Measuring and managing the customer experience - an old idea gains new currency

We all, no doubt, have preferred models and frameworks that stand the personal test and time as new management fads come and go. And for me, the SERVQUAL model of service quality is one I return to again and again. For all its limitations, I've yet to come across a better encapsulation of how to analyse customer expectations.

I first came across SERVQUAL (later renamed RATER) in the 1990s while studying for my Masters qualification in marketing. Briefly Zeithaml, Parasuraman and Berry's model proposes that service quality is judged across five dimensions (distilled from ten originally):

  • Reliability
  • Assurance
  • Tangibles
  • Empathy
  • Responsiveness

What I found particularly interesting was the concept that these variables are not measured in absolute terms, but rather by comparing experiences with the expectations of the client or customer.

Nor is each dimension equally important - although what matters most tends to vary from industry to industry and from client to client, which means that no firm should presume to know their client expectations.

So a SERVQUAL survey would initially ask a sample of clients about the relative importance of each dimension in their experience of a service, as well as their expectations of it. They would then be asked about their experience of how a specific company performs against each of the five dimensions.

The authors identified five resulting gaps that can create a difference between expectations and experience, with the collective overall gap creating customer dissatisfaction:

The potential gaps:

  1. Between management perception of customer expectations and customer expected service 
  2. Between management perception of customer expectations and service quality specification
  3. Between service quality specification and service delivery
  4. Between service delivery and external communication
  5. Between expected service and experienced service

The lessons for service providers are clear:

  1. Don't guess what your customers expect from you - ask.
  2. Convert this understanding of their expectations into clear service blueprints
  3. Ensure staff deliver consistently to these blueprints through communication, training and monitoring
  4. Marketing and communications need to set realistic expectations (under promise and over deliver)
  5. Recognise that customer expectations are also influenced by previous experience and the reviews and comments of others.

There are other, more nuanced messages here too. Much as we are encouraged to delight our customers by delivering beyond their expectations, a law of diminishing returns kicks in. Indeed, if a customer feels the tangibles of a service are too luxurious (for example the offices they visit to receive the service or the training manual they receive on a management development programme) they may conclude that they are paying far more for the service than they need to.

By understanding both the dimensions that really matter and the customer's expectations of them, a service provider can focus resources on those areas that will have the greatest impact - and potentially make savings elsewhere.

As an example of this principle in practice, it is difficult to beat Rayanair, often cited by customer experience expert Ian Golding in his presentations on customer experience. Ryanair has perfected its marketing and communications so that no customer can be left in doubt that they will be receiving a no frills service in which any extras need to be paid for.

The relationship is clear from the start - the customer is essentially cargo but the price represents remarkable value. And when the customer turns up for their flight and discovers they still get a smile from the staff and they don't really need to pay to use the toilet, their expectations are exceeded. And they generally disembark feeling very satisfied with the value for money they've experienced.

More recently, Ryanair has needed to raise its game and show more respect for its customers in the face of price competition from other airlines. But as these competitors increasingly compromise their service to reduce prices, they expose their carefully cultivated brands to the danger of customer disappointment.

The SERVQUAL model makes such intuitive good sense, it's surprising it has not achieved greater currency. It has its critics and its limitations, but perhaps its time has finally come?