What is the difference between perception of service quality and customer satisfaction?

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In many cases, there is no difference between these two terms.  They are often used interchangeably.  However, some scholars argue that there is truly a difference between the two.

The perception of service quality is a measure of how well a service that is received matches up to the expectation that the customer had prior to receiving the service.  Customer satisfaction is the degree to which the customer is happy with the service received.

These are clearly very similar concepts.  However, some scholars differentiate between the two.  Some scholars argue that customer satisfaction is more of a long-term concept while perception of service quality varies from one transaction to the next.  That is, a person can feel that they have gotten poor service from a firm on a recent transaction and therefore give the firm a low score on perception of quality yet, at the same time, the person can be fairly satisfied with the firm because of the quality of previous transactions. 

Researchers have found that there is a strong correlation between these two things.  That is, people who have a perception that the services they have received have been of high quality are very likely to have high levels of customer satisfaction as well.  Therefore, the difference between these two things appears to be more important to academics than to actual customers.

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This is a great question.

One of the things that people say often is that perception is reality. What they mean by this is what people think is what really counts. So, if a company has great customer satisfaction, but no one thinks so, then this company will suffer in this area. However, if there is a company with very bad customer satisfaction, but people actually think it is good, then this company might fare well. The perception is what people think, which may or may not be rooted in reality. 

In light of this, what a  company wants is the perception of great customer satisfaction and reality to back it up.

In conclusion, perception is usually seen as the opposite of reality. 

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