Understanding customer expectations

ADS Although customer satisfaction can be conceived in a number of ways, it is typically defined as the degree to which a product meets or exceeds the customer’s expectations about that product. Obviously, the key to this definition lies in understanding customer expectations and how they are formed. Marketing researchers have discovered that customers can hold many different types of expectations as shown in Exhibit 10.6. Customer expectations can vary based on the situation. For example, expectations are likely to be very high (i.e., closer to the ideal end of the range) in situations where personal needs are very high. In highly involving situations such as weddings, birthdays, or funerals, customers will demand a great deal from the firm. Expectations also tend to be higher when customers have many alternatives for meeting their needs. This connection between expectations and alternatives is one reason that serving customers in highly commoditized markets is so challenging. Other situations can cause customer expectations to be lower (i.e., closer to the tolerable end of the range), such as when the purchase is not involving, or when the monetary or nonmonetary prices are low.

Customers can also become more tolerable of weak or poor performance when they have fewer product alternatives, or when the poor performance is beyond the control of the firm (e.g., bad weather, excessively high demand, natural disasters).

The Zone of Tolerance 

The difference between the upper and lower end of the range of possible customer expectations is an important strategic consideration in managing customer satisfaction. Marketers often refer to the upper end of expectations as desired performance expectations (what customers want) and the lower end of the range as adequate performance expectations (what customers are willing to accept). As shown in Exhibit 10.7, the extent of the difference between desired and adequate performance is called the zone of tolerance.10 The width of the zone of tolerance represents the degree to which customers recognize and are willing to accept variability in performance (i.e., quality, value, or some other measurable aspect of the marketing program). Performance can fall above the zone of tolerance, within the zone of tolerance, or below it:

• Customer delight occurs when actual performance exceeds the desired performance expectation. This level of performance is rare and quite surprising when it occurs. Therefore, customers find it to be memorable.

• Customer satisfaction occurs when actual performance falls within the zone of tolerance. Satisfaction levels vary based on where performance falls within the zone (high or low).
•  Customer dissatisfaction occurs when actual performance falls below the adequate performance expectation. Depending upon the severity of the performance level, customers may go beyond dissatisfaction to become frustrated or even angry. This too can be very memorable for customers.

Now, with the marketing plan developed and implemented, we can think of these issues in a strategic sense by considering the zone of tolerance as a moving target. If the zone is narrow, the difference between what customers want and what they are willing to accept is also narrow. This means that the marketer will have a relatively more difficult time matching performance to customer expectations. Hence, customer satisfaction is harder to achieve when the zone of tolerance is narrow. Conversely, customer satisfaction is relatively easier to achieve when the zone of tolerance is wide. In these instances, the marketer’s hurdle is lower and the satisfaction targets are easier to hit. Delighting the customer by exceeding desired expectations is an exceedingly difficult task for any marketer. And, causing customer dissatisfaction by failing to meet even adequate expectations is a situation that should be avoided at all times.


Customers will typically hold different expectation levels and zones of tolerance for different factors of performance. In a restaurant, for example, customers might have a narrow zone of tolerance for food quality, an even narrower zone of tolerance for service quality, an average zone of tolerance for wait time, and a relatively wide zone of tolerance for cleanliness. From the marketer’s point of view, two issues are important. First, the firm must clearly understand the relevant performance factors about which customers will hold performance expectations. Customers can have expectations for just about anything, though there are typically only a few factors that are critical for most customers. Many firms look first at factors dealing with product strategy; however, critical performance factors can cut across the entire marketing program. Second, the firm must track expectations  and performance over time.
 

Tracking performance levels vis-à-vis expectations and the zone of tolerance is a useful diagnostic tool for both strategic planning and the management of customer satisfaction. The approach is also useful for tracking the effectiveness of performance improvements, and in assessing the performance of new goods or services. In the end, tracking both expectations and performance is an important way to ensure that  customer satisfaction remains stable or improves over time. Declining customer satisfaction suggests a need for immediate corrective action.

Managing Customer Expectations 

Many marketers ask two key questions as they work toward managing customer expectations: (1) Why are customer expectations unrealistic? and (2) Should we strive to delight our customers by consistently exceeding their desired expectations? Although it is true that customers are more demanding today than ever (especially American consumers), their expectations are typically not that unrealistic. Most customers are looking for the basics of performance things that a firm is supposed to do or has promised to do.11 For example, flights should take off and land on time, meals in a restaurant should taste good and be prepared as ordered, new cars should be hassle free throughout the warranty period, and your soft drink should be cold and fresh. On these and other basic factors of performance, it is essentially impossible for the firm to exceed customer expectations. These basic factors represent the bare minimum: If the firm wants to exceed expectations, it has to go above and beyond the  call of duty. Beyond the Pages 10.3 explains how exceeding customer expectations is an important component of customer loyalty.

The second question about delighting the customer is a bit more controversial. Firms should always strive to exceed adequate expectations. After all, this is the basic delineation between satisfaction and dissatisfaction. The tougher question is whether the firm should try to exceed desired expectations. The answer depends on several issues. One is the time and expense involved in delighting customers. If delighting a customer does not translate into stronger customer loyalty or long-term customer retention, then it is not likely to be worth the effort. It may also not be a good investment if delighting one customer lowers performance for other customers. Another issue is whether continually delighting customers raises their expectations over time. To be effective, customer delight should be both surprising and rare, not a daily event. Firms should look for small ways to delight customers without elevating expectations beyond what can reasonably be  delivered. Finally, the firm must be aware of whether its initiatives to delight the customer can be copied by competitors. If customer delight is easily copied, it ceases to be a key means of differentiation for the firm.

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