MACQUARIE GRADUATE SCHOOL OF MANAGEMENT MGSM WORKING PAPERS IN MANAGEMENT Reality or perception? The effect of actual and perceived performance on satisfaction and behavioral intention

The extent to which actual (rather than perceived) performance influences customer satisfaction has received limited attention by researchers, yet it is important for managers to understand the extent to which customer perceptions and behavioral intentions are associated with actual service performance. This study investigates the links between actual and perceived performance, customer standards, attributions, satisfaction and behavioral intention. The results suggest actual performance is a significant predictor of customer satisfaction, separate from its indirect association via perceived performance. Customers’ comparison standards are also suggested to impact on satisfaction both directly and indirectly. Customer attributions, in contrast, do not appear to influence performance judgments, but are significantly associated with satisfaction levels. Customer experience is shown to be associated with satisfaction via an interaction effect, and also to be significantly associated with behavioral intentions. The implications for research and management are discussed.