Closing the service gap

Companies struggling to close the gap between customer expectations and perceived experiences need to look at four areas where blunders occur, Thunderbird Professor Sundaresan Ram, Ph.D., said July 30, 2013, during the Thunderbird Executive MBA Summer Lecture Series on campus near Phoenix, Arizona. “If perceptions exactly match expectations, then the gap is zero, and you have satisfied customers,” Ram told an audience of more than 100 students, prospective students and alumni. “The problem is, expectations can be a moving target.” Although some companies sell products rather than services, Ram said every business needs to understand the service gap model. “It’s the manner in which you deliver the product or service that keeps your customers coming back,” he said. “Everybody is in the service business.”

Expectations gap: The first breakdown occurs when a gap exists between expectations and delivery. Customers who arrive with unrealistic expectations rarely leave happy. Ram said sales  managers sometimes promise more than the company can deliver to close a deal, but the tactic ultimately backfires. “Only make promises you can keep,” he said. “Never overpromise because you will under deliver.”

Knowledge gap: The second trouble spot is the knowledge gap, which occurs when people designing the product or service do not know what their customers want. Ram said senior managers can close this gap by talking to key customers and frontline employees on a regular basis and listening to what they say. “You think you know what they want, but most of your customers expect something else,” he said. “Customers have their own checklists.”

Design gap: The third potential trap is the design gap, which occurs when a company listens to their customers but designs the wrong thing. Ram said this usually occurs when a company cuts corners to save money. Other companies misjudge the market’s direction. “Innovation is anticipating customer expectations and designing solutions that customers don’t even know they want yet,” he said. “But this is different than designing something they don’t want.”

Delivery gap: The final breakdown is the delivery gap, which occurs when a company fails to deliver a service as promised. “You’re only as good as your weakest employee standing in front of the customer,” Ram said. “It takes one person like that to destroy 20 years of goodwill.”

The four gaps flare up at every company from time to time, but Ram said the zone of forgiveness widens as companies narrow the distances. “The company that fails is not the company that has a gap for the first time,” he said. “It’s the company that has the same gap for several weeks in a row.”

This article is based on a keynote address that Sundaresan Ram, Ph.D., delivered July 30, 2013, as part of the Executive MBA Summer Lecture Series at Thunderbird School of Global Management near Phoenix, Arizona. The full video is available below and on YouTube.