Chapter 5 --- Understanding Customer Expectations and Perceptions Through Marketing Research Donna J. Hill, Ph.D. Fall 2000

Company Perceptions of Consumer Expectations Provider GAP 1 CUSTOMER Expected Service GAP 1 Company Perceptions of Consumer Expectations COMPANY Part 2 Opener

Common Research Objectives for Services To identify dissatisfied customers To discover customer requirements or expectations To monitor and track service performance To assess overall company performance compared to competition To assess gaps between customer expectations and perceptions To gauge effectiveness of changes in service To appraise service performance of individuals and teams for rewards To determine expectations for a new service To monitor changing expectations in an industry To forecast future expectations

Research --- Key Vehicle for Understanding Expectations and Perceptions Most critical stage -- defines the problem and research objectives Eight Key Criterion for an Effective Research Program

Figure 5-1 Criteria for An Effective Services Research Program Includes Quantitative Research Includes Qualitative Research Includes Perceptions and Expectations of Customers Occurs with Appropriate Frequency Research Objectives Includes Measures of Loyalty or Behavioral Intentions Measures Priorities or Importance Balances Cost and Value of Information Includes Statistical Validity When Necessary

Qualitative Research complaint solicitation critical incident studies Qualitative research is conducted to clarify problem definition and prepare for more formal empirical research complaint solicitation critical incident studies requirements research service expectation meetings and reviews ethnography studies customer panels ? Lost customer research future expectations research

Quantitative Research Also called descriptive or empirical research can be used to test hypothesis Relationship surveys (SERQUAL is a type) Trailer Calls (Post-transaction surveys) Process checkpoint evaluations Mystery shopping Database marketing research

Measures Priorities or Importance Direct importance measures Indirect importance measures

Portfolio of Services Research Research Objective Type of Research Identify dissatisfied customers to attempt recovery; identify most common categories of service failure for remedial action Customer Complaint Solicitation “Relationship” Surveys Post-Transaction Surveys Customer Focus Groups “Mystery Shopping” of Service Providers Employee Surveys Lost Customer Research Assess company’s service performance compared to competitors; identify service-improvement priorities; track service improvement over time Obtain customer feedback while service experience is still fresh; act on feedback quickly if negative patterns develop Use as input for quantitative surveys; provide a forum for customers to suggest service-improvement ideas Measure individual employee service behaviors for use in coaching, training, performance evaluation, recognition and rewards; identify systemic strengths and weaknesses in service Measure internal service quality; identify employee-perceived obstacles to improve service; track employee morale and attitudes Determine the reasons why customers defect To forecast future expectations of customers To develop and test new service ideas Future Expectations Research

Stages in the Research Process Stage 1 : Define Problem Stage 2 : Develop Measurement Strategy Stage 3 : Implement Research Program Stage 4 : Collect and Tabulate Data Stage 5 : Interpret and Analyze Findings Stage 6 : Report Findings

SERVQUAL A type of relationship survey Uses 21 questions based on five dimensions. (asked twice, once for expectation and once for perception. Compute the difference between the ratings customers assign to the paired expectation/perception statements. Uses mean scores on statements making up dimension See appendix on pages 135-136

Zone of Tolerance Charts Used to report findings on two levels of customer expectations desired service and adequate service Along with customer perceptions of company performance

Service Quality Perceptions Relative to Zones of Tolerance Figure 5-6 Service Quality Perceptions Relative to Zones of Tolerance by Dimensions 9 8 7 6 5 4 3 2 1 O O O O O Reliability Responsiveness Assurance Empathy Tangibles Retail Chain Zone of Tolerance S.Q. Perception O

Figure 5-6 Importance/Performance Matrix HIGH   High Leverage Attributes to Improve Attributes to Maintain     Importance  Low Leverage    Attributes to Maintain Attributes to De-emphasize LOW HIGH Performance