The ability of any services firm or organization to consistently meet expectations, leading to high levels of customer loyalty leads to value creation for the company's brand over time. Value creation is the accumulation of customer loyalty over time; it is in fact being increasingly quantified in the context of the hospitality industry today (Bowen, Sparks, 1998)
This has been shown to extend into the services sectors of the global economy as well, specifically in the hospitality industry as well (Lee, 1983). Expectations are in fact solidified when the two sets of factors, social exchange and voluntary behaviors, are strengthened through greater consistent levels of trust (Chow, Holden, 1997)
The lesser the level of trust, the greater the fragmentation of each component of the model, and the disintegration of relationships and processes flows that encompass it, and the eventual decline in customer activity in this framework. A significant proof point for this model can also be found in the work of (Hatch, Schultz, 2002) which also shows that aspiring to the role of a trusted advisor actually increases the coherence and consistency between organizational and individual ethical norms
The interaction of customer satisfaction, trust, commitment as social exchange behaviors, and loyalty, cooperation and participation as voluntary performance behaviors serve as the foundations for how expectations are formed. All six of these combined factors contribute to the development of expectations (Hawes, Strong, Winick, 1996)
The interaction of customer satisfaction, trust, commitment as social exchange behaviors, and loyalty, cooperation and participation as voluntary performance behaviors serve as the foundations for how expectations are formed. All six of these combined factors contribute to the development of expectations (Hawes, Strong, Winick, 1996)
A transaction is the exchange of values between two parties. The things-of-value need not be limited to goods, services, and money; they include other resources such as time, energy, and feelings" (Kotler, 1972)
A transaction is the exchange of values between two parties. The things-of-value need not be limited to goods, services, and money; they include other resources such as time, energy, and feelings" (Kotler, 1972)
A transaction is the exchange of values between two parties. The things-of-value need not be limited to goods, services, and money; they include other resources such as time, energy, and feelings" (Kotler, 1972)
Nature and Characteristics of Expectations The interchange between social exchange and voluntary performance behaviors that fuel and are also fueled by the validation and reinforcement of trust serve as the catalyst of expectations being created and sustained. Implicit in the defining of expectations is that they will align with and be congruent to the ethical norms from both an organizational and individual level (Larzelere, Huston,1980), and this is particularly relevant in the acquiring of services, where expectations are integral to the purchase process (Altinay, 2007)
Expectations of customers across each distribution channel they interact with vary significantly, and have been proven to be directly related to the level of electronic enablement within each given channel and its levels of personalization, perceived level of security and trustworthiness (Zaheer, McEvily, Perrone,1998). This has been shown to extend into the services sectors of the global economy as well, specifically in the hospitality industry as well (Lee, 1983)
Based on the use of SERVQUAL insights gained, hospitality providers are initiating the following strategies. First, many are creating training programs to ensure the moments of truth customer service representatives have with customers delivers transparency and fosters trust by having all the essential information available to the service representative (Lfgren, 2005)
Sheth and Parvatijar (1995) pointed out that relational bonding between traders in preindustrial society was prevalent and that the development of markets in this period was concerned with the continuity of a repeat purchaser which also served to quantify trust as a differentiator in service relationships. Such continuity was achieved because those who participated in the market knew and trusted each other (MacKenney, 1987)
Expectations and trust are in fact interrelated, and from the standpoint of a consumer acquiring services, the interlinking of these two factors is even more integrated than that of consumers purchasing products. The reason is that implicit in the sale of any service is the implied expectation that their delivery will be to the satisfaction level agreed upon (Milliman, Fugate, 1988)
, (1988) suggested a model that details the gaps between customer expectations and the actual service delivered. SERVQUAL is often used as a measurement instrument, to also construct service strategy components as well (Parasuraman, Zeithaml, & Berry, 1988)
, (1988) suggested a model that details the gaps between customer expectations and the actual service delivered. SERVQUAL is often used as a measurement instrument, to also construct service strategy components as well (Parasuraman, Zeithaml, & Berry, 1988)
, (1988) suggested a model that details the gaps between customer expectations and the actual service delivered. SERVQUAL is often used as a measurement instrument, to also construct service strategy components as well (Parasuraman, Zeithaml, & Berry, 1988)
A little later, Bagozzi (1975) focused on the importance of the exchange process in greater detail, noting that there are three broad determinants of exchange relationships: (a) social actor variables (attraction, similarity, prestige, and expertise), (b) social influence variables (specific actions, communications, and information transmitted between parties), and - situational variables (alternative sources of value, the physical and psychological setting, and the legal and normative setting or organizational norms and values). However, while the exchange theory of marketing provides good normative rules for exchange relationships, it does not yet explain why and how values and, arguably, value is directly created from expectations (Sheth, Gardner, & Garrett, 1988)
Value creation is the accumulation of customer loyalty over time; it is in fact being increasingly quantified in the context of the hospitality industry today (Bowen, Sparks, 1998). The creation of customer value has increasingly been seen as the next source of competitive advantage (Woodruff, 1997)
The continual increasing of expectations is entirely dependent on each of these specific sets of factors staying in equilibrium and balanced with each other. Social exchange and voluntary behaviors however require trust to be present, and strengthened in each interaction and product or service experience (Young, Wilkinson, 1989)
Social exchange and voluntary behaviors however require trust to be present, and strengthened in each interaction and product or service experience (Young, Wilkinson, 1989). In organizations that rely extensively on distribution channels the interaction of both social exchange and voluntary behaviors is inherently more difficult to manage given the specific coordination efforts between channel partners (Zaheer, McEvily, Perrone, 1998)