Journal ArticleDOI
Managing Retention in Service Relationships
Sam Aflaki,Ioana Popescu +1 more
TLDR
In this article, the authors propose a dynamic model that relies on behavioral theories and empirical evidence to capture the effect of past service experiences on service quality expectations, customer satisfaction, and retention.Abstract:
In a repeat business context, past experiences with a service provider affect customers' decisions to renew their contract. How should a strategic firm manage customized service over time to maximize the long-term value from each customer relationship? We propose a dynamic model that relies on behavioral theories and empirical evidence to capture the effect of past service experiences on service quality expectations, customer satisfaction, and retention. Although firms can benefit from managing service expectations at the beginning of a relationship, we find that varying service in the long run is not optimal. Behavioral regularities explain the structure of optimal service policies and limit the value of responsive service. Loss aversion expands the range of optimal constant policies; however, if satisfying experiences are more salient, then firms should constantly vary service levels. Loyal or high-margin customers need not warrant better service; those who anchor less on past service experiences do---provided that retention is improved by better past experiences. The effect of customer memory on service levels is determined by whether habituation or rather goodwill drives defection decisions.
This paper was accepted by Christian Terwiesch, operations management.read more
Citations
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Supermodularity And Complementarity
TL;DR: The supermodularity and complementarity is universally compatible with any devices to read, and will help you to get the most less latency time to download any of the authors' books like this one.
Journal ArticleDOI
Optimal Design of Social Comparison Effects: Setting Reference Groups and Reference Points
Guillaume Roels,Xuanming Su +1 more
TL;DR: Modeling social comparison as a game between players, it is found that ahead-seeking behavior leads to output polarization, whereas behind-averse behavior leadsTo output clustering, and social planners must tailor the reference structure to the predominant mode of social comparison and their objective.
Journal ArticleDOI
Service quality and student/customer satisfaction in the private tertiary education sector in Singapore
TL;DR: In this article, the authors examined the relationship between service quality, student satisfaction, and behavioural intentions in the private tertiary educational sector (PTES), using Singapore as a case study.
Journal ArticleDOI
The Design of Experiential Services with Acclimation and Memory Decay: Optimal Sequence and Duration
TL;DR: In this paper, the authors show how experiential services should be sequenced and timed to maximize the satisfaction of customers who are subject to memory decay and acclimation, and they find that memory decay favors positioning the highest service level near the end, whereas acclimance favors maximizing the gradient of service level.
Journal ArticleDOI
Revenue-Maximizing Rankings for Online Platforms with Quality-Sensitive Consumers
TL;DR: Stochastic models are introduced and proposed effective solution methods that can be used to optimize the ranking considering long-term revenues and a key feature of the model is that customers are quality-sensitive and are attracted to the platform or driven away depending on the average relevance of the output.
References
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Book
Dynamic Programming and Optimal Control
TL;DR: The leading and most up-to-date textbook on the far-ranging algorithmic methododogy of Dynamic Programming, which can be used for optimal control, Markovian decision problems, planning and sequential decision making under uncertainty, and discrete/combinatorial optimization.
Journal ArticleDOI
Measuring service quality: a reexamination and extension
TL;DR: In this paper, the authors investigate the conceptualization and measurement of service quality and the relationships between service quality, consumer satisfaction, and purchase intentions, and investigate the relationship between the two factors.
Journal ArticleDOI
Loss Aversion in Riskless Choice: A Reference-Dependent Model
Amos Tversky,Daniel Kahneman +1 more
TL;DR: In this article, the authors present a reference-dependent theory of consumer choice, which explains such effects by a deformation of indifference curves about the reference point, in which losses and disadvantages have greater impact on preferences than gains and advantages.
Journal ArticleDOI
A Dynamic Process Model of Service Quality: From Expectations to Behavioral Intentions:
Abstract: Relying on a Bayesian-like framework, the authors develop a behavioral process model of perceived service quality. Perceptions of the dimensions of service quality are viewed to be a function of a ...
Journal ArticleDOI
A Multistage Model of Customers' Assessments of Service Quality and Value
Ruth N. Bolton,James H. Drew +1 more
TL;DR: In this article, the authors developed a model of how customers with prior experiences and expectations assess service performance levels, overall service quality, and service value, applied to residential customers' assessments of local telephone service.