The Zone of Tolerance

Extensive theoretical and empirical work has been conducted in the Marketing discipline

to understand and explain the link between customer satisfaction and service quality. The

greatest volume of research has focused upon the disconfirmation theory, which holds that

satisfaction (dissatisfaction) is dependent upon the size of the confirmation (disconfirmation) of

the service customers’ initial expectations (Churchill and Surprenant 1982). A similar theory, the

Gaps Model of service quality, holds that customer satisfaction is based upon perceptions of

service quality relative to the customer’s initial expectations (Parasuraman, Zeithaml, and Berry

1985). Both perspectives place great emphasis upon the role that expectations serve in the

satisfaction development process.

A refinement of the Gaps Model of service quality is the norms-based zone of tolerance

model, introduced by Zeithaml, Berry and Parasuraman (1993) and further refined by

Parasuraman, Zeithaml, and Berry (1994). The zone of tolerance (ZOT) is defined as “the

difference between desired service and the level of service considered adequate” (Zeithaml et al

1993, pg. 6). As may be noted in this definition, the ZOT model recognizes that customers enter

service encounters with different expectation levels. Desired service is “the level of service the

customer hopes to receive … a blend of what the customer believes can be and should be”

(Zeithaml et al 1993, pg. 6). On the other hand, adequate service is the “level of service the

customer will accept” (Zeithaml et al 1993, pg. 6). The difference between these two

expectation standards is the zone of tolerance. The ZOT model proposes that satisfaction will

result as long as customer perceptions of service performance fall in the zone. Zeithaml and her

colleagues (1993) proposed that the ZOT varies across customers and can expand/contract with
the same customer. They also proposed that adequate service expectations are subject to change,

while desired service expectations are relatively enduring.

Parasuraman et al (1994) continued development of the ZOT model by testing three

alternative questionnaire formats using an extensive mailing of 12,470 questionnaires. A total of

3069 usable questionnaire were returned for a response rate of 25%. Focusing on the five

SERVQUAL dimensions of reliability, responsiveness, assurance, empathy, and tangibles

(Parasuraman, Zeithaml, and Berry 1988), the three column format measured the respondents’

adequate and desired expectations, as well as their perceptions of the service provider’s

performance in identical, side-by-side scales. The two column format generated direct measures

of the service-superiority gap (perceived performance on desired service levels) and the service-

adequacy gap (perceived performance on adequate service levels) with identical, side-by-side

scales. The one column format generated direct measures of both the service-superiority and

service-adequacy gaps, but the questionnaire was split into two parts, with one set of scales

designed to measure each of the gaps separately. Parasuraman et al (1994) found that while each

of the formats were both reliable and valid, only the three column format offered the ability to

determine where perceptions fell relative to the ZOT, the ability to pinpoint ZOT positions, and

reduce the chance for inflated ratings and erroneous inferences.

Another theoretical article regarding the ZOT was offered by Johnston (1995).

Specifically, he theoretically examined the relationship between involvement and the ZOT, as

well as the impact of various service performance outcomes upon the ZOT. In relation to the

impact of involvement, he proposed that the width of the ZOT is “inversely proportional to the

degree of involvement” (Johnston 1995, pg. 49). In other words, high involvement generates a

narrower ZOT, while low involvement generates a wider ZOT. Similar to Zeithaml et al’s (1993)

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contention, he also proposed that (1) performance within the ZOT may go unnoticed by the

customer, (2) performance below the customer’s adequate expectations level (below the ZOT)

will generate dissatisfaction, and (3) performance above the customer’s desired expectations

level (above the ZOT) will generate “delight”, or what Zeithaml et al (1993) termed a “customer

franchise.”

It is appropriate to note that disagreement exists in the services marketing literature as to

whether perceived service quality should be measured using a performance-based framework or

with a standards (or norms)-based framework. Teas and DeCarlo (2004, pg. 272) noted that

“performance-based frameworks specify perceived performance, without any comparative

referents, as the perceived quality concept,” while “standards-based frameworks specify a

relative or comparative performance conceptualization of perceived quality.” In other words,

does a direct measure of perceived service quality offer greater explanatory power than a norms-

based comparative measure? Parasuraman et al (1994) argued that norms-based models (such as

the ZOT) would be more useful because of the measurement of more precise information about

customer perceptions across the multiple expectations levels. In their study of 107

undergraduate students’ perceptions of a university’s Student Services Center, Teas and DeCarlo

(2004) found that performance-based models offered more explanatory power than the ZOT

regarding the relationship between perceived quality and purchase intentions. However, they

also found that the ZOT (as the representative norms-based model) offered superior performance

(relative to performance-based models) when evaluating the linkage between perceived quality

and satisfaction. Hence, they provided support for the ZOT as a useful managerial and research

tool for better understanding how customer perceptions of quality impact satisfaction with the

service.

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 Additionally, Voss, Parasuraman, and Grewal (1998) argued that there are instances when

a standards-based framework does not provide sufficient explanatory power. Specifically, in

their study of 200 faculty members of a large university, these authors found that the standards-

based framework was only useful when price and performance were consistent. In other words,

they examined how price perceptions impacted the expectations-perceived performance

framework. They found that the more customers were price tolerant, the less satisfied they were

with a high-price/low-quality offering. On the other hand, for those customers who were initially

less price tolerant, satisfaction was greater for the low-price/high-quality offering. Yet, in those

instances where levels of delivered performance matched the price level (low-price/low-quality;

high-price/high-quality), perceived performance was compared against prior expectations to

determine satisfaction levels.

Additional support for the ZOT model has been provided by Walker and Baker (2000).

These authors proposed that the width of the ZOT varies for essential versus less-essential

service quality components. They also proposed that the ZOT width would be influenced by the

degree of customer experience with the service, as well as the number of competitive alternatives

the customers perceived. They surveyed 205 college students regarding health club membership.

It was found that the width of the ZOT does indeed varying dependent upon the service quality

dimension in question. Specifically, Walker and Baker (2000) found that the ZOT was narrower

for the assurance and reliability dimensions than for the empathy, responsiveness, and tangible

dimensions of service quality. In relation to customer experience levels, it was found that no

significant differences exist between experienced and non-experienced customers on desired

service level expectations. However, the ZOT is narrower for experienced customers “because

they have increasingly demanding adequate expectations” (Walker and Baker 2000, pg. 424).

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Additionally, these authors found no support for the Zeithaml et al (1993) proposition that the

presence of readily available provider alternatives would narrow the ZOT. Walker and Baker

(2000) attributed this finding to the stability of the desired expectations standard.

Another recent study offered similar findings to those reported by Walker and Baker

(2000). Gwynne, Devlin, and Ennew (2000) also investigated the width of the ZOT relative to

the different service quality dimensions and found in their study of 218 students that service

quality dimensions that are perceived as more important enjoy a wider zone of tolerance. Their

results attribute this to higher levels of desired expectations for the most important service

quality dimensions. It was also found that these desired expectations tend to be relatively stable.

Additionally, customers who were more favorably disposed to the provider (generally more

experienced customers) tended to have higher levels of adequate expectations than their less

favorably disposed counterparts, and thus tended to have narrower ZOT’s.

In summary, the Zone of Tolerance (ZOT) model is a standards-based framework for

understanding customer perceptions of service quality and satisfaction with the service. While

the ZOT is inappropriate in some instances, such as when the primary purpose is “to explain the

variance in some dependent construct,” it is considered appropriate when “the primary purpose is

to diagnose accurately service shortfalls” (Zeithaml et al 1996, pg. 40). The model holds that

service customers has two basic types of prepurchase expectations; desired and adequate. These

expectations define the boundary of the zone of tolerance. As long as perceived performance

falls within the zone, the result is customer satisfaction. Performance below the zone generates

dissatisfaction, while high performance that exceeds the customers’ desired expectations

generates delight, or a customer franchise.

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 What does the Zone of Tolerance model offer business managers? It explains that the

firm’s customers enter discrete transactions with the organization with different expectations.

They have a level of service they will accept, and they have a level of service they want. As long

as the firm’s offerings fall within the zone, the customers will be satisfied. However, falling

within the zone is only enough to maintain competitive parity. Obviously, falling below the zone

puts the firm at a competitive disadvantage. On the other hand, performing above the zone offers

the firm the possibility of developing a long-term competitive advantage. It is important that the

firm gain an understanding of the service quality dimensions that are most important to its target

customers, for it is within these dimensions that the zone is narrowest. It is likely that

competitive advantage may not be derived from performance on these dimensions, but the firm

must perform within the customers’ zones of tolerance on these dimensions to be competitive.

Yet, the less important dimensions offer an opportunity for the development of sustainable

competitive advantage as the zones of tolerance associated with these dimensions tend to be

wider.

References

Churchill, Gilbert A., Jr. and Carol Surprenant (1982), “An Investigation Into the Determinants
of Customer Satisfaction,” Journal of Marketing Research, XIX (November), 491-504.

Gwynne, Anne L., James F. Devlin, and Christine T. Ennew (2000), “The Zone of Tolerance:
Insights and Influences,” Journal of Marketing Management, 16, 545-564.

Johnston, Robert (1995), “The Zone of Tolerance: Exploring the Relationship Between Service
Transactions and Satisfaction with the Overall Service,” International Journal of Service
Industry Management, 6 (2), 46-61.

Parasuraman, A., Valarie A. Zeithaml, and Leonard L. Berry (1985), “A Conceptual Model of
Service Quality and Implications for Future Research,” Journal of Marketing, 49 (Fall),
41-50.

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Parasuraman, A., Valarie A. Zeithaml, and Leonard L. Berry (1988), “SERQUAL: A Multiple-
Item Scale for Measuring Consumer Perceptions of Service Quality,” Journal of
Retailing, 64 (Spring), 12-40.

Parasuraman, A., Valarie A. Zeithaml, and Leonard L. Berry (1994), “Alternative Scales for
Measuring Service Quality: A Comparative Assessment Based on Psychometric and
Diagnostic Criteria,” Journal of Retailing, 70 (3), 201-230.

Teas, R. Kenneth and Thomas E. DeCarlo (2004), “An Examination and Extension of the
Zone-of-Tolerance Model,” Journal of Service Research, 6 (February), 272-286.

Voss, Glenn B., A. Parasuraman, and Dhruv Grewal (1998), “The Roles of Price, Performance,
and Expectations in Determining Satisfaction in Service Exchanges,” Journal of
Marketing, 62 (October), 46-61.

Walker, Jim and Julie Baker (2000), “An Exploratory Study of a Multi-Expectation Framework
For Services,” Journal of Services Marketing, 14(5), 411-431.

Zeithaml, Valarie A., Leonard L. Berry, and A. Parasuraman (1993), “The Nature and
Determinants of Customer Expectations of Service,” Journal of the Academy of
Marketing Science, 21 (Winter), 1-12.