In this article we will discuss about:- 1. Meaning of Customer 2. Customers and Their Expectations 3. Customer Requirements 4. Manage Customer Expectations 5. The Conceptual Model of Customer Expectations of Service 6. Managing Customer Expectations to Improve Satisfaction.
Contents:
- Meaning of Customer
- Customers and Their Expectations
- Customer Requirements
- Manage Customer Expectations
- The Conceptual Model of Customer Expectations of Service
- Managing Customer Expectations to Improve Satisfaction
1. Meaning of Customer:
A customer refers to individuals or households that purchase goods and services generated within the economy. The word ‘customer’ historically derives from “custom,” meaning “habit”; a customer was someone who frequented a particular shop, who made it a habit to purchase goods there, and with whom the shopkeeper had to maintain a relationship to keep his or her “custom,” meaning expected purchases in the future.
‘Customer needs’ may be defined as ‘the goods or services a customer requires to achieve specific goals’. Different needs are of varying importance to the customer. Customer expectations are influenced by cultural values, advertising, marketing, and other communications, both with the supplier and with other sources.
Both customer needs and expectations may be determined through interviews, surveys, conversations, data mining or other methods of collecting information. Customers at times do not have a clear understanding about their needs.
Assisting in determining needs can be a valuable service to the customer. In the process, expectations may be set or adjusted to correspond to known product capabilities or service.
2. Customers and Their Expectations:
Customers are people who buy products and services from other people (usually companies of one sort or another). What customers think and feel about a company and/or its products is a key aspect of business success. Attitudes are shaped by experience of the product, the opinions of friends, direct dealings with the company, and the advertising and other representations of the company.
Irrespective of whether a business’ customers are consumers or organisations, it is the job of marketers to understand the needs of their customers. In doing so, they can develop goods or services which meet their needs more precisely than their competitors. The problem is that the process of buying a product is more complex than it might at first appear.
Customers do not usually make purchases without thinking carefully about their requirements. Wherever there is choice, decisions are involved, and these may be influenced by constantly changing motives.
The organisation that can understand why customers make decisions such as who buys, what they buy and how they buy will, by catering more closely for customers’ needs, become potentially more successful.
3. Customer Requirements:
The supermarket industry provides a good example of the way in which different groups of customers will have different expectations. Some customers just want to buy standard products at the lowest possible prices.
They will, therefore, shop from supermarkets that offer the lowest prices and provide a reasonable range of goods. In contrast, some supermarket shoppers are seeking such aspects as variety and quality.
They will, therefore, choose to buy from an upmarket supermarket. Additionally some customers will have special tastes such as willing to buy Fair Trade products or organic fruit and vegetables. It is clear, therefore, that to be successful a business has to have a clear understanding of their target customers and the expectations of this group.
Most markets are made up of groups of customers with different sets of expectations about the products and services that they want to buy. Marketing oriented businesses will, therefore, need to carry out research into customer requirements to ensure that they provide those products and services which best meet their customer expectations in the relevant market segment.
4. Manage Customer Expectations:
The organizations demonstrate a commitment to understanding the customer’s perspective. Most of the bench-marking partners send surveyor to customers who have complained recently to see how satisfied they were with how the complaint was handled.
Some call the customers to determine satisfaction. One organization surveys every fourth customer with a complaint. Another described complaints as “free information” about their customer’s needs and expectations.
These organizations supplement surveys of people who complain with routine and often extensive data collection tools in order to understand their customers. Customers are surveyed to determine their level of satisfaction with existing services.
Surveys are sent with questions, often in a Likert Scale format where the customer can select the degree of satisfaction on a scale, e.g., from one to five. These surveys assess customer satisfaction with existing services, delivery of services, helpfulness of employees, and overall performance of the organization.
Some companies add a few short questions to the end of customer calls or correspondence. Companies also survey their front-line employees for their attitudes as well as for their ideas on improved service to their customers, asking their employees to take the customer’s perspective.
After the nearby community complained about noise levels, the Red River Army Depot changed the times they detonated ammunition and put “listeners” (members of the community) at check-points throughout the surrounding area to monitor noise levels.
The partners focus on clear customer target groups. One company that serves a wide variety of customers decided to focus on its high-volume business customers. Three months after a high-volume business customer has complained, the company follows up to find out whether they are still using their services and, if not, the reasons for dissatisfaction.
In addition, the company routinely solicits feedback before, during, and after service. It conducts focus groups and has established a Customer Advisory Council to drive decisions related to this key target group.
These organizations do not wait for complaints to come in the door. They try to anticipate the needs and problems of customers and to set realistic expectations through customer education and communication strategies.
Research shows that 40 percent of complaints come from customers having inadequate information about a product or a service. Using customer feedback to understand customer expectations and needs, organizations educate their customers and/or the public on what they can expect from their products and services and what obligations and responsibilities their customers have. For example – one enforcement/regulatory partner has extensive education on the requirements and reasons for utilizing their services.
(1) Learn How to Say No:
Both companies and government agencies, especially regulatory agencies, need to draw limits. When it is not possible to give the customer what they demand, it is still possible for a customer to feel that he or she has been heard patiently and has been treated fairly.
A number of techniques convey concern—calling customers and telling them the company understands; giving the customer the best explanation they can; and being transparent and honest with customers concerning laws and policies of the organization.
Being professional and considerate of customers enhances their view of the organization-even when the customer may be disappointed with the outcome. A recent taxpayer letter to the Internal Revenue Service shows that the techniques cited above really work –
“For the first time in a long time, a communication from IRS is clear, concise, informative and user friendly. The attached—while I’d preferred not to have made the mistake—points out exactly what happened and what needed to be done.”
In a small percentage of cases, it will be necessary to close a complaint when it is felt that the company or agency has done everything that can be done. Recognizing that it is not always possible to satisfy a customer, having procedures and trained staff to handle these cases, is part of an effective complaint handling system.
(2) Keep the Human Touch:
One company found that it committed a gross blunder when it introduced enhanced information technology. Employees lost eye contact with their customers. Keep the human touch-don’t let automation get between the front-line employee and the customer.
5. The Conceptual Model of Customer Expectations of Service:
The conceptual model developed in this text specifies three different types of customer expectations of service –
(i) Desired service,
(ii) Adequate service, and
(iii) Predicted service.
Antecedents of each type of service expectation are also delineated, and author offer 18 propositions about service expectations and their antecedents.
The conceptual model of customer expectations is divided into four main sections –
(1) The expected service component,
(2) Antecedents of desired service,
(3) Antecedents of adequate service, and
(4) Antecedents of both—predicted and desired service.
The expected service component describes two types of customer expectations of service. First, desired service is defined as the level of service the customer hopes to receive and second as the level of service, the customer will accept.
Antecedents of desired service define and describe enduring service intensifiers and personal needs, two of the major influences on desired service.
Antecedents of adequate service identifies and explains five of the main influences on adequate service –
(i) Transitory service intensifiers,
(ii) Perceived service alternatives,
(iii) Self-perceived service role,
(iv) Situational factors, and
(v) Predicted service.
Predicted service, the level of service customers believe they are likely to get, is the third type of service expectation developed in the model. Predicted service is viewed both as an antecedent of adequate service as well as the expectation standard for customer satisfaction assessments.
Antecedents of both desired and predicted service details four variables: explicit service promises, implicit service promises, word-of-mouth communications, and past experience, all of which affect both desired and predicted service.
Exploratory research was used to develop an understanding of different types of customer expectations and their sources. We conducted 16 focus group interviews with customers of insurance, business equipment repair, truck rental and leasing, automobile repair, and hotel industry businesses.
The model presented provides a comprehensive framework of service expectations and their potential antecedents. The model clarifies the distinction between customer satisfaction and service quality assessment within a single framework by specifying three different levels of customer expectations.
The constructs and propositions embedded in the model augment the extent literature on customer expectations and raise a number of intriguing questions and methodological challenges for future research.
6. Managing Customer Expectations to Improve Satisfaction:
Let’s focus on customer satisfaction, an issue of great concern to every successful home builder. If you’re like most home builders, you believe you know what your past, present, and even future customers want to see in their newly-constructed homes.
Well perhaps you do, but I believe there is still more for all of us to learn about our customers. Many experts insist that customers don’t really know what they want, they have to be told. They’re wrong! Customers do know what they want, but unfortunately they’re not proficient at describing their needs in terms that home builders can easily understand.
On the right is a graphical construct universally referred to as the Kano Model. This graphic takes its name from the Japanese professor/consultant who developed it in the early 1980s, Dr. Noriaki Kano, of Tokyo University.
When you can understand Kano’s three types of customer needs and manner to reveal them, you, too, will be well on your way to understanding the customer’s needs as well as, or perhaps better than, they do.
The Kano Model is useful in gaining a thorough understanding of customers’ needs.
As portrayed in Kano’s Model, there are two dimensions:
(i) Achievement (the horizontal axis) which runs from the home builder “didn’t do it at all” to the home builder “did it very well.”
(ii) Satisfaction (the vertical axis) which goes from being “dissatisfied” with the product or service to being “satisfied” with the product or service.
Dr. Kano has isolated and identified three levels of customer expectations, such as what it takes to positively impact customer satisfaction. The three levels of needs described in the Kano Model are expected quality, normal quality, and exciting quality.
Let’s examine each of these:
(i) Expected Quality:
Fully satisfying the customer at this level simply gets the home builder into the market. The entry level expectations are referred to as the “must” level qualities, properties, or attributes.
These expectations are also known as the “dissatisfiers” because by themselves they are unable to satisfy a home buyer. However, failure to provide these basic expectations will cause dissatisfaction.
Examples include – use of seasoned lumber; use of unleaded paint; provision of water-tight windows and doors; and meeting or even exceeding all federal, state, and local building codes. The “musts” include customer assumptions, expected qualities, expected functions, and other unspoken expectations.
(ii) Normal Quality:
These are the qualities, attributes, and characteristics that keep a home builder in the market. These higher level expectations are known as the “wants” or “satisfiers” because they are the expectations that home buyers will specify.
Examples include – plenty of options (such as potential room usage, appliance designs, and colour choices); sufficient floor plan and elevation choices; and a variety of mortgage lenders from which to select.
(iii) Exciting Quality:
These are features and properties that make a home builder a leader in the market. The highest level of customer expectations, as described by Kano, is termed the “wow” level qualities, properties, or attributes. These expectations are also known as the “delighters” or “exciters” because they go well beyond anything the home buyer might imagine and ask for.
Examples include – a lifetime warranty on the roof; a 20 year guarantee on the air conditioning and heating system; interior walls that can disappear and reappear as needed; and a solar-based water heating and electrical system.
Their absence does nothing to hurt a possible sale, but their presence improves the likelihood of purchase. “Wows” not only excite customers to make on-the-spot purchases but also to increase brand loyalty and referrals. These are unspoken ways of knocking the customer’s socks way off.