The magnitude of the difference between Perception and Expectation can determine Customer Satisfaction.

 

Reading time: 4 min 52 sec

I am not sure if it is a blessing or a curse.

When I walk into an establishment or experience a service, I can not help but notice what improvements can be easily made to enhance the experience. As a business strategist and advisor, I can not help but see these obstacles. After all, a great strategist observes and determines what keeps their clients from breakout success. Great strategy arises from curiosity and a desire to do things better. Having personally experienced numerous “service failures” recently, some with excellent Service Recovery and others with none, motivated me to write this.
Let’s start with the question, How can so many businesses not see the chasm between customer expectations and perceptions?

Seth Godin recently said,

“Good pizza is rare, even though the method to create it is well known. Any efforts to make it more convenient, cheaper or easier will almost always make it worse.”

He wasn’t talking about pizza, just saying. I experienced this with a franchise Barbershop where adding unnecessary extras to an essential service made the experience less convenient, more expensive, and more complex. The result was service failure and a lack of service recovery.

BAD HAIRCUT DAY

I recently headed out to a new Men’s Barber Shop to try it. My stylist is on maternity leave, forcing the change. We all know how personal this service is and how loyal we are to our stylist. I chose a franchise location of a growing national brand. Their SEO was excellent as they ranked first on Google, with excellent reviews. The website was exceptionally designed with great graphics and copy, too. Scheduling online was easy, too. I received confirmation and notification by email and text as well. I was genuinely excited about this new experience.

My Expectation was high, that is, until I walked through the door. I was shocked; the place was packed, every seat in the waiting area was taken, and every barber chair was full, too! I checked in, “David here, I have an 11 O’Clock appointment,” it was 10:55. The response was rote, “Thank you, your stylist will be right with you. Can I get you anything?”

I thought to myself that what I needed was a chair to sit in. My quick assessment of the situation was that “right with you” was a half-truth. I stood around for a few minutes thinking someone would be called back, opening up a spot to sit, but that didn’t happen either. The closest seat I knew was in my car, so I told the receptionist I would wait there and to please text me when ready. At 11:20, I phoned in and informed her I could not wait any longer, canceling my appointment.

I would not reschedule. My confidence was gone! With so many things “broken” in their service delivery, I would not endure a horrible haircut, either. I will never return. This event was a great example of the chasm between customer expectation and perception, and I could not pass up the opportunity to dig deeper here.

CUSTOMER SATISFACTION

The magnitude of the difference between Perception and Expectation can determine Customer Satisfaction. Expectation is the anticipatory beliefs about the delivery experience of a good or service, and Perception, on the other hand, is the interpretation of the actual service experience.

SATISFACTION = PERCEPTION – EXPECTATION

Simply put, when expectations exceed perception, customer satisfaction is negative.

When Perception exceeds Expectation, it is positive.

The more significant this difference in either direction, the greater the range of customer reaction, from Raving Fans to Raging Mad. Simple math but complex in delivery. Of course, we all desire Raving Fans. A company must align its capabilities with customer expectations to provide a positive customer experience. The fundamental task is to steer customer expectations into an area where they can be met or ideally exceeded.

“Only those who do more than they promised will cause excitement.”

Digital Business Leadership By Ralf T. Kreutzer, Tim Neugebauer, Annette Pattloch.

UNDER PROMISE AND OVER DELIVER

Today, even a small business can create a near-perfect experience online and through social media. Marketing intentionally raises customer expectations for sales or appointments, which can be challenging to meet. When the customer shows up and opens the front door, it’s “Game On.” The members of the Team must now take over and meet or exceed the heightened Expectations. The problem now becomes…

“The future of an organization is in the hands of the privates in the field, not the generals back home.” Krulak’s Law of Leadership

A business should enhance the delivery experience of its product or service for the happiest customers while simultaneously modulating expectations.
As the adage goes…” Under promise and over deliver.”
Alternatively stated, be honest with your customer. These last two points together nearly always prevent customer dissatisfaction.
In most instances, the easiest business strategy is “more.” More of whatever it is being delivered. More is easier; increase the number, and the revenue, profit, or whatever other metric is being monitored should increase, too. That is until something “breaks,” which is very likely unless the business systems have been designed and optimized for “more.”

CLOSING THE CHASM

Closing the gap between customer expectation and Perception in service delivery, or sales, is critical for many vital dimensions in a business, including;

Customer Retention: Services that consistently meet or exceed expectations create satisfied customers who are likelier to be loyal and engage in positive word-of-mouth.

Competitive Differentiation: In markets where services can be easily replicated, exceeding customer expectations can be a source of competitive advantage and market differentiation.

Price Sensitivity: Customers are less sensitive to price increases when their expectations are consistently met or exceeded.

Service Customization: Understanding expectations and perceptions allows businesses to tailor services to the unique preferences of different customer segments, which can lead to enhanced customer experiences.

Recovery Strategies: Understanding customer perceptions can guide service recovery strategies when expectations are not met. Effective recovery can many times enhance customer satisfaction beyond pre-service failure levels.

Innovation Driver: Anticipating changes in consumer expectations can drive innovation in service delivery, developing new features or methods that offer a competitive edge.

TAKEAWAY POINTS for the BUSINESS OWNER

To successfully manage expectations and perceptions, businesses should:
* Engage in clear and consistent communication.
* Create realistic expectations through honest marketing and communication.
* Create feedback mechanisms to understand and adapt to ever-changing customer expectations and perceptions.
* Train, train, and train more. Implement ongoing employee training programs to enhance service delivery that aligns with consumer expectations.
* Become a customer of your business. Engage a trusted friend to act as a “secret shopper” and engage your business. Ask for honest feedback, listen, and make the needed changes.

In conclusion, managing consumer expectations and Perceptions is not just about meeting a baseline level of service quality; it is about creating and delivering value that resonates with consumers, fosters satisfaction, and ensures loyalty and business success. The dynamic nature of these factors means that businesses must be agile and responsive to the changing landscape of consumer psychology and market conditions.