Capture Customer Expectations to Create a Strategic Advantage

Consumer Expectations

Let’s start with a consumer example – someone showing up at a five-star hotel. That guest brings both needs and expectations. The needs include a bed, a bathroom, perhaps wireless Internet access. But along with those needs are expectations of a five-star hotel. These come from past experience, word-of-mouth communication, corporate advertising, and price. If there is a gap between these created expectations and the guest’s service experience, the hotel has a problem. Inside the gap between what was expected and what the guest perceives she was given are other possible service gaps. Capturing the gaps between expectations and experience allows a supplier to prioritize improvements in its service delivery system and consistently match and exceed expectations customers have created.  Once the expectations are identified, the hotel can do a superior job differentiating its offerings and gaining a competitive advantage.

Account Expectations

Services
The same scenario is true for business-to-business customer relationships. For example, the goals of Marriott International’s Alliance Account Program are to increase the targeted accounts’ global preference and to increase profitable global share for Marriott’s brands. The Alliance Account Program doesn’t simply sell rooms.  It sells Marriott’s core competencies: productivity, business solutions, and strategic relationships.

The Marriott-Deloitte & Touche story began on September 12th, 2001. D&T employees showed up to find that the collapse of the World Trade Center had severely damaged their office building.  The employees had no access to their offices, computers, and phones. With tax season looming, D&T sent out an RFP for temporary office space to several major hotel chains, including Marriott International.  D&T was looking for 200-250 offices for a minimum of two months—effective immediately.

Patrice Spinner, a Marriott employee for 23 years, was the relationship manager assigned to Deloitte and Touche in the late 90’s.  She said that most chains responded to the RFP by offering D&T room availability and pricing, but Patrice Spinner decided to play a different game. She and 40 other Marriott people formed a cross-functional account management team, creating a total solution for D&T. 

The team was comprised of managers from Marriott’s Global Sales Organization, a hotel General Manager, Marriott Sales Executives, a Marriott Manager from its furniture rental division, a VP of Information Resources (to set up phone, computer & Internet lines), the General Manager of Marriott’s Worldwide Reservation Center, and many others. Spinner, who knew D&T very well, directed each team member to the key people at D&T to meet specific needs and expectations.

The Marriott team’s final solution for D&T included room pricing and availability, as well as safety and security systems, food and beverage options, telecommunications (internet connections, phone banks, etc.), office furniture, consolidated billing, and a customer service call center.  The team goal, included in the Marriott proposal, was to “deliver a comprehensive office relocation package that provided Deloitte & Touche with virtually uninterrupted service to clients.”

Marriott won the bid because it provided for D&T’s expectations and needs. That contract lasted for over five years.  During that period Marriott charged premium prices for premium service, making millions in the process.

Manufacturing
Let’s explore some needs/expectations examples from other industries. Manufacturers often define a product as the tangible equipment they produce. But research has shown again and again that the company that purchased the equipment defined the product as a combination of all of the experiences involved with buying, using and servicing that equipment, not only as a piece of equipment. If the equipment is reliable but is not as easy to use as expected, it will not be perceived as the best equipment on the market. If the piece of equipment is easy to use but people serving the equipment are not responsive or are rude, the equipment will not be perceived as the best on the market.

Transportation
Transportation companies often define their product as delivered goods. But from the account contact’s perceptions, the product is a combination of delivered goods and how well the transportation company met the account’s expectations in all areas of the delivery. From the account’s point of view, how the way they are treated by the truck driver during the delivery process is one expectation that many transportation companies do not think about. They tend to hire their drivers on their driving record, not for their customer service skills. Their driving record is important but unless the drivers can provide service and relationship quality, they may easily frustrate some of the account contacts’ expectations.

Energy
Consider the electric utility that measures its own effectiveness by continuous and clean power. That power can meet the needs of the targeted customer.  However, the strategic account could be weakened if that utility demonstrates organization arrogance or poor service quality in the delivery. That was one of the reasons the utilities were so concerned about deregulation. The utility’s strategic accounts had no options and the utilities tended to ignore the expectations, and sometimes the stated needs, of their largest accounts.

In all these cases, the supplier definition of a product is too narrow to capture the client’s expectations. When a supplier determines the critical interactions between its company and the customer, when it isolates the critical expectations within each of those interactions, it can sharply differentiate its offerings. That is perhaps the largest single reason to identify the customer/account’s expectations.

Service Quality Expectations
Differentiating to meet varying account expectations brings us back to Zeithaml’s research – particularly in the determinants of service quality.  Generally speaking, all customer/account expectations can be broken into five service quality determinants:

The Five Determinants of Service Quality

1.    Reliability: The ability to provide what was promised, dependably and accurately
2.    Responsiveness: The willingness to help customers and provide prompt service
3.    Assurance: The knowledge and courtesy of employees and their ability to convey trust and confidence
4.    Empathy: The degree of caring and individual attention provided to customers
5.    Tangibles: The physical facilities and equipment and the appearance of personnel

These are presented in descending order of importance to the account contact/customer. What’s interesting about these determinants is that empathy—what we would traditionally think of as customer service—is rated fourth. What’s clear with the first three ranked determinants is that service quality is not a matter of touchy-feely expectations but instead a matter of detailed and specific performance expectations. Unless those varying performance expectations are captured, and used as benchmarks, the supplier is unable to take its service delivery systems to advantageous levels. Determining the expectations of strategic accounts is not soft stuff; it’s offering a way to create a sustainable, competitive advantage.