How does a service company stay ahead of competition in meeting customer expectations? All else being equal, a company’s goal is to meet customer expectations better than its competitors can. Given the fact that adequate service expectations change rapidly in a turbulent environment, how can a company ensure that it stays ahead of competition?
The adequate service level reflects the minimum performance level expected by customers after they consider a variety of personal and external factors (Figure 3.6), including the availability of service options from other providers. Companies whose service performance falls short of this level are clearly at a competitive disadvantage, with the disadvantage escalating as the gap widens. These companies’ customers may well be ‘reluctant’ customers, ready to take their business elsewhere the moment they perceive an alternative.
If they are to use service quality for competitive advantage, companies must perform above the adequate service level. This level, however, may signal only a temporary advantage.
Customers’ adequate service levels, which are less stable than desired service levels, will rise rapidly when competitors promise and deliver a higher level of service. If a company’s level of service is barely above the adequate service level to begin with, a competitor can quickly erode that advantage. Companies currently performing in the region of competitive advantage must stay alert to the need for service increases to meet or beat competition.
To develop a true customer franchise – immutable customer loyalty – companies must not only consistently exceed the adequate service level but also reach the desired service level.
Exceptional service can intensify customers’ loyalty to a point at which they are impervious to competitive options.
How does a company exceed customer service expectations?
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