About Them Customers’ Expectations

Steve Vargo

A (somewhat) Diffferent View on Customer Expectations

Actually, I have done quite a bit of empirical research in this area – to date, however, I have mostly just published the method and a pilot study (see Vargo and Lusch, 2005) “Consumer’s Evaluative Reference Scales and Social Judgment Theory: A Review and Exploratory Study,” in Review of Marketing Research, 1.

I think, as is common because of the flawed disconfirmation-of-expectations model, the discussion is confusing expectations and desires (what is desired). My research suggests that the latitude of acceptability in an evaluation is anchored (not bounded by, as in the zone of tolerance model) expectations and desires, probably with the former serving as something of a reality check for what is desired – an ideal point, thus more is not always better. Thus, it is normally advantageous to exceed expectations but not (at least significantly) what is desired.

The latitude of acceptability can expand and contract but most of the expansion and contraction is with the latitude of noncommitment (a term adopted from work of Sherif and colleagues), a neutral latitude between acceptability and objectionability. This latitude is typically very wide, as I expect it should be for everyday evaluations (e.g., most routine purchases), but I expect it narrows or maybe vanishes in critical situations (thus the 80/20 rule suggested by Mitch), though I have only confirmed this in a pilot study so far.

The bottom line is that exceeding expectations does not keep “raising the bar” – it actually is good, up to a point. On the other hand, exceeding desires is a problem – think in terms of too much friendliness by a waiter in a restaurant or too much attention by a salesperson in a department store, what I call hyperservice

Steve Vargo
Professor of Marketing
University of Hawaii
Twitter: SteveVargo

Ursha

the problem of consistent over-delivery

I also agree that customers get used to consistent over-delivery and start taking it for granted.
From the theories of conditional learning we can see that random reinforcement is far more effective than regular - if customer knows that his expectations are, from time to time, far exceeded, he will be looking forward to the next surprise. When he knows that he's always going to get something extra, that's not surprise anymore.
As a psychologist, I always like to compare business relationships with private ones, because the same principles can be applied to any relationship. When you are in a succesful relationship with your partner/husband/wife, it works very well if both of you see in it some benefits - you give/receive them - that are of great importance for you and you believe that you could not find it elsewhere. (In a way, you could call this loyalty.) And if you now think of the gifts or surprises that you give to each other - it is exciting and interesting as long as they are unexpected. When you start giving the gifts every single day, he/she gets accustomed to it and soon you won't get feedback such as "thank you" or "that's really nice of you" but more of "Why didn't I get my gift today? That's really rude of you."
"Exceeding expectations" every day in the same way always turns into regular expectations.

Jim Smith

Aiming for "meeting expectations" breeds mediocrity

When we evaluate our employees, I hope we have a category called "exceeds expectations/requirements of the job " and one called "far exceeds expectations of the job". If we are satisfied with employees who just meet expectations, we have nothing but a mediocre work force. Top performers always exceed or far exceed the requirements of the job.

In like fashion, meeting expectations with customers means that our business in the eyes of the customer is nothing but mediocre. To be a top performing business we need to exceed or far exceed the customers expectations.

I rest my case.

Glenn Friesen \ Customer Service Training

Well Put

I so rarely see comment discussions this interesting, too!

Redesigning the customer experience for the new social customer should be an especially wild ride for tall organizations.

Karl Sharicz

Delivering More Than Expected

I am personally of the opinion that over delivering on expectations to a calculated degree is a good thing. It doesn’t have to happen consistently all the time and I don't think it necessarily creates precedence. It doesn’t have to be an always or never proposition. The situation at hand will dictate when and when not to. On the other hand, over committing and under delivering has never helped me personally and but not necessarily on those “obligatory” occasions that a woman might come to expect.

My wife and I once stayed at a hotel where they asked what the occasion was and I told them it was a wedding anniversary. Upon entering our room we found a lovely card from the management along with a bottle of wine and two wine glasses. Was I delighted? I sure was. Would I expect that or more if I booked there again? No. All other aspects of that stay being expected or greater, I would stay there again and I would also recommend that hotel to anyone I knew that was looking for something special and delightful. Yet I also wouldn’t set them up for disappointment by implying they would receive the exact same delights as I received. There were other surprises that occurred during our stay and so I figure this is the kind of place that attempts to surprise and delight their customers in various and creative ways. In that way they demonstrated that they cared about me and that I was important to them.

There are lots of ways organizations can demonstrate caring for customers. By contrast I have done business with many organizations where the lack of attention and caring becomes noticeable and that’s when I begin losing faith and looking elsewhere. It sounds like a simple concept and it is but I find far too few organizations following this kind of strategy. Raising the bar on excellence is really what it should be all about. Would I choose to stop learning for example if I thought that everyone expected me to be smarter or more skillful this year than I was last? I have no interest in mediocrity in any form or for any reason. Status quo be damned…!!

Gregory (@pipzlchoice)

The core of an intent

This is a great discussion. I side with Esteban that it is more economical to continually optimize the systems, processes and practices with the goal of exceeding customer's expectation, than not. Such a strategy, despite it's apparent up front cost, leads not only to creation of "beloved" brand equity, but eliminates Toyota like corporate reputation meltdowns we are witnessing unfold. The intent to learn and correct is in the core of such strategy IMHO, as oppose to strategy of cost optimization at any expense.

Naor Almog

Exceeding Customer Expectations at the IT business

Hi guys

I have enjoyed reading this thread about exceeding customer expectations.
I am interested in the exceeding customer expectations topic where the customer is a telecom company and the vendor is company that develop, deliver and deeply the (CRM) software (that will be used to serve the end customers). How things are changed here in your opinion?
Exceeding Customer Expectations means very low number of software defects, very high availability of the deployed software etc.

Nowadays, software vendors are committed to deliver software meeting very aggressive contractual commitments that are so hard to meet so isn’t it dangerous to initiate any “exceeding customer expectations” program with customers?

Are you familiar with any relevant article or post on this?

Thanks
Naor

Topsiano

great debate! Here's another point of view

I took my time to read through each post and must confess it looked more like a live show.

Well, my own take on this topic is coming from the project management perspective:

For the project scope (i.e. the work to be done; the tangible core; what makes your product/service functionally effective) - PLEASE STAY ON POINT. This is the motivating factor for your customer.

Lets check two tendencies here:
1. Goldplating :the incorporation of costly and unnecessary features or refinements into a product or structure; any expensive nonessential item, convenience, or feature e.g an apartment with a sauna.
2. Scope Creep: It is also called focus creep, requirement creep, feature creep, function creep. This, in project management, refers to uncontrolled changes in a project's scope e.g. a wristwatch running faster or slower.

These are situations that almost always occur in project scope management when not-enough attention is given to the customer/client. Businesses should have it in mind that those folks had a NEED to be met, else they wouldn't have showed up in your office in the first place.

Aside the tangible core, there are other aspects that can make your business unique - your brand. With your brand you can meet the WANTS of your customer.
A brand is a set of added values, values which offer both functinal and psychological benefits to the consumer e.g. performance in use; price; packaging; colour, taste and smell; shape and form;associations and the brand's advertising.
your brand is the differanciating factor for your customer. It is what makes the customer know that your business exists, and with it, you should ALWAYS EXCEED CUSTOMERS' EXPECTATIONS to stay on top of your game.

Even, brands are still limited in being able to win customers' absolute loyality. Here, i suggest a way to add mystery, sensuality and intimacy to what you have to offer - becoming a LOVEMARK! When a customer falls in love with you. He will be willing to even pay more to get your product or service.

You can bet on this!

Cheers.