Customer Expectations in Service Industry

By John Dudovskiy

Customer ExpectationsFactors Influencing Customer Expectations

Factors that influence the level of customer expectations have been specified by Rai (2008) as the following:

Firstly, benchmarks specified by service competitors. Competitors’ service benchmark influence customer expectations in a way that the higher the benchmarks, the higher customer expectations will be.

Secondly, individual psychology. As it has been discussed above the role of individual differences find greater reflection in the level of customer satisfaction in the service sector compared to the level of customer satisfaction in products. Therefore, most of the service companies strive to adopt individual approach taking into account expectations and characteristics of each individual customer (Barnard, 2002)

Thirdly, individual background. As it has been identified that individual psychology plays a great role on the service expectations from that individual; individual background as one of the main determinants of individual psychology also plays an important role in customer service expectations.

Fourthly, previous service records of the company. When potential consumers approach a service company they will have their expectations according to various characteristics of the company, including its previous service records. Accordingly consumer expectations will be high in companies with reputable service records, and vice-versa.


Issues in Customer Expectations

As it has been well established in business world, one of the important conditions of ensuring long-time profitability of the business is meeting or exceeding customer expectations at all times. However, even with the willingness of the company to exceed customer expectations and with relevant skills and capabilities achieving this objective can prove to be challenging due to the following reasons specified by Rai (2008):

Firstly, customer expectations may be unrealistic. The issue of customer expectations being unrealistic have been raised by several authors including Miller (1995), James (2004), and Hayes (2008). The common practice for service companies in such a scenario would be to try satisfying customer expectations according their capability, at the same time letting customers know in a diplomatic and polite way that their expectations are unrealistic.

Secondly, ever-increasing customer expectations. Due to increasing level of competition in any industry customer demand and expectations are increasing in a faster way than ever. As a result companies are left in a position to exceed ever increasing customer expectations at the expense of their profit margins.

Thirdly, lack of tools to be used in exceeding customer expectations. Rai (2008) states that there can be occasions where  even if management of companies do understand customer expectations correctly, and willing to commit in order to exceed them, still they may lack knowledge, competence or skills in order to be able to exceed customer expectations.

Fourthly, it is challenging for companies to identify any measure or benchmark regarding how far they should go in order to please their customers, taking into account ever-increasing customer expectations.


  • Rai, AK, 2008, Customer Relationship Management: Concepts and Cases, PHI Learning

Category: Customer Services