantifying customer satisfaction, the importance of service attributes, the extent of service quality gaps and perceptions of value

• they also provide managers with yardsticks to evaluate and track the firm`s service performance and show how the firm compares with competitors

• Results from empirical studies often trigger the need to conduct further qualitative research

• Empirical data can highlight specific service deficiencies for deeper qualitative probing

Perceptions and expectations of customers

• Expectations serve as standards or reference points for customers

• In evaluating service quality, customers compare what they perceive they get in a service encounter with their expectations of that encounter

• Measurement programme that captures only perceptions of service is missing a critical part of service quality equation

• Companies need to incorporate measures of customer expectations

• Measurement of expectations can be included in a research programme in multiple ways

• First basic research relates to customer requirements-that identifies the service features or attributes that matter to customers

• Research on levels of customer expectations is also needed.

• Assessment of the cost of research compared with its benefits or value to the company is important

• Customers have many service requirements, but not all are equally important. There is therefore a need to measure priorities and importance

• Because customer expectations and perceptions are dynamic, companies need to institute a service quality research process not just do isolated studies

• An important trend in services research involves measuring the positive and negative consequences of service quality along with overall satisfaction or service quality scores

Elements in affective services marketing research programme

• Complaint solicitation: firms use complaints as research to collect and document them, then use the information to identify dissatisfied customers, correct individual problems where possible

• Critical incident studies: where by customers provide verbatim stories about satisfying and dissatisfying service encounters they have experienced

• Requirement research:involves identifying the benefits and attributes that customers expect in a service. This type of research is very basic and essential because it determines the type of questions that will be asked in surveys and ultimately the improvements that will be attempted by the firm

Relationship and servqual surveys

• One category of survey could appropriately be named relationship surveys because they pose questions about all elements in the customer`s relationship with the company[including service, product and price]

• This comprehensive approach can help a company diagnose its relationship strengths and weaknesses

• These surveys typically monitor and track service performance annually with initial survey providing baseline

• One of the first measures to be developed specifically to measure service quality was SERVQUAL survey

• The SERVQUAL scale involves a survey containing 21 service attributes, grouped into the five service quality dimensions of reliability, responsiveness, assurance, empathy and tangibles

• The survey often asks customers to provide two different rating on each attribute