Some companies have more than just a competitive advantage in customer service, they have unwavering customer loyalty. How do they do it? The authors argue that the key to providing superior service is understanding and responding to customer expectations. Through their research, two different kinds of expectations emerged, both of which can change over time and from one service encounter to the next for the same customer. By responding appropriately to these expectations, managers can be on their way to developing a “customer franchise.”
Understanding customer expectations is a prerequisite for delivering superior service; customers compare perceptions with expectations when judging a firm’s service.1 However, the nature of customer service expectations and how they are formed has remained ambiguous. Researchers have defined customer service expectations in a variety of ways but with no conceptual framework to link different types of expectations or indicate their interactions in influencing perceptions of service performance.2
Motivated by the pivotal role of customer expectations in service quality assessments, and by the limited knowledge about their structure and formation, we have undertaken a study designed to answer several fundamental questions:
- What is the nature of customers’ service expectations? Are there different types of expectations?
- What factors influence the formation of these expectations?
- How stable are the expectations? Do they change over time? Do they vary across service situations and across customers?
- How can companies manage expectations to enhance customers’ perceptions of service?
- What can companies do to exceed customers’ expectations?
To answer these and related questions we conducted sixteen focus group interviews with customers in six service sectors (automobile insurance, commercial property and casualty insurance, business equipment repair, truck and tractor rental and leasing, automobile repair, and hotels). Eight of our focus group interviews were with business customers and eight were with consumers. We describe our research approach in more detail in the Appendix.
The research reported on here is the latest phase in an ongoing stream of research on service quality. We have been systematically studying this subject since 1983 through a carefully designed sequence of research phases, each building on, adding to, and refining insights from preceding phases. Our research protocol has been to explore questions through qualitative research, model what we find, and then test the relationships within the model through quantitative research.
In this article we discuss key findings from our most recent research phase. Since this phase was a qualitative phase (see Appendix), our results are more in the form of preliminary conclusions than empirically verified inferences. We intend to explore these conclusions quantitatively in our next research phase. Nevertheless, the insights we discuss here are based on consistent patterns of responses obtained from sixteen focus groups in five cities representing various industries and customer types. We interviewed both end-customers (consumers) and business customers because we thought one group’s expectations might differ from the other’s. We found minimal differences.