MKTG2003 - Marketing for Financial Services - Blog Post 11

Another model I found interesting in this course is the Expectation versus Performance Model. This model matches the expectations of a financial service by customers and then compares it with the actual perceived performance of the service. If the performance of the service exceeds the expectations of the customers they will be 'delighted' which will eventually lead to brand preference and loyalty if the ‘delight’ can be maintained. If expectation equals performance customers will be 'merely satisfied'' and if expectation exceeds performance customers will be dissatisfied. I am now going to apply the model to Colonial First State Australian Share Fund.

From the research done during the presentation I found the expected rate of return on the Australian Share Fund. Due to the global financial crisis CFS should try to match their performance with the expected return even if it achieves only “mere satisfaction”, as if another global crises hits and unexpected market fluctuations arise, then investors could be dissatisfied with a less than expected rate of return. CFS could also lower the expected rate of return on the Australian Share Fund, so that customers do not remain disappointed. However, they should not lower the expected rate to much, as CFS will not want clients to switch to banks that offer a higher rate of return. An example of how to ‘manage expectations’ would be to suggest a rate of 3.85% for a 7 year investment and a 4.49% rate for a 10 year one. (A whole percentage below what they are confident to achieve). This will ‘delight customers’ when the higher rate is achieved and also is not low enough to make customers want to switch.

Finally it must be mentioned that the rate of return is not the only factor customers 'expect' from the financial service and use for judging the performance. In addition to the rate of return other customer contact points like post purchase service, the actual financial centre and friendliness of the staff is taken into account. Therefore CFS must make sure that they deliver as much if not more than they can promise to provide.