Page 105 - DMGT308_CUSTOMER_RELATIONSHIP_MANAGEMENT

Customer Relationship Management

Notes Among the intriguing questions about service expectations is whether customers hold the same
or different expectation levels for service firms in the same industry. For example, are desired
service expectations the same for all restaurants? Or just for all fast-food restaurants? Do the
levels of adequate service expectations vary across restaurants? Consider the following quotation:
“Levels of expectation are why two organizations in the same business can offer far different
levels of service and still keep customers happy. That is why, McDonald’s can extend excellent
industrialized service with few employees per customer and why an expensive restaurant with
many tuxedoed waiters may be unable to do as well from the customer’s point of view.”
Customers typically hold similar desired expectations across categories of service, but these
categories are not as broad as whole industries. Among subcategories of restaurants are expensive
restaurants, ethnic restaurants, fast-food restaurants and airport restaurants. A customer’s desired
service expectation for fast-food restaurants is quick, convenient, tasty food in a clean setting.
The desired service expectation for an expensive restaurant, on the other hand, usually involves
elegant surroundings, gracious employees, candlelight and fine food. In essence, desired service
expectations seem to be the same for service providers within industry categories or subcategories
that are viewed as similar by customers.
The adequate service expectation level, on the other hand, may vary for different firms within a
category or subcategory. Within fast-food restaurants, a customer may hold a higher expectation
for McDonald’s than for Burger King, having experienced consistent service at McDonald’s over
time and somewhat inconsistent service at Burger King. It is possible, therefore, that a customer
can be more disappointed with service from McDonald’s than from Burger King even though
the actual level of service at McDonald’s may be higher than the level at Burger King.

Notes Organisations should practice total quality marketing with emphasis on internal
marketing. Effective internal marketing practiced would indicate the quality standard of
the input process, output, and other related aspects as viewed by the organisation’s internal
customers. This would enable the organisation to initiate steps to improve the practice,
procedure, process and performance of people associated with external customers. This
attempt would obviously contribute towards customer retention.

4.3.1 Zone of Tolerance

Services are heterogeneous in that performance may vary across providers, across employees
from the same provider, and even with the same service employee. The extent to which customers
recognize and are willing to accept this variation is called the zone of tolerance and is shown in
Figure 4.8. If service drops below adequate service – the minimum level considered acceptable –
customers will be frustrated and their satisfaction with the company will be undermined. If
service performance is higher than the zone of tolerance at the top end – where performance
exceeds desired service – customers will be very pleased and probably quite surprised as well.
You might consider the zone of tolerance as the range or window in which customers do not
particularly notice service performance. When it falls outside the range (either very low or very
high), the service gets the customer’s attention in either a positive or negative way. As an
example, consider the service at a checkout queue in a grocery store. Most customers hold a
range of acceptable times for this service encounter – probably somewhere between five and 10
minutes. If service consumes that period of time, customers probably do not pay much attention
to the wait. If a customer enters the line and finds sufficient checkout personnel to serve him or

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