Competitive challenges faced by businesses today are driving a greater awareness of customer service and customer satisfaction, with an increasing push towards satisfying and even exceeding customer expectations. While the process and implications of meeting customer expectations has been extensively researched, our understanding of customers’ actual service expectations following enduring above-service expectation service encounters is limited, especially for business-to-business relationships. Addressing this knowledge gap is important, so that companies can sustain service delivery over time.
The research problem addressed in this thesis research is: Is it viable and desirable for companies to consistently exceed customers’ service expectations at future service encounters? Services marketing literature relating to customer expectations and customer satisfaction is reviewed and drawn upon to develop two theoretical frameworks: A perceived-performance model outlining the process of evaluating performance, and an extension to the zone of tolerance theory model of customer expectations.
Case-study research was used as the primary methodology for this research to allow the investigation to proceed within a real-life context. Primary data to inform the research problem was collected through semi-structured in-depth interviews with five participants from four long-standing business customers of a focal manufacturing (supplier) company.
The results show that customers will increase their expectations following a service encounter that delivers above the service level they expect. Once customers increase their expectations as a result of above-expectation service, they retain those higher expectations for future service encounters. The results also provide support for the two posited theoretical frameworks, namely, a perceived-performance model and a model of exceeding customer expectations.
The research results indicate that exceeding customer expectations narrows the zone of tolerance for future service encounters and increases the desired level of service to the level which exceeded previous expectations. With regard to changes in customer expectation levels over time, the case study data shows that increases in service expectations for promptness and responsiveness were most pronounced in the customer business sample studied.
The thesis research adds knowledge to our understanding of customer perceptions and evaluation of service performance. It is anticipated that this research will assist small and medium business owners and managers to understand customer expectations with a view to managing and planning future service encounters. Businesses that are better able to understand the concepts related to this research and develop contingency strategies to deal with the outcomes will potentially have a greater ability to develop loyal and satisfied customers.