SBP 11a: Swaying the Customer-Judge

This principle occurs because each customer has unique specifications for the service process. Customer-specifications are based on (a) customer experience with similar service processes, and (b) the needs of their individual inputs into the process (by the Unified Services Theory). Therefore, each customer's expectation for the service process can be unique.

Understanding this Service Business Principle requires understanding the difference between quality and value. “Quality” comes from the satisfaction of expectations, which are cognitive or formal descriptions of the service process and outcome. On the other hand, “value” comes from the satisfaction of needs, which are changes that customers perceive will increase their happiness (or whatever you choose to call “feeling good”-consider your favorite “happy” term in this discussion) or decrease their unhappiness. Needs come from customers' beliefs about what will increase their happiness. Service expectations come from customers' beliefs about what a service provider is willing and able to do for the customer. When expectations for a service provider appear to fill customer needs, the customer will consider purchasing the service, otherwise they will not. For example, a customer might expect that a particular well-known flower shop will produce exactly what is ordered, will deliver it precisely where and when requested, will only use the highest quality, long-lasting flowers, and all this for a low, low price–the customer will not patronize such a high-quality flower shop unless the service fills a need.

(Think about how many high-quality services there are that you do not patronize because they do not fill a need. Stroll through the yellow pages of the phone book. Surely there are some high-quality air-conditioner repair shops, beauticians, car painters, ditch diggers, etc. in your community. Even if they were high-quality at a low price, you still would not patronize them unless they filled a need. Or, look at a recent issue of Consumer Reports, which rates the quality of various goods and services. Do you patronize all of the “high-quality” companies, even the ones at a low price? No, because many of the goods and services do not fill your particular needs.)

Often, customers mistakenly assume quality is value, or that value defines quality. Much of this is a semantic confusion based on the inadequacy of the English language. Further, customers assume that companies define quality based on customer needs (which should be the case, but often is not). This is captured in the Provident Provider Hypothesis, which might be stated: “service providers are in business to fill customer needs, which implies that they will want to attend to needs that are common, and since my needs appear to be common, service providers should attempt to fill my needs.” Many customers believe the Provident Provider Hypothesis, yet find that some companies who do exactly what they intend to do still fail to meet customer needs. This is because the Provident Provider Hypothesis is not always true.

• Some companies are not in the business to fill needs, although successful companies generally are.
• Some companies are not aware of common needs of customers, although market research can help identify those needs.
• A customer may think their needs are common, when in fact they are not (and may be beyond the scope of the service process).
• For economic and practical reasons, there is a limit to the scope of needs filled by service providers, meaning that some customer needs will be out of the scope of service.

The adverse effects of a misapplied Provident Provider Hypothesis can be mitigated by improved communication between the company and the customer. Companies who strive to fill a range of customer needs can gather information from customers about their needs and adjust the service process accordingly, and can communicate limits to the need-filling ability early to avoid investment resulting in dissatisfaction.

One last comment about “value.” As discussed above, value comes from the satisfaction of needs. By acquiring value, the customer usually has to give up the opportunity to satisfy other needs. For example, by spending money to have a service provider paint your house, you are sacrificing the opportunity to use that money to fulfill another need, such as going on a vacation. Therefore, the filling of needs usually involves some degree of sacrifice, which is the giving up of something good for something better. So, as a broader concept, value of a service is the need filling potential of the service minus the sacrificed need-filling opportunity (of time and money expenditures).

The company must decide what the service specifications will be, where they will come from, and how they will be achieved.

This Service Business Principle indicates that one reason communication with customers is important in service processes is to avoid misaligned specifications of quality. Customers communicate their expectations, and service providers communicate the service features that customers might expect. If customer expectations are not within the realm of the service being provided, the customer can usually opt out before committing to the service. For this to work, the communication needs to be earlier in the service process rather than later, since late communication implies that the customer has probably already committed himself or herself to the process.

An additional advantage of early and frequent communication with customers can be realized when the service fails to meet agreed-upon expectations. If such service failures are detected early, the opportunity for effective recovery is much greater. (This topic will be revisited in SBP: Early Communication/Early Recovery.)

Issues pertaining to sources of service-process specifications were discussed in detail under the Who is in Control Service Business Principle. Even when the service organization or the service employee is responsible for defining the service process, care must be taken to assure that it adequately addresses customer needs and expectations. Techniques such as customer focus groups or customer surveys can help determine this ex post facto. Another method is to conduct a walk-through audit, which is a study of the service process from the customer's point of view. The studier creates a list of scales for measuring various aspects of the service process. Customers or company employees can walk-through the service process and record measurements. This data can help identify components of the service process where customer needs are not being met, or where customers may have different expectations than what is designed into the service process.

The following table shows some walk-through audit questions that might be used for a doctor's office. (Another example is shown in Fitzsimmons2 chapter 6.)

A general method for evaluating the alignment between customer expectations and the service that is delivered is the SERVQUAL survey instrument.¹⁾ (cited in Fitzsimmons2 chapter 10 pages 274) SERVQUAL contains forty four general questions about a service, half of which are about customer expectations, and half of which are about the specific company's performance. Differences between responses on the two survey halves identifies possible areas of service specification misalignment.

One illustration of the importance of early and frequent communication with customers occurred when my wife requested kitchen designs from cabinet retailers. One cabinet retailer put together a kitchen design based on detailed communication about her preferences and the company's style options. She considered the design to be high-quality, since it reflected both her interests and what the company was capable of installing. A different cabinet retailer put together a kitchen design based on what they could provide, but with little communication with my wife. My wife considered the result to be low-quality, since it did not meet her definition of a excellent kitchen design. As a result, this second company did not have a chance to make the sale, regardless of the “quality” of the cabinets themselves.

An airline might define quality in terms of on-time departures and arrivals, low amounts of misrouted baggage, or the food and beverages served on board the aircraft. These service features may fill customers' needs for meeting schedules, having their belongings, and not being hungry. The idea is that customers will be happier if they are on time for their meetings, have their belongings, and are not hungry. However, customers may have other needs that motivate expectations for reasonable service (by a Provident Provider Hypothesis). Customers have social interaction needs, and are happier if gate personnel treat them with respect (not as a nuisance). They have comfort needs, and are happier if they are not required to sit in a stuffy cabin prior to departure. They have planning needs, and are less upset if they know a flight is going to be delayed before spending a great deal of time waiting in a plane that is delayed. Should passengers expect gate personnel to treat them with respect, stuffy cabins to be aired out, and delays to be announced when the airline is aware of them? If initial expectations are superseded by experience to the contrary, customers conclude that the airline is not interested in satisfying customer needs.

With manufacturing, product quality is more standardized, as specified by product engineers. Customers judge a product by its ability to fill needs, which customers attempt to determine before the product is purchased (through “search” properties–see SBP: The Marketing of Properties). If customer requirements are different from engineering specifications, the customer may motivate the product engineer to change the specifications, but otherwise individual customers have little impact on the product specifications.

1. What is “quality” in this industry? How do “high-quality” service providers differ from “low-quality” service providers?
2. In what way is quality determined? Where and by whom is it specified?
3. Where do customers get their expectations for service?
4. In what ways do customers “value” the service? What needs does the service fulfill? How do those needs relate to customer happiness?

Create a walk-through audit for your service business process, considering a part of the process that has perhaps a half-dozen steps. For each step of that process, identify a question or two that measures service performance on a 5-point scale. List the meaning of each point on the scale, or the meaning of just the end points. Estimate the performance specification (the acceptable point on the scale) for each measure. If possible, visit the service facility and complete the audit. Make some observations about the appropriateness of service performance specifications and actual performance relative to probable customer requirements.